Intersection of Race and Telecomm Policy: Media Power in Wrong Hands Brings Neither "Peace of Mind nor Serenity of Spirit"

On March 18, Sen Barack Obama delivered a speech called "A More Perfect Union." Many have viewed the speech as a challenge to the nation to address our "racial stalemate." The Benton Foundation is taking the opportunity to host a dialogue on the intersection of race and telecommunications policy. (See our previous interview with Andrew Schwartzman)

Below is a Q&A with David Honig of the Minority Media and Telecommunications Council. For over 30 years, Honig has devoted his life to advocating for greater diversity and minority participation in media and telecommunications.

As Congress, the Federal Communications Commission and even the courts have shaped policies with far-reaching consequences, Honig has steadfastly monitored communications issues and marshaled testimony and written countless briefs. His impact is unquestionable, even though the political climate has swung back and forth on such issues as affirmative action. Everyone who cares about minority representation in broadcasting knows that what progress has been made would be even less if not for Honig’s efforts. The Minority Media and Telecommunications Council (MMTC) is a national nonprofit organization dedicated to promoting and preserving equal opportunity and civil rights in the mass media and telecommunications industries. MMTC is generally recognized as the nation's leading advocate for minority advancement in communications. We strongly believe that the breathtaking changes in communications technology and the new global forms of media partnerships must enhance diversity in the 21st century. Media Power in Wrong Hands Brings Neither "Peace of Mind nor Serenity of Spirit"

Benton Foundation: Sen Obama said that the US's history of legalized discrimination helps explain the wealth and income gap between black and white, and the concentrated pockets of poverty that persists in so many of today’s urban and rural communities. How has the history of legalized discrimination affected U.S. telecommunications policy? What could be a more inefficient deployment of resources than having the entrepreneurial, managerial and creative wealth of a third of the country unable to find expression in the nation’s most powerful industries?

Mr. Honig: How important is diversity in the media and telecom industries? They’re are a sixth of the economy. They’re our largest export, they define our culture and they make our democracy possible. People of color are 34% of the nation’s population, yet they hold only about two percent of the asset value of our nation’s broadcasting industry -- and far less in cable and telecom. That wasn’t an accident. For decades, the FCC was an active participant in preventing people of color from working in or attaining ownership of licensed facilities that used the public’s airwaves. The FCC gave thousands of licenses to rabid segregationists for free, without once questioning these applicants’ character or intervening when — surprise, surprise -- they practiced segregation in broadcast programming and hiring. The FCC even helped segregated state university systems advance their scheme of installing powerful noncommercial TV and FM broadcast training facilities only at so-called “flagship” (whites only) schools, with no licensing of these stations at state-owned HBCUs [Historically Black Colleges and Universities]. And from the 1930s to the 1990s, the FCC gave away hundreds of new broadcast licenses using discriminatory factors like “past broadcast record” and “broadcast experience” to openly replicate minority exclusion. For decades, the FCC was an active participant in preventing people of color from working in or attaining ownership of licensed facilities that used the public’s airwaves. As Dr. King pointed out in 1963, technology and resources in the wrong hands have “brought us neither peace of mind nor serenity of spirit.” But excluding minorities from the public airwaves isn’t just morally wrong. What could be a more inefficient deployment of resources than having the entrepreneurial, managerial and creative wealth of a third of the country unable to find expression in the nation’s most powerful industries?

Benton Foundation: What have the effects of discrimination been historically?

Mr. Honig: Here’s an example. Consider advertisers’ “no-urban” and “no-Spanish” dictates -- “NUDs” and “NSDs.” These are instructions advertisers give media buyers, directing them not to buy Black and Spanish radio or television usually because the advertiser doesn’t want a critical mass of people of color in its stores. Some of the key ad categories where this happens are housing developments, jewelry stores, electronics and office supply stores, car dealerships and restaurant chains. Broadcasters that received the business that should have gone to Black and Spanish radio simply pocketed the dollars that Black and Spanish radio earned but never collected. By our estimate, based on the FCC’s research, Black and Spanish radio lose on the order of $200M annually thanks to NUDs and NSDs. The money lost over the years by minority media, just from this one discriminatory practice, would have been enough to buy Clear Channel or a top-four television network with change left over. How slow was the FCC to correct this? In December 2007, and to its credit, the FCC banned this shameful practice. But to win that ruling, it took us 23 years. Consider that it only took ten years — ten! — after Brown v. Board of Education for a 1/3 segregationist Congress to pass the 1964 Civil Rights Act.

Benton Foundation: Are we still seeing the effects of this discrimination today?

