Like many media industries, radio has long been dominated by a relatively small group of people who control the means of production, who have the resources and the political leverage/influence to further their interests and exclude competitors. This paper will discuss how this exclusion has particularly affected minorities in their quest for a stronger presence within the media. To demonstrate the magnitude of this problem, the Commerce Department's National Telecommunications and Information Administration (NTIA) has reported that minorities currently make up approximately 27% of the US population, yet they only own less than 3% of all radio and television stations1. (See Appendix, Exhibit 1.)

Because the United States was founded on the notion of liberty, free speech, and diversity, we must promote plurality and diversity of viewpoints in radio broadcasting. It is vital for minorities to be able to exercise some control over editorial content and programming selection, to offer audiences a minority perspective and represent and give exposure to issues that are important to minority communities. Moreover, we should promote a heterogeneous broadcasting community to prevent any undue concentration of economic power.

The challenges which minority broadcasters face can be generally categorized into three areas. First, government policy regarding broadcast regulations should be favorable to-- or at least not restrictive of-- minority entry. Second, any broadcaster must obtain enough capital to buy the expensive equipment that is required to establish a radio station. Minorities in particular face challenges in this area because on average they have lower incomes and less influence to tap into significant financial resources. Third, minority broadcasters have difficulties generating revenues necessary to cover their operating costs even after they buy a radio station because of racial biases in advertising practices.

According to an NTIA study conducted this year, access to capital (e.g. via bank loans) remains the most significant barrier to ownership. Larry Irving, assistant secretary of Commerce for Communications and Information and an NTIA administrator commented, "The study found that in communities where black-owned banks exist, there is a much greater likelihood for the presence of a minority owned radio or television station." To help lift this barrier, the NTIA encourages majority/minority partnering to increase the number of minority entrepreneurs and minority-owned businesses in the telecommunications and information industries. Furthermore, a few independent groups such as the National Broadcasters Association have initiated funds to help finance minorities wishing to enter the broadcasting industry.

The most significant piece of public policy to affect the status of present and future minority broadcasters is the 1996 Telecommunications Act. By relaxing previously imposed ownership caps, this legislation has allowed several large media conglomerates to expand, thereby threatening the existence of small, minority-owned stations. These smaller stations mainly face the threat of being bought out by bigger, more powerful broadcasting companies. In 1996, for example, 26 Black radio stations were either bought by a larger corporation or simply went out of business, partly precipitated by the Act2. This conglomeration of stations into the hands of fewer and fewer players has had the effect of greatly increasing station prices and thus raising the barriers to (minority) entry even more.

In addition, small stations must contend with the big companies that can "easily manipulate the flow of news and information3," possibly creating a bottleneck. This would put small, minority-owned stations at a disadvantage because having access to up-to-the-minute information is crucial in the media industry. Such a bottleneck would give the power of that access to a select few, leaving the media vulnerable to the their whims and selective interests.

Like the newspaper and television businesses, radio broadcasting is primarily financed through advertising revenues. Currently, minority broadcasters must struggle to convince advertisers to place ads with them. In fact, even when they succeed in getting advertisements, they often receive much lower rates per second than general market stations. These forms of discrimination are more commonly referred to as 'minority discounts' and 'no urban/Spanish dictates.'

Minority discounts describe the discrimination that occurs when minority-owned or minority-formatted stations are paid less money for airtime, i.e. less "per point", than their general market counterparts. Such discounts are measured in terms of cost per point, which is the rate that advertisers pay to reach 1% of the entire population. For example, in New York, a Spanish-formatted station has a 6.1 local commercial share (and indication of audience size) but only earned $21.5 million in 1997. In that same year, two general market stations with local commercial shares of 4.6 and 5.5 earned $34.8 and $37.3 million, respectively. (See Appendix, Exhibit 4.)

No urban/Spanish dictates are policies often adopted by advertising agencies that make blanket restrictions against advertising on minority stations. When the FCC surveyed some 3,745 minority-formatted stations, ninety-one percent indicated that they had encountered such dictates4. Usually these dictates are explicitly stated as part of the company's policy, but sometimes, they appear in other, less direct forms. For instance, a Volvo dealership in New York did not want to advertise on a black station, claiming that they wished to target a demographic audience with certain characteristics that precluded the average Black person, i.e. college graduate plus, income of $65k, ages 25-54. However, even when presented with research that indicated that most Volvo owners did not fit this profile and that a significant portion of Volvo owners in New York were African-American, the dealership still refused to advertise with the station.

