2006 Quadrennial Regulatory Review, 44457-44466 [E7-15456]
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Federal Register / Vol. 72, No. 152 / Wednesday, August 8, 2007 / Proposed Rules
Flooding source(s)
Location of referenced elevation
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44457
Communities affected
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ADDRESSES
Town of Chapel Hill
Maps are available for inspection at Chapel Hill Town Hall, Stormwater Management Program Office, 209 North Columbia Street, Chapel Hill,
North Carolina.
Send comments to The Honorable Kevin C. Foy, Mayor of the Town of Chapel Hill, 405 Martin Luther King Jr. Boulevard, Chapel Hill, North
Carolina 27514.
(Catalog of Federal Domestic Assistance No.
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Dated: July 26, 2007.
David I. Maurstad,
Federal Insurance Administrator of the
National Flood Insurance Program,
Department of Homeland Security, Federal
Emergency Management Agency.
[FR Doc. E7–15427 Filed 8–7–07; 8:45 am]
BILLING CODE 9110–12–P
20743. U.S. Postal Service first-class,
Express, and Priority mail should be
addressed to 445 12th Street, SW.,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: The
Media Bureau contacts for this
proceeding are Mania Baghdadi and
Jamila Bess Johnson, both at (202) 418–
7200. Press inquiries should be directed
to Mary Diamond at (202) 418–2388.
SUPPLEMENTARY INFORMATION:
I. Introduction
FEDERAL COMMUNICATIONS
COMMISSION
[MB Docket Nos. 06–121, 02–277, 04–228;
MM Docket Nos. 01–235, 01–317, 00–244;
FCC 07–136]
47 CFR Part 73
2006 Quadrennial Regulatory Review
Federal Communications
Commission.
ACTION: Notice of proposed rulemaking.
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AGENCY:
SUMMARY: This document seeks
comment on various proposals to
promote minority and female ownership
in the media industry. It also addresses
a motion to withdraw, revise, and
republish the Commission’s Further
Notice of Proposed Rulemaking in its
media ownership review.
DATES: The agency must receive
comments on or before October 1, 2007
and reply comments on or before
October 16, 2007.
ADDRESSES: Comments may be filed
electronically using the Internet by
accessing the Electronic Comment
Filing System, https://www.fcc.gov/cgb/
ecfs/, or the Federal eRulemaking Portal,
https://www.regulations.gov. The
Commission’s contractor will receive
hand-delivered or messenger-delivered
paper filings for the Commission’s
Secretary at 236 Massachusetts Avenue,
NE., Suite 110, Washington, DC 20002.
Commercial overnight mail (other than
U.S. Postal Service Express Mail and
Priority Mail) must be sent to 9300 East
Hampton Drive, Capitol Heights, MD
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1. The Commission has before it the
‘‘Motion for Withdrawal of the Further
Notice of Proposed Rulemaking and for
the Issuance of a Revised Further
Notice’’ filed on August 23, 2006 (the
‘‘Motion for Withdrawal’’) by the
Diversity and Competition Supporters
(collectively, ‘‘MMTC’’). MMTC states
that the Commission’s Further Notice of
Proposed Rule Making (FNPRM) in the
media ownership proceeding, 71 FR
45511, August 9, 2006, is flawed and
should be withdrawn, revised, and
republished. The FNPRM invited
comment on the several media
ownership rules adopted by the
Commission in its 2002 Biennial Review
Order, 68 FR 46286, August 5, 2003, and
the pending petitions for
reconsideration of the 2002 Biennial
Review Order, and initiates the
statutorily mandated 2006 quadrennial
review of the Commission’s media
ownership rules. Specifically, MMTC
asserts that the FNPRM is deficient
because it fails to: (1) Identify and
describe MMTC’s minority ownership
proposals remanded by the court in
Prometheus Radio Project, et al. v. FCC,
373 F.3d 372 (3d Cir. 2004); (2) refer to
or seek comment on a definition of a
socially and economically
disadvantaged business (‘‘SDB’’); and (3)
identify section 257 of the
Telecommunications Act of 1996 as a
central legal basis for minority
ownership relief. MMTC requests that
the Commission restart the ownership
proceeding.
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2. The FNPRM sought comment on
MMTC’s various proposals, as well as
on the general issue of fostering
minority and female ownership. We
urged commenters to explain the effects,
if any, that their rule proposals would
have on ownership of broadcast outlets
by minorities, women and small
businesses. Given the impact of these
issues on our comprehensive ownership
review, we believe it would be
beneficial to issue this Second FNPRM
to set forth in greater detail the
proposals MMTC identified in its
Motion for Withdrawal and to clarify
the record as requested by MMTC. Thus,
in this Second FNPRM, we seek
comment on the proposals MMTC
submitted in the 2002 biennial review
proceeding, as they are described in
Appendix A, as well as on the proposals
submitted to the Commission by the
Advisory Committee on Diversity for
Communications in the Digital Age
(‘‘Diversity Committee’’), which are also
described in Appendix A and are set
forth more fully in the Committee’s
recommendations to the Commission.
See https://www.fcc.gov/DiversityFAC/
for a full listing of Diversity Committee
meetings, recommendations and white
papers. In order to consider fully the
issues raised by MMTC, as discussed
further below, we consolidate our
ongoing section 257 proceeding with
this proceeding.
3. We find it unnecessary to adopt the
specific approach suggested by MMTC
that we rescind and reissue the FNPRM
in its entirety. The approach we take, in
conjunction with the initial FNPRM,
provides ample notice to the
commenting public on the specific
issues germane to our media ownership
review, including those raised by
MMTC relating to ownership diversity.
II. Background
4. In comments filed in the
Commission’s 2002 biennial review
proceeding, MMTC proposed numerous
measures to promote minority broadcast
ownership. In the subsequent 2002
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Biennial Review Order, the Commission
listed 13 of MMTC’s proposals, in
addition to describing proposals other
commenters submitted. The
Commission stated that, because a
‘‘more thorough exploration’’ of those
comments was warranted, it would
initiate a separate proceeding to address
MMTC’s 13 proposals and the other
comments regarding minority and
female broadcast ownership.
Responding to MMTC’s concern that
minorities lack equal transactional
opportunities, the Commission also
stated that it would create a federal
advisory committee to study minority
and female ownership issues. In
addition, the Commission adopted a
transfer policy (the so-called ‘‘small
business cluster transfer policy’’)
intended to promote diversity of
ownership, based largely on a proposal
submitted by MMTC, which permits
sales of grandfathered combinations that
exceed the ownership limits to and by
certain ‘‘eligible entities.’’ Entities may
transfer control of or assign an existing
grandfathered combination to ‘‘eligible
entities,’’ defined as entities that would
qualify as a small business consistent
with Small Business Administration
(‘‘SBA’’) standards for its industry
grouping. In addition, eligible entities
may sell existing grandfathered
combinations without restriction.
5. In the 2002 Biennial Review Order,
the Commission repealed its failed
station solicitation rule (‘‘FSSR’’), which
is part of the Commission’s waiver
standard under the local television
ownership rule. That waiver standard
permits a television station purchaser to
exceed local television ownership limits
if the acquired station is failed, failing,
or unbuilt. See 47 CFR 73.3555 Note 7.
Under the FSSR, a waiver applicant was
required to demonstrate that serious
efforts had been made to secure an outof-market buyer for the troubled station.
A waiver was not granted unless the
applicant could show that the in-market
buyer was the ‘‘only reasonably
available entity willing and able to
operate the station’’ and that an out-ofmarket sale would result in an
‘‘artificially depressed price.’’ In the
2002 Biennial Review Order, the
Commission retained the waiver
standard, but eliminated the FSSR
requirement.
6. On review, the U.S. Court of
Appeals for the Third Circuit remanded
the Commission’s decision to address
MMTC’s 13 proposals in a separate
rulemaking and ordered the
Commission to address those proposals
at the same time that it addresses the
other remanded issues. The court also
remanded the Commission’s decision to
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repeal the FSSR because the
Commission did not address the
potential impact of the repeal on
minority television station ownership.
III. Discussion
A. Minority and Female Ownership
Initiatives
1. Socially and Economically
Disadvantaged Businesses (‘‘SDBs’’)
7. MMTC argues that the Commission
erred in the FNPRM by failing to seek
specific comment on how to define
SDBs, adding that the concept of SDBs
is central to most of the minority
ownership initiatives proposed in the
2002 biennial review proceeding.
MMTC states that the Prometheus
opinion recognizes the importance of
establishing a definition for SDBs
because, in approving the small
business cluster transfer policy, the
court indicated that, by the next
quadrennial review, the Commission
would have the benefit of a stable
definition of SDBs as well as
implementation experience in order to
reevaluate whether an SDB-based
waiver policy would better promote the
Commission’s diversity objectives.
MMTC maintains that, without a
definition for SDBs, the Commission
cannot effectively evaluate the existing
small business cluster transfer policy or
its other proposals, as remanded by the
Prometheus court.
8. MMTC states that the issue of the
SDB definition has already been fully
briefed in the Commission’s proceeding
examining market entry barriers. In that
proceeding, initiated in 2004, the public
was invited to comment on
constitutionally permissible ways to
further the mandate of section 257 of the
Telecommunications Act of 1996, which
directs the Commission to identify and
eliminate market entry barriers for small
telecommunications businesses, and
section 309(j) of the Communications
Act of 1934, as amended (‘‘the Act’’),
which requires the Commission to
further opportunities in the allocation of
spectrum-based services for small and
rural businesses and businesses owned
by women and minorities. See 69 FR
34672, June 22, 2004. The Media Bureau
also asked commenters to provide
specific recommendations for building
on the series of market entry barrier
studies that the Commission released in
December 2000. The studies are
available on the Commission’s Web site
at
https://www.fcc.gov/opportunity/
meb_study/ and https://www.fcc.gov/
Bureaus/Mass_Media/Informal/
ad=study/.
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9. We invite comment on MMTC’s
proposal that the Commission define
SDBs for purposes of analyzing policy
initiatives in support of media
ownership diversity. We ask that
commenters address whether use of a
proposed definition raises any
constitutional concerns, practical
concerns, or other considerations
unique to the Commission’s policy
objectives, and we invite comment on
its impact on small entities. To ensure
full consideration of this issue, we will
consolidate the MB Docket No. 04–228
proceeding commenced in 2004 with
our review of the media ownership
rules.
2. MMTC Proposals
10. We seek comment on the various
proposals for increasing minority and
female broadcast ownership identified
by MMTC. As MMTC suggests, we have
attached its description of these
proposals as Appendix A.1 The
proposals include: (1) those that MMTC
submitted for consideration in the 2002
biennial review proceeding; (2) the
MMTC proposals the Commission listed
in the 2002 Biennial Review Order,
which the Third Circuit ordered the
Commission to address on remand; and
(3) media-related recommendations of
the Diversity Committee.2 In discussing
these proposals, commenters should
address the various questions and issues
set forth below.
11. In addition, as MMTC requests,
we also seek comment on the efficacy of
the FSSR in promoting minority and
female broadcast ownership. When outof-market purchasers for a station are
unavailable, the Commission permits
ownership rule waivers for failed,
failing and unbuilt stations because the
in-market purchase of such stations is
preferable to having frequencies go
unused, even where the combination
would violate the local television
ownership rule. In the 2002 Biennial
Review Order, the Commission
determined that applicants seeking a
1 We have included the text of Appendix B to
MMTC’s Motion for Withdrawal as Appendix A
hereto. Although we have modified the MMTC
Appendix to eliminate a non-substantive footnote
and to correct a few apparent minor typographical
errors, we have not altered the descriptions,
assessments, or legal analyses of the proposals, as
submitted by MMTC. By incorporating these
materials, we do not adopt any such descriptions,
assessments, or analyses as official Commission
policy; we are providing them only to specifically
invite public comment on them.
2 The descriptions of the Diversity Committee
recommendations are provided by MMTC, which is
a member of the Diversity Committee but which
does not represent the Diversity Committee as a
whole. Although the Diversity Committee
recommendations are not subject to the Third
Circuit’s remand, we are seeking comment on them
to ensure a more complete record.
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waiver of the local television ownership
rule no longer needed to comply with
the FSSR requirement that they must
first demonstrate the unwillingness of
out-of-market buyers to offer a
reasonable price for the failed, failing, or
unbuilt station. In eliminating the FSSR
requirement, the Commission found that
the efficiencies associated with the
operation of two same-market stations,
absent unusual circumstances, will
always result in the buyer being the
owner of another station in the same
market. In remanding the Commission’s
repeal of the FSSR, the Third Circuit
stated that the purpose of the FSSR was
to ensure that minority broadcasters
received notification of these station
sales. The Third Circuit found that the
Commission’s decision was arbitrary
and capricious because it failed to
discuss the effect of the repeal on
minority ownership.
12. We invite comment on the extent
to which the FSSR or another
construction of the rule could promote
minority and female ownership. We ask
commenters to provide concrete
evidence rather than generalized
assertions.
B. Constitutional Issues
13. Any measures to facilitate
minority and female broadcast entry
that are based on racial or gender
classifications must satisfy the
heightened constitutional standards that
apply to governmental preferences for
minorities and women under the Equal
Protection Clause. The Supreme Court’s
ruling in Adarand Constructors, Inc. v.
˜
Pena, 515 U.S. 200 (1995), requires that
governmental classifications based on
race must be analyzed under strict
scrutiny, and are constitutional only if
such classifications are narrowly
tailored measures that further a
compelling governmental interest.
Gender classifications are subject to
intermediate scrutiny, under which the
government’s action must be
substantially related to the achievement
of an important objective. In discussing
a proposal targeted or designed to
promote minority and female broadcast
ownership, commenters should
describe, consistent with relevant case
law, how the proposal would satisfy
constitutional standards. In particular,
proponents of initiatives that rely on a
definition of SDBs should explain in
detail whether and how the definition
would satisfy constitutional standards.
C. Statutory Authority
14. We also seek further comment on
the Commission’s statutory authority to
address issues of minority and female
ownership. Section 257 of the Act
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requires the Commission to identify and
eliminate ‘‘market entry barriers for
entrepreneurs and other small
businesses in the provision and
ownership of telecommunications
services and information services.’’
