Aiding minority ownership

The Federal Communications Commission’s (FCC) April 20 decision to reinstate the UHF discount rule should be heralded as a significant opportunity to advance diversity and minority broadcast television ownership.

For years, we have urged the FCC to address the continuing paucity of minority and new entrant broadcast ownership.

Our Howard Stirk Holdings (HSH), of which I am the sole owner, represent one of only two African-American television station licensee enterprises owned by a minority in the United States today. My ownership opportunity came about when, in order to meet various FCC ownership limits, stations had to be spun off from a larger multistation sale involving Sinclair Television Group and the Barrington Broadcast Group in 2013.

Without the UHF discount, these larger sales would never have happened. The national cap artificially limited the ability of broadcasters to compete in the larger media market against the likes of Comcast, Charter, Verizon and AT&T, none of which have these limits.

The UHF discount was first adopted by the FCC in 1985 in recognition of the technical differences between UHF and VHF television signals, and it has been confirmed by Congress several times since.

When calculating compliance with the national ownership rules, which allow a single owner to hold any number of stations as long as the aggregate coverage is less than 39 percent of the national audience, UHF stations are counted as serving only half of the audience in the market.

But when the FCC decided in 2013 to consider eliminating the UHF discount without adjusting the national audience cap, the opportunity for transactions like Sinclair and Barrington ended.

This gravely limited the opportunity for minority owners like HSH to acquire stations subject to spin-off. In addition, due to other actions taken over the last four years by the FCC, well-established broadcasters like Sinclair and Nexstar have been effectively prevented from aiding minority owners with financing, joint sales agreements (JSA) or shared services agreements (SSA).

Despite the approved use of JSAs for nearly 20 years — for example, in the name of advancing diversity and minority opportunity — the FCC made JSAs ownership attributable, again hobbling broadcasters from being able to compete in the market.

This was a proven way for larger broadcasters to work with minority and new owners, which was and continues to be my circumstance.

This is also why it was so tragic when the FCC removed JSAs and SSAs as effective ways for larger broadcasters to work with smaller ones.

I simply would not have been able to fulfill my lifelong dream and ambition of being a TV network broadcast station owner without first being allowed to acquire stations that had to be spun off, or without the critical use of JSAs and SSAs.

Now that the FCC has corrected its mistake and reinstated the UHF discount, I firmly believe market principles will again provide opportunity for minority and underrepresented communities to compete.

Since the 1970s, the FCC has expressed the need to enhance minority ownership and diversity. Yet, the problem remains. Out of the several thousand televisions stations across America, only 12 are owned by minorities — and I own seven, so clearly there is tremendous work that remains.

The time is long over due for the FCC to let the free market work to help resolve the matter, and as the National Association of Broadcasters noted, reinstating the UHF discount “represents a rational first step in media ownership reform policy allowing free and local broadcasters to remain competitive with multi-national pay TV giants and broadband providers.”

FCC Chairman Ajit Pai and Commissioner Michael O’Rielly deserve a heart- felt thanks for their leadership and work on this critically important issue. It is without any doubt, a step in the right direction for drastically increasing the FCC’s stated goal of minority ownership.

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