The Small Business Administration yesterday proposed a rule change that for the first time would outhorize loans to minority-owned firms seeking to purchase television or radio stations.
The change would modify a prohibition, in effect since SBA's creation in 1953, that bars loans for the purchase of broadcasting stations.
The proposed rule could go into effect as soon as 30 days from now, said an SBA spokesman. "It's not 100 per cent sure the rule will be finalized in the form it's in now, but we intend to go in that direction unless somebody gives a good reason not to," the spokesman said.
Minority group members own only a minuscule portion - less than 1 per cent - of the broadcast stations in this country. Of 8,500 AM and FM radio FCC commissioner Pat Russell. Only three of the nation's 725 television stations are owned by minorities.
Under the new procedures, SBA would be outhorized to make or gurantee loans of up to $500,000 for the purchase or construction of television, radio or cable television stations.
All small businesses would be eligible for the loans, but the new rule would mandate special consideration for firms owned by persons who are "socially or economically disadvantaged."
What SBA's statutor $500,000 loan limit means is that buyers would be limited to radio station in "small or medium-sized markets," said Frank Washington, an aide to Federal Communications Commission Chairman Richard Wiley.
"Firms "couldn't realistically be expected" to purcahse television stations with loans of that size, Washington said.
SBA's move comes in response to pressure from both inside and outside the governmetn. After the FCC held a series of workshops in May on minority ownership, Wiley and then-Chairman Benjamin Hooks met with SBA administrator A. Vernon Weaver to press for the rule change.
More pressure came from the White House Office of Telecommunications Policy and from groups like the NAACP and the National Black Media Coalition, sources said.
An FCC spokesman said yesterday's announcement is the first of several planned steps to increase minority ownership in broadcasting. Other measures, scheduled for disclosure within the next several weeks, are expected to re-direct some existing sources of federal money toward minorities trying to enter the broadcasting field.
Radio is a "a very good minority-oriented industry, because it has specialized programming." said Pat Brame, assistant director of the National Radio Broadcasting Association, a group of generally small stations.
"It appeals to specialized groups, not to the masses, like TV," Brame said.