Despite the apparent limitation of 47
U.S.C. 257(a) to telecommunications
and information services, the
congressional directive to promote ‘‘the
policies and purposes of this Act
favoring diversity of media voices’’ in
implementing section 257(a) arguably
brings broadcasting within the scope of
section 257. We invite comment on this
interpretation of the statute. The
statutory provision also specifically
directs the Commission to ‘‘promote the
policies and purposes of this Act
favoring diversity of media voices’’ in
carrying out its section 257
responsibilities. In addition, in 1996,
Congress amended section 1 of the Act
to make it clear that the Commission’s
mandate is to regulate interstate and
foreign communications services so that
they are ‘‘available, so far as possible, to
all people of the United States, without
discrimination on the basis of race,
color, religion, national origin or sex
* * *’’ We ask commenters to address
whether and how these statutory
provisions support the Commission’s
efforts to promote media ownership
diversity.
15. Further, section 309(j) of the Act
requires the Commission to promote the
dissemination of licenses to a wide
variety of applicants, including
members of minority groups and
women. Section 309(j) directs the
Commission to ‘‘ensure that * * *
businesses owned by members of
minority groups and women are given
the opportunity to participate in the
provision of spectrum-based services.’’
In addition, section 309(j)(3)(B) requires
the Commission, in establishing
eligibility criteria and bidding
methodologies, to promote ‘‘economic
opportunity and competition * * * by
avoiding excessive concentration of
licenses and by disseminating licenses
among a wide variety of applicants,
including small businesses, rural
telephone companies, and businesses
owned by members of minority groups
and women.’’
16. We invite comment on the
Commission’s statutory authority to
facilitate the licensing of spectrumbased services to a diversity of entities,
including businesses owned by minority
groups and women. Commenters should
also address the limitations of these
statutory provisions in light of recent
court decisions regarding equal
protection. We also solicit comment on
any further statutory provisions that
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would enable the Commission to
address ownership diversity,
particularly in terms of fostering
diversity of ownership among
minorities and women.
IV. Procedural Matters
A. Comment Information
17. Pursuant to sections 1.415 and
1.419 of the Commission’s rules, 47 CFR
1.415, 1.419, interested parties may file
comments and reply comments on or
before the dates indicated above.
Comments may be filed using: (1) The
Commission’s Electronic Comment
Filing System (ECFS); (2) the Federal
Government’s eRulemaking Portal; or (3)
by filing paper copies. See Electronic
Filing of Documents in Rulemaking
Proceedings, 63 FR 24121, May 1, 1998.
• Electronic Filers: Comments may be
filed electronically using the Internet by
accessing the ECFS: https://www.fcc.gov/
cgb/ecfs/ or the Federal eRulemaking
Portal: https://www.regulations.gov.
Filers should follow the instructions
provided on the Web site for submitting
comments.
• For ECFS filers, if multiple docket
or rulemaking numbers appear in the
caption of this proceeding, filers must
transmit one electronic copy of the
comments for each docket or
rulemaking number referenced in the
caption. In completing the transmittal
screen, filers should include their full
name, U.S. Postal Service mailing
address, and the applicable docket or
rulemaking number. Parties may also
submit an electronic comment by
Internet e-mail. To get filing
instructions, filers should send an email to ecfs@fcc.gov, and include the
following words in the body of the
message, ‘‘get form.’’ A sample form and
directions will be sent in response.
• Paper Filers: Parties who choose to
file by paper must file an original and
four copies of each filing. If more than
one docket or rulemaking number
appears in the caption of this
proceeding, filers must submit two
additional copies for each additional
docket or rulemaking number.
Filings can be sent by hand or
messenger delivery, by commercial
overnight courier, or by first-class or
overnight U.S. Postal Service mail
(although we continue to experience
delays in receiving U.S. Postal Service
mail). All filings must be addressed to
the Commission’s Secretary, Office of
the Secretary, Federal Communications
Commission.
• The Commission’s contractor will
receive hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary at 236
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Federal Register / Vol. 72, No. 152 / Wednesday, August 8, 2007 / Proposed Rules
Massachusetts Avenue, NE., Suite 110,
Washington, DC 20002. The filing hours
at this location are 8 a.m. to 7 p.m. All
hand deliveries must be held together
with rubber bands or fasteners. Any
envelopes must be disposed of before
entering the building.
• Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights,
MD 20743.
• U.S. Postal Service First-Class,
Express, and Priority mail should be
addressed to 445 12th Street, SW.,
Washington, DC 20554.
People with Disabilities: To request
materials in accessible formats for
people with disabilities (Braille, large
print, electronic files, audio format)
send an e-mail to fcc504@fcc.gov or call
the Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
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B. Regulatory Flexibility Act
18. As required by the Regulatory
Flexibility Act, 5 U.S.C. 603, the
Commission prepared an Initial
Regulatory Flexibility Analysis
(‘‘IRFA’’) in the initial Notice of
Proposed Rulemaking in the media
ownership proceeding and a
Supplemental Initial Regulatory
Flexibility Analysis Act (‘‘Supplemental
IRFA’’) in the initial Further Notice of
Proposed Rulemaking in the media
ownership proceeding. We have now
prepared a Second Supplemental IRFA,
which is set forth in Appendix B.
Written public comments are requested
on the Second Supplemental IRFA.
These comments must be filed in
accordance with the same filing
deadlines for comments on the Second
FNPRM, and should have a separate and
distinct heading designating them as
responses to the Second Supplemental
IRFA.
C. Paperwork Reduction Act
19. This document does not contain
proposed information collections
subject to the Paperwork Reduction Act
of 1995 (‘‘PRA’’), Pub. L. No. 104–13,
109 Stat. 163 (1995). Therefore, it does
not contain any proposed new or
modified information collection burden
for small business concerns with fewer
than 25 employees, pursuant to the
Small Business Paperwork Relief Act of
2002, Pub. L. No. 107–198, 116 Stat. 729
(2002). However, depending on the
rules adopted as a result of this Second
FNPRM, the report and order ultimately
adopted in this proceeding may contain
information collections. The
Commission will provide a period for
public comment on any PRA burdens
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contained in the report and order and
will submit such burdens to the Office
of Management and Budget for approval
when the report and order is adopted
and released.
D. Ex Parte Information
20. This is a permit-but-disclose
notice and comment rulemaking
proceeding. Ex parte presentations are
permitted, except during the Sunshine
Agenda period, provided that they are
disclosed as provided in the
Commission’s rules.
21. Contact Information. The Media
Bureau contacts for this proceeding are
Mania Baghdadi and Jamila Bess
Johnson, both at (202) 418–7200. Press
inquiries should be directed to Mary
Diamond at (202) 418–2388.
V. Ordering Clauses
22. Accordingly, it is ordered, that
pursuant to the authority contained in
sections 1, 2(a), 4(i), 257, 303, 307, 309,
310, and 613 of the Communications
Act of 1934, as amended, 47 U.S.C. 151,
152(a), 154(i), 257, 303, 307, 309, 310,
and 533, and section 202(h) of the
Telecommunications Act of 1996, this
Second Further Notice of Proposed
Rulemaking is adopted.
23. It is further ordered that, pursuant
to the authority contained in sections 1,
2(a), 4(i), 257, 303, 307, 309, 310, and
613 of the Communications Act of 1934,
as amended, 47 U.S.C. 151, 152(a),
154(i), 257, 303, 307, 309, 310, and 533,
and section 202(h) of the
Telecommunications Act of 1996, notice
is hereby given of the proposals
described in this Second Further Notice
of Proposed Rulemaking.
24. It is further ordered that MB
Docket No. 04–228 shall be consolidated
with MB Docket No. 06–121 et al.
25. It is further ordered that MMTC’s
Motion for Withdrawal of the Further
Notice of Proposed Rulemaking and for
the Issuance of a Revised Further Notice
is granted to the extent described
herein, and in all other respects, denied.
26. It is further ordered that MMTC’s
Request for Ruling on its Motion for
Withdrawal of the Further Notice of
Proposed Rulemaking and for the
Issuance of a Revised Further Notice is
granted to the extent described herein,
and in all other respects, denied.
27. It is further ordered that comments
and reply comments with regard to
those matters raised in this Second
Further Notice of Proposed Rulemaking
will be due October 1, 2007 and October
16, 2007, respectively.
28. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
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this Second Further Notice of Proposed
Rulemaking, including the Second
Supplemental Initial Regulatory
Flexibility Analysis, to the Chief
Counsel for Advocacy of the Small
Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Appendix A—Minority Ownership
Proposals and Suggestions 3
Section I (items 1–14) contains the 14
proposals of the Diversity and Competition
Supporters (‘‘MMTC’’) in MM Docket No. 02–
277. The FCC’s Advisory Committee on
Diversity for Communications in the Digital
Age (‘‘Diversity Committee’’) also proposed
eight of these items, as noted therein.
Section II (items 15–26) contains 12
informal suggestions made by the Minority
Media and Telecommunications Council at a
November 6, 2002 meeting of stakeholders at
the Commerce Department. These were not
the Diversity and Competition Supporters’
proposals in the media ownership
proceeding; rather, they were the Minority
Media and Telecommunications Council’s
informal suggestions to stakeholders. The
Diversity Committee also proposed one of
these items, as noted therein.
Section III (items 27–34) contains
recommendations issued by the Diversity
Committee that do not track the proposals or
suggestions in items 1–26. Among these,
items 27–30 are nonregulatory
recommendations, and items 31–34 are
regulatory recommendations. The Diversity
Committee has propounded 17
recommendations germane to media
ownership: Eight tracking items in Section I,
one tracking an item in Section II, and the
eight items in Section III.
Section I: MMTC Proposals in MM Docket
02–277
1. Equal transactional opportunity policy—
barring discrimination on the basis of race or
gender in broadcast transactions.
Location(s) in Record: Initial Comments of
Diversity and Competition Supporters, MB
Docket No. 02–277 (filed January 2, 2003)
(‘‘MMTC 2003 Comments’’), pp. 115–120;
MMTC Letter to Hon. Michael Powell, MM
Docket No. 02–277 (April 28, 2003) (‘‘MMTC
April 28, 2003 Ex Parte’’), pp. 11–19.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: Race and gender
discrimination in the sale of broadcast
stations would be banned, consistent with 47
U.S.C. 151. The seller would certify
compliance by checking a box on a Form 314
or Form 315 application.
Year First Proposed: 1994.
Parallel Recommendation of Diversity
Committee: Transactional Transparency
Recommendations, May 14, 2004, p. 4; White
3 This Appendix is a verbatim copy of Appendix
B to MMTC’s Motion for Withdrawal, except that
this Appendix reflects minor typographical
corrections and the omission of a non-substantive
footnote.
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Paper on Equal Transactional Opportunity,
April 29, 2004.
Relevance of SDB Definition: No.
2. Transfer Restriction of Grandfathered
Clusters to SDBs.
Location(s) in Record: MMTC 2003
Comments, pp. 107–109.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: The seller of a
grandfathered cluster would not have to
break it up if it were sold to an SDB. In the
2002 Biennial Review, the Commission
adopted a provision for the transfer intact of
a grandfathered cluster, but decided that
small businesses, rather than SDBs, would
constitute the class of eligible buyers. MMTC
seeks to develop a definition of ‘‘socially and
economically disadvantaged business’’ (SDB)
that would be appropriate for broadcasting
and be constitutionally sound. SDBs are a
subset of small businesses. Like other small
businesses, they are economically
disadvantaged; but unlike other small
businesses, they are also socially
disadvantaged. Their social disadvantage
stems from individualized factors or from
their membership in a class (such as a racial
group in a particular industry) for which
discrimination has inhibited entry and
financing. An SDB definition is desirable
because it would be less dilute in its impact
on minorities by omitting, for example, the
children of millionaires who, as new
entrants, can qualify as small businesses
although they have never been
disadvantaged.
Year First Proposed: 2003.
Parallel Recommendation of Diversity
Committee: none.
Relevance of SDB Definition: Yes.
3. Structural rule waiver for selling a
station to an SDB, where the sale to the SDB
is ancillary to a transaction that otherwise
would be barred by an ownership rule.
Location(s) in Record: MMTC 2003
Comments, p. 103.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: A company
contemplating a transaction that would
otherwise be barred by an ownership rule
(perhaps one that would qualify in the future,
e.g., if the Commission adopted a staged
implementation of deregulation program; see
item 13 infra) would be permitted to
complete the transaction if it sells stations to
SDBs.
Year First Proposed: 1995 (concept
originally advanced by NTIA in 1977).
Parallel Recommendation of Diversity
Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17–18;
White Paper on Incentive-Based Regulations,
May 23, 2004, pp. 5–6.
Relevance of SDB Definition: Yes.
4. Tolling buildout deadlines for selling
expiring construction permits to SDBs.
Location(s) in Record: MMTC 2003
Comments, pp. 112–115 (originally a petition
for rulemaking filed by Entravision Holdings
LLC, RM–9567 (filed March 10, 1998)).
Nature of Item: Formal rulemaking
proposal.
Summary of Item: In 1998, Entravision
submitted a petition for rulemaking which
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sought to revise the construction permit
expiration standard established pursuant to
47 U.S.C. 319(a)–(b) and implemented in 47
CFR 73.3598. Entravision proposed that the
Commission allow holders of expiring
construction permits to sell them to entities
in which minorities own at least 20% of the
equity, or to entities which commit to serve
the programming needs of minority or foreign
language groups for at least 80% of their
operating time. MMTC proposed a
modification of Entravision’s concept to
make it applicable to all SDBs.
Year First Proposed: 1998.
Parallel Recommendation of Diversity
Committee: Financial Issues.
Recommendations, June 14, 2004, pp. 17–18;
White Paper on Incentive-Based Regulations,
May 23, 2004, pp. 9–10.
Relevance of SDB Definition: Yes.
5. Structural rule waivers for creating
incubator programs.
Location(s) in Record: MMTC 2003
Comments, pp. 104–105.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: The Commission would
act on still-pending incubator plans
developed in 1992 by Chairman Sikes and by
NABOB. With constitutionally required
modifications, these plans would allow a
company to acquire more than the otherwiseallowable number of stations in a market if
the company establishes a program that
substantially promotes ownership by
disadvantaged businesses. The incubator
programs could encompass management or
technical assistance, loan guarantees, direct
financial assistance through loans or equity
investment, training and business planning
assistance.
