On Nov. 20, 2017, the FCC released an Order on Reconsideration of several of its broadcast multiple and cross-ownership rules, which included a Notice of Proposed Rulemaking (NPRM) looking toward increasing minority, female, and small business ownership by establishing an “incubator” program which incentives established broadcasters to help those types of entities. Comments on the NPRM have been filed, but there is an opportunity to file Reply Comments by April 9. The proposed incubator program is intended to “help facilitate entry by new voices into the marketplace by providing access to capital and/or technical expertise to new entrants and small businesses.” The FCC has asked commenters to suggest eligibility criteria and how the agency should structure, design, implement, enforce, and monitor the incubator program.

Chairman Pai has tasked the FCC’s Diversity Advisory Committee to oversee the program. In a speech to the Multicultural Media, Telcom, & Internet Council’s Annual Broadband and Social Justice Summit just last month, Chairman Pai outlined some specifics of the program saying it, “would provide an ownership rule waiver or similar benefit to a company that helps facilitate station ownership for a qualifying entity. For example, in exchange for a defined benefit, an established company could assist a new owner by providing management or technical assistance, loan guarantees, direct financial assistance, training, or business planning assistance.”

Groups such as the National Association of Broadcasters have already voiced their approval of the program in their reply comments, believing that it will “foster new entry into the broadcast industry, particularly by minorities, women, and small businesses.” NAB in early-filed reply comments has recommended creating a standard based on the new entrant bidding that was used during the FCC broadcast auctions. In analyzing publically available FCC data, the NAB was able to look at the new entrant bidding credit for every FM broadcast auction held since the FCC began the adoption of the credit. NAB concluded that bidding credits resulted in 93 percent more winning bids by women owners and 40 percent more winning bids by minority owners in FM auctions since 2004. Thus, the NAB concluded this was an effective means of promotion station ownership diversity.

Meanwhile, other reply comments have been critical of the FCC’s proposed approach. Reply comments filed together by nine organizations (Office of Communication, Inc. of the United Church of Christ, Media Alliance, National Organization for Women Foundation, Communications Workers of America, Common Cause, Benton Foundation, Media Council Hawai`i, Prometheus Radio Project, and Media Mobilizing 2 Project), all of which generally support broadcast diversity, cited past endeavors by the FCC to promote diversity that failed.

UCC et al, say that the FCC has lacked sufficient data to adequately follow through on this type of program and that similar efforts in the 1990s failed, then, “to offer persuasive arguments that eliminate the program’s inherent concerns” and could cause “a substantial loophole in the Commission’s ownership rules without having any significant impact on minority and female ownership.” They go on to, say that the FCC has failed to address these concerns and call into question why the FCC has decided to move forward with a program that these groups say was, in the past, “infeasible.” They take the position that the adoption of an incubator program will do little to promote minority and female ownership and that it will be “futile without strict media ownership limits,” particularly in light of the Commission’s “chronic failure” to gather ownership data in order to evaluate the program’s impact on actually increasing media ownership diversity.

If you have any recommendations to the FCC on how to best implement this incubator program and need help filing a reply comment, feel free to call us at (703) 812-0400. You can file comments via the FCC ECFS webiste here.