The 2012 presidential race is tightening as both candidates attempt to sway the swing voters in key states that may decide the victory. Yet, in spite of all the discourse, neither the Democratic nor Republican party platform has addressed the critical issue of the decline of minority ownership in the federally regulated electronic mass media and telecom industries.
This year, both the Democratic and Republican party platforms recognized that Americans are able to achieve exceptional feats given a level playing field, at least in the context of international trade. But how can you apply this concept to domestic enterprise when systematic discrimination is interwoven into the fabric of our society?
The media and telecom industries, which represent approximately one-sixth of our nation’s economy, are a perfect example of how ingrained structural discrimination continues to limit our economic progress and civil rights goals. The first radio broadcasting authorization was awarded by the Secretary of Commerce in 1909. Forty years later, in 1949, the Federal Communications Commission awarded the first radio license to a minority-owned business. A similar pattern emerged in television when the first minority-owned television license was granted in 1973. As a result of this discrimination, minorities were decades late to the industry and faced even more challenges in overcoming licensing practices, which favored those with experience, until the policies changed in 1978. When minorities were able to get a foothold in the industry, they were often left with technically inferior stations that were geographically removed from their target audience.
Decades of Bipartisan Platforms for Diversity
Since the early days of broadcasting, the Commission, the courts, and the executive branch have endorsed diversity as a critical element of national communications policy. In the past, politicians have made minority ownership in media and telecom a priority by including it in their party platforms.
As early as 1980, the Democratic Platform promised to continue work to “[i]ncrease ownership of small business by minorities, especially in those areas which have been closed to minorities, such as communications and newspapers” and “continue to monitor the flow of talent into science and engineering and provide the appropriate training and opportunities to ensure an adequate number of well-trained scientists and engineers in the coming years, with particular emphasis on women and minorities[.]”
The 1984 Democratic Party Platform referenced the importance of minority ownership and participation in an evolving telecommunications system:
“This electronic marketplace is so fundamental to our future as a democracy (as well as to our economy) that social and cultural principles must be as much a part of communications policy as a commitment to efficiency, innovation, and competition. Those principles are diversity, the availability of a wide choice of information services and sources; access, the ability of all Americans, not just a privileged few, to take advantage of this growing array of information services and sources; and opportunity, a commitment to education and diverse ownership, particularly by minorities and women, that will give every American the ability to take advantage of the computer and the telecommunications revolution.”
The 1992 Republican Party Platform recognized that telecommunications could extend opportunities for citizens underserved by traditional means. It stated, “Distance learning, through technology, will help bring exciting, quality, affordable education to all students, even in rural areas and inner cities.”
The 1996 Democratic Party Platform pledged to make significant improvements in efficiency and responsibility amongst government and, in doing so, ensure that “all Americans have access to high quality public services, whether they reside in inner cities, suburbs, or rural communities, and [to forge] new partnerships with the private sector including small, minority, and women-owned businesses, and with state and local governments to enhance opportunities for all Americans from technology to transportation to travel and tourism.”
The 2000 Democratic Party Platform echoed the previous platform, advocating for universal Internet access and digital literacy training. “Democrats believe that every American – regardless of income, geography, race, or disability – should be able to reach across a computer keyboard, and reach the vast new worlds of knowledge, commerce, and communication that are available at the touch of a fingertip.”
The 2008 Democratic Platform once again pledged to boost diversity in media ownership, stating, “We will encourage diversity in the ownership of broadcast media, promote the development of new media outlets for expression of diverse viewpoints and clarify the public interest obligations of broadcasters who occupy the nation’s spectrum.”
A Dearth of Minority Participation Ignored by the 2012 Party Platforms
Where is the recognition of minority participation in media in the 2012 Party Platforms? Nowhere.
One has to wonder whether the omission of diverse ownership and participation in telecommunications was the deliberate response to an issue now resolved.
The answer is no.
In 2011, the Commission released a Notice of Proposed Rulemaking in a proceeding created to review media ownership rules. The Commission found that 2.1 percent, just 29 of the 1,394 existing full-power television stations, were minority-owned. In 2009, MMTC conducted a study on minority ownership in radio and found that only 7.24 percent of commercial radio stations were minority-owned. Even those weak numbers appear to have declined precipitously since 2009, with no FCC intervention yet on the horizon.
