Voluntary market agreements not FCC should create incubators.

The Federal Communications Commission today issued a notice of proposed rulemaking as a first step toward creating an incubator program for disadvantaged groups that want to enter the television and radio broadcast industries. According to the Commission, “Such a program would seek to encourage new and diverse broadcast station owners by drawing on the technical expertise and/or financial assistance of existing broadcasters.”

The NPRM also seeks comment from the public on how best to structure and implement the program.

The State via the Commission has a monopoly on access to spectrum. It has the force of law behind this monopoly. It should, for the sake of bond holders, pursue policies that help increase returns on the spectrum that it licenses to private companies. The better broadcast companies perform i.e. attract listeners and views and sell advertisement, the more taxable income for the State and continued flow of income to bond holders.

I don’t see this incubator program doing that. It is a pure political move. It is designed to keep the barbarians aka social justice warriors from knocking down the gate. The Commission has been holding the warriors off since the Clinton Administration by not following through on recommendations to institute such programs. It appears now, with this NPRM, that they are trying to give the impression of progress on the issue of diversity.

They should save their strength.

Any incubation for future broadcast station owners can be done in the private sector. Potential and existing broadcast station owners can enter into voluntary agreements to exchange expertise and financial assistance in exchange for a piece of a minority owner’s action. It should be up to a potential minority owner to explain the economic and financial value that an existing broadcast station owner can glean from an investment in a minority-owned station or outright sale of an existing station to a minority-owned firm.

Think of the decision rule the British Empire imposed on itself when it decided to decolonize. The second world war drained the Empire of resources. Holding on to territories in Africa and the Caribbean was expensive, so they cut a deal with these protectorates. We’ll prepare you for independence and you’ll give us a piece of the economic action.

This is the model that existing broadcast station owners and potential minority-owned firms should enter. Where the existing owner wants to off-load a station and a minority firm shows it can bring value, then they can enter an exchange. The State via the Commission need not involve itself by establishing incubator programs.