U.S. Commission on Civil Rights

Minneapolis-St. Paul News Coverage of Minority Communities

Appendices

APPENDIX A

Brief Background to the Deregulation Debate and Studies Regarding the Effects on Communities of Color

Background

Deregulation is the largely bipartisan effort to clear some Federal Communications Commission (FCC) regulations of American electronic media beginning in the mid-1970s. By 1981, a further shift took place when new FCC Chairman Mark Fowler began a fundamental and ideologically-driven reappraisal of regulations long held central to national broadcasting policy. [1] Of course, there are arguments among proponents of deregulation about the extent to which rules should be abandoned, and opponents of the way the telecommunications industry has been deregulated disagree on what rule changes should be made in light of new technology. And as would be expected of any contentious issue, legal challenges have been made in regard to the deregulation (or lack thereof) of the telecommunications industry.[2] However, for the purpose of this appendix, the debate will be severely simplified into the basic opinions of the opponents and proponents of deregulation. 

Since the late 1970s, specific deregulatory actions taken by the FCC or Congress include the following: extending the length of television licenses; expanding the number of radio and television stations a single company can own; abolishing guidelines for minimal amounts of nonentertainment programming, most notably the Prime Time Access Rule; eliminating the Fairness Doctrine of 1987, which attempted to ensure that all coverage of controversial issues by a broadcast station was balanced and fair; dropping guidelines for how much advertising could be carried; leaving the responsibility of technical standards increasingly to licensees; and deregulating television s competition, in particular cable.[3] Many of these rule changes were the result of the Telecommunications Act of 1996 (Telecom Act), [4] which had the intention of letting anyone enter any communication business to let any communication business compete in any market against any other. [5]  

In addition to the explicit rule changes, the Telecom Act, Section 202(h), required the FCC to reassess and modify its broadcast ownership rules every two years. Thus, in October of 2002, the commission initiated review of four ownership rules: the national television multiple ownership rule,[6] the local television ownership rule,[7] the radio-television cross-ownership rule,[8] and the dual network rule.[9] On June 2, 2003, the FCC released its Report and Order replacing its absolute prohibition and its restrictions on common ownership of radio and television outlets in the same market with Cross Media Limits. The FCC also revised the market definition and the way it counts stations for purposes of television ownership cap from a 35 percent national audience reach to a 45 percent reach limit. Finally, the FCC retained the dual network rule.[10] On September 3, 2003, however, the United States Court of Appeals for the Third Circuit issued an order staying the effectiveness of these new media ownership rules. The court ordered that the prior ownership rules remain in effect pending resolution of these proceedings.[11]

Although most of the specific rules being reviewed were implemented later, much of the debate regarding deregulation of the telecommunications industry revolves around the Communications Act of 1934.[12] This act established basic principles regarding telecommunications in the United States. First, it instituted that the airways are public property. Second, commercial broadcasters are licensed to use the airways. Third, the main condition for use will be whether the broadcaster served the public interest, convenience, and necessity. Although the act has been updated through amendment many times, these basic principles are still central to the debate. Proponents of deregulation do not perceive television and radio licensees as public trustees of public property. As Chairperson Fowler said of television, it is just another appliance or a toaster with pictures. [13] Therefore, it is not the licensees responsibility to provide a wide variety of services to many different viewing or listening groups, which is not to imply that licensees would not attempt to do so. From this point of view, broadcasting is a business operating in a marketplace and should therefore be free of government regulation for the most part. Current FCC Chairperson Michael Powell, also a proponent of deregulation measures, rhetorically tries to find more of a middle ground: 

I believe in the market, because I think it's the best way to get dialogue between consumers and producers. But I also believe that markets fail. And government has to intervene. I also think that corporate activity can harm individuals, and government ought to do something about that. I personally believe in ideological temperament. I'm fairly moderate. But I do believe in the market, as do, I think, most of our country s leaders. And I believe that it is a valuable mechanism to consider when trying to find the best welfare for consumers.[14]

In addition, proponents of deregulation argue that the evolution of the way news can be obtained demands new rules. As Chairman Powell stated, Almost every rule that's being considered here pre-dates cable television, pre-dates direct broadcast satellite television, pre-dates the Internet . . . So, what's really at stake here is to take account of those changes, and to follow Congress mandate to review the rules thoroughly, and produce a result that works. [15] With so many new means for the public to acquire information, many argue that rules governing television stations are unnecessary.