In addition to late entry, several other factors contribute to the dearth of minority participation in the communications industries. A 2008 Government Accountability Office study identified three primary barriers to media entry for diverse businesses: large scale ownership, lack of access to capital, and the elimination of the tax certificate. The lack of access to capital is a significant obstacle for minority-owned businesses. It’s no secret that our economy has seen better days; however, it is even more difficult for diverse businesses to overcome the access to capital barrier against the backdrop of an alarming wealth gap whereby the median wealth of White households is 20 times greater that of African American households and 18 times greater than Hispanic households.
Minority Ownership is Vital for the Future of Our Economy
Why should you and your candidate for public office care about this issue? Three reasons: (1) demographics are shifting toward a majority-minority U.S. population, (2) the exclusionary broadcast pattern is repeating in emerging industries, and (3) the FCC is facilitating a massive shift in spectrum licensing to move spectrum from broadcasters to telecommunications services in the next few years. We cannot afford to have minority-owned businesses locked out of the telecom industry.
The reality is that our nation’s demographics are changing, and changing fast. Recent census data signaled the shift when it reported that, for the first time, the majority of U.S. babies are minorities. As we continue our cultural evolution, we cannot afford to foster policies and practices that exclude what will be a majority-minority population from such a significant portion of our economy.
Innovation in telecommunications is responsible for the creation of new and exciting technologies, but in terms of opportunities for minority-owned businesses, as the song says, “It’s All Just a Little Bit of History Repeating.” In high tech, minorities face barriers similar to those of broadcasters. Minority entrepreneurs have trouble gaining access to capital in a field where venture capitalists are much more likely to invest with White-founded businesses, due to pattern matching and a pipeline of entrepreneurs devoid of color. The problem doesn’t lie solely with businesses that are created using the infrastructure; there are also disparities as to who is able to participate in the auction process to secure licenses to build the infrastructure.
Echoing the exclusionary behavior of the FCC in the early days of broadcast licensing, the 21st century FCC has made it very difficult for minority broadcasters to obtain spectrum licenses in telecom. In 2006, the Commission applied harmful Designated Entity (DE) rule modifications that nearly eradicated minority participation in spectrum auctions. The Third Circuit vacated two of the rule modifications due to insufficient opportunity for notice and comment, but the Commission’s reinstatement of the previous version of the rules failed to make up for the lost opportunities that resulted from the application of invalid rules.
The ability of DEs to participate in spectrum auctions has never been more relevant. Right now, a significant opportunity to enter the industry is brewing as the Commission begins the incentive auction process to redistribute spectrum from broadcast to telecommunications. In order to circumvent past mistakes and make progress to change structural discrimination, minority-owned businesses must have the opportunity to get their foot in the door and participate fully in these incentive auctions.
We Cannot Afford to Ignore This Problem
In the 2012 Party Platform, both political parties recognize the importance of the telecommunications sector, but skirt around diversity. The Republican Party globally affirms that discrimination is unacceptable, while denouncing “preferences, quotas, and set-asides as the best or sole methods” to help low-income individuals obtain opportunities to participate in our economy and society. The Democratic Party discussed the importance of minority-serving higher education institutions, recognized that small businesses are important to people of color, and acknowledged that poverty has a disproportionate impact in communities of color. However, neither party has pieced these issues together to show how diverse ownership and participation in an industry that comprises one-sixth of our economy could boost our standard of living and help us achieve the elusive goal of universal first class citizenship.
Both political parties ought to address this issue before November 6. For its part, the FCC needs to ensure minority ownership is addressed during its incentive auction rulemaking proceeding. If we fail to take this opportunity to include minority inclusion as priorities now, minorities will continue to fall behind in the years ahead – and so will our nation.
Jacqueline Clary is the John W. Jones Fellow at the Minority Media and Telecommunications Council. In this position, she focuses on a variety of policy issues to advance minority participation in the media and telecommunications industries. Ms. Clary earned her B.A. from John Carroll University, her J.D. from Syracuse University College of Law, and is a member of the New York State Bar.