True to their promise of vigorous oversight of the FCC, Senate Commerce Committee leaders have asked Chairman Martin for info on private equity investments in communications companies.
In a letter sent Thursday (July 12), House Energy & Commerce Chairman John Dingell (D-Mich.) and Telecommunications & Internet Subcommittee Chairman Ed Markey (D-Mass.) pointed to the sale of Clear Channel, Radio One and Univision stations to private equity firms as part of the reason for their concern.
"We seek your assistance in ascertaining whether there are policy implications for this trend," they wrote, and "whether the Federal Communications Commission's current attribution rules for ownership and control of Commission licenses is adequate."
They are concerned that the sales mean less transparent management, cost-cutting and resale of stations that might "run contrary" to station owners' public trustee status, though they point out others argue the sales insulate companies from the market pressure on public companies to post "ever-higher earnings" to satisfy stockholders.
The legislators have asked for written responses by July 20 to a series of questions. That date may be important since two sources whose job is to keep an eye out for such hearings suggest the committee is preparing to hold an FCC oversight hearing July 24. A committee spokesperson said no hearing has yet been scheduled.
And the questions are:
"1. Does the Commission compile data on private equity ownership and control of entities subject to the Commission's jurisdiction in a manner different from information requested from other licensees?
2. Does the Commission compile data on private equity ownership or control for wireless licensees, including broadcast media, in a manner different than that which may be utilized for ownership and control of telecommunications carriers, or other non-wireless entities, subject to the Commission's jurisdiction?
3. Has the Commission considered the impact of private equity ownership on localism? If not, should the Commission specifically do so?
4. Has the Commission considered the impact of private equity ownership on consumer protection and quality of service for telecommunications carriers?
5. Has the Commission fully considered the impact of private equity ownership on the media ownership rules, particularly as it relates to attribution?
6. Do you believe the Commission's "debt-plus-equity" attribution rules need to be revised to more accurately understand actual private equity ownership and control of broadcast properties?
7. Has the Commission encountered any problems concerning the management and financial transparency of licensees and entities that are owned by private equity firms?
8. What issues, in your view, related to private equity ownership, should the Commission be actively aware of and considering? Should the Commission initiate a proceeding to consider these issues?