Structure of broadcasting

Historically, the basic rationale for close regulation of the broadcast industry has been that the scarcity of frequencies over which radio and TV were broadcast. In 1924, when commercial radio was still in its infancy, no one knew what form radio would take or who would pay for it.

By the 1930s, the new FCC faced an interesting challenge: Most cities had radio stations, and 97 percent were affiliated with three networks: NBC, CBS and Mutual. All night time programming came from through these networks out of New York or Los Angeles. Locally produced programs were almost non-existent.

Even local news was kept off the air. All three networks agreed with wire services and newspaper publishers to keep radio news to 30 seconds per item, and under five minutes, with a recommendation to read your local newspaper.  But in 1938, the news from Europe was so dire that radio reports from CBS and NBC grew longer and more detailed.

NBC v US, 1943 — The Supreme Court said the First Amendment doesn’t exempt broadcasters from FCC regulation, even in anti-trust cases.  This led NBC to sell its “Blue Network” which became ABC.  From the 1950s through the 1990s, ownership of TV and radio stations was limited.

Original ownership limit: The Rule of Sevens — From 1940s thru 1984, no one owner (note, owner, and not affiliate) could have more than seven TV, seven AM and seven FM stations. The law was liberalized in 1984 to 12, and again limit raised to 18 in 1992 and 20 in 1994.

Ownership rules change: As telecommunications volume and flexibility expanded with new technologies in the late 20th century, neo-conservatives argued for a new approach, saying that the original scarcity rationale for regulation was no longer relevant.  This led to the the Telecommunication Act of 1996.

Telecommunications Act of 1996 

 Telecommunications Act of 1996 lifted limits on radio and TV station ownership with the idea of saving failing radio stations and increasing diversity in television broadcast ownership.  One unexpected result was the complete domination of radio by a handful of companies and the end of local radio broadcasting.

Under the 1996  law, there is no limit to the number of radio and TV stations owned, but owners were not supposed to reach more than 35 percent of all audiences. The law had a UHF discount provision saying the UHF stations counted as half the number as VHF stations. Theoretically, one company could own TV stations serving up to 70 percent of the market. Before 1996, duopoly was prohibited: no company could more than one FM and one AM station and one TV station in any single market. After 1996, a major market realignment for radio occurred after the rules changed for radio (Realignment of TV ownership occurred with the FCC 2003 order):

  • Metro markets (45 +) — max is 8, w/ five of each kind (eg., five FMs, 3 AMs).
  • Large markets (30 – 44) — max is 7, with 4 of each kind.
  • Mid sized markets (15 – 30) — max is 6, again 4 of each kind
  • Small markets (less than 15) — max is 5, with 3 of each
  • Mini markets (three or less) — max is two.

The Telecommunications Act of 1996 also included the Communications Decency Act (CDA), which was struck down in most parts in the Reno v ACLU case of 1997.  One part that did survive, CDA Section 230, is discussed in Section 10 (Digital media law) in this book.

 

Ownership structure after 1996

FCC Order June 2, 2003 — The FCC retained its ban on mergers among any of the top four national broadcast networks, but was attempting to open the rest of the market up to deregulation.  The Order was challenged and failed, and the 1996 Telecommunications Act is what stands now.

Local TV Multiple Ownership Limit:

  • In markets with five or more TV stations, a company may own two stations, but only one of these stations can be among the top four in ratings.
  • In markets with 18 or more TV stations, a company can own three TV stations, but only one of these stations can be among the top four in ratings. In deciding how many stations are in the market, both commercial and non-commercial TV stations are counted.
  • In markets with 11 or fewer TV stations in which two top-four stations seek to merge there is a waiver process.The new rule permits local television combinations that are proven to enhance competition in local markets and to facilitate the transition to digital television through economic efficiencies. Finally, the new rule? continued ban on mergers among the top-four stations will have the effect of preserving viewpoint diversity in local markets. The record showed that the top four stations each typically produce an independent local newscast.

Cross ownership (two media in one market) Under old rules, one company couldn’t own more than one medium in any market. This changed in the FCC Order of June 2, 2003, when the FCC noted that the newspaper/broadcast cross-ownership rule was no longer necessary in the public interest to maintain competition, diversity or localism. However, in 2007 the FCC revised its rules and ruled that they would take it “case-by-case and determine if the cross-ownership would affect the public interest.”

Prometheus Radio Project v. FCC,   2020    —  Prometheus and the media reform group United Church of Christ argue that additional consolidation should not be allowed if it would harm ownership rates by women and people of color.   “The FCC has long decried low ownership diversity numbers but ignored facts in the record showing consolidation harms diversity by putting more television and radio stations into the hands of fewer and fewer owners,” said the UCC.  This case is now on the US Supreme Court docket after winning at the federal appeals court level.  According to the church’s media reform project:

The state of ownership diversity is abysmal. Although the FCC’s data is flawed and not completely reliable, it gives the best indication we currently have regarding current numbers. In full power television, racial minorities combined own 26 stations out of 1,376 licensed stations, Hispanics own 58 stations, and women own 73. In FM radio, racial minorities own 159 of 6,647 radio stations, Hispanics own 219, and women own 390. In all cases, the share owned by women and people of color is in the single digits, and in the case of most individual categories, such as Asian Americans, control is less than 1 percent. And the FCC data is incomplete, for example in FM radio 19 percent of stations did not report any data at all.

Diversity of ownership

Minority Americans had almost no influence on the mainstream / White press during the 19th and most of the 20th century, but at least there were Black  newspapers:  The Richmond Afro-American, the Pittsburgh Courier and the Chicago Defender, the Norfolk Journal and Guide, among others.

