Minority Commercial Broadcast Ownership in the United States

The United States has a long history of promoting diverse viewpoints, beginning with newspapers, expanding into radio and television, and emerging with the Internet and other new technologies. Minority ownership of broadcast stations has been a critical part of ensuring a vibrant marketplace of ideas and opinions. This report examines the history of minority commercial broadcast ownership, the role of diversity of viewpoints in a changing broadcast industry, the status of minority broadcasters, and the continuing challenges and opportunities faced by minority broadcast owners.


For more than twenty years, the National Telecommunications and Information Administration (NTIA) has administered the Minority Telecommunications Development Program (MTDP). The Administration of President Jimmy Carter established the program in 1978 to coordinate Federal Government and private industry efforts to increase minority ownership of broadcasting outlets and telecommunications businesses. NTIA implemented the program once an Executive Branch reorganization creating the agency took effect. The reorganization resulted in consolidation and transfer to NTIA of certain functions of the White House Office of Telecommunications Policy (OTP) and the United State Department of Commerce's Office of Telecommunications (OT). NTIA continues to be the President's principal advisor on telecommunications and information policy issues.

On January 31, 1978, NTIA's predecessors, OTP and OT, filed a petition with the Federal Communications Commission (FCC) urging it to adopt a policy promoting minority broadcast ownership in locations with minority communities. The petition proposed that the Commission modify certain licensing rules, policies, and procedures to achieve that goal. Specifically, the petition recommended that, in comparative license hearings, the FCC award preferences to applicants with minority ownership. In non-comparative licensing, the petition suggested the Commission: expedite minority application processing; allow minorities to gain experience through part-time station operations under time brokerage arrangements; adopt the National Association of Broadcasters' tax certificate proposal to permit owners selling their stations to minority entrepreneurs to defer capital gains; waive television ownership limits in the 50 largest markets for minority owners; reduce financial requirements for minority license applicants; and adopt the Congressional Black Caucus' plan to allow groups with at least 50 percent minority ownership to purchase at "distress sale" prices stations designated for license revocation or renewal hearings.(1)

Several months later, the FCC issued a "Statement of Policy on Minority Ownership of Broadcast Facilities."(2) The policy statement acknowledged the "dearth" of minority broadcast ownership as evidenced by minorities' control of less than one percent of the Nation's 8,500 commercial radio and television stations. These ownership levels contrasted sharply with minorities' 20 percent representation in the population at that time.(3) The Commission stated that minority participation in broadcast ownership and management resulted in more diverse programming because of licensees' responsibility to serve audience needs and interests. It also noted minority ownership advanced the Commission's long-held commitment to "diversity of control" of the public's scarce spectrum.

The FCC determined that diversification of programming and ownership were public interest objectives it could further by encouraging minority broadcast ownership. Accordingly, the Commission pledged to issue tax certificates to broadcasters proposing to sell their stations to parties "where minority ownership is in excess of 50 percent or controlling."(4) The transactions also had to present a "substantial likelihood that diversity of programming will be increased," before the FCC would provide a certificate.(5) The Commission also expanded its distress sale policy to allow licensees to avoid costly, time-consuming revocation or renewal hearings by selling stations to minorities at below market prices before any hearing commenced. Finally, it promised to process expeditiously applications for tax certificates and distress sales.(6)

On October 31, 1978, the Commission addressed several remaining issues raised by NTIA's filing and by comments on the petition.(7) It declined to adopt NTIA's suggestion that the Commission generally waive certain rules when the waiver would promote minority broadcast ownership but not jeopardize the rule's purpose. As examples, NTIA mentioned the anti-trafficking rule prohibiting assignments by anyone owning their stations for less than three years, the duopoly rule against owning more than one broadcast facility in a given service, and the requirement of a compelling public interest showing before an owner could acquire a third or fourth television station in the fifty largest markets. Rather than enact a broad waiver to facilitate minority ownership, the Commission reiterated its general policy supporting the goal and made clear it would consider the minority ownership policy in evaluating requests for waivers or declaratory judgments.(8)

