FCC Should Revisit Foreign Investment Rules, Pai Tells MMTC

The FCC should revisit rules barring foreign investment in broadcasting and relax regulations on AM radio to promote minority media ownership, said FCC Commissioner Ajit Pai at a Minority Media & Telecom Council breakfast Wednesday, part of the MMTC’s Access to Capital conference. Commissioner Jessica Rosenworcel also attended the breakfast, and also suggested possible rule changes to favor minority media ownership. Pai called the foreign investment rules “an anachronistic relic,” and said changes to them would help minority businesses by increasing the availability of capital, which he called “the lifeblood of a business."

A disproportionate amount of minority media owners are in the AM radio business, making it more important for the commission to work to revitalize the industry, Pai said. He said “arcane rules” that prevent AM stations from improving their facilities, such as the Ratchet Rule, are hurting AM. Pai said FCC moves to revitalize AM by relaxing such rules would “signal to the industry that we are open to considering different ways to improve the AM radio band,” and therefore keep more minority media owners in business.

The FCC’s most effective method of encouraging minority media ownership was the minority tax certificate, Rosenworcel said, telling MMTC members to urge Congress to reinstate the certificate. “No single policy we have had in place has been as effective at diversifying ownership in broadcast properties,” Rosenworcel said. She also said the commission should focus efforts to encourage diversity on areas of the law where provisions for encouraging diversity are already contained in the statute, such as the commission’s auction rules. “We need to think about those parts of the statute in all we do,” said Rosenworcel. She said the auction rules allow the commission to use bidding credits to increase diverse participation in spectrum auctions.

"It’s important for us to stay focused on the other slices of spectrum we can and should push into the commercial marketplace,” said Pai. He said he was hopeful the H block would be auctioned by the end of the year, and that the commission would be able to “collaboratively” work with government entities to clear 1755-1780 MHz band, and pair it with the 2155-2180 MHz band for auction next year. Pai also said the commission should work to free up 195 MHz of unlicensed spectrum for commercial and consumer use.

"The issue now is no longer connection, it’s capacity,” said Rosenworcel, of the problem of connecting classrooms to the Internet. Rosenworcel said Internet access for schools is a “civil rights issue.” She said the commission should reinvest in its E-rate program and that the commission would begin a rulemaking next week related to improving the program. Pai will give a speech next week laying out his “vision” for E-rate, which he said would make the program more attractive to students and allow schools to tailor their programs to students.

Both Pai and Rosenworcel said the commission needs to soon complete its 2010 Quadrennial Review -- which is soon to butt against the 2014 iteration of the congressionally required proceeding (CD April 11 p9) -- as part of its work on media ownership. “We need to put the quad back in Quadrennial,” Pai said. “It’s incumbent on us to get something out the door even if we don’t all agree on it,” he said. “It’s important we study this hard and get it right,” said Rosenworcel.