Year First Proposed: 1992.
Parallel Recommendation of Diversity
Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17–18;
White Paper on Incentive-Based Regulations,
May 23, 2004, pp. 6–7.
Relevance of SDB Definition: Yes.
6. Bifurcation of channels for share-times
with SDBs.
Location(s) in Record: Comments of the
Minority Media and Telecommunications
Council in MB Docket 01–317 (Radio
Ownership) (filed March 19, 2002) (‘‘MMTC
2002 Comments’’), pp. 111–173; Reply
Comments of the Minority Media and
Telecommunications Council in MB Docket
01–317 (Radio Ownership) (filed May 8,
2002) (‘‘MMTC 2002 Reply Comments’’), pp.
6–10; MMTC 2003 Comments, pp. 106–107.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: The Commission would
create a new class of ‘‘Free Speech Stations.’’
They would be independently owned by
SDBs, have at least 20 non-nighttime hours
per week of airtime, and be primarily
devoted to non-entertainment programming.
A Free Speech Station would share time on
the same channel with a largely deregulated
‘‘Entertainment Station.’’ A cluster owner
that bifurcates a channel to accommodate a
Free Speech Station and an Entertainment
Station could buy another fulltime station in
the market by taking advantage of section
202(b)(2) of the Telecommunications Act,
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which allows for an exception to the local
radio ownership rule when a new station is
created. That additional fulltime station
would also be bifurcated into a Free Speech
and an Entertainment Station. In this way, a
cluster could grow steadily up to the limits
allowed by antitrust law.
Year First Proposed: 2002.
Parallel Recommendation of Diversity
Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17–18;
White Paper on Incentive-Based Regulations,
May 23, 2004, pp. 7–8.
Relevance of SDB Definition: Yes.
7. Structural rule waivers for financing
construction of an SDB’s unbuilt station.
Location(s) in Record: MMTC 2003
Comments, pp. 109–110.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: When a broadcaster
provides an SDB with an equity/debt plus
interest (‘‘EDP Interest’’) that enables the SDB
to build out an unbuilt permit, (1) the EDP
Interest should be deemed nonattributable,
and (2) the entity providing the EDP Interest
should be reserved a place in line to
subsequently duopolize or crossown another
same-market station. This reserved place in
the queue, in markets where only a limited
number of new combinations can be created
under the local ownership rules, would
provide an incentive to broadcasters to assist
SDBs to build out their unbuilt permits.
Year First Proposed: 1999.
Parallel Recommendation of Diversity
Committee: none.
Relevance of SDB Definition: Yes.
8. Grandfathering of nonattribution of EDP
(equity debt-plus) interests in SDBs.
Location(s) in Record: MMTC 2003
Comments, pp. 110–112.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: The nonattributable
nature of EDP Interests in SDBs would be
grandfathered, irrespective of whether the
entity providing the EDP Interest (the ‘‘EDP
Provider’’) subsequently acquires other
properties which otherwise would cause the
EDP Interest to be attributable to the EDP
Provider. These arrangements would be
permissible where (1) the EDP Provider
merges with, acquires, or is acquired by a
company unrelated to the company holding
a nonattributable EDP Interest in an SDB (an
‘‘Unrelated Transaction’’); (2) the Unrelated
Transaction occurs at least a year after the
EDP relationship was formed; (3) the
Unrelated Transaction would otherwise
cause the EDP Provider’s EDP Interest in the
SDB to become attributable; and (4) the EDP
Provider and the SDB make an affirmative
showing that the EDP Provider does not
exercise undue influence over the SDB.
Year First Proposed: 1999.
Parallel Recommendation of Diversity
Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17–18;
White Paper on Incentive-Based Regulations,
May 23, 2004, pp. 8–9.
Relevance of SDB Definition: Yes.
9. Mathematical touchstones: Tipping
points for the nonviability of independently
owned radio stations in a consolidating
market, and quantifying source diversity.
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Location(s) in Record: MMTC 2002 Reply
Comments, pp. 22–27; MMTC Reply
Comments, pp. 17–24; MMTC April 28, 2003
Ex Parte, pp. 6–7.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: MMTC offered two
formulas suitable for crafting and
implementing rules to promote diversity: (1)
The ‘‘Tipping Point Formula’’ established
how the Commission could ensure that local
radio markets could preserve independent
owners. This formula was based on the
premise that independent owners each need
determinable and quantifiable revenue
streams in order to stay afloat and provide
service to the public. The formula
acknowledges the existence of a tipping point
in the distribution of radio revenue in a
market between cluster owners and
independents. When the combined revenues
of a market’s cluster owners exceed this
tipping point, the independents can no
longer survive. By identifying this tipping
point, the formula provides a rational basis
for determining whether a transaction would
limit diversity. (2) The ‘‘Source Diversity
Formula’’ expresses consumers’ utility
derived from marginal increases in source
diversity. The Source Diversity Formula is
based on the premise that increases in
consumer utility flow from their access to
additional sources, with diminishing returns
to scale. This formula would require fieldtesting before it could be applied in practice
to measure source diversity.
Year First Proposed: 2002.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: Yes.
10. Zero tolerance for ownership rule
abuse.
Location(s) in Record: MMTC 2003
Comments, pp. 123–127.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: Structural abuse is
endemic due to limited enforcement
resources, the ease of concealing abuse, and
the high financial rewards for rule breaking.
Structural rule relaxation would be easier to
accept if the Commission holds the line on
abuse through a Zero Tolerance Policy
focused on clear standards, pro-active
investigations, evidentiary hearings, and
strict penalties for rule violations.
Year First Proposed: 2003.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
11. Use of Joint Operating Agreements
(JOAs) as an alternative to Local Marketing
Agreements (LMAs) and Joint Sales
Agreements (JSAs).
Location(s) in Record: Comments of the
Communications Workers of America (CWA)
in MB Docket 02–277 (filed January 2, 2003),
pp. 4–5 and 48; MMTC Reply Comments, pp.
15–16.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: The Commission
requires ownership attribution of most JSAs
and LMAs. While this step promotes
diversity, it also reduces the options
available to financially troubled facilities
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seeking to survive. CWA proposed that JOAs,
such as those used in the newspaper
industry, could be used to help companies
survive and to promote diversity at the same
time. A JOA adapted to broadcasting would
leave each station’s program creation,
program organization and distribution, and
sales strategy and implementation in the
hands of each station’s licensees. At the same
time, a genuine JOA allows both stations to
take advantage of operational synergies for
non-program, non-sales related functions,
such as accounting, engineering, and
physical plant management. A JOA would
not be attributable.
Year First Proposed: 2003.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
12. Opening FM spectrum for new
entrants.
Location(s) in Record: MMTC 2003
Comments, pp. 128–141; MMTC April 28,
2003.
Ex Parte, pp. 10–11.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: The Commission has
systematically broadened spectrum
availability as a means of balancing
consolidation with new entry. MMTC
proposed three methods by which the FCC
could open the FM radio spectrum to new
entrants: (1) create two new classes of FM
stations suitable for serving small
communities; (2) perform a comprehensive
engineering search of the FM spectrum to
identify the most-needed new drop-in
opportunities; and (3) replace FM station
classes with pure interference-based criteria.
Year First Proposed: 2003.
Parallel Recommendation of Diversity
Committee: Recommendation on Diversifying
Ownership in the Commercial FM Radio
Band, October 4, 2004, as amplified by the
Recommendations of the Subcommittee on
New Technologies, June 11, 2004, containing
eight relevant subparts: (1) Create medium
power FM stations; (2) replace the FM Table
with interference-based allotment criteria; (3)
allow Class A stations to use low towers and
higher-than-standard power while retaining
appropriate ERP levels; (4) conduct a
comprehensive channel search for new FM
allotments; (5) harmonize regional
interference protection standards; (6) repeal
the third-adjacent FM contour rules; (7) relax
the community of license and transmitter site
rules; and (8) authorize interference
agreements.
Relevance of SDB Definition: No.
13. Staged implementation of deregulation,
coupled with a negotiated rulemaking.
Location(s) in Record: MMTC 2003
Comments, pp. 84–101 and 145–147;
Comments of Paxson Communications
Corporation, MB Docket 02–277 (filed
January 3, 2003), pp. 6–14; MMTC Reply
Comments, pp. 25–32.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: By implementing
deregulation in stages, the Commission could
measure the impact of deregulation while it
is underway, and implement mid-course
corrections when needed to protect diversity,
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competition, localism and minority
ownership. MMTC proposed that the
Commission would implement its new
ownership rules over a ten-year period in five
two-year stages. In even-numbered years, the
Commission would use quantitative tests to
measure diversity, competition, localism and
minority ownership. If these tests showed ill
health on any of these four factors, the
Commission would take corrective steps in
the odd-numbered years. If a subsequent
even-year measurement showed continued ill
health, the Commission could apply the
brakes until market conditions change.
Paxson Communications offered a similar
proposal. The coefficients of a staged
implementation plan could be worked out in
a negotiated rulemaking involving
representatives of all of the stakeholders in
the proceeding.
Year First Proposed: 2003.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: Yes.
14. Market-based, tradable diversity credits
as an alternative to voice tests.
Location(s) in Record: MMTC Reply
Comments, pp. 34–38; MMTC April 28, 2003.
Ex Parte, pp. 8–10.
Nature of Item: Formal rulemaking
proposal.
Summary of Item: A system of marketbased diversity credits would be created as
an alternative to voice tests. A quantity of
diversity credits would be given to SDBs,
commensurate with the extent of their social
and economic disadvantages. Diversity
credits would also be given to the seller at
the closing of a transaction that would result
in greater structural diversity. If a transaction
would add to concentration, the buyer would
return a number of diversity credits to the
Commission when the transaction closes.
Finally, companies could buy or sell
diversity credits to one another, thereby
providing a market-based source of access to
capital for SDBs. A similar paradigm used by
the EPA has replaced much command-andcontrol environmental regulation. Diversity
credits would (1) incentivize diversity, (2)
disincentivize consolidation, (3) place on the
beneficiaries of consolidation the
responsibility of paying for the remediation
of some of consolidation’s ill effects, (4) serve
as a mechanism to provide access to capital
to SDBs, (5) capture the measure of diversity
more precisely than an inherently
approximate voice test, and (6) allow for
easier administration than a system of voice
tests and waivers.
Year First Proposed: 2003.
Parallel Recommendation of Diversity
Committee: Transactional Transparency
Recommendations, May 14, 2004, p. 3; White
Paper on Diversity Credits, May 22, 2004.
Relevance of SDB Definition: Yes.
Section II: MMTC’s Informal Suggestions to
Stakeholders
15. Equity for specific and contemplated
future acquisitions.
Location(s) in Record: MMTC, Background
Materials: Omnibus Media Ownership
Proceeding Stakeholders Meeting, U.S.
Department of Commerce, November 6, 2002,
Tab 10 (‘‘Twelve Minority Ownership
Solutions’’).
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Nature of Item: Private industry initiative;
but see item 29 infra, proposing collaborative
role for FCC in creating a fund or funds).
Summary of Item: Broadcast companies
would collaborate with one another and with
institutional investors to create new targeted
funds specializing in providing equity for
broadcast new entrants.
Year First Proposed: 1977.
Parallel Recommendation of the Diversity
Committee: None (but see item 29 infra).
Relevance of SDB Definition: No.
16. Debt on favorable terms—enhanced
outreach and access to debt financing by
major financial institutions.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative
(but see items 28 and 29 infra, proposing
collaborative role for FCC).
Summary of Item: Broadcast companies
would solicit commitments from large
institutional lenders to work with new
entrants in providing debt financing for
acquisitions, with or without the
participation of the SBA as a guarantor.
Year First Proposed: 1977.
Parallel Recommendation of Diversity
Committee: None (but see items 28 and 29
infra).
Relevance of SDB Definition: No.
17. Investments in institutions specializing
in minority and small business financing.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Broadcast companies
would invest in existing funds with proven
track records of success as participants in the
financing of new entrants. The Quetzal/J.P.
Morgan Fund, the Telecommunications
Development Fund (TDF), the Broadcast
Capital Fund and other Small Business
Investment Corporations (SBICs) are
examples of these funds.
Year First Proposed: 1976.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
18. Assistance—cash and in-kind—to
institutions that train future minority media
owners.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Media institutions
would provide assistance to colleges and
other programs that provide minorities the
skill sets needed to transition from
management to ownership. Examples of these
institutions are Historically Black Colleges
and Universities (HBCUs), Hispanic Serving
Institutions (HSIs) and other programs,
particularly the National Association of
Broadcasters Education Fund’s (NABEF’s)
Broadcast Leadership Training (BLT)
Program.
Year First Proposed: 1992.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
19. Creation of business planning centers.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Business planning
centers, typically affiliated with universities,
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would work one-on-one with minority
entrepreneurs as they develop business plans
and strategies, seek financing and pursue
acquisitions.
Year First Proposed: 1992.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
20. Executive loans, and engineers on loan
to minority owned companies and
applicants.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: The broadcasting
industry would create an executive loan
program, following the examples of similar
programs in other industries. Loaned
executives or engineers would work on the
staffs of minority broadcasters fulltime for six
months to two years.
Year First Proposed: 1992.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
21. Enhanced access to broadcast
transactions.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Sellers would give
minority new entrants a first look at their
properties, allowing them a headstart for due
diligence and financing.
Year First Proposed: 2002.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
22. Nondiscrimination provisions in
advertising sales contracts, designed to
expressly avoid such practices as ‘‘no urban/
no Spanish’’ dictates.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Contemplates FCC or FTC
policy statement or rule.
Summary of Item: Rep firms, ad agencies,
broadcasters and advertisers would agree to
use a standard provision in advertising sales
contracts that would confirm that the parties
to these contracts will not participate in a
scheme to restrict advertising because of the
membership in a minority group of the
targets of the foregone advertising. The FTC
or FCC would obtain certifications that this
contract provision is always used in ad sales
contracts.
Year First Proposed: 1984.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
23. In-house incubation and mentoring
programs for future minority owners.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Established media
companies would develop their own inhouse programs to incubate and mentor
future minority owners, including their own
executives who might wish to transition into
ownership. These initiatives would have no
regulatory tie-ins.
Year First Proposed: 1976.
