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There were several reports in the broadcast trade press today about an article in the Hill newsletter from retiring Congressman Greg Walden about his proposals to increase diversity in broadcast ownership.  Congressman Walden, a former broadcaster, seeks in his Broadcast Diversity in Leadership Act to foster minority ownership and ownership by new entrants by establishing in legislation an incubator program similar to the one adopted by the FCC in 2018, but put on hold by the Third Circuit Court of Appeals in their decision on broadcast ownership (which is now before the Supreme Court – see our post here).  While, given the short time before the end of the Congressional session, the Congressman’s bill stands little chance of passing both houses of Congress and being adopted before the end of the year, the bill is worth reviewing as it has the support of both the NAB and minority-advocacy organizations, so it could well resurface in a new Congress.

The bill adopts much of the framework of the FCC’s incubator program (which we outlined in our article here).  Under the proposed legislation, an existing broadcaster could work with an aspiring broadcaster to help that new entrant purchase and operate a broadcast station. The bill asks the FCC to adopt rules outlining the support that could be provided to the new entrant, including training, financing and access to resources of the established broadcaster. The established broadcaster could even hold a non-controlling equity interest in the emerging broadcaster, as long as the new entrant retains control.  In exchange for providing the services or financing, if the incubation is determined to be successful after a two-year period, the existing broadcaster would be allowed to acquire one station in a similarly sized market that exceeded the current cap on broadcast ownership allowed by Section 73.3555 of the Commission’s rules.  So, if the existing broadcaster operates in a market where one party can only own 6 stations, it could acquire a seventh.
Continue Reading Congressman Walden Urges Adoption of Broadcast Diversity in Leadership Act – An Incubator Program to Assist New Entrants to Broadcast Ownership

The Office of Management and Budget, acting pursuant to the Paperwork Reduction Act, has just approved the FCC’s broadcast incubator program, about which we wrote here.   That approval makes the program effective.  The program permits an established broadcaster to provide assistance to a new broadcaster (generally, a qualified small business) to enter the radio broadcast industry.  If, over a 3-year period, the assistance provided by the existing broadcaster (usually either financial assistance or management training) is deemed a success, the established broadcaster can receive a credit allowing it to purchase a station in excess of the radio ownership limits allowed for broadcasters in a market of similar size to the one in which the incubation occurred.  It is interesting that this rule became effective just as the US Court of Appeals heard oral argument on the question of whether that program does enough to encourage new entrants into broadcast ownership to meet court-imposed obligations to address these issues.

The oral argument is on the appeal of the FCC’s 2017 ownership decision which, among other things, did away with the prohibition on newspaper-broadcast cross-ownership and the rule that required that there be 8 independently owned TV stations in a market before one owner could own two stations in that market.  The appeal, as we wrote here, essentially argues that the FCC has not done enough to promote minorities and other new entrants to get into broadcast ownership.  Reports are that the judges asked the FCC many questions at yesterday’s argument as to whether the FCC had enough data to conclude that the changes that were made in 2017 were in the public interest and would not unduly burden new entrants who want to get into media ownership.
Continue Reading FCC Incubator Order Becomes Effective Just as Third Circuit Hears Arguments on 2017 Order Relaxing FCC Broadcast Ownership Rules

At its meeting last week, the FCC adopted a Report and Order creating an incubator program to incentivize existing broadcasters to assist new entrants to get into broadcast ownership. The FCC in its order last year relaxing TV local ownership rules and abolishing the newspaper-broadcast cross-ownership rule had agreed to adopt an incubator program (see our articles here and here). In fact, the US Court of Appeals for the Third Circuit, which is reviewing the FCC’s ownership order, stayed the processing of that appeal to await the rules on the incubator program (see our article here), as the Court has previously indicated that considerations of how changes in the ownership rules affect new entrants is part of its analysis of the justification for such changes. What rules did the FCC adopt?

The FCC will encourage an existing broadcaster who successfully incubates a new entrant into broadcasting by giving them a “presumptive waiver” of the ownership rules. To understand what this means requires looking at several questions including (1) what services does the existing broadcaster have to provide to qualify for the credit; (2) which new entrants qualify for incubation; (3) what is a successful incubation; and (4) what does the presumptive waiver provide to the broadcaster providing the incubation services. Let’s look at each of these questions.
Continue Reading FCC Adopts Incubator Program To Assist New Radio Owners – What Does it Provide?

The FCC has released the agenda for its Open Meeting to be held on Tuesday, November 27.  The agenda is full of issues of importance to broadcasters, and several items may resolve issues that may be troubling – including issues relating to low power FM stations (LPFM) and resolving a long outstanding proceeding concerning the possibility of mandatory public interest obligations for TV stations.  The Commission also has on tap initiatives to encourage the entry of minorities and other new entrants into the broadcast business – even though comments on the Commission’s proposals on this matter were received just a month ago.

First, the Commission is to release an Order on Low Power FM.  We have written about some of the issues that could be decided previously – including issues of whether or not to allow the assignment and transfer of such stations (here) and whether to give these stations preferences over translators and even improvements in full power stations (here and here).

On the TV side, the Commission seems ready to issue an order on the public interest obligations of television operators.  We wrote about the proposals – made as part of the Commission’s DTV proceedings (though to be applicable to all TV stations), here.  Proposed rules included the standardization of quarterly issues programs lists, making station’s public fies available on the Internet, and quantifying other public interest obligations.  Continue Reading FCC Meeting to Consider LPFM Reform, Public Interest Requirements for TV Stations, and Minority Ownership Proposals