Reinstating the UHF Discount will help advance minority ownership

Armstrong Williams | 5/4/2017, 11:45 a.m.
The FCC’s April 20, 2017, decision to reinstate the UHF Discount should be heralded as a significant opportunity to advance ...
Armstrong Williams

The FCC’s April 20, 2017, decision to reinstate the UHF Discount should be heralded as a significant opportunity to advance diversity and minority broadcast television ownership. For years we have urged the FCC to address the continuing paucity of minority and new entrant broadcast ownership. Howard Stirk Holdings companies, of which I am the sole owner, represent one of only two African-American television station licensee enterprises in the United States today. My ownership opportunity came about when, to meet various FCC ownership limits, stations had to be spun-off from a larger multistation sale involving Sinclair Television Group, Inc. and the Barrington Broadcast Group, LLC back in 2013.

Without the UHF Discount, these larger sales agreements would never have happened. The national cap artificially limited the ability of broadcasters to compete in the larger media market against Comcast, Charter, Verizon, AT&T, etc., none of which have these limits.

The UHF Discount was first adopted by the FCC in 1985 in recognition of the technical differences between UHF and VHF television signals, and has been confirmed by Congress several times since. When calculating compliance with the national ownership rules, which allow a single owner to hold an unspecified number of stations as long as the aggregate coverage is less than 39 percent of the national audience, UHF stations are discounted and counted as serving only half of the audience in the market.

But when the FCC decided in 2013 to open a proceeding to eliminate the UHF Discount, but not to also adjust the national audience cap, the ability for similar Sinclair and Barrington transactions promptly ended. This development gravely limited the opportunity for minority owners such as Howard Stirk Holdings to acquire stations subject to spin-off. In addition, because of other actions taken over the past four years by the FCC, well-established broadcasters such as Sinclair and Nexstar have been effectively prevented from aiding minority owners with financing, Joint Sales Agreements and Shared Services Agreements.

Despite the approved use of JSAs for nearly 20 years, for example, in the name of advancing diversity and minority opportunity, which is also among the reasons the FCC removed the UHF Discount, the FCC made JSA ownership attributable, again hobbling broadcasters’ ability to compete in the market. JSA ownership was a proven way for larger broadcasters to work with minority and new entrant owners, which was and continues to be my circumstance.

It was tragic when the Wheeler FCC removed JSAs and SSAs as effective ways for larger broadcasters to work with smaller ones, such as Howard Stirk Holdings.

As a minority broadcast owner, I simply would not have been able to fulfill my lifelong dream and ambition of being a TV network broadcast station owner without first being allowed to acquire stations that had to be spun-off as part of a larger transaction, and without the critical use of JSAs and SSAs.

Now that the FCC has corrected its mistake and reinstated the UHF Discount, which allows broadcasters to fairly compete with the AT&Ts and the Verizons of the world, I firmly believe market principles will again provide opportunity for minority and underrepresented communities to compete.

Since the 1970s the FCC has expressed the need to enhance minority ownership and diversity. Yet, the problem remains. Out of the several thousand televisions stations across America, only 12 are owned by minorities (including women, Latinos, Asians and Blacks) and I own seven. So clearly tremendous work remains to be done. The time is long overdue for the FCC to let the free market work to help resolve the matter, and as the National Association of Broadcasters noted, “reinstating the UHF Discount represents a rational first step in media ownership reform policy, allowing free and local broadcasters to remain competitive with multinational pay TV giants and broadband providers.”

Chairman Ajit Pai and Commissioner Michael O’Rielly deserve a heartfelt thanks for their leadership and work on this critically important issue. It is without any doubt, a step in the right direction for drastically increasing the FCC’s stated goal of minority ownership.

Mr. Williams is manager/sole owner of Howard Stirk Holdings I & II Broadcast Television Stations and the 2016 Multicultural Media Broadcast Owner of the year. Listen to Mr. Williams on Sirius XM126 Urban View nightly 6 p.m.-8 p.m. EST. Follow on Twitter @arightside.