DINGELL, MARKEY TO STUDY PRIVATE EQUITY ROLE

Rep. John D. Dingell (D-Mich.), chairman of the Committee on Energy and Commerce, and Rep. Edward Markey (D-Mass.), chairman of the Subcommittee on Telecommunications and the Internet, sent a letter yesterday to FCC Chairman Kevin Martin requesting information on the growing trend of private equity ownership of communications-related entities.

They said they are trying to ascertain “whether there are policy implications for this trend and whether the Federal Communications Commission's current attribution rules for ownership and control of commission licenses is adequate.”

The letter continued: “History also suggests that private equity ownership is marked by a management structure that is not overly transparent and by fluid asset management where actual holdings and control may vary significantly, as properties are bought and sold. These historical styles may not be consistent with many of the core public interest and localism values that Congress has assigned to local media outlets and may implicitly undermine the commission's media ownership rules.”

In addition, they submitted a list of questions that they want answered by July 20.

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?