CQ WEEKLY – IN FOCUS
Oct. 27, 2012 – 2:05 p.m.
Changing Channels on Minorities
By Ambreen Ali, CQ Staff
The spectrum auctions that Congress authorized earlier this year promise to usher in new services for Americans hooked on their wireless devices and also broaden access to new communities. But some lawmakers say the auctions risk hurting those consumers already on the losing side of the digital divide.
The auctions scheduled for 2014 are an incentive for broadcast television stations to sell their spectrum licenses back to the government so they can be reissued to wireless companies for broadband and mobile expansion. But the process, warns the Congressional Tri-Caucus, could disproportionately affect African-Americans, Asians and Hispanics, because they depend more heavily on free, over-the-air programming than does the general public.
Less-profitable TV stations are not only more likely to take the deal, they’re also more likely to cater to niche communities, including minorities and the economically disadvantaged. If those stations opt to sell their spectrum rather than stay in business, some lawmakers say, the broadcast landscape will become increasingly homogenous, and minority communities will lose out on programming tailored to them.
Even stations that decide to stay in business may be affected, because the Federal Communications Commission is expected to repackage the frequencies of all the remaining TV stations into a compressed spectrum band after the auctions. Some members of Congress are urging the commission to tread carefully and ensure that consumers are given ample notice of any changes in channels or programming.
“When we’re talking about spectrum and free Internet for mobile devices, we understand that’s a necessary endeavor,” says Rep.
The Texas Democrat adds that Congress will work with the FCC to address those concerns and “to have our voices heard.”
Relying on Broadcast
Shortly before the FCC convened Sept. 28 to begin laying its plans for the auctions, the Tri-Caucus chairmen sent a letter urging the commission to ensure that there is no loss of service for the 28 percent of Asian, 23 percent of black and 26 percent of Latino households that rely on broadcast television. Those figures, from a June survey by the market research agency GfK, demonstrate a stronger dependence on broadcast among minorities than among the general population, in which fewer than 18 percent of households consume broadcast exclusively.
In its first public draft plan on structuring the auctions, the FCC asks for input on preserving the signals of the broadcast stations that the Tri-Caucus wants to remain on the air. Rep.
“I’m concerned that these communities may not even know if the channels are moved,” Chu adds. “They may face interruptions in service and may not know what is happening.”
But any loss of broadcast service in those communities caused by the auctions must be weighed against the upside: the unleashing of broad swaths of spectrum that will benefit consumers of mobile and Internet services, including minorities, who actually tend to lead the market in adopting mobile technologies.
According to Nielsen, smartphone market penetration is highest among Asians, at 60 percent, followed by Hispanics at 50 percent, African-Americans at 48 percent and whites at 39 percent.
Changing Channels on Minorities
Nielsen found last year that African-Americans watch a greater amount of traditional television than do people in other ethnic groups, but they also consume the most mobile TV. Asians lead in time spent watching Internet video, and Hispanics also watch at higher rates than the general population. White Americans watch less video on the Internet or mobile phones than the other ethnic groups.
The Nielsen data also shows that, overall, the television audience is consuming less network television and more paid cable and satellite stations. That has led broadband proponents to argue that consumers will not mind some loss of broadcast programming.
Weighed “against the costs, which are speculative, are the benefits of greater availability of high-speed mobile spectrum that we do know, from the data, African-Americans rely on more than white folks,” says John Horrigan, a vice president of the Joint Center for Political and Economic Studies, which advocates for minority communities.
In his former role as a senior staff member at the FCC, Horrigan helped develop the Obama administration’s National Broadband Plan, which urges the expansion of wireless spectrum. In 2009, Horrigan conducted an agency study that questions whether minorities truly depend more on broadcast than do other communities. It found that 85 percent of African-Americans and Hispanics pay for cable or satellite TV, just one point less than the percentage of the general population that does so.
“As society goes more and more toward the provision of goods and services online, that often hollows out offline options for carrying out day-to-day tasks,” he says.
The Tri-Caucus leaders acknowledge the benefits of broadband for their communities, but they say the statistics on adopting mobile technology do not reveal the full picture on factors such as age and income disparities. Younger Latinos may be hip to online video streams, but their elders are less likely to know how to watch telenovelas online should their local Spanish-language TV station go out of business.
“Even though you can say that mobile devices are well-represented in minority communities, I think you have to dig a little deeper into the type of devices, the type of packages that they are subscribing to and what is the use,” Gonzalez says.
Moreover, as National Association of Broadcasters President Gordon H. Smith points out, any transition from broadcast to broadband asks consumers to give up a free service for one with fees.
“What has driven this policy from the beginning was a bias toward companies that would bill you by the bit and against those that provide programming for free,” says Smith, a former Republican senator from Oregon who served on the Commerce, Science and Transportation Committee, which oversees spectrum policy.
Although the NAB supports the auctions, many broadcasters consider the Obama administration’s zeal to make more spectrum available to wireless companies an indication of bias against their sector.
“The sad irony,” Smith says of the auctions, “is that the people most harmed are those most aligned with President Obama’s political base.”
Diversity in Ownership
Proponents and detractors alike agree that the FCC’s initial proposal asks the right questions about the auctions’ potential impact on minorities. But minority advocates say the agency should do more, including encourage diversity in media ownership.
Changing Channels on Minorities
At the September FCC meeting, Commissioner Mignon Clyburn praised the agency for considering the use of bidding credits to help small businesses — particularly those owned by minorities and women — access spectrum.
David Honig, president of the Minority Media and Telecom Council, which supports the auctions, sees new opportunities online for minority broadcasters and says the FCC can use tax incentives to encourage them.
“There’s little disagreement that, overall, broadcasting carries more diverse views and perspectives when ownership is diverse,” Honig says. “More people who couldn’t get into terrestrial broadcasting could get in on the broadband or wireless side.”
The agency could use unlicensed spectrum to encourage minority entrepreneurs, adds Michael Copps, a former FCC commissioner and the adviser behind the new Media and Democracy Initiative at Common Cause, which is designed to promote diversity in media. In a recent speech to the National Association of Black-Owned Broadcasters, he suggested setting aside prime-time blocks on networks for independently produced programming.
“It shouldn’t just be a policy of wholesale transfer of spectrum from big media to big telecom,” Copps says.
The ideas being floated by such advocates highlight the options before the FCC. In dictating how spectrum is freed up for wireless use, the agency could reset the rules at play in both the broadcast and broadband sectors.
But Honig says that the commission has to be proactive if it is serious about encouraging diversity programming and that Congress has to hold the FCC’s feet to the fire. At the end of the year, the agency is due to deliver to Congress a triennial report on market-entry barriers in telecommunications and information services. Lawmakers, he says, should urge timely completion of the report, which is often submitted late, and use it to hold hearings on the concerns raised by the Tri-Caucus chairmen.
“I hope that Congress will review the report on time, and I hope that they’ll do so recognizing that we’re in the midst of this critical transition,” he says. “They can ensure the transition is done in a way that advances diversity to the benefit of consumers.”
FOR FURTHER READING: Spectrum auction authorized, CQ Weekly, p. 359; spectrum “crunch,” 2010 CQ Weekly, p. 2795.