Opponents of deregulation hold strong to the principles of the Communications Act of 1934, that the airwaves are public property and the media companies responsibility is to serve the public not consumers. Therefore, they argue that by erasing rules that require licensees to perform a public service, the licensees will purely seek profit at the expense of balanced public broadcasting.[16]

Deregulation and Civil Rights: What We Know

The opponents of deregulation argue that relaxing the rules regarding ownership creates an oligopoly of media giants who decide what information we will receive.[17] These corporations also have vested interests in what news is reported and can limit journalistic freedom. The clearest case study for this claim can be seen by network coverage of deregulation itself. FCC Commissioner Jonathan Adelstein has discussed how the media owners are largely in favor of deregulation efforts, and that position is reflected by major television networks general lack of coverage of the issue:

This is one of the most important things the FCC has ever undertaken. And yet, we see virtually nothing on any of the major media outlets about it, particularly on television, which is somewhat disturbing. It raises a real question as to whether or not there is independence between ownership and the journalists. There's no better case study that I can think of than this issue in determining whether or not the journalists are able to cover the stories they want to. Clearly, the owners may have a concern about this going out. And that would be evidenced by the fact that we've seen virtually no national news coverage on this issue.[18]

Besides for the major television outlets largely ignoring the issue, the public can see a trend in the number of owners of television and radio stations since deregulation began in the 1970s. The FCC's empirical study titled A Comparison of Media Outlets and Owners for Ten Selected Markets (1960, 1980, 2000) concluded, The number of broadcast outlets increased dramatically from 1960 to 2000. The number of broadcast owners also increased significantly from 1960 to 1980 but, from 1980 to 2000, the count of owners was generally, relatively stagnant. This is mainly due to tremendous consolidation, especially in the radio industry, since passage of the 1996 Telecom Act. [19] The oligopoly that opponents of deregulation claimed would occur seems to be happening based on the statistics. For example, in 1975 there were some 1,500 owners of full-power TV stations and daily newspapers. By 2000, that number had dropped to about 625.[20] In 1996, Westinghouse, the largest radio owner at the time, owned 85 stations.[21] After the Telecommunications Act of 1996, there are now 1,700 fewer (34 percent decline in six years) owners of commercial radio, and one conglomerate, Clear Channel, owns more than 1,200 stations and controls 11 percent of the market. The second largest owner controls about 250 stations.[22] These numbers imply that deregulation has possibly decreased competition, at least in commercial radio.

An examination of minority-owned media is also revealing. According to the National Telecommunications and Information Administration (NTIA) study of 2000, the results of deregulation on minority ownership are mixed. Positive findings were listed in the executive summary of the report:

• In 2000, 187 minority broadcasters owned 449 full-power commercial radio and television stations, or 3.8 percent of the 11,865 such stations licensed in the United States. These figures represent an increase of 0.9 percentage points of the number reported in 1998. However, about half of this increase was the result of an improved methodology to identify minority owners.

• Minority owners have made some gains in the commercial radio industry, and some previous owners have been newly identified. In 2000, 175 minority broadcasters owned 426 stations, or about 4.0 percent of the nation's 10,577 commercial AM and FM radio stations. This compares with their ownership of 305 radio stations in 1998, which represented 2.9 percent of that year's industry total. Again, half of the increase came from identifying already existing owners.

