FCC MMTC chairs

Four former heads of the Federal Communications Commission from both sides of the political spectrum said Monday they see increasing diversity in broadcasting as one of the agency’s ongoing challenges. But the group told a Multicultural Media, Telecom and Internet Council virtual symposium that a potential fix to the challenge of new operators accessing capital is already in front of regulators: bringing the minority tax certificate program back to life.

A revival of the minority tax certificate is one idea that has gained bipartisan traction in Washington in recent years. It would offer tax breaks to companies that sell radio or television stations to new entrants, especially women and minorities. In recent weeks there have been whispers that a bill introduced by Rep. G.K. Butterfield (D-NC) could be part of an infrastructure spending deal being negotiated in Congress for the upcoming fiscal year.

“The tax certificate was a very useful means to get capital to people. Obviously it was abused and Congress ultimately abolished it, but I think it could be brought back with safeguards,” said former Chair Dick Wiley. “That’s another way to get the opportunity of people of all colors and backgrounds to own broadcast stations.” Wiley chaired the Commission during the Nixon and Ford administrations and helped spearhead the tax certificate’s creation in 1978.

Former Chair Bill Kennard was working as General Counsel of the FCC when former House Speaker Newt Gingrich led the Republican majority to repeal the tax certificate program. Looking back, Kennard said the decision was “tragic” because even during the 1995 effort there remained “widespread support” for the program. “Everybody loved the tax certificate,” said Kennard. “It created a lot of benefit and it created a lot of opportunity. It’s great to hear that there’s an effort to bring it back.”

Supporters of the tax certificate have previously noted that during the program’s earlier iteration from 1978 to 1995, the number of minority-owned stations rose from 40 to 323.

Butterfield told the NAB State Leadership Conference in May that he planned to push forward with the effort to get the bill passed, despite being unsuccessful during the past two congressional terms. No standalone bill has been introduced to date. But the previous proposed legislation, which Butterfield introduced in July 2019, would have required the FCC to report to Congress every two years how many minority and female broadcasters there are, and include recommendations on how to increase those numbers.

During her stint leading the FCC, former Chair Mignon Clyburn said efforts to collect more data on the state of ownership and conduct studies about how many minorities and women owned stations “got demonized.” She told the MMTC event that she still believes it remains an important first step for the FCC and hopes politics can be taken out of data collection. “You can’t meet what you don’t measure,” she said.

Clyburn was among the former FCC leaders who said the creation of a radio incubator program during Chair Ajit Pai’s term will be a positive. Pai said the idea originated at the MMTC several decades ago. “I hope this will be a way for minorities to get into the broadcast business,” he said.

Kennard said even though it remains important to grow diversity in broadcasting, he believes efforts must increasingly focus on where media is heading. “The media landscape is changing dramatically and the technologies that we all grew up with – radio, television and cable TV – it’s all being transformed by the internet and streaming technologies,” he said. “The next opportunity in content creation is going to be to create content for these new streaming platforms.” Kennard said as media economics change, it will be important for advocates inside and outside of the FCC to recognize what the barriers are to allowing women and minorities to succeed in the media marketplace.

Pai said Monday that a program created during his tenure to pay the FCC’s summer interns should also help promote diversity inside the agency and in the telecommunications industry more broadly. It was one of the many reforms accomplished, but Pai said he wished he could have done more, including the adoption of a plan for the agency similar to what then-chair Kennard created in 1999 for his successors. “It’s the one regret from my time in office,” said Pai.