Parallel Recommendation of Diversity
Committee: None.
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Relevance of SDB Definition: No.
24. Enactment of tax deferral legislation
designed, to the extent possible, to foster
minority ownership.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Legislation; FCC has
recommended it to Congress several times.
Summary of Item: The Commission would
continue to recommend to Congress the
adoption of a tax deferral program to replace
the former Tax Certificate Policy, under
which a seller was able to defer capital gains
taxes on the sale of a media property to a
minority controlled firm. The new program
would be focused on SDBs rather than only
on minorities, and it would be extended to
telecommunications. In recent years, Senator
John McCain, Congressman Charles Rangel
and Congressman Bobby Rush have each
introduced legislation along these lines.
Year First Proposed: 1977; in effect from
1978–1995 as the Tax Certificate Policy (see
68 FCC2d 979 (1978)); repealed by Congress
in 1995; restoration often proposed since
1995.
Parallel Recommendation of Diversity
Committee: Financial Issues
Recommendations, June 14, 2004, pp. 14–15;
Transactional Transparency
Recommendations, May 14, 2004, pp. 2–3.
Relevance of SDB Definition: Yes (included
in bills sponsored by Senator John McCain
and by Congressman Bobby Rush).
25. Examination of how to promote
minority ownership as an integral part of all
FCC general media rulemaking proceedings.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: Contemplates FCC policy
statement or procedural rule.
Summary of Item: All general mass media
rulemaking proceedings (except individual
FM or TV allotment proceedings) would
include a request for comment on how the
proposed rules affected minority
entrepreneurship or could be tailored to have
a positive impact on minority
entrepreneurship.
Year First Proposed: 1973.
Parallel Recommendation of Diversity
Committee: None.
Relevance of SDB Definition: No.
26. Ongoing longitudinal research on
minority and female ownership trends.
Location(s) in Record: Twelve Minority
Ownership Solutions.
Nature of Item: FCC or NTIA research
initiative.
Summary of Item: The FCC or NTIA would
conduct an annual, authoritative survey of
minority and female ownership trends. As a
longitudinal instrument, it could track this
data over time, enabling scholars to examine
the impact of rule changes on minority and
female ownership.
Year First Proposed: 1995.
Parallel Recommendation of Diversity
Committee: none.
Relevance of SDB Definition: Yes.
Section III: Proposals Sponsored by the
Diversity Committee
27. Clearinghouse through which licensees
could announce availability of stations for
sale.
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Location(s) in Record: Diversity
Committee, Financial Issues.
Recommendations, June 14, 2004, pp. 13–14.
Nature of Item: Private industry initiative.
Summary of Item: The National
Association of Broadcasters and/or the
National Association of Media Brokers could
create a website or other clearinghouse
through which licensees with stations for
sale could seek minority buyers.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
28. Extension of the Community
Reinvestment Act (CRA) to encourage
financial institutions to provide debt
financing to broadcasters.
Location(s) in Record: Diversity
Committee, Financial Issues
Recommendations, June 14, 2004, p. 15.
Nature of Item: Recommendation for FCC
to propose rule revisions to the Treasury
Department.
Summary of Item: The FCC would work
with the Treasury Department to expand the
application of the CRA credit to encourage
financial institutions to place capital in
private equity funds led by minority and
female entrepreneurs, or in funds that invest
in communities of color. A similar incentive
mechanism could be explored with the
appropriate regulatory agencies to encourage
pension funds, insurance companies and
other financial institutions to place monies
with such equity funds.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
29. Encourage more local and regional
banks to participate in SBA guaranteed loan
programs for broadcast and telecom ventures.
Location(s) in Record: Diversity
Committee, Financial Issues
Recommendations, June 14, 2004, p. 16.
Nature of Item: Recommendation for FCC
and SBA to expand outreach to banks.
Summary of Item: The FCC would work
closely with the SBA to educate and
encourage more local and regional banks
(which have not been heavily involved in
broadcast or telecom lending) to make loans
through the SBA’s 7(a) or 504 programs.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
30. Establishment of a fund of funds.
Location(s) in Record: Diversity
Committee, Financial Issues
Recommendations, June 14, 2004, pp. 16–17.
Nature of Item: Private industry initiative.
Summary of Item: The FCC would initiate
discussions with the major pension funds to
encourage the establishment of a fund of
funds that would place capital with minority
focused private equity funds such as those
belonging to the National Association of
Investment Companies (NAIC), which are led
by minority management and which invest in
opportunities led by women and minority
entrepreneurs and/or in opportunities in
underserved markets.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
31. Revision of the Distress Sale Policy to
institute case-by-case review of purchasers’
qualifications.
Location(s) in Record: Diversity
Committee, Recommendation on the Distress
Sale Policy, June 1, 2004; Financial Issues
Recommendations, June 14, 2004, pp. 18–19.
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Nature of Item: Rulemaking
recommendation.
Summary of Item: The Distress Sale Policy,
in existence since 1978 but seldom used
recently, would be revised to ensure that it
satisfies the narrow tailoring prong of strict
scrutiny. In particular, a potential buyer, of
any race, would demonstrate that its
proposed service to the community would
address needs unmet by existing media.
Service to minority audiences could be an
unmet need.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
32. Reservation, for a company that
finances or incubates an SDB, of first place
in the queue to form a duopoly in a market
for which only a limited number of duopolies
are permissible.
Location(s) in Record: Diversity
Committee, Financial Issues
Recommendations, June 14, 2004, pp. 17–18;
White Paper on Incentive-Based Regulations,
May 23, 2004, p. 9.
Nature of Item: Rulemaking
recommendation.
Summary of Item: When the local market
voice test limits how many LMAs may be
created, a company wishing to have its
application to create an LMA considered first
could reserve a place in the application
queue by financing or incubating an SDB.
Year First Proposed: 1999.
Relevance of SDB Definition: Yes.
33. Relaxation of foreign ownership
restrictions (see 47 U.S.C. 310(b)(4)).
Location(s) in Record: Diversity
Committee, Adoption of a Declaratory Ruling
on Section 310(b) (4) Waivers, December 10,
2004.
Nature of Item: Recommendation for
rulemaking or policy statement.
Summary of Item: The Commission would
consider whether a noncontrolling
investment from foreigners (e.g. up to 49%)
could be permitted where the investment
would help eliminate a barrier to access to
capital for domestic minority owned
broadcasters as contemplated by 47 U.S.C.
257.
Year First Proposed: 2004.
Relevance of SDB Definition: Yes.
34. Extension of divestiture deadlines in
mergers where applicants have actively
solicited bids for spin-off properties from
SDBs.
Location(s) in Record: Diversity
Committee, Recommendation on Merger
Review, October 15, 2004.
Nature of Item: Recommendation for
rulemaking or policy statement.
Summary of Item: The Commission has
recognized that minorities, especially new
entrants, often need additional time to line
up financing. Therefore, the Commission
would announce a policy of generally
affording more time for divestitures where
the applicants solicit bids from SDBs for
spinoff properties.
Year First Proposed: 1999.
Relevance of SDB Definition: Yes.
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Appendix B—Second Supplemental
Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility
Act, as amended (‘‘RFA’’) 4 the Commission
has prepared this Second Supplemental
Initial Regulatory Flexibility Analysis
(‘‘Second Supplemental IRFA’’) of the
possible significant economic impact on a
substantial number of small entities of the
policies and rules considered in the Second
Further Notice of Proposed Rule Making
(‘‘Second FNPRM’’). Written public
comments are requested on this Second
Supplemental IRFA. Comments must be
identified as responses to the Second
Supplemental IRFA and must be filed by the
deadlines for comments on the Second
FNPRM. The Commission will send a copy
of the Second FNPRM, including this Second
Supplemental IRFA, to the Chief Counsel for
Advocacy of the Small Business
Administration (‘‘SBA’’).5 In addition, the
Second FNPRM and the Second
Supplemental IRFA (or summaries thereof)
will be published in the Federal Register.6
A. Need for, and Objectives of, the Proposed
Rules
2. The Further Notice of Proposed Rule
Making in MB Docket Nos. 06–121, et al.,7
invites comment on how to address the
issues raised by the opinion of the U.S. Court
of Appeals for the Third Circuit in
Prometheus Radio Project v. FCC,8 and,
pursuant to section 202(h) of the
Telecommunications Act of 1996, on whether
the media ownership rules are ‘‘necessary in
the public interest as the result of
competition.’’ 9 In Prometheus, the court
affirmed some Commission decisions and
4 See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601–
612, has been amended by the Contract With
America Advancement Act of 1996, Pub. L. No.
104–121, 110 Stat. 847 (1996) (‘‘CWAAA’’). Title II
of the CWAAA is the Small Business Regulatory
Enforcement Fairness Act of 1996 (‘‘SBREFA’’).
5 See 5 U.S.C. 603(a).
6 See id.
7 2006 Quadrennial Regulatory Review—Review
of the Commission’s Broadcast Ownership Rules
and Other Rules Adopted Pursuant to Section 202
of the Telecommunications Act of 1996, Further
Notice of Proposed Rule Making, 71 FR 45511,
August 9, 2006 (‘‘FNPRM’’).
8 Prometheus Radio Project, et al. v. F.C.C., 373
F.3d 372 (2004) (‘‘Prometheus’’), stay modified on
rehearing, No. 03–3388 (3d Cir. Sept. 3, 2004)
(‘‘Prometheus Rehearing Order’’), cert. denied, 73
U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04–1020,
04–1033, 04–1036, 04–1045, 04–1168 and 04–1177);
see also 2002 Biennial Regulatory Review—Review
of the Commission’s Broadcast Ownership Rules
and Other Rules Adopted Pursuant to Section 202
of the Telecommunications Act of 1996, 68 FR
46286, August 5, 2003 (‘‘2002 Biennial Review
Order’’).
9 See Telecommunications Act of 1996, Pub. L.
No. 104–104, 110 Stat. 56, sec. 202(h) (1996) (‘‘1996
Act’’); Consolidated Appropriations Act, 2004, Pub.
L. No. 108–199, sec. 629, 118 Stat. 3 (2004)
(‘‘Appropriations Act’’) (amending sections 202(c)
and 202(h) of the 1996 Act). Section 202(h) requires
the Commission to periodically review its media
ownership rules to determine ‘‘whether any of such
rules are necessary in the public interest as the
result of competition’’ and to ‘‘repeal or modify any
regulation it determines to be no longer in the
public interest.’’
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remanded others for further Commission
justification or modification.10 In the Second
FNPRM, we seek additional comment on
specific proposals advocated by the Diversity
and Competition Supporters (collectively,
‘‘MMTC’’) to foster minority and female
ownership. In addition, the Commission will
consolidate into the broadcast ownership
proceeding the record established in MB
Docket No. 04–228, in which the
Commission solicited public comment on
constitutionally permissible ways to further
the mandates of Section 257 of the
Telecommunications Act of 1996,11 which
directs the Commission to identify and
eliminate market entry barriers for small
telecommunications businesses, and Section
309(j) of the Communications Act of 1934, as
amended (the ‘‘Act’’),12 which requires the
Commission to further opportunities in the
allocation of spectrum-based services for
small businesses and businesses owned by
women and minorities. The Commission
previously published a Supplemental IRFA
in connection with the FNPRM. We issue this
Second Supplemental IRFA in order to invite
comment on the effects on small entities,
including minorities and women, of the
proposals identified in this Second FNPRM.
We particularly solicit comment from all
small business entities, including minorityowned and women-owned small businesses.
B. Legal Basis
3. The Second FNPRM is adopted pursuant
to sections 1, 2(a), 4(i), 257, 303, 307, 309,
310 and 613 of the Act, as amended, 47
U.S.C. 151, 152(a), 154(i), 257, 303, 307, 309,
310, and 533, and Section 202(h) of the
Telecommunications Act of 1996.
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C. Description and Estimate of the Number
of Small Entities To Which the Proposed
Rules Will Apply
4. The RFA directs agencies to provide a
description of, and, where feasible, an
estimate of the number of small entities that
may be affected by the proposed rules, if
adopted.13 The RFA defines the term ‘‘small
entity’’ as having the same meaning as the
terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
entity’’ under Section 3 of the Small Business
Act.14 In addition, the term ‘‘small business’’
has the same meaning as the term ‘‘small
business concern’’ under the Small Business
Act.15 A small business concern is one
10 See Prometheus Rehearing Order. Accordingly,
except for revisions to the local radio ownership
rule, the rule changes made in the 2002 Biennial
Review Order remain stayed, and the preexisting
ownership rules remain in effect.
11 47 U.S.C. 257.
12 47 U.S.C. 309(j).
13 5 U.S.C. 603(b)(3).
14 Id. sec. 601(3) (incorporating by reference the
definition of ‘‘small business concern’’ in 15 U.S.C.
632). Pursuant to the RFA, the statutory definition
of a small business applies, ‘‘unless an agency, after
consultation with the Office of Advocacy of the
Small Business Administration and after
opportunity for public comment, establishes one or
more definitions of such term which are
appropriate to the activities of the agency and
publishes such definition(s) in the Federal
Register.’’
15 Id.
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which: (1) Is independently owned and
operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional
criteria established by the SBA.16
5. Television Broadcasting. In this context,
the application of the statutory definition to
television stations is of concern. The Small
Business Administration defines a television
broadcasting station that has no more than
$13 million in annual receipts as a small
business. Business concerns included in this
industry are those ‘‘primarily engaged in
broadcasting images together with sound.’’ 17
According to Commission staff review of the
BIA Financial Network, Inc. Media Access
Pro Television Database as of July 10, 2007,
about 880 (68 percent) of the 1,300
commercial television stations in the United
States have revenues of $13 million or less.
However, in assessing whether a business
entity qualifies as small under the above
definition, business control affiliations 18
must be included. Our estimate, therefore,
likely overstates the number of small entities
that might be affected by any changes to the
ownership rules, because the revenue figures
on which this estimate is based do not
include or aggregate revenues from affiliated
companies.
6. An element of the definition of ‘‘small
business’’ is that the entity not be dominant
in its field of operation. The Commission is
unable at this time and in this context to
define or quantify the criteria that would
establish whether a specific television station
is dominant in its market of operation.
Accordingly, the foregoing estimate of small
businesses to which the rules may apply does
not exclude any television stations from the
definition of a small business on this basis
and is therefore over-inclusive to that extent.
