Employment

  Federal concern about employment diversity was initiated in the 1968 Report of the National Advisory Commission on Civil Disorders. The FCC, based on the public interest standard, responded with a statement about equal employment opportunity (47 CFR 73.2080, section b). The result was an examination of license renewals to determine whether the racial composition of a station's staff was similar to the demographic makeup of the community in which the station was licensed (zone of reasonableness). Short-term renewals, fines, and the threat of possible revocations could result from noncompliance. The FCC responded with a model Equal Employment Opportunity (EEO) program in 1975 to eliminate race and gender discrimination. The Supreme Court affirmed the legality of such oversight by independent regulatory agencies in NAACP v Federal Power Commission (1976). The FCC was committed to programming fairness and accurate representation of minority group tastes and viewpoints (FCC, 1978).

     Congress, in the Cable Television Consumer Protection and Competition Act of 1992, required the FCC to monitor employment statistics for women and minorities in the cable and broadcast industries. The FCC's first report found that from 1986 to 1993 the number of women in the national workforce increased by 1.1 percent, in the broadcast industry 2.8 percent, and 3.6 percent in upper-level positions. The number of minorities increased 2.1 percent in the national work­ force, 2.2 percent in the broadcast industry, and 2.4 percent in upper-level positions (FCC, 1994).

     The FCC's EEO policies were overturned in Lutheran Church v FCC (1998). Essentially, the court found that increasing staff diversity did not necessarily lead to diversity of viewpoints in the marketplace because only a small number of station employees made programming decisions. The policy was also overbroad, much as the Supreme Court found in Adarand v Pena ( 199 5 ). The court's response to the FCC's request for a rehearing indicated that its decision did not preclude any policies that encouraged "broad outreach" to a diverse applicant pool. The FCC has responded with a Notice of Proposed Rulemaking (NPRM) suggesting that broadcasters, cable operators, and other multi-channel video programming distributors could send job announcements to recruitment organizations or to participate in job fairs, internships, etc. They could also devise their own recruitment process. Annual hiring reports would still be filed with the FCC. These rules were adopted two years later (FCC, 2000).

     A portion of these rules were overturned in DC/MD/DE Broadcasters Association v FCC ( 2001). The commission responded with another NPRM suggesting that all media outlets " widely disseminate information about job openings to all segments of the community to ensure that all qualified applicants have sufficient opportunity to compete for jobs in the broadcast industry" (FCC, 2001). These rules were adopted in November 2002. What was once a requirement that media owners represent the diversity of their audiences with equal numbers of minorities on their staffs is now a program that requires them to widely distribute job opening information, attend job fairs, and offer scholarships. Statements by the commissioners decried their inability to be more forceful in this area, but stated that limitations by the courts have greatly diminished the force of regulation. Industry spokespersons were hesitant to support the new rules, saying that EEO has been over-regulated in the past (Greenberg, 2002).

Program Content

     The public interest resulted in two rules requiring diversity in program content: ascertainment and the fairness doctrine. Ascertainment required stations to determine issues of public importance by surveying listeners and community leaders. The fairness doctrine required that these issues be addressed fairly. These rules, plus a decision by the Supreme Court that gave audiences the right to testify before the FCC, United Church of Christ v FCC (1966), resulted in increased minority participation in the 1970s until the FCC began deregulating radio in 1981 (FCC, 1981). Honig and Williams argued that deregulation was the result of a conservative FCC wishing to reduce the workload for radio stations coupled with the loss of influential groups pressuring the FCC about diversity.

     Deregulation was necessary because the number of radio stations had increased from 5 83 in 1941 to 9,000 by the late 1980s, forcing stations to develop specialized formats to attract audiences; radio could no longer provide general services to all of its audiences. The result was the elimination of policy guidelines concerning non-entertainment programming, the ascertainment process, commercial time guidelines, and rigidly formatted program logs (FCC, 1981). The fairness doctrine was abolished in 1987. The concern for radio format changes ended in 1976 in response to the court decision in cases such as Citizens Committee to Save WEFM v FCC (FCC, 1976). Although the FCC was concerned with empowering broadcasters to select entertainment formats that offered the greatest commercial viability in their markets, the results of these policy decisions might have had an impact on programming oriented toward minority audiences.

     The end of program content regulation for purposes of increasing diversity and the move away from numerical goals for employment after 1976 spelled the end of employment and program affirmative action policies. The FCC argued that none of these policies actually increased the diversity of information and turned to station ownership diversity as a solution.