The Commission did, however, implement one of NTIA's two suggestions for minimizing financial obstacles confronting minority broadcast applicants. One recommendation proposed that the FCC relax working capital requirements for new radio applicants, who must demonstrate their financial qualifications to hold broadcast licenses. NTIA's suggestion recognized that minorities often faced difficulty obtaining bank loans because they lacked the operating experience lenders desired of their borrowers. The Commission restated an earlier action reducing from one year to three months the operating capital any radio applicant must maintain. It retained the one year working capital requirement for television applicants, however, because "more expensive television operations appear to be more directly affected by liquidity considerations."(9) NTIA offered a second financial proposal for an expedited process to encourage bank loans to minorities. It would have allowed a "recognized lending institution" temporarily to replace, without judicial approval, a defaulting borrower with an alternative management team. Citing the adequacy of lenders' remedies under bankruptcy law, the Commission rejected the suggestion. Finally, it chose not to provide a blanket assurance of expedited processing for minority applications, as NTIA requested.(10)

Minority Broadcast Ownership Reports

NTIA, in its petition, urged the Commission to implement additional policies to diffuse broadcast ownership among an array of people representing racially and ethnically diverse communities. Despite development of policies and programs to improve minority entrepreneurs' chances of buying and operating broadcast facilities, little information was readily available about existing minority owners. Therefore, in 1990 NTIA's MTDP began gathering data on commercial broadcast station ownership by racial and ethnic minorities, including African Americans, Hispanic Americans, Asian Americans, and Native Americans. That year, NTIA published the first in a series of reports on minority commercial broadcast ownership.(11)

2000 Minority Broadcast Ownership Report Methodology

In 2000, MTDP for the first time conducted a written survey to help gather empirical baseline data about minority commercial broadcast owners in the United States.(12) Thirty short-answer questions comprised the voluntary survey, which required an estimated 30 minutes of owners' time to complete depending on the number of stations they owned. A copy of the 2000 Survey of Minority Broadcast Owners and accompanying cover letter is provided in Appendix A.

To develop a universe of potential respondents to the minority broadcast owner survey, MTDP staff compiled lists of minority broadcast owners from NTIA's past ownership reports and the membership directories of several minority and industry-wide broadcasting associations. In addition, these associations publicized the survey among their members and encouraged their participation. NTIA also publicized the survey in industry and minority media and posted the instrument with instructions on its website at <>. As a result of the publicity, MTDP and the Economics Statistics Administration (ESA) supplemented the survey universe with additional owners who contacted MTDP to request questionnaires. MTDP and ESA also selected from BIA Research Inc.'s commercial database Media Access Pro Version 2.6 stations with ethnic formats whose owners or principals had ethnic surnames to enlarge the universe. The universe, as constructed, represented a census of all known African American, Asian American, Hispanic American, and Native American owners of commercial full power AM and FM radio, as well as UHF, VHF, and low power television stations in the United States.(13)

Using the universe of minority broadcast owners that staff developed, MTDP sent surveys to approximately 487 minority broadcast owners over a three-month period ending November 8, 2000. During that time, MTDP engaged in further outreach to non-responding minority owners by telephone, fax, and e-mail to encourage their participation, conduct abbreviated telephone interviews, and clarify responses on submitted surveys. Ultimately, MTDP received a total of 124 completed survey forms, which represents a survey response rate of about 25 percent.(14) That response rate limits the inferences that can be drawn about the universe of minority broadcast owners. Nevertheless, the collected data reveal trends and attitudes that are useful in understanding the experiences of minority broadcast owners, and in identifying issues for further study.

Accordingly, this year's report examines the responses of surveyed African American, Asian American, Hispanic American, and Native American broadcasters who reported themselves as sole proprietors of commercial broadcast facilities operating in the United States, as owners of more than 50 percent of a corporation, or as have voting control of a partnership that owns such facilities. The report also presents statistical and other information about minority owners with whom MTDP's past experience and publicly available information suggest fit its definition of minority ownership. Historically, NTIA's minority ownership reports have defined minority ownership with a focus on equity ownership to the exclusion of controlling interests of voting stock (or voting interests in a partnership) greater than 50 percent.(15) This report discusses in section II the policy implications of this traditional definition and reviews other current and proposed definitions.