An additional element of the definition of
‘‘small business’’ is that the entity must be
independently owned and operated. It is
difficult at times to assess these criteria in the
context of media entities, and our estimates
of small businesses to which they apply may
be over-inclusive to this extent.
7. Radio Broadcasting. The Small Business
Administration defines a radio broadcasting
entity that has $6.5 million or less in annual
receipts as a small business.19 Business
concerns included in this industry are those
16 15
U.S.C. 632.
North American Industry Classification
System: United States, 1997, at 508–09 (1997)
(NAICS Code 513120, which was changed to
515120 in October 2002). This category description
continues, ‘‘These establishments also produce or
transmit visual programming to affiliated broadcast
television stations, which in turn broadcast the
programs to the public on a predetermined
schedule. Programming may originate in their own
studio, from an affiliated network, or from external
sources.’’ Separate census categories pertain to
businesses primarily engaged in produced
programming. See id. at 502–505, NAICS Code
512110, Motion Picture and Video Production;
Code 512120, Motion Picture and Video
Distribution; Code 512191, Teleproduction and
Other Post-Production Services; and Code 512199,
Other Motion Picture and Video Industries.
18 ‘‘[Business concerns] are affiliates of each other
when one [business concern] controls or has the
power to control the other, or a third party or
parties controls or has the power to control both.’’
13 CFR 121.103(a)(1).
19 13 CFR 121.201.
17 OMB,
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44465
‘‘primarily engaged in broadcasting aural
programs by radio to the public.’’ 20
According to Commission staff review of the
BIA Financial Network, Inc. Media Access
Radio Analyzer Database as of July 10, 2007,
about 10,520 (95 percent) of 11,055
commercial radio stations in the United
States have revenues of $6.5 million or less.
We note, however, that in assessing whether
a business entity qualifies as small under the
above definition, business control
affiliations 21 must be included. Our estimate,
therefore, likely overstates the number of
small entities that might be affected by any
changes to the ownership rules, because the
revenue figures on which this estimate is
based do not include or aggregate revenues
from affiliated companies.
8. In this context, the application of the
statutory definition to radio stations is of
concern. An element of the definition of
‘‘small business’’ is that the entity not be
dominant in its field of operation. We are
unable at this time and in this context to
define or quantify the criteria that would
establish whether a specific radio station is
dominant in its field of operation.
Accordingly, the foregoing estimate of small
businesses to which the rules may apply does
not exclude any radio station from the
definition of a small business on this basis
and is therefore over-inclusive to that extent.
An additional element of the definition of
‘‘small business’’ is that the entity must be
independently owned and operated. We note
that it is difficult at times to assess these
criteria in the context of media entities, and
our estimates of small businesses to which
they apply may be over-inclusive to this
extent.
9. Daily Newspapers. The SBA has
developed a small business size standard for
the census category of Newspaper Publishers;
that size standard is 500 or fewer
employees.22 Census Bureau data for 2002
show that there were 5,159 firms in this
category that operated for the entire year.23
Of this total, 5,065 firms had employment of
499 or fewer employees, and an additional 42
firms had employment of 500 to 999
employees. Therefore, we estimate that the
majority of Newspaper Publishers are small
entities that might be affected by our action.
D. Description of Projected Reporting,
Recordkeeping, and Other Compliance
Requirements
10. Depending on the rules adopted as a
result of this Second FNPRM, the Report and
Order (R&O) ultimately adopted in this
proceeding may contain new or modified
information collections. We anticipate that
none of the changes would result in an
increase to the reporting and recordkeeping
requirements of broadcast stations,
20 See
NAICS Code 515112.
concerns] are affiliates of each other
when one [business concern] controls or has the
power to control the other, or a third party or
parties controls or has the power to control both.’’
13 CFR 121.103(a)(1).
22 13 CFR 121.201; NAICS Code 511110.
23 U.S. Census Bureau, 2002 Economic Census,
Subject Series: Information, ‘‘Establishment and
Firm Size (Including Legal Form of Organization),’’
Table 5, NAICS Code 511110 (issued Nov. 2005).
21 ‘‘[Business
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Federal Register / Vol. 72, No. 152 / Wednesday, August 8, 2007 / Proposed Rules
newspapers, or applicants for licenses. As
noted above, we invite small business
entities to comment in response to the
Second FNPRM.
DEPARTMENT OF TRANSPORTATION
E. Steps Taken To Minimize Significant
Impact on Small Entities, and Significant
Alternatives Considered
49 CFR Part 71
Office of the Secretary
[OST Docket No. 2007–28746]
11. The RFA requires an agency to describe
any significant alternatives that it has
considered in reaching its proposed
approach, which may include the following
four alternatives (among others): (1) The
establishment of differing compliance or
reporting requirements or timetables that take
into account the resources available to small
entities; (2) the clarification, consolidation,
or simplification of compliance or reporting
requirements under the rule for small
entities; (3) the use of performance, rather
than design, standards; and (4) an exemption
from coverage of the rule, or any part thereof,
for small entities.24
12. We are directed under law to describe
any alternatives we consider, including
alternatives not explicitly listed above.25 The
Second FNPRM describes and seeks
comment on the minority ownership
proposals made by MMTC in comments in
the 2002 biennial ownership proceeding, as
well as the recommendations of the Diversity
Committee, and consolidates the record
developed in MB Docket No. 04–228 with the
record in MB Docket Nos. 06–121, et al. The
proposals are intended to promote minority
and female ownership, and we seek comment
on the extent to which they would benefit
small businesses, including those owned by
minorities and women. We especially
encourage small entities to comment on the
proposals under consideration in this
consolidated proceeding. We do not propose
specific rules in the Second FNRPM but
rather seek comment on a number of different
proposals that could have an impact on small
entities. Accordingly, we will describe the
steps taken to minimize the significant
impact on small entities and the significant
alternatives that we consider in the Final
Regulatory Flexibility Analysis.
F. Federal Rules That May Duplicate,
Overlap, or Conflict With the Proposed
Rules
None.
[FR Doc. E7–15456 Filed 8–7–07; 8:45 am]
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BILLING CODE 6712–01–P
24 5
25 5
U.S.C. 603(c).
U.S.C. 603(b).
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RIN 2105–AD71
Standard Time Zone Boundary in
Southwest Indiana
Department of Transportation
(DOT), Office of the Secretary (OST).
ACTION: Supplemental notice of
proposed rulemaking.
AGENCY:
SUMMARY: DOT is providing notice of a
petition from the Board of
Commissioners in Perry County, IN, to
change the time zone boundary for the
County from the Central Time Zone to
the Eastern Time Zone, and DOT’s
request for additional information from
Perry County to aid in its determination
of whether this change would serve the
convenience of commerce, the statutory
standard for a time zone change. Other
persons supporting or opposing the
change to Perry County’s time zone
boundary are also requested to provide
comment. The final rule will be based
on all of the information received
during the entire rulemaking proceeding
and whether the statutory standard has
been met.
DATES: Comments should be received by
August 31, 2007, to be assured of
consideration. Comments received after
that date will be considered to the
extent practicable. If the time zone
boundary is changed as a result of this
rulemaking, the effective date would be
November 4, 2007.
ADDRESSES: You may submit comments
by any of the following methods:
• Web site: https://dms.dot.gov.
Follow the instructions for submitting
comments on the DOT electronic docket
site.
• Fax: 1–202–493–2251.
• Mail: Docket Management Facility;
U.S. Department of Transportation, 1200
New Jersey Avenue, SE., Room W12–
140, Washington, DC 20590–001.
• Hand Delivery: Room W12–140 on
the plaza level of the U.S. Department
of Transportation, 1200 New Jersey
Avenue, SE., Washington, DC, between
9 a.m. and 5 p.m., Monday through
Friday, except Federal Holidays.
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
online instructions for submitting
comments.
General Instructions: All submissions
must include the agency name and
docket number (OST Docket Number
2007–28746) or Regulatory
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Identification Number (RIN 2105–AD71)
for this rulemaking. Note that all
comments received will be posted
without change (including any personal
information provided) to https://
dms.dot.gov. Please refer to the Privacy
Act heading under Regulatory Notices.
Docket: For access to the docket to
read background documents or
comments received, go to https://
dms.dot.gov at any time or to Room
W12–140 on the plaza level of the U.S.
Department of Transportation, 1200
New Jersey Avenue, SE., Washington,
DC, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal
Holidays.
FOR FURTHER INFORMATION CONTACT:
Judith S. Kaleta, Office of the General
Counsel, U.S. Department of
Transportation, 1200 New Jersey
Avenue, SE., Washington, DC 20590,
indianatime@dot.gov, (202) 493–0992.
SUPPLEMENTARY INFORMATION: Knox,
Daviess, Martin, Pike, and Dubois
Counties (the Petitioning Counties) and
Perry County were six of eight counties
that moved from the Eastern Time Zone
to the Central Time Zone under DOT’s
January 2006 final rule to establish a
standard time zone boundary in Indiana
(71 FR 3228). On July 19, 2007, DOT
published a notice of proposed
rulemaking in the Federal Register (72
FR 39593) finding that, based on a Joint
Petition filed by the Petitioning
Counties and three Supplemental
Responses, the Petitioning Counties
provided enough information to justify
proposing to change their boundary
from the Central Time Zone to the
Eastern Time Zone.
Under our normal procedures, we do
not take action unless a county makes
a clear showing that the proposed
change of time zone would meet the
statutory standard. However, as we
noted in our previous rulemaking on
time zone boundary changes in Indiana,
this has been an unusual case because
of the number of counties involved,
their relationship to each other and to
other neighboring counties, and the
circumstances leading up to the
petitions. Perry County is located in
southwest Indiana, is contiguous to the
Petitioning Counties, and had its time
zone changed at the same time as the
Petitioning Counties. Therefore, DOT
asked for comments with regard to Perry
County in the Notice of Proposed
Rulemaking concerning standard time
zone boundary in Southwest Indiana
published in the Federal Register on
July 19, 2007. DOT stated, ‘‘We also
understand that this proposal may have
an impact on surrounding Counties,
particularly Perry County which
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Agencies
[Federal Register Volume 72, Number 152 (Wednesday, August 8, 2007)]
[Proposed Rules]
[Pages 44457-44466]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-15456]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[MB Docket Nos. 06-121, 02-277, 04-228; MM Docket Nos. 01-235, 01-317,
00-244; FCC 07-136]
47 CFR Part 73
2006 Quadrennial Regulatory Review
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: This document seeks comment on various proposals to promote
minority and female ownership in the media industry. It also addresses
a motion to withdraw, revise, and republish the Commission's Further
Notice of Proposed Rulemaking in its media ownership review.
DATES: The agency must receive comments on or before October 1, 2007
and reply comments on or before October 16, 2007.
ADDRESSES: Comments may be filed electronically using the Internet by
accessing the Electronic Comment Filing System, https://www.fcc.gov/cgb/
ecfs/, or the Federal eRulemaking Portal, https://www.regulations.gov.
The Commission's contractor will receive hand-delivered or messenger-
delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. Commercial
overnight mail (other than U.S. Postal Service Express Mail and
Priority Mail) must be sent to 9300 East Hampton Drive, Capitol
Heights, MD 20743. U.S. Postal Service first-class, Express, and
Priority mail should be addressed to 445 12th Street, SW., Washington,
DC 20554.
FOR FURTHER INFORMATION CONTACT: The Media Bureau contacts for this
proceeding are Mania Baghdadi and Jamila Bess Johnson, both at (202)
418-7200. Press inquiries should be directed to Mary Diamond at (202)
418-2388.
SUPPLEMENTARY INFORMATION:
I. Introduction
1. The Commission has before it the ``Motion for Withdrawal of the
Further Notice of Proposed Rulemaking and for the Issuance of a Revised
Further Notice'' filed on August 23, 2006 (the ``Motion for
Withdrawal'') by the Diversity and Competition Supporters
(collectively, ``MMTC''). MMTC states that the Commission's Further
Notice of Proposed Rule Making (FNPRM) in the media ownership
proceeding, 71 FR 45511, August 9, 2006, is flawed and should be
withdrawn, revised, and republished. The FNPRM invited comment on the
several media ownership rules adopted by the Commission in its 2002
Biennial Review Order, 68 FR 46286, August 5, 2003, and the pending
petitions for reconsideration of the 2002 Biennial Review Order, and
initiates the statutorily mandated 2006 quadrennial review of the
Commission's media ownership rules. Specifically, MMTC asserts that the
FNPRM is deficient because it fails to: (1) Identify and describe
MMTC's minority ownership proposals remanded by the court in Prometheus
Radio Project, et al. v. FCC, 373 F.3d 372 (3d Cir. 2004); (2) refer to
or seek comment on a definition of a socially and economically
disadvantaged business (``SDB''); and (3) identify section 257 of the
Telecommunications Act of 1996 as a central legal basis for minority
ownership relief. MMTC requests that the Commission restart the
ownership proceeding.
2. The FNPRM sought comment on MMTC's various proposals, as well as
on the general issue of fostering minority and female ownership. We
urged commenters to explain the effects, if any, that their rule
proposals would have on ownership of broadcast outlets by minorities,
women and small businesses. Given the impact of these issues on our
comprehensive ownership review, we believe it would be beneficial to
issue this Second FNPRM to set forth in greater detail the proposals
MMTC identified in its Motion for Withdrawal and to clarify the record
as requested by MMTC. Thus, in this Second FNPRM, we seek comment on
the proposals MMTC submitted in the 2002 biennial review proceeding, as
they are described in Appendix A, as well as on the proposals submitted
to the Commission by the Advisory Committee on Diversity for
Communications in the Digital Age (``Diversity Committee''), which are
also described in Appendix A and are set forth more fully in the
Committee's recommendations to the Commission. See https://www.fcc.gov/
DiversityFAC/ for a full listing of Diversity Committee meetings,
recommendations and white papers. In order to consider fully the issues
raised by MMTC, as discussed further below, we consolidate our ongoing
section 257 proceeding with this proceeding.
3. We find it unnecessary to adopt the specific approach suggested
by MMTC that we rescind and reissue the FNPRM in its entirety. The
approach we take, in conjunction with the initial FNPRM, provides ample
notice to the commenting public on the specific issues germane to our
media ownership review, including those raised by MMTC relating to
ownership diversity.