Station Ownership

     Diversity of station ownership was a goal of the FCC that assumed that who owned radio outlets would influence, if not determine, program diversity. The assumption was that increasing minority (women and ethnic minorities) owners would increase programming for such underserved audiences and thus serve the public interest. Further encouraging ownership diversity was a two-day meeting resulting from pressure from the National Black Media Coalition and the National Association of Black-Owned Broadcasters in 1977. The resulting FCC policy statement found that despite the fact that minorities comprised approximately 20 percent of the population, they controlled less than 1 percent of the over 8,500 radio stations. The FCC proposed two solutions to the lack of ownership diversity. First, tax certificates were offered to broadcasters who sold their stations to ownership teams that had a "significant minority interest." Tax certificates allowed sellers to defer capital gains taxes. Second, "distress sales" were authorized for licensees who were scheduled for revocation hearings before the FCC. The rationale was that broadcasters who would likely lose their licenses in such hearings could sell their properties at a reduced cost to minority ownership teams, producing at least some profit from the sale of the station. The market would benefit by increasing station ownership diversity. The government would also save money because costly hearings would be avoided (FCC, 1978). The result of these two solutions was the sale of 82 radio stations to minority owners between 1978 and 1982. Despite this increase, still only 2 percent of broadcast stations were minority owned (Honig, 1984). Former FCC Chair Kennard decried the lack of stations owned by minorities because only 2.5 percent of all broadcast stations had minority owners in 1997 (McConnell, 1998).

     The historical basis for ownership diversity can be found in the Policy Statement on Comparative Broadcast Hearings (FCC, 1965). Two criteria stipulated by the FCC as integral to deciding between competing applicants for station licenses were diversification of ownership and integration of ownership/management, defined as station owners living and being active in the communities for which the license was granted. Application of these factors to diversity of station ownership was affirmed in Citizens Communications Center v FCC (1974). Direct application to minority owners of broadcast stations was made in TV 9 Inc. v FCC (1973).

     The FCC was in the process of re-examining its ownership diversity procedures in the late 1980s. As more Republican members of Congress took office, along with conservative Democrats appointed during the Reagan administration, the FCC began to question its proper role in this area. Nevertheless, Congress made clear in budget resolutions that the FCC was not to make any changes.

     The Supreme Court affirmed both the enhancement credits (tax certificates) and distress sales as methods for increasing minority ownership. The court's decision was twofold. First, increasing broadcast diversity was an important government goal. Second, FCC policies of diversifying ownership were determined to be reasonable means of meeting these goals. A substantial amount of data supporting this conclusion was appended to the decision (Metro v FCC).

     Similar reasoning was used to support incentives for women to own broadcast stations, but data analyzed by the Court of Appeals failed to meet the second part of the Supreme Court's decision in Metro: no link could be established between increasing female ownership of broadcast stations and the consequent increase in programming for women. Thus, the ownership preference was held to be unconstitutional (Lam­precht v FCC).

     Americans for Radio Diversity reported that minority ownership was up to 3.1 percent before the enactment of the Telecommunications Act of 1996. The removal of many station ownership caps has led to massive radio consolidations, however, and minority ownership has declined to 2.8 percent (2000). The decline was due in part to sharply higher station prices, which was brought about by industry consolidation.

Recent Developments

     The FCC, the broadcast industry, and Congress have recently been active in exploring ways to increase diversity of radio station ownership. Then FCC Chair Reed Hundt announced a plan resulting from the standards set by the Supreme Court in Adarand v Pena to give preferences to women and minorities in its auction of personal communications services, originally reserved for small businesses (Jessel, 1995). More recently, FCC commissioners Kennard and Powell challenged the National Association of Broadcasters (NAB) to develop solutions. The result was the Prism Fund, funded by mega­ media owners such as CBS and Disney/ABC promising $1 billion to assist minorities and women with the purchase of radio stations. The NAB has also been active, offering $10 million to encourage station purchases by minorities and women (McConnell, 1999). Fox created a vice president of diversity to increase the number of minority actors and broadcast managers (Schlosser, 2000). Congress has also been concerned with affirmative action and station ownership. Senator John McCain (R-AZ) offered a bill to reinstate tax credits for selling media properties to minorities (Albi­niak, 1999).

     More recently, the Quetzal/Chase Capital Partners announced the first three investments in minority owned enterprises: Blue Chip Broadcasting, Hookt.com, and Urban Box Office Networks, Inc. (J.P. Morgan Partners, 2000).