• All minority groups have increased their radio ownership since 1998. In terms of absolute growth, the number of Hispanic American-owned stations increased the most with the addition of 57 stations, followed by an increase of 43 African American-owned, 18 Asian American-owned, and three Native American-owned. Excluding the effect of improved search methodology, however, the number of African American-owned stations increased by 15 percent, and Hispanic American-owned stations 19 percent, Asian American-owned stations by 300 percent, and Native American-owned by 25 percent. The considerable increase in Asian American-owned stations was largely the result of purchases by one large owner.

• African Americans ownership of 211 radio stations in 2000 continues to lead that of other minorities and represents almost half of all minority-owned radio stations. Hispanic Americans owned 187 stations or 44 percent of all minority radio stations.[23]  

The report also found some disturbing trends. These findings were included in the executive summary as the following:

• Minority owners share of the commercial television market decreased in 2000. The 23 full-power commercial television stations owned by minorities in 2000 represented 1.9 percent of the country's 1,288 such licensed stations. This is the lowest level since the Minority Telecommunications Development Program began issuing reports in 1990. That year, minorities owned 29 full-power television stations, compared with as many as 38 during 1995 and 1996. Between 1998 and 2000, there was a loss of five Hispanic American-owned and four African American-owned stations, and a new identification of two Asian American-owned stations, for a net loss of seven stations.

• While the broadcast industry's strong performance in recent years has benefited some minority owners and may help explain the increase in the number, consolidation still threatens the survival of most minority owners, who as mostly single-station operators find it difficult to compete against large group owners.

• At a time when single-station owners are struggling to remain competitive, 61 percent of minority owners operate stand-alone stations. In 2000, 131 or 31 percent of minority-owned stations were part of a duopoly (two or more stations of the same type in the same market), compared with 36 percent of nonminority competitors. Seventeen minority-owned stations, or 4 percent, participated in a local marketing agreement, while 8 percent of nonminority competitors did so.

• As reported in past years, minority owners continue to own more AM than FM stations. In 2000, minorities owned 248 AM stations and 178 FM facilities. Declining AM listenership over the past 15 years and the technical limitations of these stations make them generally less profitable than FM stations.[24]

The quantitative research may have produced some mixed results in regard to the overall value of deregulation on minority ownership of media, but the qualitative research, in the form of personal opinions of minority owners, yielded a much more uniform response.

Overwhelmingly, minority broadcasters were convinced that the Telecommunications Act of 1996 hurt opportunities for minority broadcast ownership. Seventy-three broadcasters, about 63 percent of survey respondents stated that view, while only six or five percent of responding broadcasters expressed the opposite view. Almost 14 percent of minority owners who replied to the survey, or 16 respondents, were undecided about the Act's impact on minority ownership, while about an equal number (17) expressed no opinion on the matter. Narrative responses from owners reflected their concern about the adverse effects of consolidation on their businesses. One African American owner commented that [c]ritical mass by major Wall Street financed ownerships have [created] major obstacles for [the] minority owner. [It] is very difficult to compete against big ownership with 7 8 stations in the same market. Another owner wrote [t]he 1996 Act is a disaster for small and minority broadcasters and operates against the principle of diversity of media ownership. An Hispanic American broadcaster in Florida decried the deregulation prompted by the 1996 Act. He said [u]nder present station pricing, expansion is impossible. [The] Telecommunications Act of 1996 eliminated the participation and expansion of small entrepreneurs. An exiting Native American woman radio owner bluntly summarized a common sentiment among some broadcasters: If the FCC and the federal government would have let the previous ownership cap prevail, I cannot help but feel it would have been beneficial to minority broadcasters. We were proving that we could be a formidable broadcaster serving the needs of our license communities and making money. [25]

