Plan to Auction Airwaves Raises Protest : Communications: Coalition, citing a decline in minority ownership, says the government sale would favor big firms.
As it prepares to auction off valuable slices of the radio spectrum for new communications services, the Clinton Administration is coming under fire from critics who say it hasn’t done enough to help women and minorities acquire an ownership stake in the information networks of tomorrow.
The criticism surfaced last week in a letter sent by the Coalition for Wireless Competition to Federal Communications Commission Chairman Reed E. Hundt, expressing concern that the auctions “will only benefit some large companies.” The issue will receive further scrutiny in a hearing today before the House Subcommittee on Minority Enterprise, at which committee members are expected to challenge Administration officials over their proposed auction rules.
“In the past three years, minority ownership in broadcasting has been in steady decline; with other new technologies now emerging, we believe new and much more aggressive approaches are needed to foster more minority ownership opportunities,” said David Honig, executive director of the Minority Media Ownership and Employment Council, a Washington-based advocacy group.
The House hearing comes only days after a heated Commerce Department meeting at which attorney Thomas A. Hart Jr., who represents minority investors seeking to acquire so-called personal communications services licenses, told Assistant Commerce Secretary Larry Irving that the Administration’s plans to auction the airwaves without more financial incentives for women and minorities amounts to “raping us for $10 billion by not allowing us to compete.”
But there is also opposition to giving special preference to the groups clamoring for it. Preference programs have come under attack in the past from critics who say they are unfair and encourage big companies to ally with minority or female investors who aren’t sincerely interested in running a communications business.
Entertainer Bill Cosby and civil rights lawyer Vernon E. Jordan Jr. are among scores of minority and female applicants who made millions of dollars from FCC preference rules in the 1980s.
The battle over preferences underscores the importance of the government’s fall auctions of radio spectrum to provide new wireless services that will enable users to talk and send faxes and data over the airwaves with hand-held transceivers. Wireless technology is one of the fastest-growing sectors of the burgeoning telecommunications industry.
Beyond financial self-interest, advocates of women, minorities and small businesses say owners in these groups can better bring new technology to rural, inner-city and niche markets that might otherwise be left out.
Although efforts to encourage women, minorities and small businesses to gain PCS licenses have more support this time around, Jerry Lucas, president of Telestrategies, a McLean, Va., consulting firm, says they are still likely to be challenged in court.
“Small businesses, woman-owned or minority-owned companies (aren’t) going to do anything in offering PCS service that is unique or different,” Lucas told his clients in a recent newsletter.
The Clinton Administration says it supports ownership diversity but is also counting on the spectrum auctions to ease federal budget woes.
“We made a $10-billion commitment to the American taxpayer” to reduce federal outlays with revenue from the auction, Irving said during Tuesday’s meeting with minority and female executives.
Since 1978, the FCC has given preference to seekers of broadcast licenses if minorities and women were to be among the owners and managers. Still, just 273 of the nation’s 9,870 radio stations are controlled by blacks, Latinos, Asian Americans or Native Americans, according to the Commerce Department, and just 27 of the 1,151 television stations are controlled by minorities.
