On Day 1 of the 2012 Broadband and Social Justice Summit, David Honig delivered the following remarks:
Welcome to the third annual MMTC Broadband and Social Justice Summit. I would like to open the Summit by saying that this is an extraordinary time to be in media and telecom policy. Our industries are in a constant state of change.
And with great change comes great responsibility. For our transition to the Digital Age to yield opportunity, we must act with purpose and vision to achieve a society that is more inclusive and meaningful than the one we have today: we need more participation, more education, more skills, more jobs, and more civic engagement.
But first we must define our goals. Social Justice means different things to different people. We define it by asking, “What will America look like in 25 years? Will our children feel that we have bequeathed them the ability to enjoy the opportunities promised in our Constitution? Or will they still be fighting the same struggles that we and those before us have been fighting for more than 400 years?”
Social Justice means that talent, initiative, creativity, management skill and entrepreneurial ability are equally distributed throughout society. As a result, we would expect to see our most important and influential industries, media, telecom and broadband, which comprise one‐sixth of our economy, looking just like America.
But we don’t. And why is that? It’s not because of any innate differences in ability or initiative. Instead, it’s the result of market barriers, some of which have their antecedents generations back, some of which are of more recent origin. And it’s our job at MMTC to identify these barriers, call them out, and try our best to fix them.
Now, how will we know when we have achieved Social Justice? The answer lies in our entrepreneurs, those enterprising individuals who put their time, money, and soul into building a product, meeting payroll, and helping others thrive. Twenty-five years from now, will our entrepreneurs have had every chance for success? Or are there still barriers to entry, to growth, and to opportunity?
In 25 years, if entrepreneurs will no longer have to navigate the obstacles in financing, regulations, and statutes, they can say that they have had a fair chance to make it on their own. Then our answer will be yes – we have achieved a climate of Social Justice. So, now that we have defined our goals, how do we get there?
First, let’s take a look at a report card. As MMTC’s 25th birthday fades in our rearview mirror, our organization grows, and our industries continue to change, I have had much opportunity to reflect on our accomplishments. When you turn on the television with your kids and can show them people of color and women anchoring and reporting the news, we had a lot to do with that. When you see dozens of new minority broadcast owners getting a foothold in the industry, we helped with that. Poor people got vouchers to convert to DTV – that was our proposal, and it worked out pretty well. Minority businesses got included in the NTIA broadband stimulus legislation in 2008. And in 2011, after 27 years, we got broadcast advertising nondiscrimination enforcement across the finish line. We’re proud of all that and more.
Yet we are still nowhere close to closing the wealth gap, alleviating the impending spectrum crunch, or preserving entrepreneurship and career opportunities in traditional and new media.
Consider first broadband. More than one-third of our population has not yet adopted this life-changing technology. Those least likely to have adopted broadband include low income and less educated Americans, those with disabilities, rural households and minorities. In 1999, NTIA Director Larry Irving gave these disparities a name: the “digital divide.”
Let’s clearly understand what the digital divide is. It is the greatest threat to first class citizenship since segregation. It represents the very real possibility that the opportunities of broadband won’t be available to everybody. We could very quickly wake up and discover that this enormously powerful tool – high speed, affordable, accessible broadband – that we thought was going to be the great equalizer, is instead going to be overlaid on a society already riddled with systematic and structural inequalities.
That’s a formula for disaster in terms of our competitiveness, our economic growth, and, more than that, our moral fiber as a nation. What do we stand for if even in the Digital Age, even after the passage of the great civil rights laws of the 1960s and the enforcement of those laws, even after the election of Barack Obama as President of the United States, we find these disparities still persisting? Why are we losing this ground?
One area where we are seeing promise is in the mobile realm. People of color are taking advantage of wireless broadband to close the digital divide. In wireless service and smartphone use, African Americans and Hispanic Americans lead the nation in adoption. But even this accomplishment is threatened by an impending spectrum crunch where demand for wireless spectrum will soon eclipse the supply. To achieve Social Justice, we have to reverse this trend.
Let’s talk about spectrum exhaustion, which engineers tell us is likely to come about in very large markets such as New York, Chicago, Los Angeles and DC by the end of 2013. So imagine what you will be doing two years from today – on January 26, 2014. We certainly hope that you will be here, attending the Fifth Annual MMTC Broadband and Social Justice Summit.
But as you leave your house to come here, will you take your cell phone or laptop with you? Will your expectations for these devices have changed? If we run out of spectrum relative to demand, your expectations for a fast and reliable connection will no longer be met in congested markets. What will this mean for your business? For your family? For you?
