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 Federal  Communications  Commission  FCC  03-  335 
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 SEPARATE  STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN 
 Approving  in  Part,  Dissenting  in  Part 
 Re:  Section  257  Triennial  Report  to  Congress 
 This  Triennial  Report  requires  the  Commission  to  identify  and  report  to  Congress  on  how  it  eliminated  market  entry  barriers  for  entrepreneurs  and  other  small  businesses.  The  purpose  of  our 
 exercise  is  clear  from  the  statute  –  to  promote  the  policies  and  purposes  of  the  Communications  Act  “favoring  diversity  of  media  voices,  vigorous  economic  competition,  technological  advancement,  and  the 
 promotion  of  the  public  interest,  convenience,  and  necessity.” 
 I  share  a  strong  commitment  to  these  Congressional  goals.  Entrepreneurs  and  small  businesses  play  a  crucial  role  in  communications  industries,  from  providing  service  in  rural  and  underserved  areas,  to 
 encouraging  innovation  and  niche  operations,  to  bringing  a  unique  and  diverse  voice  to  the  public  airwaves,  and  countless  other  examples. 


 I  support  most  of  the  Report  and  the  legislative  recommendations.  I  commend  the  Bureaus  involved  for  the  dedication  to  small  business  interests  evidenced  in  the  actions  and  legislative  proposals 
 described  in  the  Report.  In  particular,  a  tax  incentive  program  benefiting  small  communications  businesses,  including  disadvantaged  firms  and  those  owned  by  women  or  minorities,  could  help  create 
 greatly-  needed  diversity  of  ownership  in  the  media  and  other  communications  industries.  Yet,  there  is  more  that  we  can  do  on  the  regulatory  front,  and  I  challenge  the  Bureaus  to  stay  vigilant  in  identifying  and 
 eliminating  market  entry  barriers. 
 I  dissent,  however,  to  any  suggestion  that  the  Commission’s  new  broadcast  ownership  rules  will  promote  “diversity  of  media  voices”  or  eliminate  market  entry  barriers  for  entrepreneurs  and  other  small 
 businesses.  I  believe  they  will  have  the  opposite  effect.  Entrepreneurs  and  small  businesses,  as  well  as  the  general  public,  are  in  no  way  better  served  by  slashing  media  ownership  protections  and  thereby 
 allowing  fewer  media  companies  to  control  what  Americans  see,  hear  and  read. 
 A  license  to  use  the  public  airwaves  means  the  ability  to  promote  the  ideas,  news,  culture,  and  language  of  the  owner’s  choosing.  Unfortunately,  females  and  minorities  historically  have  been,  and 
 continue  to  be,  underrepresented  in  media  ownership.  As  reported  by  NTIA,  in  2000,  minority  broadcasters  owned  a  mere  4  percent  of  the  nation’s  commercial  radio  stations  and  1.9  percent  of  the 
 nation’s  commercial  television  stations  –  the  lowest  level  of  minority  television  ownership  since  the  tracking  of  such  data  began  in  1990.  Minority  ownership  of  broadcast  stations  has  fallen  by  14  percent 
 since  1997. 
 The  June  2003  Biennial  Regulatory  Review  of  Broadcast  Ownership  Rules  will  only  exacerbate  this  worrisome  trend.  The  new  rules  allow  a  massive  increase  in  consolidation  which  will  raise  the 
 already  high  entry  barriers  for  smaller  market  participants  or  new  entrants  in  the  media  industry.  Small  or  single-  station  entrants  will  find  themselves  increasingly  competing  with  large,  consolidated  group 
 owners.  In  more  concentrated  and  more  expensive  media  markets,  entrepreneurs  will  face  even  more  difficulties  raising  capital,  owning  outlets,  or  having  their  unique  voices  heard. 


 Today’s  Report  describes  new  transferability  procedures  that,  in  my  view,  are  too  little  and  too  late.  The  transfer  of  entire  grandfathered  clusters  to  small  entities  will  rarely,  if  ever,  happen.  If  they 
 ever  come  on  the  market  at  all,  small  businesses  may  have  difficulty  raising  the  capital  needed  to  buy  the  expensive,  large  clusters  rather  than  single  stations  or  smaller  clusters.  Even  under  the  new  procedures, 
 the  small  business  can  flip  the  grandfathered  cluster  to  any  large  radio  or  media  conglomerate  after  only  three  years,  leaving  little  protection  against  a  front  company  buying  a  cluster  and  later  selling  it  to  further 
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 increase  the  bulk  of  well-  capitalized  radio  giants.  So  these  new  procedures  in  no  way  offset  the  damage  to  new  entrants  caused  by  the  overall  slashing  of  media  ownership  protections. 
 I  hope  that  I  am  proven  wrong.  Nevertheless,  no  entrepreneur  or  small  business  should  take  comfort  that  this  transferability  exception  will  come  anywhere  close  to  counteracting  the  damage  done  by 
 loosening  the  media  ownership  protections. 
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