Like many other companies that practice discrimination against minority-formatted or owned stations, this Volvo dealership felt compelled to exclude minorities out of a desire to maintain a certain product image. In this case, it is reasonable to assume that they wanted to present Volvo cars as luxury items, not wishing to be associated with urban stations, which generally serve communities with smaller incomes and lower education levels. Even if the managers at the dealership were not personally biased against minorities, they may have made their advertising decisions based on the perceptions and prejudices of the public at large, i.e. Whites. In another telling example, JC Penney launched an Afro-centric line of products a few years ago that turned Out to be very successful. However, it was widely believed that the chain

cancelled the line for fear of having Whites think of IC Penney as a "Black store." 5

Although it is true that minorities on average have lower incomes and lower education levels than the general public, research has shown that they actually have higher consumption patterns. US Census data reveal that African Americans outspend the average consumer in several categories: telephone service, utilities, major appliances, apparel, and certain types of groceries (see Appendix, Exhibit 2). In other words, advertisers would receive a higher marginal return for advertising to the minority market because, for example, the black population tends to spend more on particular luxury items. In addition, minorities as a percentage of the US population is projected to increase from approximately 26% in the mid-i 990s to almost 50% by the year 2050 (See Appendix, Exhibit 3). Still many advertisers retuse to spend money on minority markets.

In addition to fighting images of minorities as being less affluent, broadcasters are hurt by stereotypes of minorities as being thieves, inclined to violence and pilfering. One prominent advertising representative firm, Katz Media, sent out a memo to its clients, saying that advertisers should avoid minority stations because they (the clients) want to seek out "prospects, not suspects." This very controversial memo galvanized action by minority community groups and prompted a retraction by Katz. Still, the reality remains that much discrimination goes on in business both big and small. In fact, some broadcasters believe that the real problems lie in smaller advertisers. Big companies such as AT&T etc have the resources and manpower to research their markets thoroughly and thus realize the incredibly lucrative market they may have in minorities. In fact, many companies do not advertise in minority markets because they are uninformed, often making decisions from corporate headquarters that are far-removed from the realities of the market and basing them on ill-founded assumptions. To combat this problem, some independent groups do market research on behalf of the minority radio broadcasters to encourage advertisers to do business with these stations, as will be discussed later in this paper.

The contribution of national sales reps such as Katz to discrimination in advertising is not uncommon. Some of these firms have been found to discourage advertisers from "overbuying" the minority market in order to benefit the stations that they cover. Rather than have the advertisers purchase more comprehensive coverage and risk giving business to competitors, ad firms might convince companies that their own minority-formatted stations are sufficient to cover the entire market. Or, they may try to convince firms that there is no need to advertise with minority-formatted stations. Instead, advertising on a general market radio station would be adequate since minorities listen to those stations as well. (See Appendix, Exhibit 5.)

Discrimination in advertising generates a vicious cycle of failure within minority broadcasting. As long as minority broadcasters are unable to collect sufficient revenues, the quality of their stations' programs will suffer, and in turn, poor programming will decrease its listernership. With a smaller audience, the station will attract even less revenue, and its market value will also fall. By decreasing the profitability of minority-owned stations, these series of events would decrease the number of minority stations and lower the market values of existing ones.

Recognizing the gravity of these issues, Vice President Al Gore brought them to the public attention last year. In response, the FCC has taken great strides to more proactively pursue solutions to the problems in minority broadcasters face, particularly in the area of advertising. When the American Advertising Federation met earlier this year in February, FCC Chairman William Kennard outlined several ways in which the FCC plans to alter the status quo. First, in order to form viable solutions, it must identify the problems by collecting relevant data. It plans to do so by amending its broadcast licensee reporting forms to indicate which of the licensees are minorities or female. In addition, the FCC's State of the Radio Industry report will now include a section on minority-owned stations, publishing data about them and thereby tracking their progress. In general, the FCC has vowed to renew its principles toward promoting minority interests, but still, its influence is limited because it only has the power to regulate broadcasting; the advertising industry is actually regulated by the Federal Trade Commission. The FCC is currently looking into forming a joint task force with the FTC to set policies on acceptable advertising practices. One possible solution might be to require advertisers to evaluate stations on more objective criteria, such as prices and market research on ratings and audience characteristics.

