The Federal Communications Commission is only weeks away from the Aug. 6 deadline when U.S. District Court Judge Thomas Ambro has ordered a report on the status of its planned incubator program with the Third Circuit Court of Appeals. It appears that agency attorneys will have something concrete to submit to the Philadelphia court next month: FCC chair Ajit Pai has scheduled a vote at the Commission’s Aug. 2 meeting on a proposal (MB 17-289) to create a broadcast incubator program.
FCC officials said the program would initially apply to AM/FM full-service radio station ownership because radio has traditionally been the most accessible entry point for new entrants and small businesses seeking to enter broadcasting. “This program will encourage new voices, including women and minorities, to enter the broadcast business,” Pai said. “In particular, it will help address the significant barriers, including lack of access to capital, that currently make it hard for many to join the broadcast industry.”
The final draft has not yet been made public, but in a blog post, Pai said his proposal is along the lines of what the FCC envisioned last year in order to encourage the entry of new and diverse voices into the broadcast industry. “If adopted, my plan will enable the pairing of small aspiring, or struggling broadcast station owners with established broadcasters who will provide assistance with training, finances, mentoring and industry connections,” Pai said. “And at the end of the incubation period, the incubated entity will have the right to purchase the incubating entity’s interest in the incubated station.”
The minority tax certificate program was previously in place from 1978 to 1995 and during that time, supporters say dozens of broadcasters had long-closed ownership doors opened to them. But in the years since its demise, the number of women and minority-owned radio and television stations has dropped. Pai predicts an incubator will change that. “The incubator program would lead to greater diversity and competition in the broadcast industry,” he said.
The FCC released a broad outline of its plan last November as part of several revisions to the agency’s media ownership rules, and during the past six months a litany of broadcasters have gone on record supporting Pai’s proposal. As Inside Radio reported last month, general consensus among radio operators is that regardless of the specifics, an incubator program is something broadcasters believe can help new entrants get past financial, racist and sexist hurdles to become a new generation of owners.
The National Association of Broadcasters submitted a 26-page proposal to the FCC in March that most broadcasters have unanimously endorsed in FCC feedback. The NAB also proposed several incentives to lure broadcasters to take part. That includes a suggestion that established broadcasters be allowed to own two extra FMs—for as many as 10 FMs in the top 75 markets.
Some outside groups, however, are worried that the incubator program could instead lead to a form of “covert consolidation.” Others have suggested a tax-incentive based reward rather than ownership waivers would be a better path to take.