II. Background
4. In comments filed in the Commission's 2002 biennial review
proceeding, MMTC proposed numerous measures to promote minority
broadcast ownership. In the subsequent 2002
[[Page 44458]]
Biennial Review Order, the Commission listed 13 of MMTC's proposals, in
addition to describing proposals other commenters submitted. The
Commission stated that, because a ``more thorough exploration'' of
those comments was warranted, it would initiate a separate proceeding
to address MMTC's 13 proposals and the other comments regarding
minority and female broadcast ownership. Responding to MMTC's concern
that minorities lack equal transactional opportunities, the Commission
also stated that it would create a federal advisory committee to study
minority and female ownership issues. In addition, the Commission
adopted a transfer policy (the so-called ``small business cluster
transfer policy'') intended to promote diversity of ownership, based
largely on a proposal submitted by MMTC, which permits sales of
grandfathered combinations that exceed the ownership limits to and by
certain ``eligible entities.'' Entities may transfer control of or
assign an existing grandfathered combination to ``eligible entities,''
defined as entities that would qualify as a small business consistent
with Small Business Administration (``SBA'') standards for its industry
grouping. In addition, eligible entities may sell existing
grandfathered combinations without restriction.
5. In the 2002 Biennial Review Order, the Commission repealed its
failed station solicitation rule (``FSSR''), which is part of the
Commission's waiver standard under the local television ownership rule.
That waiver standard permits a television station purchaser to exceed
local television ownership limits if the acquired station is failed,
failing, or unbuilt. See 47 CFR 73.3555 Note 7. Under the FSSR, a
waiver applicant was required to demonstrate that serious efforts had
been made to secure an out-of-market buyer for the troubled station. A
waiver was not granted unless the applicant could show that the in-
market buyer was the ``only reasonably available entity willing and
able to operate the station'' and that an out-of-market sale would
result in an ``artificially depressed price.'' In the 2002 Biennial
Review Order, the Commission retained the waiver standard, but
eliminated the FSSR requirement.
6. On review, the U.S. Court of Appeals for the Third Circuit
remanded the Commission's decision to address MMTC's 13 proposals in a
separate rulemaking and ordered the Commission to address those
proposals at the same time that it addresses the other remanded issues.
The court also remanded the Commission's decision to repeal the FSSR
because the Commission did not address the potential impact of the
repeal on minority television station ownership.
III. Discussion
A. Minority and Female Ownership Initiatives
1. Socially and Economically Disadvantaged Businesses (``SDBs'')
7. MMTC argues that the Commission erred in the FNPRM by failing to
seek specific comment on how to define SDBs, adding that the concept of
SDBs is central to most of the minority ownership initiatives proposed
in the 2002 biennial review proceeding. MMTC states that the Prometheus
opinion recognizes the importance of establishing a definition for SDBs
because, in approving the small business cluster transfer policy, the
court indicated that, by the next quadrennial review, the Commission
would have the benefit of a stable definition of SDBs as well as
implementation experience in order to reevaluate whether an SDB-based
waiver policy would better promote the Commission's diversity
objectives. MMTC maintains that, without a definition for SDBs, the
Commission cannot effectively evaluate the existing small business
cluster transfer policy or its other proposals, as remanded by the
Prometheus court.
8. MMTC states that the issue of the SDB definition has already
been fully briefed in the Commission's proceeding examining market
entry barriers. In that proceeding, initiated in 2004, the public was
invited to comment on constitutionally permissible ways to further the
mandate of section 257 of the Telecommunications Act of 1996, which
directs the Commission to identify and eliminate market entry barriers
for small telecommunications businesses, and section 309(j) of the
Communications Act of 1934, as amended (``the Act''), which requires
the Commission to further opportunities in the allocation of spectrum-
based services for small and rural businesses and businesses owned by
women and minorities. See 69 FR 34672, June 22, 2004. The Media Bureau
also asked commenters to provide specific recommendations for building
on the series of market entry barrier studies that the Commission
released in December 2000. The studies are available on the
Commission's Web site at https://www.fcc.gov/opportunity/meb_study/ and
https://www.fcc.gov/Bureaus/Mass_Media/Informal/ad=study/.
9. We invite comment on MMTC's proposal that the Commission define
SDBs for purposes of analyzing policy initiatives in support of media
ownership diversity. We ask that commenters address whether use of a
proposed definition raises any constitutional concerns, practical
concerns, or other considerations unique to the Commission's policy
objectives, and we invite comment on its impact on small entities. To
ensure full consideration of this issue, we will consolidate the MB
Docket No. 04-228 proceeding commenced in 2004 with our review of the
media ownership rules.
2. MMTC Proposals
10. We seek comment on the various proposals for increasing
minority and female broadcast ownership identified by MMTC. As MMTC
suggests, we have attached its description of these proposals as
Appendix A.\1\ The proposals include: (1) those that MMTC submitted for
consideration in the 2002 biennial review proceeding; (2) the MMTC
proposals the Commission listed in the 2002 Biennial Review Order,
which the Third Circuit ordered the Commission to address on remand;
and (3) media-related recommendations of the Diversity Committee.\2\ In
discussing these proposals, commenters should address the various
questions and issues set forth below.
---------------------------------------------------------------------------
\1\ We have included the text of Appendix B to MMTC's Motion for
Withdrawal as Appendix A hereto. Although we have modified the MMTC
Appendix to eliminate a non-substantive footnote and to correct a
few apparent minor typographical errors, we have not altered the
descriptions, assessments, or legal analyses of the proposals, as
submitted by MMTC. By incorporating these materials, we do not adopt
any such descriptions, assessments, or analyses as official
Commission policy; we are providing them only to specifically invite
public comment on them.
\2\ The descriptions of the Diversity Committee recommendations
are provided by MMTC, which is a member of the Diversity Committee
but which does not represent the Diversity Committee as a whole.
Although the Diversity Committee recommendations are not subject to
the Third Circuit's remand, we are seeking comment on them to ensure
a more complete record.
---------------------------------------------------------------------------
11. In addition, as MMTC requests, we also seek comment on the
efficacy of the FSSR in promoting minority and female broadcast
ownership. When out-of-market purchasers for a station are unavailable,
the Commission permits ownership rule waivers for failed, failing and
unbuilt stations because the in-market purchase of such stations is
preferable to having frequencies go unused, even where the combination
would violate the local television ownership rule. In the 2002 Biennial
Review Order, the Commission determined that applicants seeking a
[[Page 44459]]
waiver of the local television ownership rule no longer needed to
comply with the FSSR requirement that they must first demonstrate the
unwillingness of out-of-market buyers to offer a reasonable price for
the failed, failing, or unbuilt station. In eliminating the FSSR
requirement, the Commission found that the efficiencies associated with
the operation of two same-market stations, absent unusual
circumstances, will always result in the buyer being the owner of
another station in the same market. In remanding the Commission's
repeal of the FSSR, the Third Circuit stated that the purpose of the
FSSR was to ensure that minority broadcasters received notification of
these station sales. The Third Circuit found that the Commission's
decision was arbitrary and capricious because it failed to discuss the
effect of the repeal on minority ownership.
12. We invite comment on the extent to which the FSSR or another
construction of the rule could promote minority and female ownership.
We ask commenters to provide concrete evidence rather than generalized
assertions.
B. Constitutional Issues
13. Any measures to facilitate minority and female broadcast entry
that are based on racial or gender classifications must satisfy the
heightened constitutional standards that apply to governmental
preferences for minorities and women under the Equal Protection Clause.
The Supreme Court's ruling in Adarand Constructors, Inc. v. Pena, 515
U.S. 200 (1995), requires that governmental classifications based on
race must be analyzed under strict scrutiny, and are constitutional
only if such classifications are narrowly tailored measures that
further a compelling governmental interest. Gender classifications are
subject to intermediate scrutiny, under which the government's action
must be substantially related to the achievement of an important
objective. In discussing a proposal targeted or designed to promote
minority and female broadcast ownership, commenters should describe,
consistent with relevant case law, how the proposal would satisfy
constitutional standards. In particular, proponents of initiatives that
rely on a definition of SDBs should explain in detail whether and how
the definition would satisfy constitutional standards.
C. Statutory Authority
14. We also seek further comment on the Commission's statutory
authority to address issues of minority and female ownership. Section
257 of the Act requires the Commission to identify and eliminate
``market entry barriers for entrepreneurs and other small businesses in
the provision and ownership of telecommunications services and
information services.'' Despite the apparent limitation of 47 U.S.C.
257(a) to telecommunications and information services, the
congressional directive to promote ``the policies and purposes of this
Act favoring diversity of media voices'' in implementing section 257(a)
arguably brings broadcasting within the scope of section 257. We invite
comment on this interpretation of the statute. The statutory provision
also specifically directs the Commission to ``promote the policies and
purposes of this Act favoring diversity of media voices'' in carrying
out its section 257 responsibilities. In addition, in 1996, Congress
amended section 1 of the Act to make it clear that the Commission's
mandate is to regulate interstate and foreign communications services
so that they are ``available, so far as possible, to all people of the
United States, without discrimination on the basis of race, color,
religion, national origin or sex * * *'' We ask commenters to address
whether and how these statutory provisions support the Commission's
efforts to promote media ownership diversity.
15. Further, section 309(j) of the Act requires the Commission to
promote the dissemination of licenses to a wide variety of applicants,
including members of minority groups and women. Section 309(j) directs
the Commission to ``ensure that * * * businesses owned by members of
minority groups and women are given the opportunity to participate in
the provision of spectrum-based services.'' In addition, section
309(j)(3)(B) requires the Commission, in establishing eligibility
criteria and bidding methodologies, to promote ``economic opportunity
and competition * * * by avoiding excessive concentration of licenses
and by disseminating licenses among a wide variety of applicants,
including small businesses, rural telephone companies, and businesses
owned by members of minority groups and women.''
16. We invite comment on the Commission's statutory authority to
facilitate the licensing of spectrum-based services to a diversity of
entities, including businesses owned by minority groups and women.
Commenters should also address the limitations of these statutory
provisions in light of recent court decisions regarding equal
protection. We also solicit comment on any further statutory provisions
that would enable the Commission to address ownership diversity,
particularly in terms of fostering diversity of ownership among
minorities and women.
IV. Procedural Matters
A. Comment Information
17. Pursuant to sections 1.415 and 1.419 of the Commission's rules,
47 CFR 1.415, 1.419, interested parties may file comments and reply
comments on or before the dates indicated above. Comments may be filed
using: (1) The Commission's Electronic Comment Filing System (ECFS);
(2) the Federal Government's eRulemaking Portal; or (3) by filing paper
copies. See Electronic Filing of Documents in Rulemaking Proceedings,
63 FR 24121, May 1, 1998.
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: https://www.fcc.gov/cgb/ecfs/ or the Federal eRulemaking Portal: https://www.regulations.gov. Filers
should follow the instructions provided on the Web site for submitting
comments.
For ECFS filers, if multiple docket or rulemaking numbers
appear in the caption of this proceeding, filers must transmit one
electronic copy of the comments for each docket or rulemaking number
referenced in the caption. In completing the transmittal screen, filers
should include their full name, U.S. Postal Service mailing address,
and the applicable docket or rulemaking number. Parties may also submit
an electronic comment by Internet e-mail. To get filing instructions,
filers should send an e-mail to ecfs@fcc.gov, and include the following
words in the body of the message, ``get form.'' A sample form and
directions will be sent in response.
Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or
rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or by first-class or overnight U.S. Postal Service
mail (although we continue to experience delays in receiving U.S.
Postal Service mail). All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.
The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
[[Page 44460]]
Massachusetts Avenue, NE., Suite 110, Washington, DC 20002. The filing
hours at this location are 8 a.m. to 7 p.m. All hand deliveries must be
held together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
U.S. Postal Service First-Class, Express, and Priority
mail should be addressed to 445 12th Street, SW., Washington, DC 20554.
People with Disabilities: To request materials in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format) send an e-mail to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
B. Regulatory Flexibility Act
18. As required by the Regulatory Flexibility Act, 5 U.S.C. 603,
the Commission prepared an Initial Regulatory Flexibility Analysis
(``IRFA'') in the initial Notice of Proposed Rulemaking in the media
ownership proceeding and a Supplemental Initial Regulatory Flexibility
Analysis Act (``Supplemental IRFA'') in the initial Further Notice of
Proposed Rulemaking in the media ownership proceeding. We have now
prepared a Second Supplemental IRFA, which is set forth in Appendix B.
Written public comments are requested on the Second Supplemental IRFA.
These comments must be filed in accordance with the same filing
deadlines for comments on the Second FNPRM, and should have a separate
and distinct heading designating them as responses to the Second
Supplemental IRFA.
C. Paperwork Reduction Act
19. This document does not contain proposed information collections
subject to the Paperwork Reduction Act of 1995 (``PRA''), Pub. L. No.
104-13, 109 Stat. 163 (1995). Therefore, it does not contain any
proposed new or modified information collection burden for small
business concerns with fewer than 25 employees, pursuant to the Small
Business Paperwork Relief Act of 2002, Pub. L. No. 107-198, 116 Stat.
729 (2002). However, depending on the rules adopted as a result of this
Second FNPRM, the report and order ultimately adopted in this
proceeding may contain information collections. The Commission will
provide a period for public comment on any PRA burdens contained in the
report and order and will submit such burdens to the Office of
Management and Budget for approval when the report and order is adopted
and released.
D. Ex Parte Information
20. This is a permit-but-disclose notice and comment rulemaking
proceeding. Ex parte presentations are permitted, except during the
Sunshine Agenda period, provided that they are disclosed as provided in
the Commission's rules.
21. Contact Information. The Media Bureau contacts for this
proceeding are Mania Baghdadi and Jamila Bess Johnson, both at (202)
418-7200. Press inquiries should be directed to Mary Diamond at (202)
418-2388.
V. Ordering Clauses
22. Accordingly, it is ordered, that pursuant to the authority
contained in sections 1, 2(a), 4(i), 257, 303, 307, 309, 310, and 613
of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a),
154(i), 257, 303, 307, 309, 310, and 533, and section 202(h) of the
Telecommunications Act of 1996, this Second Further Notice of Proposed
Rulemaking is adopted.
