Washington — Federal Communications Commission chairman Michael Powell embraced a bill introduced last Tuesday by Sen. John McCain (R-Ariz.) that would create tax incentives to spread ownership of telecommunications companies to various small business owners, including minorities and women.
"I applaud and welcome Sen. McCain's on-going and consistent efforts to encourage and facilitate new entry, including women and minorities, into the telecommunications industry," Powell said in a statement.
McCain would allow companies to take tax deferrals and postpone capital gains tax, with limitations, on the sale of telecommunications facilities to small business owners that qualify under the legislation.
"These tax barriers can be even more formidable for women and minorities, for whom it has historically been more difficult to obtain necessary capital," McCain said. "We look forward to working with interested organizations over the next several months to further refine this legislation."
For years, McCain, Powell and other policymakers have complained that women and minorities were underrepresented in the ownership of broadcast and cable TV outlets, as well as ownership of traditional phone companies and new wireless properties.
The goal of the McCain bill is to use the tax code to expand minority participation without resorting to government-imposed set-asides and quotas.
Under the legislation, the acquirer must be an "economically and socially disadvantaged" business as defined at some point by the U.S. Treasury Secretary.
Sellers that can take advantage of the tax breaks include cable system and broadcast property owners.
"As communications media converge, minority and economically disadvantaged businesses should be able to fully participate in this vital sector of our economy," said National Cable & Telecommunications Association president Robert Sachs in a statement endorsing the bill. "We look forward to working with Sen. McCain and others to enact this much needed measure."