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Adelstein: Dereg harmful to minority buyers

A carve-out aimed at helping minorities, women and small businesses to get into
radio does little to offset the damage caused by the Federal Communications Commission's broadcast-ownership
deregulation, commissioner Jonathan Adelstein told minority media
executives Tuesday.

"The sad reality is that small businesses, including those owned by
minorities and women, are going to find it even tougher in more concentrated and
expensive media markets to raise capital, own outlets and have their unique
voices heard over the public airwaves," Adelstein told the Minority Media
Telecommunications Council.

He was expressing concern about a provision of the new rules intended to
increase chances that some local radio clusters would be sold to minorities and
other disadvantaged businesses.

Under the new rules, which tightened some aspects of radio-ownership limits,
formerly legal radio clusters that now violate local limits may not be sold
intact except to minority, female or small-business owners.

Those buyers would be required to hold the stations at least three years
before selling them to a major media company or other owner.

"This meager exception does little, if anything, to offset the real harm," of
diminished overall opportunities for minority media ownership, Adelstein said.

First, he predicted that few clusters would come on the market given that
those exceeding the limit will now be grandfathered.

Additionally, any that are offered intact would be too expensive for most
disadvantaged businesses.

In the meantime, front companies established for the sole purpose of
"flipping" radio clusters will attract the necessary investment to buy them.
"The ultimate beneficiary of this well-intentioned provision could be giants
like Clear Channel [Communications Inc.] or Infinity [Broadcasting Corp.], not small businesses," he added.