23. It is further ordered that, pursuant to the authority contained
in sections 1, 2(a), 4(i), 257, 303, 307, 309, 310, and 613 of the
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i),
257, 303, 307, 309, 310, and 533, and section 202(h) of the
Telecommunications Act of 1996, notice is hereby given of the proposals
described in this Second Further Notice of Proposed Rulemaking.
24. It is further ordered that MB Docket No. 04-228 shall be
consolidated with MB Docket No. 06-121 et al.
25. It is further ordered that MMTC's Motion for Withdrawal of the
Further Notice of Proposed Rulemaking and for the Issuance of a Revised
Further Notice is granted to the extent described herein, and in all
other respects, denied.
26. It is further ordered that MMTC's Request for Ruling on its
Motion for Withdrawal of the Further Notice of Proposed Rulemaking and
for the Issuance of a Revised Further Notice is granted to the extent
described herein, and in all other respects, denied.
27. It is further ordered that comments and reply comments with
regard to those matters raised in this Second Further Notice of
Proposed Rulemaking will be due October 1, 2007 and October 16, 2007,
respectively.
28. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Second Further Notice of Proposed Rulemaking, including
the Second Supplemental Initial Regulatory Flexibility Analysis, to the
Chief Counsel for Advocacy of the Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Appendix A--Minority Ownership Proposals and Suggestions \3\
---------------------------------------------------------------------------
\3\ This Appendix is a verbatim copy of Appendix B to MMTC's
Motion for Withdrawal, except that this Appendix reflects minor
typographical corrections and the omission of a non-substantive
footnote.
---------------------------------------------------------------------------
Section I (items 1-14) contains the 14 proposals of the
Diversity and Competition Supporters (``MMTC'') in MM Docket No. 02-
277. The FCC's Advisory Committee on Diversity for Communications in
the Digital Age (``Diversity Committee'') also proposed eight of
these items, as noted therein.
Section II (items 15-26) contains 12 informal suggestions made
by the Minority Media and Telecommunications Council at a November
6, 2002 meeting of stakeholders at the Commerce Department. These
were not the Diversity and Competition Supporters' proposals in the
media ownership proceeding; rather, they were the Minority Media and
Telecommunications Council's informal suggestions to stakeholders.
The Diversity Committee also proposed one of these items, as noted
therein.
Section III (items 27-34) contains recommendations issued by the
Diversity Committee that do not track the proposals or suggestions
in items 1-26. Among these, items 27-30 are nonregulatory
recommendations, and items 31-34 are regulatory recommendations. The
Diversity Committee has propounded 17 recommendations germane to
media ownership: Eight tracking items in Section I, one tracking an
item in Section II, and the eight items in Section III.
Section I: MMTC Proposals in MM Docket 02-277
1. Equal transactional opportunity policy--barring
discrimination on the basis of race or gender in broadcast
transactions.
Location(s) in Record: Initial Comments of Diversity and
Competition Supporters, MB Docket No. 02-277 (filed January 2, 2003)
(``MMTC 2003 Comments''), pp. 115-120; MMTC Letter to Hon. Michael
Powell, MM Docket No. 02-277 (April 28, 2003) (``MMTC April 28, 2003
Ex Parte''), pp. 11-19.
Nature of Item: Formal rulemaking proposal.
Summary of Item: Race and gender discrimination in the sale of
broadcast stations would be banned, consistent with 47 U.S.C. 151.
The seller would certify compliance by checking a box on a Form 314
or Form 315 application.
Year First Proposed: 1994.
Parallel Recommendation of Diversity Committee: Transactional
Transparency Recommendations, May 14, 2004, p. 4; White
[[Page 44461]]
Paper on Equal Transactional Opportunity, April 29, 2004.
Relevance of SDB Definition: No.
2. Transfer Restriction of Grandfathered Clusters to SDBs.
Location(s) in Record: MMTC 2003 Comments, pp. 107-109.
Nature of Item: Formal rulemaking proposal.
?>Summary of Item: The seller of a grandfathered cluster would
not have to break it up if it were sold to an SDB. In the 2002
Biennial Review, the Commission adopted a provision for the transfer
intact of a grandfathered cluster, but decided that small
businesses, rather than SDBs, would constitute the class of eligible
buyers. MMTC seeks to develop a definition of ``socially and
economically disadvantaged business'' (SDB) that would be
appropriate for broadcasting and be constitutionally sound. SDBs are
a subset of small businesses. Like other small businesses, they are
economically disadvantaged; but unlike other small businesses, they
are also socially disadvantaged. Their social disadvantage stems
from individualized factors or from their membership in a class
(such as a racial group in a particular industry) for which
discrimination has inhibited entry and financing. An SDB definition
is desirable because it would be less dilute in its impact on
minorities by omitting, for example, the children of millionaires
who, as new entrants, can qualify as small businesses although they
have never been disadvantaged.
Year First Proposed: 2003.
Parallel Recommendation of Diversity Committee: none.
Relevance of SDB Definition: Yes.
3. Structural rule waiver for selling a station to an SDB, where
the sale to the SDB is ancillary to a transaction that otherwise
would be barred by an ownership rule.
Location(s) in Record: MMTC 2003 Comments, p. 103.
Nature of Item: Formal rulemaking proposal.
Summary of Item: A company contemplating a transaction that
would otherwise be barred by an ownership rule (perhaps one that
would qualify in the future, e.g., if the Commission adopted a
staged implementation of deregulation program; see item 13 infra)
would be permitted to complete the transaction if it sells stations
to SDBs.
Year First Proposed: 1995 (concept originally advanced by NTIA
in 1977).
Parallel Recommendation of Diversity Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17-18; White Paper on Incentive-
Based Regulations, May 23, 2004, pp. 5-6.
Relevance of SDB Definition: Yes.
4. Tolling buildout deadlines for selling expiring construction
permits to SDBs.
Location(s) in Record: MMTC 2003 Comments, pp. 112-115
(originally a petition for rulemaking filed by Entravision Holdings
LLC, RM-9567 (filed March 10, 1998)).
Nature of Item: Formal rulemaking proposal.
Summary of Item: In 1998, Entravision submitted a petition for
rulemaking which sought to revise the construction permit expiration
standard established pursuant to 47 U.S.C. 319(a)-(b) and
implemented in 47 CFR 73.3598. Entravision proposed that the
Commission allow holders of expiring construction permits to sell
them to entities in which minorities own at least 20% of the equity,
or to entities which commit to serve the programming needs of
minority or foreign language groups for at least 80% of their
operating time. MMTC proposed a modification of Entravision's
concept to make it applicable to all SDBs.
Year First Proposed: 1998.
Parallel Recommendation of Diversity Committee: Financial
Issues. Recommendations, June 14, 2004, pp. 17-18; White Paper on
Incentive-Based Regulations, May 23, 2004, pp. 9-10.
Relevance of SDB Definition: Yes.
5. Structural rule waivers for creating incubator programs.
Location(s) in Record: MMTC 2003 Comments, pp. 104-105.
Nature of Item: Formal rulemaking proposal.
Summary of Item: The Commission would act on still-pending
incubator plans developed in 1992 by Chairman Sikes and by NABOB.
With constitutionally required modifications, these plans would
allow a company to acquire more than the otherwise-allowable number
of stations in a market if the company establishes a program that
substantially promotes ownership by disadvantaged businesses. The
incubator programs could encompass management or technical
assistance, loan guarantees, direct financial assistance through
loans or equity investment, training and business planning
assistance.
Year First Proposed: 1992.
Parallel Recommendation of Diversity Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17-18; White Paper on Incentive-
Based Regulations, May 23, 2004, pp. 6-7.
Relevance of SDB Definition: Yes.
6. Bifurcation of channels for share-times with SDBs.
Location(s) in Record: Comments of the Minority Media and
Telecommunications Council in MB Docket 01-317 (Radio Ownership)
(filed March 19, 2002) (``MMTC 2002 Comments''), pp. 111-173; Reply
Comments of the Minority Media and Telecommunications Council in MB
Docket 01-317 (Radio Ownership) (filed May 8, 2002) (``MMTC 2002
Reply Comments''), pp. 6-10; MMTC 2003 Comments, pp. 106-107.
Nature of Item: Formal rulemaking proposal.
Summary of Item: The Commission would create a new class of
``Free Speech Stations.'' They would be independently owned by SDBs,
have at least 20 non-nighttime hours per week of airtime, and be
primarily devoted to non-entertainment programming. A Free Speech
Station would share time on the same channel with a largely
deregulated ``Entertainment Station.'' A cluster owner that
bifurcates a channel to accommodate a Free Speech Station and an
Entertainment Station could buy another fulltime station in the
market by taking advantage of section 202(b)(2) of the
Telecommunications Act, which allows for an exception to the local
radio ownership rule when a new station is created. That additional
fulltime station would also be bifurcated into a Free Speech and an
Entertainment Station. In this way, a cluster could grow steadily up
to the limits allowed by antitrust law.
Year First Proposed: 2002.
Parallel Recommendation of Diversity Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17-18; White Paper on Incentive-
Based Regulations, May 23, 2004, pp. 7-8.
Relevance of SDB Definition: Yes.
7. Structural rule waivers for financing construction of an
SDB's unbuilt station.
Location(s) in Record: MMTC 2003 Comments, pp. 109-110.
Nature of Item: Formal rulemaking proposal.
Summary of Item: When a broadcaster provides an SDB with an
equity/debt plus interest (``EDP Interest'') that enables the SDB to
build out an unbuilt permit, (1) the EDP Interest should be deemed
nonattributable, and (2) the entity providing the EDP Interest
should be reserved a place in line to subsequently duopolize or
crossown another same-market station. This reserved place in the
queue, in markets where only a limited number of new combinations
can be created under the local ownership rules, would provide an
incentive to broadcasters to assist SDBs to build out their unbuilt
permits.
Year First Proposed: 1999.
Parallel Recommendation of Diversity Committee: none.
Relevance of SDB Definition: Yes.
8. Grandfathering of nonattribution of EDP (equity debt-plus)
interests in SDBs.
Location(s) in Record: MMTC 2003 Comments, pp. 110-112.
Nature of Item: Formal rulemaking proposal.
Summary of Item: The nonattributable nature of EDP Interests in
SDBs would be grandfathered, irrespective of whether the entity
providing the EDP Interest (the ``EDP Provider'') subsequently
acquires other properties which otherwise would cause the EDP
Interest to be attributable to the EDP Provider. These arrangements
would be permissible where (1) the EDP Provider merges with,
acquires, or is acquired by a company unrelated to the company
holding a nonattributable EDP Interest in an SDB (an ``Unrelated
Transaction''); (2) the Unrelated Transaction occurs at least a year
after the EDP relationship was formed; (3) the Unrelated Transaction
would otherwise cause the EDP Provider's EDP Interest in the SDB to
become attributable; and (4) the EDP Provider and the SDB make an
affirmative showing that the EDP Provider does not exercise undue
influence over the SDB.
Year First Proposed: 1999.
Parallel Recommendation of Diversity Committee: Financial Issues
Recommendations, June 14, 2004, pp. 17-18; White Paper on Incentive-
Based Regulations, May 23, 2004, pp. 8-9.
Relevance of SDB Definition: Yes.
9. Mathematical touchstones: Tipping points for the nonviability
of independently owned radio stations in a consolidating market, and
quantifying source diversity.
[[Page 44462]]
Location(s) in Record: MMTC 2002 Reply Comments, pp. 22-27; MMTC
Reply Comments, pp. 17-24; MMTC April 28, 2003 Ex Parte, pp. 6-7.
Nature of Item: Formal rulemaking proposal.
Summary of Item: MMTC offered two formulas suitable for crafting
and implementing rules to promote diversity: (1) The ``Tipping Point
Formula'' established how the Commission could ensure that local
radio markets could preserve independent owners. This formula was
based on the premise that independent owners each need determinable
and quantifiable revenue streams in order to stay afloat and provide
service to the public. The formula acknowledges the existence of a
tipping point in the distribution of radio revenue in a market
between cluster owners and independents. When the combined revenues
of a market's cluster owners exceed this tipping point, the
independents can no longer survive. By identifying this tipping
point, the formula provides a rational basis for determining whether
a transaction would limit diversity. (2) The ``Source Diversity
Formula'' expresses consumers' utility derived from marginal
increases in source diversity. The Source Diversity Formula is based
on the premise that increases in consumer utility flow from their
access to additional sources, with diminishing returns to scale.
This formula would require field-testing before it could be applied
in practice to measure source diversity.
Year First Proposed: 2002.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: Yes.
10. Zero tolerance for ownership rule abuse.
Location(s) in Record: MMTC 2003 Comments, pp. 123-127.
Nature of Item: Formal rulemaking proposal.
Summary of Item: Structural abuse is endemic due to limited
enforcement resources, the ease of concealing abuse, and the high
financial rewards for rule breaking. Structural rule relaxation
would be easier to accept if the Commission holds the line on abuse
through a Zero Tolerance Policy focused on clear standards, pro-
active investigations, evidentiary hearings, and strict penalties
for rule violations.
Year First Proposed: 2003.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
11. Use of Joint Operating Agreements (JOAs) as an alternative
to Local Marketing Agreements (LMAs) and Joint Sales Agreements
(JSAs).
Location(s) in Record: Comments of the Communications Workers of
America (CWA) in MB Docket 02-277 (filed January 2, 2003), pp. 4-5
and 48; MMTC Reply Comments, pp. 15-16.
Nature of Item: Formal rulemaking proposal.
Summary of Item: The Commission requires ownership attribution
of most JSAs and LMAs. While this step promotes diversity, it also
reduces the options available to financially troubled facilities
seeking to survive. CWA proposed that JOAs, such as those used in
the newspaper industry, could be used to help companies survive and
to promote diversity at the same time. A JOA adapted to broadcasting
would leave each station's program creation, program organization
and distribution, and sales strategy and implementation in the hands
of each station's licensees. At the same time, a genuine JOA allows
both stations to take advantage of operational synergies for non-
program, non-sales related functions, such as accounting,
engineering, and physical plant management. A JOA would not be
attributable.
Year First Proposed: 2003.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
12. Opening FM spectrum for new entrants.
Location(s) in Record: MMTC 2003 Comments, pp. 128-141; MMTC
April 28, 2003.
