Just six months into his four-year term as a Federal Communications Commissioner, Ajit Pai is more than ready to deal with issues that will help increase the number of minority broadcast station owners, breathe back life into AM radio, and allow more wireless data providers to deliver their services to minority communities.
In an exclusive interview, Commissioner Pai, who worked as an attorney in all three branches of government as well as the private sector, addressed the issues of access to capital for minority broadcasters, the future of AM radio, and the FCC’s upcoming wireless spectrum incentive auction.
Relaxing Foreign Investment to Increase Access to Capital for Minority Broadcasters
With minority broadcasters having owned in 2009 a mere 800 of the nation’s 11,000 full power radio stations – a number that is actually decreasing rapidly – having access to capital is essential to keeping the remaining minority owned broadcast stations from closing their doors.
One solution Pai has publicly recommended is to relax the FCC’s interpretation of Section 310 (b)(4) of the Communications Act – the foreign investment restrictions dating from 1912 and contained in the 1934 Communications Act.
“It’s time for us to revisit this limitation and make sure that we are giving minority broadcasters and all broadcasters a full range of financial options that enable them to keep their operations afloat and to thrive,” Pai said.
He also lauded Minority Media and Telecommunication Council’s comments regarding how a foreign investor’s capital infusion into local broadcast stations poses no more threat to national security and poses no more risk than a foreign investment in U.S. telecommunications infrastructure.
“Foreign companies can make a major investment in cable companies, telephone companies, and wireless companies, but they can’t make a similar investment in a broadcast company,” Pai said. “I think it is important for the FCC to try and remove any barriers that it can identify to allowing broadcasters, especially minority broadcasters, to get capital that’ll help them stay afloat.”
Minority-Owned Broadcasting and the Future of AM
When Pai spoke at the National Association of Black Owned Broadcasters’ recent conference, he said that he was taken aback about how dramatically the number of minority owned broadcasters has been declining each year. While he made it clear that he could not speak for other Commissioners, Pai thinks that increasing the number of minority-owned broadcast stations is a priority.
“My hope is that we at the FCC try and shine some spotlight on it to make sure that minorities have just as much opportunity in broadcasting ownership than anyone else. My hope is that we will take a more proactive look at it, including, I will add, in the context of our current media ownership review. I’m hopeful that in turn, my colleagues agree [that] we need to tackle this entire issue.”
While the number of minority-owned broadcast stations continues on its downward slope, nearly two-thirds of them, which are AM stations, will also disappear if no significant action takes place. Many of the minority-owned AM stations face declining revenues and listenership.
According to data cited by the FCC, “the most recent figures show that AM’s audience share has dropped to 17%. Among younger listeners, the decline is even more dramatic. Among persons aged 12-24, AM accounts for only 4 [percent] of listening, while FM accounts for 96 [percent]. Among persons aged 25-34, AM accounts for only 9 [percent] of listening…”
However, Pai, who grew up listening to AM radio and shared how it played a big role in his life, believes that the AM band still has a future. He proposed that the FCC create an AM Radio Revitalization Initiative, through which the FCC would scrutinize all of the AM radio regulations and devise methods to tweak the current rules and allow the AM band to flourish again.
As the FCC prepares to implement its upcoming wireless spectrum incentive auction, as announced during its Sept. 28 meeting, Pai suggested four guiding principles the FCC should follow to ensure that the auction is fair, efficient and diverse.
His guiding principles included making sure that (1) the FCC remains faithful to the statute Congress passed, (2) ensuring that the auction is fair to all of the stakeholders involved and takes their input into consideration, (3) keeping the rules of the auction simple and understandable for everyone involved, and (4) setting a deadline. Pai declared that “we need to make sure that we get the invisible infrastructure of spectrum out to the marketplace, so that wireless broadband providers can continue to provide new and ever more advanced purposes which all communities especially minorities can benefit.”
The Importance of Public Engagement
As an FCC Commissioner considering issues that affect all Americans and industries constituting one-sixth of the economy, Pai has instituted an open-door policy to allow members of the public to offer solutions to problems the FCC faces. He also hopes that organizations like MMTC continue to be regular players at the Commission.
“Public engagement is absolutely essential,” Pai began. “It is very easy for me to read the paper or put something on my desk. There is no substitute for actually hearing personally from people who are affected by the decisions that we make.”
Tiffany K. Bain is a 2011 public relations graduate of Florida A&M University. She currently serves as the Minority Media & Telecommunications Council’s Research Associate. She got her start in the industry in 2007 as an Emma L. Bowen Foundation intern at the nation’s leading cable provider.