MTDP solicited information from minority broadcast owners based on assurances of confidentiality. Therefore, except for information about owners and their enterprises obtained from publicly available sources, the report does not disclose questionnaire responses attributable to any identifiable owner. Rather, it contains results and analyses presented in the aggregate or anecdotally. As a result, in contrast to past minority ownership reports, the year 2000 report does not include a compilation of individual owners and their stations. The report does, however, describe the broadcasting industry generally, and compares the minority broadcast owners MTDP has identified to their non-minority competitors in the Nielsen DMA (Designated Market Areas) and the Arbitron-rated markets(16) in which they are located. MTDP obtained information from BIA's Media Access Pro database about minority and non-minority owners operating in the same markets.

Public Comments

To obtain as many views as possible, NTIA invited the public to submit written comments on opportunities for increased minority media ownership.(17) NTIA posed specific questions relating to the following concerns: defining minority ownership; changes affecting minority broadcast ownership since the enactment of the Telecommunications Act of 1996; federal policies, programs, and regulatory or legal measures to promote minority ownership; legal or economic impediments confronting minority owners; and ownership opportunities presented by new media technologies. Five commenters responded, and MTDP includes their views as appropriate in relevant sections of the report.

Minority Ownership Roundtable

On July 18, 2000, NTIA convened a roundtable titled "Media Diversity: Minority Owners Conquering New Frontiers."(18) Minority broadcast owners, industry representatives, academicians, policymakers, capital providers, and minority business advocates discussed barriers to diversifying ownership and increasing broadcast industry consolidation. One primary purpose of the meeting was to gather information from knowledgeable industry participants and observers who would not qualify as survey subjects. Their contributions enhanced data NTIA obtained from the minority broadcast ownership survey and lent important perspectives to this report.

The roundtable consisted of two morning panels and two afternoon working groups. The first panel began with an overview of minority media ownership, and a discussion of the consolidation following the Telecommunications Act of 1996 and its adverse effects on minority ownership. The group also addressed the challenge of preserving diverse voices when fewer owners control more stations. During the second panel, discussants examined financing issues for minority media owners, reflected on the benefits to minority ownership of the FCC's repealed tax certificate program, and offered predictions about opportunities for minority ownership arising from convergence and innovative new media technologies. The working groups enabled the audience to offer their views on minority ownership definitions and on policies and programs to promote diversity in media ownership

1. Petition for Issuance of Policy Statement or Notice of Inquiry, Office of Telecommunications Policy (later reorganized as NTIA), Dept. of Commerce, (submitted Jan. 31, 1978), explained in Memorandum and Order, In the Matter of Petition for Issuance of Policy Statement or Notice of Inquiry by National Telecommunications and Information Administration, 69 F.C.C. 2d 1591 (1978) [1978 NTIA Petition M&O].

2. FCC Statement of Policy, FCC 78-32, 68 F.C.C.2d 979 (May 25, 1978) [1978 FCC Policy Statement].

3. Id. at 981.

4. Id. at n. 20. The Commission's statement did not, however, interpret "controlling" interests.

5. Id.

6. Id.

7. 1978 NTIA Petition M&O, supra at n.1. The Commission considered in separate proceedings NTIA's recommendations regarding minority applicants' involvement in comparative hearings, and use of "time brokerage or shared-time arrangements" as an alternative to full station ownership to fulfill the programming needs of minorities and other special interests. See id. at 8-9.

8. Id. at 9-12.

9. Id. at 14.

10. Id. at 15.

11. NTIA issued reports on minority commercial broadcast ownership in the United States annually from 1990 through 1994 and from 1996 through 1998. For each report, MTDP staff identified minority station owners through periodicals and anecdotal information. FCC staff and representatives of several industry associations and minority interest organizations helped to locate other minority station owners. Whenever possible, staff interviewed by telephone owners or general managers of the minority broadcast facilities they identified, and asked them about minority station ownership and operations. Otherwise, staff sought information from available station representatives, and assumed the accuracy of the information any respondent provided. Based on the information gathered, MTDP compiled a list of commercial radio and television stations in which minority ownership exceeded 50 percent.