But in broadcasting, Black ownership was nearly impossible, and what little once  existed has been in decline.

According to a 2021 FCC report, all minority groups owned 4 percent of commercial broadcasting property and 3% of non-commercial broadcasting. But even these figures are deceptive, according to the Media 2070 project, which says:

  • Only 1.3 percent of U.S. full-power commercial TV stations were Black-owned in 2019. This figure is even lower when accounting for stations where the nominal owner does not operate the station.
  • Black ownership levels in broadcast radio were not much better: Only 2 percent of commercial FM stations were Black-owned, a figure that declined from the FCC’s prior count. The level of Black AM radio ownership improved slightly since the FCC’s prior count, but was just 3.3 percent. Black people make up more than 14 percent of the U.S. population, according to 2020 census data.
  • The FCC data also indicate that people of color own just 6 percent of the nation’s full-power TV stations, 7 percent of commercial FM radio stations and 13 percent of commercial AM radio stations — even though they make up 43 percent of the U.S. population.

This is similar to the ownership pattern found in a 1992 FCC survey:  218 of 10,834 AM, FM and TV stations were Black-owned, and 330 were minority owned, for 2% and 3% representation.

In 1995 Congress repealed the FCC’s minority tax certificate program — which since 1978 had helped increase broadcast station ownership by people of color from less than 1 percent to 3 percent.

Partly as a result, Black radio station ownership took a major hit after the Telecommunications Act of 1996 when US Radio (the largest Black-owned broadcast company in the U.S.) was sold to Clear Channel Communications.  In a 1998 report, the FCC reported Black ownership down to 1.7 percent.

In 2022, the National Association of Broadcasts has endorsed legislation to re-instate the tax certificate program,  “improving diversity in broadcasting and creating new opportunities for women, people of color and other underrepresented communities.”

Media 2070 Project 

The Media 2070 Project, begun in 2020, is an attempt to put these statistics into perspective and suggest that a tiny minority of the poorest stations is not representative of the African American minority.

In an essay calling for reparations, the project said:

Since the colonial era, media outlets have used their platforms to inflict harm on Black bodies through weaponizing narratives that promote Black inferiority and portray Black people as threats to society.

Also see:

Case Study:  WLBT  television,  Jackson, Mississippi 

Southern television and radio deliberately blocked civil rights coverage from national news organizations from the 1940s through the 1960s.  Civil rights advocates noted that the pattern of suppressing news was widespread in the media, and that the broadcast media was not living up to its obligation to serve the public interest.  Therefore, they argued, these broadcast stations should not be allowed to renew their broadcast licenses.

The test case took place in 1969 with the Supreme Court case,  Office of Comm. of United Church of Christ v. FCC.   In this case, civil rights groups challenged the FCC’s licensing practices in Mississippi — and won.

Rev. Everett Parker helped challenge WLBT’s FCC license.

The WLBT  challenge began in 1954, when a group of civil rights activists began studying the pattern of racially biased news and public affairs programming. The Jackson, Miss. Chapter of the NAACP filed repeated complaints with the FCC about one particularly racist television station, WLBT in Jackson. Requests for a public hearing when the station license came up over the years were consistently turned down by the FCC.

When WLBT applied for what it thought would be a routine renewal of its broadcasting license in 1964, the church and a coalition of civil rights leaders formally challenged the license. Headed by Rev. Everett Parker, the group charged that the station blacked out nationally-produced civil rights news about nearby events; had promoted race-hating points of view without balance or regard for the Fairness Doctrine; and refused to feature African American speakers in any context, even on Sunday morning church service broadcasts.

The WLBT response was typical for stations whose licenses were challenged: It ginned up a list of all its public service activities from its log books, including service to the African American community. Usually complaints would stop at this point, and in effect be buried in red tape. But the coalition had an ace up its sleeve– it responded that the station’s log books were highly inaccurate, and presented evidence from a detailed content analysis, which had been kept secret up until that point. When the FCC approved the WLBT license, The church appealed the decision to a federal court, but the attorneys did not really expect to win both the case and the much larger battle over FCC’s regulatory procedure. Yet in 1966, the appeals court ruled that the FCC would conduct public hearings on the license and that the citizens would have standing before the FCC.

The court decision, written by Judge Warren Burger (who would later become the Chief Justice of the US Supreme Court) eloquently restated the longstanding tradition of broadcast regulation:

“A broadcaster is not a public utility … but neither is it a purely private enterprise like a newspaper or an automobile agency. A broadcaster has much in common with a newspaper publisher, but he is not in the same category in terms of public obligations imposed by law. A broadcaster seeks and is granted the free and exclusive use of a limited and valuable part of the public domain; when he accepts that franchise it is burdened by enforceable public obligations. A newspaper can be operated at the whim or caprice of its owners; a broadcast station cannot. After nearly five decades of operation the broadcast industry does not seem to have grasped the simple fact that a broadcast license is a public trust subject to termination for breach of duty… Under our system, the interests of the public are dominant. The commercial needs of licensed broadcasters and advertisers must be integrated into those of the public. Hence, individual citizens and the communities they compose owe a duty to themselves and their peers to take an active interest in the scope and quality of the television service which stations and networks provide and which, undoubtedly, has a vast impact on their lives and the lives of their children… The 1964 renewal application (for WLBT) might well have been routinely granted except for the determined and sustained efforts of Appellants (the church coalition) at no small expense to themselves. Such beneficial contribution as these Appellants, or some of them, can make must not be left to the grace of the (Federal Communications) Commission.” (United Church of Christ v FCC, 1966).  For more on the Civil Rights WLBT story, see this National Archives publication.