Perhaps the most well-publicized proposal to address this issue is one suggested by Kennard: "microradio." The FCC could effectively expand the number of broadcast opportunities for minorities by creating "two or three low-power classes with potentially hundreds of stations, each with power up to 1 kilowatt on the FM band...." Currently, the FCC will only authorize FM radio licensees if they can operate at 6000 watts, and commercial FM stations must operate at a minimum of 100 watts. By being allowed to provide low power service, community groups and small businesses that cannot afford the facilities and equipment necessary for a full-power station will be able to operate smaller, less expensive ones. Not only would these stations be cheaper to operate, but priority for license grants would be given to minorities as well, giving them a competitive advantage. Unfortunately, since these micro-stations would essentially be "squeezed in" among existing broadcast signals, the established broadcasters would strongly oppose them and would likely use their political influence to halt the development of microradio.

Still, separate from the FCC or the FTC, minority broadcasters can also find support from the government through the Minority Telecommunications Development Program (MTDP), a division of the NTIA. The program provides training for them in the form of a management program known as ComTrain. It is also responsible for collecting data, examining trends and business opportunities, and organizing conferences, all for the benefit of minority broadcasters. By collecting more comprehensive data and making such information widely available, groups like the MTDP are making an important contribution to the dismantling of all types of discrimination, both deliberate and inadvertent.

However, feeling that government policies will not solve all of these problems, some groups within the radio industry have attempted to alleviate them through industry-wide and industry-initiated actions. For instance, the National Association of Broadcasters recently pledged $10 million dollars toward helping minorities purchase TV and radio stations. As alluded to earlier, many independent groups have been forming over the years to break down misconceptions by advertisers and thereby encourage them to places ads with minority broadcast stations. For example, The Interep Store, a national rep firm, investigates reports of advertisers who have expressed a reluctance to place ads on the stations of their minority clients. According to Stewart Yaguda, and Interep executive, advertisers usually change their dictate after being presented with the research6.

In the past several years and this year in particular, the trend has been towards encouraging increased minority ownership. With strong efforts on the parts of both the government and the radio industry to reduce the amount of discrimination and lower barriers to entry into the broadcasting industry, we can look forward to a more diversified community within the radio industry-- and hopefully within other media industries as well.

Appendix

WAGO-AM (Gospel)

WENN-FM (Urban Contemporary)

WATV-AM (Urban Contemporary)

WAYE-AM (Religious)

WEUP-AM (Black Contemporary)

WTQX-AM (Black Contemporary)

WZZA-AM (Black Contemporary/Gospel)

WBIL-AM/FM (Black Contemporary)

WAPZ-AM (Rhythm & Blues)

KYFX-FM (Adult Contemporary)

KLRG-AM (Gospel)

KMZX-FM (Urban Contemporary)

KCLT-FM (Black Contemporary)

KAKJ-FM (Black Contemporary)

KBLX-AM/FM (Adult Contemporary)

KOJJ-FM (Adult Contemporary)

KJOP-AM (Hispanic Country)

KJLH-FM (Urban Contemporary)

KGFJ-AM (Black Contemporary)

KDIA-AM (Urban Contemporary)

KMAX-FM (Religious, Ethnic)

KWIZ-FM (Christian)

KEST-AM (Asian/European International)

KCKC-AM (News, Talk)

KAEV-FM (Urban Contemporary)

KDKO-AM (Black Contemporary)

WKND-AM (Black Contemporary)

WKYS-FM (Urban Contemporary)

WOL-AM (News, Talk)

WMMJ-FM (Black Soul)

WHUR-FM (Black Contemporary)

WRBD-AM (Rhythm & Blues)

WSVE-AM (Religious)

WPUL-AM (Black Contemporary)

WRXB-AM (Adult Contemporary)

WTMP Radio LTD

WTMP-AM (Urban Contemporary)

WJIZ-FM (Solid Gold)

WJYZ-AM (Oldies, Gospel)

WOKS-AM (Black Contemporary)

WFXE-FM (Urban Contemporary)

WUWU-AM (Gospel)

WKKN-FM (Country)

WHKN Radio

WHKN-FM (Country)

WTJH-AM (Inspirational)

WIZA-AM (Christian Gospel)

WBKZ-AM (Gospel/Blues)

WVON-AM (Talk)

WESL-AM (Gospel)

WBEE-AM (Jazz)

WSSQ-FM (Adult Contemporary)

WSDR-AM (News/Talk)

WZZT-FM (Urban Contemporary)

WBGE-FM (Urban Contemporary)

WLTH-AM (Talk)

WPZZ-FM (Urban Contemporary)