As we reach spectrum exhaust, prices unavoidably will increase to mediate demand. Who is this going to hit hardest? Thanks to the recession, communities of color face depression-level unemployment and dramatically reduced household incomes. With the housing crisis, their savings evaporated. The money isn’t there in minority communities to pay scarcity rents for access to spectrum.
To avert this spectrum disaster, we need incentive auctions to begin almost immediately, thus enabling underutilized DTV spectrum to be repurposed for wireless. Congress can expedite the process through a comprehensive statute that provides broadcasters with fair compensation as they decide to relinquish spectrum.
And to promote diversity, the statute should include strong Designated Entity (DE) rules to make up for the unreasonable 2006 rules that demolished minority participation. Under those rules, the dollar value of licenses won by designated entities in Auction 73 dropped to 2.6% – and the value of licenses won by minorities dropped almost to zero. Since 1993, the Designated Entity program has shepherded hundreds of new entrants into the wireless industry, advancing competition, ownership diversity, consumer choice and lower priced wireless services. Without a substantial DE Program, we would not today have MetroPCS, Leap Wireless and even T-Mobile – all of which have their roots in Designated Entities.
Another primary reason cited for non-adoption is lack of interest or need. This is unacceptable. In this room, as we use our mobile devices to check into our work and the outside world, we understand that broadband service is essential for success in our lives.
So how do we show non-adopters the value of something we all recognize is indispensable? By understanding what drives people to go online: access to jobs, education, government services, and media and social networking websites.
To its credit, the FCC has helped launch Connect to Compete, a partnership between corporations and nonprofits to increase broadband adoption, digital literacy, and access to equipment and training tools. But these efforts alone are far from enough to rapidly bring 100 million Americans online.
Many of these 100 million Americans aren’t online because they don’t perceive the online world to contain much that’s relevant to their lives. But we have a powerful tool at our disposal to overcome this lack of perceived relevance: visual storytelling, which has motivated decades of citizens to action. For example, through comic books and video games, the federal government has recruited for the military, and NASA has encouraged STEM education.
Public purpose media can do the same for broadband adoption. By providing relevant content and a toolbox of information and advice, One Economy’s Public Internet Channel and Web series like Diary of a Single Mom and Los Americans engage viewers and build their digital literacy skills at the same time.
Another key factor holding millions back from adopting broadband is the simple fact that a computer and even many smartphones can’t be bought out of income. They have to be bought out of savings – out of wealth. And the racial wealth gap has grown to epic proportions. By 2009, the gap separating African American households from white households had grown to 20:1, and the gap separating Hispanic from white households had grown to 18:1, according to the Pew Research Center.
How do we reverse this trend? One part of the solution is intellectual property protection. For 400 years, the main narrative of culture in America has been how people of color had their stories, songs, designs, and cultural artifacts stolen. In the Digital Age, stopping intellectual property theft requires legislation, since many people are not familiar with the concept of paying for content instead of enjoying it because someone stole it.
Two bills pending in Congress could make a big difference in protecting intellectual property from infringement. These bills would do something invaluable for content creators in the Digital Age: chop the head off of the dangerous snake of websites whose only significant purpose is to steal.
Contrary to what some are maintaining, these bills are not anti-tech industry. They are not anti-First Amendment, because there’s no First Amendment right to steal someone else’s property. They would not “kill the Internet as we know it.” Rather, they would ensure that our laws protect the very lifeblood of the digital market place – our digital entrepreneurs and content creators. The legislation would stop criminals – mostly offshore – from stealing Americans’ content online, and would reduce the burden on content creators to protect their works and their livelihoods.
The legislation isn’t perfect, and it should be improved for the benefit of consumers. But given the stakes, we’d be negligent not to take a stand against digital piracy.
Protecting intellectual property is not enough on its own to overcome the astronomical wealth gap. No discussion of broadband policy is complete without brainstorming solutions to ensure that new entrants, particularly minority owned businesses (MBEs), have the opportunity to fully participate in the broadband economy.
One-third of our population – about 34% – are people of color. To put that in context, this means that people of color possess a third of the nation’s intellectual capital, a third of its entrepreneurial initiative, and a third of its inherent managerial capability.
Yet especially in the communications industries, most of these human resources are left to waste. This is uneconomic and inefficient. Companies that successfully implement diversity will benefit from a broad array of talents and viewpoints that can help them serve their customers as our nation rapidly becomes majority-minority.
