Remarks of Assistant Secretary Irving at the National Association of Black Owned Broadcasters' Annual Meeting

The Big Chill: Has Minority Ownership Been Put on Ice?
Washington, DC
September 11, 1997

Remarks by Larry Irving
Assistant Secretary for Communications and Information
National Telecommunications and Information Administration
Department of Commerce

 

at the
National Association of Black Owned Broadcasters' Annual Meeting
"The Big Chill: Has Minority Ownership Been Put on Ice?"

 

September 11, 1997
Washington, D.C.
[as prepared]

 


Today NTIA is releasing its 1997 Minority Commercial Broadcast Ownership Report, our annual survey of minority media ownership. Our report attempts to answer the question presented as the theme of NABOB's conference -- "The Big Chill: Has Minority Ownership Been Put on Ice?" Unfortunately, the report's answer is yes -- indeed, we may have to say that minority ownership is melting away.
 

As documented in NTIA's report, this year's numbers reveal an overall decline in real terms. Our survey found that minorities now own 322 of our nation's 11,475 commercial broadcast stations, down from 350 last year, representing 2.8 percent of total commercial ownership -- falling from 3.1 percent in 1996. Moreover, the loss of 28 stations happened when the overall number of commercial broadcasting stations was increasing by 63 stations.
 

The specific racial breakdown is as follows: Black ownership represents 1.7 percent; Hispanic ownership represents 1.05 percent, Asian ownership represents .03 percent and Native American ownership represents .04 percent. The only category that showed an increase from last year was the total number of Hispanic-owned stations, which went up from 115 to 120 stations due to an increase in the number AM radio stations owned by Hispanics.
 

I wish I could say that this year's numbers appear to be an aberration. Unfortunately, a five-year comparison reveals that over the past five years, the total number of commercial stations has grown by 641, but that minority ownership totals have declined -- minorities own 8 fewer stations today than in 1992.
 

NTIA found that minorities are buying AM stations -- the number of minorities owning AM stations only went down by 1. It is the FM stations that are losing their minority owners. FM stations decreased by 27. NTIA also found that minorities are buying are buying low-power, less profitable stations. This is a potential problem, as these are the stations that fall victim to the economic whims and downturns of the marketplace.
 

The decline in Black ownership can be ascribed in part to the sale of US Radio, the largest Black-owned broadcast company in the U.S. to Clear Channel Communications. NTIA also believes that the underrepresentation of minority owners bears a direct relationship to a lack of access to investment capital, and the lack of legislation and policy initiatives that promote minority ownership.
 

All these numbers and further breakdowns are in NTIA's report. We have copies here for you today.
 

I do want to note that NTIA does not have any empirical data to link the fall in ownership numbers to the Telecommunications Act of 1996. We are looking into the data to determine the nexus, if any, between the 1996 Act and minority ownership.
 

I hope you share NTIA's concern about the continuing decline in minority-owned broadcast companies. NTIA's report discusses two programs that can be of assistance to minority broadcast businesses. The first, ComTrain, is a management training program for minority broadcast owners, that is administered by NTIA's Minority Telecommunications Development Program (MTDP). The broadcasters that participated in this year's minority ownership survey reported that ComTrain is the most useful government program designed to assist minority broadcast owners. The second, the Telecommunications Development Fund (TDF), was authorized by the 1996 Telecommunications Act to provide a source of loans and investment capital to small communications businesses. Those funds are in the process of being made available.
 

But more importantly, we need to find new and creative ways to address the dismal numbers. In my opinion, we are not going to have much success on the legislative front. We have to look to private sector solutions. One approach is to think about developing a "farm team" -- young, talented minority men and women who, with the right training and experience, could be the future station owners. I encourage current minority broadcasters to develop proteges. There is always going to be churn in the market, but we all have an interest in preserving a diversity of voices. Another approach is to improve minorities' access to capital. NTIA has documented the connection between access to capital and minority ownership, and its importance. Minority broadcasters need to think about creative financing arrangements and work with the financial community to increase their lending ability.
 

In the 1970s and 1980s, there was an underlying presumption that diversity of ownership and diversity of viewpoint mattered. The declining numbers suggest that we need a renewed public examination and debate about the merits of minority ownership and diversity of voice in the media. We need the nation again to agree on the underlying presumption -- otherwise we have no hope of increasing these numbers. Policymakers, legislators, and industry professionals in both the public and private sectors need to think anew about which tools and methods effectively will increase minority participation in the broadcast and telecommunications industries
 

Now is also a good time to think about minority ownership and participation in telecom more broadly. There is a growing number of ways for people to get news, entertainment, and information, and a growing number of choices in the way companies spend their advertising budgets. I encourage you to explore opportunities presented by new technologies. The Internet is changing this, and other, industries. A recent Wired magazine article said that the hip-hop generation increasingly is becoming the "chip hop generation. Hip-hop and urban contemporary music and video are on the Net. Most minority owned stations are not. You have the power to change that.
 

Last week, NTIA hosted a forum on Internet telephony. I was struck by the lack of minority participation in this new industry at all levels -- virtually no minority entrepreneurs or companies in this field. Internet telephony is just emerging and loaded with opportunities. Internet telephony is somewhat a misnomer -- its really voice over IP, with a host of multimedia applications on the horizon. And the ability to do audio and video streaming on the Net has opened up new opportunities for broadcasters. Minorities should be taking advantage of this situation! We must not continue to work merely with yesterday's tools, but seize the opportunities afforded by new technologies and their applications.
 

We've all read a lot about Princess Diana over the last two weeks. An article by Katherine Graham in the Washington Post on Sunday told about an interesting exchange between the Princess and Jim Lehrer. Princess Diana raised the question of how she was going to focus her energies and choose her causes. Jim Lehrer responded, "Make sure it matters to you. Because if it doesn't, you cannot make it matter to others."
 

Greater minority participation in broadcasting, in particular, and in telecommunications and information industries in general, must continue to matter to us. We must continue to champion this cause and make it matter to others. This Administration recognizes the importance of minority broadcast ownership -- President Clinton, Vice President Gore, and Secretary of Commerce William Daley all believe that preserving a diversity of viewpoints on our nation's airwaves is fundamental to the success of our democracy. Please share with us any thoughts and ideas you have about ways to promote minority ownership. Thank you.