WUBU-FM (Adult Urban Contemporary)

WWCA-AM (Religious)

WLOU-AM (Rhythm & Blues)

WXOK-AM (Rhythm & Blues)

KQXL-FM (Urban Contemporary)

KBCE-FM (Urban Contemporary)

KJCB-AM (Black Contemporary)

WYLD-AM/FM (Urban Contemporary)

WBOK-AM (Gospel)

KFXZ-FM (Urban Contemporary)

WERQ-AM/FM (Urban Contemporary)

WWIN-AM/FM (Urban Contemporary)

WILD-AM (Urban Contemporary)

WJZZ-FM (Contemporary Jazz)

WGPR, Inc.

WGPR-FM (Black Contemporary)

WCXT-FM (Light Mix Contemporary)

WCHB-AM (News, Talk)

WKWM-AM (Urban Contemporary)

WXLA-AM (Urban Contemporary)

WDZR-FM (Oldies)

WOWE-FM (Adult Contemporary)

WACR-AMIFM (Urban Contemporary)

WESY-AM (Gospel and Soul)

WBAD-FM (B lack Contemporary)

WGNL-FM (Urban Contemporary)

WORV-AM (Black Contemporary)

WJMG-FM (Adult Contemporary)

KISF-FM/KCTE-AM (Nostalgia)

KPRT-AM (Gospel, Jazz)

KPRS-FM (Urban Contemporary)

KTRL-AM (Jazz, Religious, Talk)

WUSS-AM (Urban Contemporary)

WCMC-AM (Album Oriented Rock)

WZXL-FM (Album Oriented Rock)

WUFO-AM (Urban Contemporary)

WLIB-AM (News, Talk)

WBLS-FM (Urban Contemporary)

WDKX-FM (Urban Contemporary)

WWRL-AM (Gospel)

WVOE-AM (Urban Contemporary)

WGSP-AM (Gospel)

WSRC-AM (Religious)

WBXB-FM (Gospel)

WQOK-FM (Urban Contemporary)

WLLE-AM (Rhythm & Blues)

WEED-AM (Country)

WRSV-FM (Urban Contemporary)

WTNC-AM (Gospel)

WSMX Radio

WSMX-AM (Religious)

WMQX-AM (Religious)

WCER-AM (Adult Mix)

WIZF-FM (Urban Contemporary)

WCIN-AM (Black Contemporary)

WRZR-FM (Hard Rock)

WDAO-AM (Rhythm & Blues)

WJTB-AM (Urban Contemporary)

KBT Communications, Inc.

WHAT-AM (Talk)

Willis Broadcasting

WURD-AM (Gospel)

WYJZ-AM (Oldies)

WAMO-AM/FM (Urban Contemporary)

WRAW-AM (Urban Contemporary)

WRFY-FM (Urban Contemporary)

WVGB-AM (Gospel)

WTGH-AM (Gospel)

WWWZ-FM (Urban Contemporary)

WPAL, Inc

WPAL-AM (Rhythm & Blues)

WMCJ-AM (Religious)

WBOL-AM (Gospel)

WOJG-FM (Gospel)

WFKX-FM (Urban Contemporary)

WLOK-AM (Gospel)

WDIA-AM (Urban Contemporary)

WHRK-FM (Urban Contemporary)

WMDB-AM (Urban Contemporary)

WVOL-AM (Classic Soul)

WQQK-FM (Urban Contemporary)

KWWJ-AM (Religious)

KEGG-AM (Gospel)

KHEY-AM/FM (Country)

KHRN-FM (Urban Contemporary)

KCOH, Inc.

KCOH-AM (Urban Contemporary)

KKZR-FM (Rock)

KJOJ-FM (Gospel)

KSJL-AM (Urban Contemporary)

KSAQ-FM (Urban Contemporary)

KUMT-FM (Adult Contemporary)

KMXB-FM (Adult Contemporary)

KCPX-AM (Adult Contemporary)

WTJZ-AM (Gospel)

WOWI-FM (Urban Contemporary)

WSVY-AM/FM (Urban Contemporary)

WREJ-Radio

WREJ-AM (Christian)

WFTH-AM (Contemporary Gospel)

WPCE-AM (Inspirational)

WMYK-FM (Inspirational)

KUJ-AM (Oldies)

KNLT-FM (Adult Contemporary)

WMC S-AM (Adult Contemporary)

WLUM-FM (Adult Contemporary)

WNOV-AM (Urban Contemporary)

