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"NABOB 2000: Reflections and Challenges"

Remarks By
FCC Chairman William E. Kennard
Before The
National Association of Black Owned Broadcasters

September 13, 2000
Washington, DC

(As Prepared for Delivery)

Thank you very much for that kind and generous introduction.

It is good to be here with you today, to be among so many friends, and to get a chance to reflect on the work we have done together.

When I try to put these past few years as Chairman into perspective, I am often reminded of the words of Dr. Martin Luther King, who once noted that “the ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”

Looking back, I feel very fortunate to have served as Chairman at this very crucial moment in our history, the advent of the Digital Era. It has been an exciting time to have the privilege to head the Commission, to work with many of the courageous people in this room, and to get a chance to grapple with the unique challenges and controversies presented by this particular transitional moment in history.

I am very proud of the progress and accomplishments we’ve made, particularly given these very daunting challenges facing the FCC at the start of my tenure:

First, and perhaps most importantly, America was transitioning from monopoly to competition, as embodied in the 1996 Telecommunications Act.

Second, while the ‘96 Act embraced competition as the new organizing principle of regulatory policy, it also ironically allowed for unprecedented consolidation -- not only in radio and television, but in all telecommunications industries. When I entered office, telecom companies were in the midst of a feeding frenzy, acquiring each other much more easily than ever before.

Third, digital conversion and the Internet explosion were fundamentally transforming every single industry under the FCC’s mandate, and not the least broadcasting. The forces and opportunities unleashed by digitization and the Internet challenged the basic assumptions that have driven the marketplace for a very long time. And every industry was grappling with these tough new questions.

Fourth, new technologies were significantly restructuring the economy. The rise of the New Economy brought Americans great prosperity, but it also created considerable new dangers. Those without access to crucial new technologies now faced a silicon ceiling that threatened to limit their upward mobility and their full potential.

So these were the forces swirling around me at the time I took office, the forces that in many ways defined my chairmanship. In a sense, these forces could be called the birth pangs of the New Economy

Some people have referred to me as the first FCC Chairman of the New Economy. I’ll leave it to the historians of the future to confer that title.

But, I am also known as the first African-American chairman. I don’t think there’ll be as much dispute about that!

One of the main reasons I had the opportunity to serve as the first African-American chairman now is because of NABOB, and I’ll be forever grateful for your support.

And, as the first African-American chairman, I should note that I began my tenure in the most hostile environment we’ve had for affirmative action programs since they began thirty-some-odd years ago.

For the first time ever, we had witnessed a breakdown in the bipartisan coalition that had for so long supported government measures to assist minorities in starting businesses. Only two years before I took office, in 1995, Congress had repealed the single most important policy for promoting minority broadcast ownership in our history, the tax certificate. And we also faced a judiciary that has been hostile to any government efforts to remedy discrimination.

But, as Winston Churchill once said, “Difficulties mastered are opportunities won!” I’ve always believed that when one avenue is closed to you, you find other ways to make progress, and you keep the fight alive.

So, despite the daunting challenges we faced in 1997, I believe that we managed to direct our efforts in such a way as to capitalize on these challenges. And I think we have a lot to show for it.

Recognizing that the broadcast industry was entering a period of unprecedented consolidation, I appealed to the broadcasters who stood to benefit most from consolidation to bring others with them – to reach out and help minority businesses. Out of these outreach efforts came the Prism (now Quetzal) Fund, an $175 million investment by the broadcasting industry to help women and minority entrepreneurs get access to capital and shatter the glass ceiling that limits ownership opportunities.

We also encouraged consolidating companies to consider minority-controlled entities when they have to spin-off properties. As a result we’ve seen 43 new minority-owned stations in the last 4 years. Indeed, the Clear Channel merger last month accounted for 29 of those new stations, the single biggest one-time increase in minority ownership in history.

We attacked head-on the decades-old problem of the advertising industry undervaluing the purchasing power of minority consumers and discounting the value of your advertising to minority communities. From that work, we produced the first ever systematic study of advertising industry bias. And from that study, we have developed guiding principles to oppose urban dictates and Spanish-language dictates in the future.

When the courts struck down our Equal Employment Opportunity rules, many said that that was the end of EEO rules for the broadcast and cable industries at the FCC. But we said, “No. We’ll find another way.” We responded to the court’s guidelines and adopted new rules.