Minority owned businesses use these human resources every day, and they understand the needs of minority communities and are willing to invest in their future. Yet many minority businesses are in crisis, such as minority broadcasters and publishers. As the Small Business Administration’s 2010 publication, The State of Small Business, notes, “[m]inority-owned establishments were more likely to close than businesses owned by their nonminority… counterparts. At the same time, the rates of job creation due to the expansion of minority-owned establishments were consistently higher than those businesses owned by Caucasians.”
Further, the spending patterns, geographic footprints, and communications needs of people of color are the key to success in evolving telecommunications markets, particularly in wireless, where minorities over-index in adoption. In 2010, the Joint Center for Political and Economic Studies published a study that oversampled African Americans and Hispanic Americans to learn more about broadband adoption trends. The study found that African Americans and Hispanic Americans are more likely to go online to conduct a job search, look for religious and government benefit information, apply for government benefits, research entrepreneurial ideas to begin an online business, and transfer money.
MBEs enhance society as a whole. By providing affordable service and equipment, as well as adoption programs, public purpose media, and digital literacy training, MBEs promote first-class digital citizenship and generate wealth that stays in the minority community.
Many companies understand the importance of working with MBEs when it comes to modest subcontracting opportunities. But this is a limited view. MBEs should not be synonymous with small business. Minority entrepreneurs should have the opportunity to participate fully in the digital economy, as small entrepreneurs, as consultants, as partners with the telecom companies, and as large business owners.
Let’s also talk about “traditional media.” Despite the FCC’s recognition that diverse participation is critical to broadcasting, minority broadcast ownership levels are abysmal and shrinking fast. Between 2007 and 2009, minority full power commercial radio ownership dropped by 9%, and minority full power commercial television ownership actually dropped by one-third.
So if the Commission recognizes that diversity is an important tenet in communications policy, why is minority broadcast ownership being allowed to disappear? Is broadcasting no longer relevant?
The truth is that Americans continue to rely, overwhelmingly, on radio and television for news, entertainment, and emergency information. The President’s State of the Union Address had over 25 million viewers, network news still draws 22 million nightly viewers, and 93% of Americans tuned in to AM or FM radio each week in 2010. Never is broadcasting more important than in times of emergency, when concerned Americans turn to television and radio over online news and other sources. Thus broadcasting couldn’t be more relevant.
Further, in a multicultural and multilingual society, minority media ownership is the key to serving all Americans. Minority and non-minority audiences differ widely in their radio programming preferences. A 2011 FCC study found that while most minority-owned stations broadcast minority-oriented programming, “most minority-targeted stations are not minority owned…[however] the presence of minority-owned stations in a market appears to raise the amount of minority-targeted programming.”
One success story that we can point to is that in 2007, the FCC voted 5‐0 to create the Advertising Nondiscrimination Rule banning “no urban dictates” and “no Spanish dictates” ‐ that is, instructions from advertisers to their agencies saying “don’t advertise on Black and Spanish radio.” Of course the reason for these instructions is that some advertisers don’t want what they consider to be too many African Americans and Latinos in their stores.
That’s against the law now. It took NABOB and MMTC 24 years to get it onto the books and three more years to get it enforced. The first federal civil rights rule of any kind ever adopted with no opposition! And right now, potentially the most far-reaching civil rights rule the FCC has on its books – a rule whose strict enforcement would deliver minority broadcasters about $200 million in revenue that they earn each year, but never collect.
Did you know that the FCC has a cable procurement rule? Since 1993, cable companies have been required to reach out to minority suppliers for procurement. Have you ever heard of a case being brought under that rule? Don’t feel bad if you haven’t, because the FCC hasn’t brought any.
We often get asked about the minority ownership initiatives like the Tax Certificate Policy, the Distress Sale Policy, and the Telecom Development Fund. Everything’s gone, including the Fund, which has been zeroed out in the federal budget. And several of the initiatives adopted in the 2007 Diversity Order are now gone thanks to the FCC’s failure to adopt a meaningful definition of eligible entities, despite the Third Circuit Court of Appeals’ expectation for it to do so.
But the greatest danger to Social Justice is the negligence of those who profess to care. The negligence of people who ought to know better.
As we discuss the state of our industries, I’m reminded of a letter Dr. Martin Luther King Jr. wrote from a Birmingham jail on April 16, 1963. He said:
“I have almost reached the regrettable conclusion that the Negro’s great stumbling block in his stride toward freedom is not the White Citizens Counselor or the Ku Klux Klanner, but the white moderate who prefers the negative peace, which is the absence of tension, to a positive peace, which is the presence of justice…who paternalistically believes he can set the timetable for another man’s freedom…who lives by a mythical concept of time and who constantly advises the Negro to wait for a more convenient season. Shallow understanding from people of good will is more frustrating than absolute misunderstanding from people of ill will. Lukewarm acceptance is much more bewildering than outright rejection.”
