Foreign Ownership Change Could Hurt Local Content for Latinos, Says Free Press

A draft declaratory ruling that could increase foreign ownership of U.S. stations was opposed by Free Press, though officials from two other nonprofits that represent minority interests take a different stance. The draft might lead to international foreign language content squeezing out local content more relevant to foreign language speakers in America, said Free Press in an ex parte filing Friday (http://bit.ly/1aJI6ZT). “This concern is particularly relevant in Latino communities where, historically, foreign investors have ignored American-Latino issues and content in favor of programming from Latin countries.” Though the National Hispanic Media Coalition agrees with some of Free Press’s points, an official said the group doesn’t object to the proposed ruling, since it isn’t actually a rule change. Free Press didn’t provide any evidence for its argument, said Minority Media and Telecommunications Council President David Honig, who has pushed for the clarification for years. “Hispanic broadcasters overwhelmingly favor this policy change."

The draft declaratory ruling would explicitly say the FCC will consider applications for foreign ownership over the 25 percent cap on a case-by-case basis, agency officials have said (CD Oct 25 p5). The item is listed on the agenda for the FCC’s Thursday open meeting, and Commissioners Mignon Clyburn, Ajit Pai and Jessica Rosenworcel have indicated they support the measure. The item has undergone few changes since it was originally proposed, and still doesn’t define the criteria by which a transaction might be approved beyond saying such transactions must pass a national security review, said an agency official Friday. Several media brokers and broadcast attorneys had said the ruling is likely to have the strongest effect on foreign language stations operating in the U.S., which will be attractive investments for foreign broadcasters to get a foothold in America (CD Nov 4 p7).

"For a lot of people who weren’t born in Latin America, content from a different country doesn’t have as much relevance,” said NHMC Executive Vice President Jessica Gonzalez, likening it to BBC sitcoms airing in America. Channels such as Univision and Azteca often cover American Latino issues well on their news programs, but their imported dramas and other shows don’t always resonate with American Latino viewers, she said. “Content that’s imported is not culturally relevant for many American Latinos.” Univision and Azteca didn’t comment.

NHMC doesn’t think this problem should derail the declaratory ruling, but said the FCC has to keep the public interest in mind. Since the FCC would still be reviewing foreign ownership transactions on a case-by-case basis, their effect on local Latino broadcast should be one of the factors in that review, said Gonzalez. “All U.S. licensees have a duty to localism and the public interest.”

The possible threat to local broadcasting is at the center of Free Press’s filing, said Policy Counsel Lauren Wilson in an interview. She said that along with squeezing out local content, international ownership would likely also be less responsive to local concerns and more removed from the market it’s servicing. If the FCC considers the effect on local broadcasting and Latino Americans in its review of foreign ownership applications, it would address some of Free Press’s concerns, said Wilson by email. “The onus must be on broadcasters to show that any proposed deal would serve the public interest, which would include showing that any proposed deal aligns with the Commission’s goals to preserve diversity and localism."

Free Press expressed skepticism the ruling will lead to increased investment in smaller broadcasters. “It is unclear why foreign banks and investors would take a risk on such owners, who are overwhelmingly single-station owners, while American banks and investors have not,” said the filing. Honig said Hispanic broadcasters’ support for the measure invalidates this argument. “These broadcasters understand their own market very well,” said Honig. “They should be given credit for being capable enough and smart enough to know how to deploy capital -- from a variety of sources -- to serve their communities.”