MTDP updated the list from year to year by adding any new information it obtained and by deleting stations believed to be "dark," or not operating because disconnected telephone numbers and inadequate forwarding information prevented staff from contacting these facilities. Although industry professionals reviewed the list before publication, MTDP recognized that its methodology may not have yielded a complete or accurate listing of all the country's minority broadcast owners. Therefore, staff encouraged the public to provide corrections and additional stations for the list.

Although NTIA did not issue a minority ownership report in 1995, it did publish a report on the subject of capital access for minority entrepreneurs titled Capital Formation and Investment in Minority Business Enterprises in the Telecommunications Industries.

12. In surveys underlying this report, Hispanic Americans were persons of Hispanic origin who identified themselves by place of origin or descent. Persons of Hispanic origin are those who indicated that their origin was Mexican-American, Chicano, Mexican, Puerto Rican, Cuban, Central or South American, or other Hispanic. People of Hispanic ethnicity can be of any race. Throughout this report, interpret Non-Minority as "White, non-Hispanic", and African American as "African American, non-Hispanic."

13. In developing the universe of minority broadcast owners, MTDP created a database of all known minority broadcast owners. Because no sampling occurred during development of this census, no sampling error resulted. Sampling error arises when characteristics differ among sampling units, which comprise only a subset of the entire population. Non-sampling error may have resulted, however, from a number of factors, including (a) an inability to obtain information about all minority broadcasters in the universe; (b) response errors; (c) differences in owners' interpretation of survey questions, (d) mistakes in coding or keying responses; and (e) other errors related to collection, response, coverage, and processing. Although MTDP did not obtain direct measurement of potential biases from non-sampling error, precautions were taken in all phases of the data's collection, processing, and tabulation to minimize the influence of nonsampling error.

MTDP acknowledges that despite its best efforts, non-sampling error likely occurred because of an inability to identify all of the nation's minority commercial broadcasters. Such error may be reduced in the future as a result of the FCC's recent requirement that owners disclose on their biennial reports information about the participation of minorities and women in station ownership. See Item 9(a) FCC Form 323 (Sept. 2000). In establishing the requirement, the Commission noted the difficulty NTIA faces in obtaining complete and accurate informantion from broadcast owners. It concluded that NTIA's data would complement, but not substitute for, information the Commission gathered, because as the licensing authority, it is "appropriately and uniquely situated to collect information on the gender and race of the attributable interests of its licensees." Memorandum Opinion and Order, In the Matter of 1998 Biennial Regulatory Review-Streamlining of Mass Media Applications and Policies and Rules Regarding Minority and Female Ownership of Mass Media Facilities, 14 F.C.C.Rcd 17525 (1999) at 19. The Commission recognized, however, that "our data may not be complete either because our rules do not require [sole proprietorships or partnerships consisting of only natural persons] to complete Form 323." Nonetheless, it encouraged such licensees voluntarily to provide racial and gender identity information to enable the Commission to "more accurately measure minority and female broadcast ownership." Id. at n.14.

14. The response rate includes 14 short-form survey responses from owners who provided their answers during telephone interviews with MTDP staff.

15. MTDP notes, however, that this report excludes at least five firms that in past years were part of the minority ownership report based on a belief that minorities owned more than 50 percent of the equity or partnership interests in the firms' broadcast stations. These include companies that have gone public since 1998 received other financing or undertaken other actions that apparently have diluted minority equity ownership to levels below the threshold NTIA has used traditionally to define minority-owned companies.

16. A.C. Nielsen Company and Arbitron are media research firms that measure U.S. television and radio audiences in local markets and conduct consumer research for stations. Advertisers often use these audience measurements to select stations for their product promotions. See Section IV, infra, for a discussion of advertising issues and the effect of rating agencies on the success of minority broadcast stations.

17. Notice of Public Meeting and Request for Comment on Minority Media Ownership, 65 Fed. Reg. 40081 (2000).

18. A transcript of the minority media ownership roundtable is available on NTIA's website at <>[Roundtable Tr.].