Our industries are experiencing the symptoms of lukewarm acceptance. How does this work in practice?
Here’s how: as a policy maker or industry leader, you show up for work each morning with several piles of work facing your day. One pile for each issue.
So what do you do? You dig into the pile that’s filled with your urgent tasks that were due yesterday. If you are lucky, you will get through most of that pile before it’s time to go home. The next morning you walk into the office and repeat the process. This continues every day for a month, every month for a year, every year for a career.
Yet, in all this time, in trying to perform triage on your tasks, you never once dug into the pile on civil rights. It’s not that you don’t believe in civil rights, it’s just that civil rights is not your immediate priority.
The people running the FCC now are very bright. They’re sincere. They’re idealistic. They’re not racists. They’re well meaning. But they often wear blinders. What their blinders cause them to miss is the law of unintended consequences.
The media ownership rules provide the perfect backdrop for a demonstration of the law of unintended consequences. Unfortunately, many broadcasters have failed to recognize that consolidation has deeply diminished minority broadcast ownership. Because of the TV duopoly rule, half of the full power commercial TV stations owned by minorities in 1999 are no longer minority owned today.
Many solutions to the minority ownership crisis are on the table, and one that’s especially promising is the “Incubator Proposal.” Under this proposal, a broadcaster that finances or incubates a disadvantaged business – bringing a new voice in the marketplace – would be permitted to obtain a waiver of the ownership limits for one additional station. This race-neutral, win-win proposal has been pending before the FCC, without opposition, in six dockets for 22 years, so hopefully this year will be the charm.
Let me close by looking back at history so we all understand what is at stake. Our society is rapidly transitioning from the Industrial Age to the Digital Age. The last time we went through this type of major transformation was in the 1930s to 1950s, when we went from an agricultural to an industrial society.
During that last transition, people of color were not protected, nor were they prepared. Rates of poverty, income disparities, incarceration rates, school drop out rates, family instability – those social indicators doubled for African Americans and Latinos during a period when they should have had the greatest opportunity to make up the ground they had lost in the Agricultural Age.
What went wrong? The rules and policies were written in a way that – deliberately or not –tended to work to the disadvantage of people of color. For example, for Social Security, the age of eligibility was set at 65 at a time when African American life expectancy was 52. And those excluded from Social Security benefits were people who worked on farms – agricultural workers – and maids and janitors. These were jobs that two-thirds of African Americans worked in. They couldn’t get Social Security. They paid in, but they couldn’t get money out. It happened because people of goodwill weren’t paying attention.
And now we have a very real risk that before mid-century, when the nation will be majority-minority, we’ll wake up and see – too late – the opportunities we wasted and the second class citizens we created as we transitioned from an industrial to a digital society.
What can we do for Social Justice in our industries right now? MMTC is doing two things:
First, we’re building MMTC as an institution that will have the resources, the people, and the skills to fight the long fight. From our conferences, our advocacy, and our weblog we are building a community for Social Justice in the Digital Age.
Second, we are focusing attention on where our national priorities should be. For broadband, that means universal access, adoption, and informed use. And in every communications industry, it means vastly increased minority ownership and career participation.
In order to succeed, we need you to raise your voice with ours. Our media, telecom and broadband industries are the most influential in the nation. They comprise one-sixth of our economy. They are the greatest sources of job growth. They will make or break our future. The policies we put in place today will either allow us to realize the opportunities promised by evolving technology or lock in permanent second class citizenship.
At today’s Summit, all of us are taking a tremendous first step. With so many creative, enterprising minds in the room I am certain we will generate great dialogue about these issues and deliver the spirit of Social Justice to the world of media, telecom and broadband.
As we participate in today’s discussions, please keep in mind the end goal for our industries: first class digital citizenship for all Americans through broadband access, adoption, and informed use. We must enable content creators to build wealth through intellectual property protection, create opportunities for more efficient use of spectrum, and encourage minority ownership and full participation in the robust legacy media industries and in new media, telecom, and information industries.
But not only will we expect more. We will take action to ensure that our high expectations are met. As we leave this Summit, each of us should pledge, this year, to mentor at least one new person, one new voice who seeks to enter and succeed in our industries.
And we should all commit to planting the seeds of change by spreading the ideas generated here with our respective organizations and communities at large. Because, as Dr. King would attest, the “Beloved Community” we aspire to create will “require a qualitative change in our souls as well as a quantitative change in our lives.”
Thanks so much for being here.