NABOB was the only commercial broadcast trade association that stood with me on that question. I am grateful for that support and I thank you for it.

We have also struggled to bring technology to the people in most danger of being left on the wrong side of the Digital Divide.

Thanks to the leadership of President Clinton and Vice-President Gore, we have wired one million classrooms to the Internet through the e-rate program. According to a recent study by Forrester Research, African-American access to the Internet will increase by 42% and Hispanic access by 20% as a result of the e-rate.

We have worked with Native American tribal governments to help them make decisions about telecommunications services for tribal residents and to increase their options for finding affordable and effective telecommunications service solutions.

We have encouraged industries through our disabilities initiative to incorporate digital curb cuts into their products in the design phase, so we can unlock the potential and productivity of people with disabilities through the use of technology that acknowledges their special needs.

And we have also tried at every turn to create more opportunities for people to use the airwaves to speak for their communities. That’s what Low Power FM is all about. I always wish that we could have found ways to work together on that, because I do believe that Low Power FM will increase diversity and build stronger communities across this nation.

In each of these areas, I have sought allies outside the Commission who believe as I do. Allies who believe that the role of government is not to serve as a shield for the interests of the powerful and the status quo, but as a sword to slash through the injustices of the old order and to cut a swath wide enough so that all people can be full participants in the Digital Age.

And I’m here today to thank NABOB for being my ally in almost every one of these efforts.

I want to thank Jim Winston in particular for his leadership and his friendship these past two and a half years. In a city often known for rewarding crass behavior and double-dealing, Jim has always been a man of his word and a consummate gentleman. He proves that it’s possible to be a very tough negotiator and a class act at the same time.

I also want to thank Lois Wright and Peppy Sutton for their hard work and leadership these past few years. Lois, Peppy…thanks.

But we are not done. Now is not the time to rest on our laurels. We’ve still got lots of work to do.

We still have much to look forward to and many more challenges ahead.

First, I have presented a rulemaking to my colleagues to change the way that we define radio markets, so that we can bring our rules more into line with commercial realities and address the most egregious cases of consolidation in local radio. We have seen transactions in which a single company proposes to acquire 70% or 80% of the radio revenues in a marketplace. That is not what Congress intended in the ’96 Act. And I hope I’ll have your support in urging my colleagues at the FCC to adopt new rules to close this loophole.

We must also plan for the future.

Soon, the FCC will release several studies designed to address the challenges raised by the Supreme Court in the Adarand case. These studies are now in their final stages, and we will be holding a roundtable next month to discuss their findings. I very much hope you will attend.

We must continue to work on reinstating the Tax Certificate policy. The tax certificate is the single most effective means of advancing minority broadcast ownership. And we should try to expand it to provide a pathway for minority businesses to participate not only in broadcasting but in the entire exciting array of business opportunities in the New Economy, from Competitive Local Exchange Carriers (CLECs) to wireless data providers.

We must also continue to articulate why broadcasting in the public interest is important. You can help by helping me define the public interest role of broadcasting in the Digital Age. NABOB’s members are unique among the industry in embracing the special responsibility of broadcasters to enhance the often unheard voices in our communities. So you are a singularly powerful voice in the public interest debate, and I very much hope you will participate.

In fact, I will be holding a forum in October on this subject, and I hope you will come and share your important perspectives, particularly upon the effects of explicit sex and violence in the media and its impact on our children and communities.

I am convinced that, together, we can and will eliminate all the barriers to access facing minorities in the New Economy. We can and will have minority ownership at every level of the broadcasting industry. And NABOB will have a thriving, rapidly expanding membership.

And it will come a lot faster if we continue to work together and commit to the hard things. And I believe that, when that happens, people will look back and they’ll say "Well, what was the turning point? What made this happen?"

And, unquestionably, people are going to look at this period in history and realize that at the dawning of this new century, there was a change. Government and industry made a mutual commitment to do things differently in telecommunications: to establish competition, diversity, and fairness as our guiding principles, and to ensure that every American – regardless of ethnicity or gender -- will be able to partake in the wonders of the Digital Age.

And, when we look back on that period in history, I will remember all the friends I made in this room and know that we were the foot soldiers who kept the flame alive, even at the most challenging of times -- and that will be a wonderful legacy for us all.

Thank you very much.

-- FCC --