Mr. Honig: Absolutely, because the consequences of discrimination replicate themselves over generations, especially in close-knit industries where advancement comes from being accepted into networks of decision-makers and dealmakers. Discrimination deeply impacts access to capital. For example, if you’re an equity house trying to choose which company to ride to the top, and you know that advertising discrimination imposes a 5-10% handicap on minority media vis-à-vis competing media, why would you ever choose to invest with minority media? These investments are made, but only when the minority entrepreneur is twice as skillful, persistent and smart as his or her competitors. We’ve seen the consequences of discrimination even more severely in the area of broadcast employment. The FCC’s EEO [Equal Employment Opportunity] rules are almost meaningless and the Commission’s isn’t even enforcing the rules it has. Thus, most hiring is being done the way it was done before the rules were initially adopted in 1969: by word of mouth from the mouths of other employees. If these “mouths” have already attained a critical mass of heterogeneity, that’s not a problem: a diverse workplace will remain diverse as long as hiring decisions are made without discrimination. But if the workplace isn’t diverse to begin with — if it lacks the critical mass of people of color that will sustain diversity through social-network recruitment, it’s inevitable that diversity will collapse. Thus most television station news operations have remained diverse even absent EEO enforcement, while radio news operations have experienced a purge of minorities. RTNDA [Radio-Television News Directors Association] tracks this data (the FCC stopped doing so; it actually thinks that if the public knew how few minorities were employed, broadcasters might feel pressured not to hire white people). In 1996, according to RTNDA, 14.6% of radio journalists were people of color, but by 2007 that number had dropped to just 6.2%. MMTC went behind that 6.2% number and teased out Spanish language and minority owned stations, arriving at a figure of less than 0.5% minorities in English language, non-minority owned radio journalism. That’s about where radio stood in 1950. The media doesn’t do a particularly good job covering news about itself, so I’m still waiting for the first report of this purge of minorities to be published in the mainstream media.

Benton Foundation: In two actions last December, the Federal Communications Commission changed the nation's media ownership rules. The three core goals of all of the FCC's media ownership rules are competition, diversity and localism. Starting first with the changes in Newspaper/Broadcast Cross-Ownership Rule, how was diversity promoted?

Mr. Honig: If I had to pick my poison and choose one rule for relaxation, with the other rules staying in place, I would pick crossownership. Crossownership hurts minority ownership, but not nearly as much as sweeping further relaxation of the local radio ownership rules or the local television duopoly rule would have hurt. After the 1999 Commission relaxed the TV duopoly rule, we lost about half of the minority owned television stations. Fortunately, the market has had nothing good to say about media consolidation: as a business proposition, consolidation has diminishing returns to scale. Several large companies have been trying to sell “non-core” assets. Maybe, if we get the tax certificate policy back, minorities and women can buy some of them.

Benton Foundation: In December, the Commission also adopted new rules and launched a new proceeding to promote diversification of broadcast ownership. I realize this decision was just released in early March, but when are we likely to know if the Commission's efforts here are successful? How will we measure this success?

Mr. Honig: The FCC sure took its time, but better late than never. The FCC’s minority ownership package contains some very substantial steps: the bans on advertising and transactional discrimination are huge, and the relaxation of the attribution rules ought to bring the seller paper market roaring back, to the great relief of new entrants who often depend on paper to close a deal. Proposals out for comment in the further notice of proposed rulemaking is even more far-reaching: moving AM broadcasters onto what’s now TV Channels 5-6, where they’d broadcast in FM mode. Two-thirds of minority owned stations are AM’s, and minority owned AM stations tend to have inferior signals and rim-shot tower sites. Migration of AM to the Channel 5-6 spectrum would at least triple the asset value of minority owned radio. Everyone who appreciates the “PIC&N” -- that’s our beloved public interest, convenience and necessity -- should get behind the Channel 5-6 migration early and often. How will we measure the FCC’s success with its new minority ownership initiatives? We won’t measure it with the FCC’s current minority ownership database, unfortunately. Last week the GAO [Government Accountability Office] released an exhaustively-researched report that found that the FCC’s procedures for collecting data on minority ownership were deeply flawed. How complicated should it be to conduct an accurate head count? This isn’t like inter-carrier comp, the DTV transition, or the USF formula. So while we’re warmly appreciative of the Martin Commission for taking very significant steps to advance minority ownership, we’re really looking toward a new 2009 Commission to remedy the present effects of past discrimination and truly diversify these industries. With the possible exception of ending the war, I can’t think of anything more important.

Further Reading: Law and Policy at the Intersection of Media, Telecom and Civil Rights (from Minority Media and Telecommunications Council)

By Kevin Taglang.