Another study that investigates the effects of deregulation of the media industry was done by Project for Excellence in Journalism. Its report examined what the possible effects on news coverage will be if the FCC continues to change its rules regarding media ownership. Like the NTIA study, the Project for Excellence in Journalism report, titled Does Ownership Matter in Local Television News: A Five-Year Study of Ownership and Quality, produced some mixed results. It concluded that in contrast to the large conglomerates that were emerging since the Telecommunications Act of 1996, smaller station groups tended to produce higher quality newscasts; network-affiliated stations tended to produce higher quality newscasts than network-owned and -operated stations; stations in which the parent company also owns a newspaper in the same market, or cross-ownership stations, tended to produce higher quality newscasts; and local ownership, although offering some protection against newscasts being very poor, did not encourage superior quality.[26] Despite concluding that ownership type made little difference in the overall topics covered in news programs, the report concluded the overall data strongly suggest regulatory changes that encourage heavy concentration of ownership in local television by a few large corporations will erode the quality of news Americans receive. [27]

APPENDIX B

Fact-Finding Meeting Agenda, Minnesota Advisory Committee

AGENDA

Minnesota Advisory Committee to the United States Commission on Civil Rights

Fact-Finding Meeting
Minneapolis-St. Paul News Media Coverage of Minority Communities

Wednesday, April 24 Thursday, April 25, 2002

Embassy Suites Hotel
425 South 7th Street
5th Floor Universal Room
Minneapolis, MN 55415

Wednesday, April 24, 2002

INTRODUCTION     9:00 a.m.

• Alan W. Weinblatt, Chairperson, Minnesota Advisory Committee

PANEL 1    9:30 a.m.

• R.T. Rybak, Mayor, City of Minneapolis

• Howard Orenstein, Senior Policy Adviser to Mayor's Office, City of St. Paul

PANEL 2    10:00 a.m.

• Fouzi Slisli, Media Director, American-Arab Anti-Discrimination Committee (ADC)

• Soraya Amra, President, Minnesota Chapter of ADC

• Francis Fairbanks, Executive Director, Minneapolis American-Indian Center

• Clarence Hightower, President and CEO, Minneapolis Urban League

PANEL 3    11:00 a.m.

• Vivian Jenkins Nelsen, President and CEO, Inter-Race

• Gary Gilson, Executive Director, Minnesota News Council

• Len Witt, Media Consultant

LUNCH    12:00 p.m.

PANEL 4    1:00 p.m.

• Lynda McDonnell, Executive Director, Urban Journalism Workshop

PANEL 5    2:00 p.m.

• Duschesne Drew, Star-Tribune Reporter

• Lisa Donovan, Pioneer Press Reporter

• Brandt Williams, Minnesota Public Radio Reporter

PANEL 6    3:00 p.m.

• Scott Libin, News Director, KSTP-TV

• Gary Hill, Director of Investigations and Special Reports, KSTP-TV

• Dennis Douda, Anchor/Reporter, WCCO-TV

PANEL 7    4:15 p.m

• Mark Anthony Rolo, Executive Director, Native American Journalists Association

• Murali Balaji, President, Asian American Journalists Association

• Maria Douglas Reeve, President, Twin Cities Black Journalists Association

OPEN SESSION    5:15 p.m.

• Mary C. Vidas, Director, Broadcast Media Education, North Community High School

ADJOURNMENT    6:00 p.m.

Thursday, April 25, 2002

PANEL 8    9:00 a.m.

• Janeen Rosas, Commissioner, Minnesota Department of Human Rights

• Tyrone Terrill, Director, St. Paul Department of Human Rights

PANEL 9    9:30 a.m.

• Al McFarlane, President, Insight News

• Lorena Duarte, Staff Reporter, La Prensa

• Kwame McDonald, Minnesota Spokesman-Recorder

• Nghi Huynh, Owner and Publisher, Asian-American Press

PANEL 10    10:30 a.m.

• Bill Buzenberg, Vice President of News, Minnesota Public Radio

• Brendan Henehan, Executive Producer for Content, Twin Cities Public Television

PANEL 11    11:30 a.m.

• Dave Peters, Senior Editor/City Edition, St. Paul Pioneer Press

• Scott Gillespie, Assistant Managing Editor for Local News, Minneapolis Star Tribune

OPEN SESSION    12:30 p.m.

• Steve Murphy, Managing Editor, WCCO Radio

ADJOURNMENT    1:30 p.m.