WKKV-FM (Jazz)

WSTX-AM/FM (Calypso, Stardust)

WSTA-AM (Adult Contemporary)

WTBN-FM (Adult Contemporary)

KSUN-AM (Spanish)

KPHX-AM (Spanish)

KQTL-AM (Contemporary Spanish)

KTZR-AM (Spanish)

KZLZ-FM (Spanish)

KAFY-AM (Spanish)

KZSA-FM (Spanish)

KSUV-AM/FM (Spanish)

KNTO-FM (Spanish)

KLAX-FM/KXED-AM (Ranchero Nortena)

KLOQ-AM (Spanish Language)

KEXT Broadcasting, Inc.

KXLM-FM (Spanish)

KNSE-AM (Spanish Contemporary)

KTGE-AM (Spanish)

KLFA-FM (Spanish)

KIQI-AM (Spanish)

KAZA-AM (Spanish)

KRRS-AM (Spanish)

KNTA-AM (Spanish)

KKLF-FM (Spanish)

KIEZ-AM (Spanish)

KURS-AM (Spanish)

KTME-AM/KRQK-FM (Spanish)

KGBA-FM (Religious Spanish)

KZWC-FM (Spanish)

KZSF-FM (Spanish)

KMMM-FM (Spanish)

KCAL-AM (Spanish)

KMQA-FM (Spanish)

KCUV-AM (Latin Top 40)

KBNO-AM (Spanish Contemporary)

KJME-AM (Spanish)

KVVS-AM (Spanish)

WCUM-AM (Spanish)

WADS-AM (Adult Contemporary)

WONQ-AM (Spanish)

WCMQ-AM (Spanish)

WZMQ-FM (Spanish)

WAQI-AM (Spanish)

WRTO-FM (Spanish)

WOCN-AM (Spanish, News, Talk)

WAMA Radio Hits

WAMA-AM (Spanish)

WXTO-AM (Spanish)

WRMD-AM (Spanish)

WTRR-AM (Talk)

WKIQ-AM (Talk)

WUNA-AM (Religious)

WAOS-AM/WXEM-AM (Spanish)

WLBA-AM (Spanish)

WOPA-AM (Spanish)

KGLA-AM (Spanish)

WILC-AM (Contemporary Spanish)

WMDO-AM (Spanish)

KABQ-AM (Spanish)

KXKS-AM (Spanish)

KDCE-AM (Spanish)

KALY-AM (Spanish Hits)

KCRX-AM (Spanish)

KRDD-AM (Spanish)

KSWV-AM (Spanish)

WSKQ-AM/FM (Spanish)

KZUE-AM (Spanish)

KINK-AM/FM (Spanish)

WPRE-AM (Spanish)

KELG-AM (Spanish)

KKLB-FM/KTXZ-AM (Spanish)

KFLZ-FM (Spanish)

KEJS-FM (Spanish)

KBOR-AM/FM (Spanish)

KBEN-AM (Spanish)

KCCT-AM (Spanish)

KBSO-FM (Spanish)

KDOS Ltd.

KLNO-AM (Spanish)

KSAB-FM (Spanish)

KHER-FM (Spanish)

KRRG-FM (Contemporary Hits)

KXEB-AM (Spanish)

KESS-AM (Spanish)

KRVA-AMIFM (Latin/Radio Variedaedes)

KTMR-AM (Spanish)

KFJZ-AM (Spanish)

KLVL-AM (Spanish)

KYST-AM (Tejano)

KERB-AM/FM (Country & Western)

KJBZ-FM (Spanish)

KDOS-AM (Spanish)

KTLK-AM (Spanish)

KCLR-AM (Spanish)

KIRT-AM (Spanish)

KQXX-FM (Spanish)

KOZA-AM (Spanish)

KCTM-FM (Contemporary, Spanish)

KINE-AM (Spanish)

KMIQ-FM (Spanish)

KSJT-FM (Spanish)

KEDA-AM (Tejano/Spanish)

KLFB-AM (Spanish)

KXTJ-FM (Spanish)

KZTA-AM/FM (Spanish)

KCB-FM (Asian Contemporary)

KAZN (AM)

WFRL-AM (Full Service)

WXXQ-FM (Country)

WNWK-FM (Multicultural)

WASG-AM (Country)

WYDH-FM (Adult Contemporary)

KTNN-AM (Country & Western)

KTWI-FM (Contemporary Oldies)

KTWS-FM (Contemporary Oldies)