Ex Parte, pp. 10-11.
Nature of Item: Formal rulemaking proposal.
Summary of Item: The Commission has systematically broadened
spectrum availability as a means of balancing consolidation with new
entry. MMTC proposed three methods by which the FCC could open the
FM radio spectrum to new entrants: (1) create two new classes of FM
stations suitable for serving small communities; (2) perform a
comprehensive engineering search of the FM spectrum to identify the
most-needed new drop-in opportunities; and (3) replace FM station
classes with pure interference-based criteria.
Year First Proposed: 2003.
Parallel Recommendation of Diversity Committee: Recommendation
on Diversifying Ownership in the Commercial FM Radio Band, October
4, 2004, as amplified by the Recommendations of the Subcommittee on
New Technologies, June 11, 2004, containing eight relevant subparts:
(1) Create medium power FM stations; (2) replace the FM Table with
interference-based allotment criteria; (3) allow Class A stations to
use low towers and higher-than-standard power while retaining
appropriate ERP levels; (4) conduct a comprehensive channel search
for new FM allotments; (5) harmonize regional interference
protection standards; (6) repeal the third-adjacent FM contour
rules; (7) relax the community of license and transmitter site
rules; and (8) authorize interference agreements.
Relevance of SDB Definition: No.
13. Staged implementation of deregulation, coupled with a
negotiated rulemaking.
Location(s) in Record: MMTC 2003 Comments, pp. 84-101 and 145-
147; Comments of Paxson Communications Corporation, MB Docket 02-277
(filed January 3, 2003), pp. 6-14; MMTC Reply Comments, pp. 25-32.
Nature of Item: Formal rulemaking proposal.
Summary of Item: By implementing deregulation in stages, the
Commission could measure the impact of deregulation while it is
underway, and implement mid-course corrections when needed to
protect diversity, competition, localism and minority ownership.
MMTC proposed that the Commission would implement its new ownership
rules over a ten-year period in five two-year stages. In even-
numbered years, the Commission would use quantitative tests to
measure diversity, competition, localism and minority ownership. If
these tests showed ill health on any of these four factors, the
Commission would take corrective steps in the odd-numbered years. If
a subsequent even-year measurement showed continued ill health, the
Commission could apply the brakes until market conditions change.
Paxson Communications offered a similar proposal. The coefficients
of a staged implementation plan could be worked out in a negotiated
rulemaking involving representatives of all of the stakeholders in
the proceeding.
Year First Proposed: 2003.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: Yes.
14. Market-based, tradable diversity credits as an alternative
to voice tests.
Location(s) in Record: MMTC Reply Comments, pp. 34-38; MMTC
April 28, 2003. Ex Parte, pp. 8-10.
Nature of Item: Formal rulemaking proposal.
Summary of Item: A system of market-based diversity credits
would be created as an alternative to voice tests. A quantity of
diversity credits would be given to SDBs, commensurate with the
extent of their social and economic disadvantages. Diversity credits
would also be given to the seller at the closing of a transaction
that would result in greater structural diversity. If a transaction
would add to concentration, the buyer would return a number of
diversity credits to the Commission when the transaction closes.
Finally, companies could buy or sell diversity credits to one
another, thereby providing a market-based source of access to
capital for SDBs. A similar paradigm used by the EPA has replaced
much command-and-control environmental regulation. Diversity credits
would (1) incentivize diversity, (2) disincentivize consolidation,
(3) place on the beneficiaries of consolidation the responsibility
of paying for the remediation of some of consolidation's ill
effects, (4) serve as a mechanism to provide access to capital to
SDBs, (5) capture the measure of diversity more precisely than an
inherently approximate voice test, and (6) allow for easier
administration than a system of voice tests and waivers.
Year First Proposed: 2003.
Parallel Recommendation of Diversity Committee: Transactional
Transparency Recommendations, May 14, 2004, p. 3; White Paper on
Diversity Credits, May 22, 2004.
Relevance of SDB Definition: Yes.
Section II: MMTC's Informal Suggestions to Stakeholders
15. Equity for specific and contemplated future acquisitions.
Location(s) in Record: MMTC, Background Materials: Omnibus Media
Ownership Proceeding Stakeholders Meeting, U.S. Department of
Commerce, November 6, 2002, Tab 10 (``Twelve Minority Ownership
Solutions'').
[[Page 44463]]
Nature of Item: Private industry initiative; but see item 29
infra, proposing collaborative role for FCC in creating a fund or
funds).
Summary of Item: Broadcast companies would collaborate with one
another and with institutional investors to create new targeted
funds specializing in providing equity for broadcast new entrants.
Year First Proposed: 1977.
Parallel Recommendation of the Diversity Committee: None (but
see item 29 infra).
Relevance of SDB Definition: No.
16. Debt on favorable terms--enhanced outreach and access to
debt financing by major financial institutions.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative (but see items 28
and 29 infra, proposing collaborative role for FCC).
Summary of Item: Broadcast companies would solicit commitments
from large institutional lenders to work with new entrants in
providing debt financing for acquisitions, with or without the
participation of the SBA as a guarantor.
Year First Proposed: 1977.
Parallel Recommendation of Diversity Committee: None (but see
items 28 and 29 infra).
Relevance of SDB Definition: No.
17. Investments in institutions specializing in minority and
small business financing.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Broadcast companies would invest in existing
funds with proven track records of success as participants in the
financing of new entrants. The Quetzal/J.P. Morgan Fund, the
Telecommunications Development Fund (TDF), the Broadcast Capital
Fund and other Small Business Investment Corporations (SBICs) are
examples of these funds.
Year First Proposed: 1976.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
18. Assistance--cash and in-kind--to institutions that train
future minority media owners.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Media institutions would provide assistance to
colleges and other programs that provide minorities the skill sets
needed to transition from management to ownership. Examples of these
institutions are Historically Black Colleges and Universities
(HBCUs), Hispanic Serving Institutions (HSIs) and other programs,
particularly the National Association of Broadcasters Education
Fund's (NABEF's) Broadcast Leadership Training (BLT) Program.
Year First Proposed: 1992.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
19. Creation of business planning centers.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Business planning centers, typically affiliated
with universities, would work one-on-one with minority entrepreneurs
as they develop business plans and strategies, seek financing and
pursue acquisitions.
Year First Proposed: 1992.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
20. Executive loans, and engineers on loan to minority owned
companies and applicants.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: The broadcasting industry would create an
executive loan program, following the examples of similar programs
in other industries. Loaned executives or engineers would work on
the staffs of minority broadcasters fulltime for six months to two
years.
Year First Proposed: 1992.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
21. Enhanced access to broadcast transactions.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Sellers would give minority new entrants a
first look at their properties, allowing them a headstart for due
diligence and financing.
Year First Proposed: 2002.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
22. Nondiscrimination provisions in advertising sales contracts,
designed to expressly avoid such practices as ``no urban/no
Spanish'' dictates.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Contemplates FCC or FTC policy statement or
rule.
Summary of Item: Rep firms, ad agencies, broadcasters and
advertisers would agree to use a standard provision in advertising
sales contracts that would confirm that the parties to these
contracts will not participate in a scheme to restrict advertising
because of the membership in a minority group of the targets of the
foregone advertising. The FTC or FCC would obtain certifications
that this contract provision is always used in ad sales contracts.
Year First Proposed: 1984.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
23. In-house incubation and mentoring programs for future
minority owners.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Private industry initiative.
Summary of Item: Established media companies would develop their
own in-house programs to incubate and mentor future minority owners,
including their own executives who might wish to transition into
ownership. These initiatives would have no regulatory tie-ins.
Year First Proposed: 1976.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
24. Enactment of tax deferral legislation designed, to the
extent possible, to foster minority ownership.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Legislation; FCC has recommended it to Congress
several times.
Summary of Item: The Commission would continue to recommend to
Congress the adoption of a tax deferral program to replace the
former Tax Certificate Policy, under which a seller was able to
defer capital gains taxes on the sale of a media property to a
minority controlled firm. The new program would be focused on SDBs
rather than only on minorities, and it would be extended to
telecommunications. In recent years, Senator John McCain,
Congressman Charles Rangel and Congressman Bobby Rush have each
introduced legislation along these lines.
Year First Proposed: 1977; in effect from 1978-1995 as the Tax
Certificate Policy (see 68 FCC2d 979 (1978)); repealed by Congress
in 1995; restoration often proposed since 1995.
Parallel Recommendation of Diversity Committee: Financial Issues
Recommendations, June 14, 2004, pp. 14-15; Transactional
Transparency Recommendations, May 14, 2004, pp. 2-3.
Relevance of SDB Definition: Yes (included in bills sponsored by
Senator John McCain and by Congressman Bobby Rush).
25. Examination of how to promote minority ownership as an
integral part of all FCC general media rulemaking proceedings.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: Contemplates FCC policy statement or procedural
rule.
Summary of Item: All general mass media rulemaking proceedings
(except individual FM or TV allotment proceedings) would include a
request for comment on how the proposed rules affected minority
entrepreneurship or could be tailored to have a positive impact on
minority entrepreneurship.
Year First Proposed: 1973.
Parallel Recommendation of Diversity Committee: None.
Relevance of SDB Definition: No.
26. Ongoing longitudinal research on minority and female
ownership trends.
Location(s) in Record: Twelve Minority Ownership Solutions.
Nature of Item: FCC or NTIA research initiative.
Summary of Item: The FCC or NTIA would conduct an annual,
authoritative survey of minority and female ownership trends. As a
longitudinal instrument, it could track this data over time,
enabling scholars to examine the impact of rule changes on minority
and female ownership.
Year First Proposed: 1995.
Parallel Recommendation of Diversity Committee: none.
Relevance of SDB Definition: Yes.
Section III: Proposals Sponsored by the Diversity Committee
27. Clearinghouse through which licensees could announce
availability of stations for sale.
[[Page 44464]]
Location(s) in Record: Diversity Committee, Financial Issues.
Recommendations, June 14, 2004, pp. 13-14.
Nature of Item: Private industry initiative.
Summary of Item: The National Association of Broadcasters and/or
the National Association of Media Brokers could create a website or
other clearinghouse through which licensees with stations for sale
could seek minority buyers.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
28. Extension of the Community Reinvestment Act (CRA) to
encourage financial institutions to provide debt financing to
broadcasters.
Location(s) in Record: Diversity Committee, Financial Issues
Recommendations, June 14, 2004, p. 15.
Nature of Item: Recommendation for FCC to propose rule revisions
to the Treasury Department.
Summary of Item: The FCC would work with the Treasury Department
to expand the application of the CRA credit to encourage financial
institutions to place capital in private equity funds led by
minority and female entrepreneurs, or in funds that invest in
communities of color. A similar incentive mechanism could be
explored with the appropriate regulatory agencies to encourage
pension funds, insurance companies and other financial institutions
to place monies with such equity funds.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
29. Encourage more local and regional banks to participate in
SBA guaranteed loan programs for broadcast and telecom ventures.
Location(s) in Record: Diversity Committee, Financial Issues
Recommendations, June 14, 2004, p. 16.
Nature of Item: Recommendation for FCC and SBA to expand
outreach to banks.
Summary of Item: The FCC would work closely with the SBA to
educate and encourage more local and regional banks (which have not
been heavily involved in broadcast or telecom lending) to make loans
through the SBA's 7(a) or 504 programs.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
30. Establishment of a fund of funds.
Location(s) in Record: Diversity Committee, Financial Issues
Recommendations, June 14, 2004, pp. 16-17.
Nature of Item: Private industry initiative.
Summary of Item: The FCC would initiate discussions with the
major pension funds to encourage the establishment of a fund of
funds that would place capital with minority focused private equity
funds such as those belonging to the National Association of
Investment Companies (NAIC), which are led by minority management
and which invest in opportunities led by women and minority
entrepreneurs and/or in opportunities in underserved markets.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
31. Revision of the Distress Sale Policy to institute case-by-
case review of purchasers' qualifications.
Location(s) in Record: Diversity Committee, Recommendation on
the Distress Sale Policy, June 1, 2004; Financial Issues
Recommendations, June 14, 2004, pp. 18-19.
Nature of Item: Rulemaking recommendation.
Summary of Item: The Distress Sale Policy, in existence since
1978 but seldom used recently, would be revised to ensure that it
satisfies the narrow tailoring prong of strict scrutiny. In
particular, a potential buyer, of any race, would demonstrate that
its proposed service to the community would address needs unmet by
existing media. Service to minority audiences could be an unmet
need.
Year First Proposed: 2004.
Relevance of SDB Definition: No.
32. Reservation, for a company that finances or incubates an
SDB, of first place in the queue to form a duopoly in a market for
which only a limited number of duopolies are permissible.
Location(s) in Record: Diversity Committee, Financial Issues
Recommendations, June 14, 2004, pp. 17-18; White Paper on Incentive-
Based Regulations, May 23, 2004, p. 9.
Nature of Item: Rulemaking recommendation.
Summary of Item: When the local market voice test limits how
many LMAs may be created, a company wishing to have its application
to create an LMA considered first could reserve a place in the
application queue by financing or incubating an SDB.
Year First Proposed: 1999.
Relevance of SDB Definition: Yes.
33. Relaxation of foreign ownership restrictions (see 47 U.S.C.
310(b)(4)).
Location(s) in Record: Diversity Committee, Adoption of a
Declaratory Ruling on Section 310(b) (4) Waivers, December 10, 2004.
Nature of Item: Recommendation for rulemaking or policy
statement.
Summary of Item: The Commission would consider whether a
noncontrolling investment from foreigners (e.g. up to 49%) could be
permitted where the investment would help eliminate a barrier to
access to capital for domestic minority owned broadcasters as
contemplated by 47 U.S.C. 257.
Year First Proposed: 2004.
Relevance of SDB Definition: Yes.
34. Extension of divestiture deadlines in mergers where
applicants have actively solicited bids for spin-off properties from
SDBs.
Location(s) in Record: Diversity Committee, Recommendation on
Merger Review, October 15, 2004.
Nature of Item: Recommendation for rulemaking or policy
statement.
Summary of Item: The Commission has recognized that minorities,
especially new entrants, often need additional time to line up
financing. Therefore, the Commission would announce a policy of
generally affording more time for divestitures where the applicants
solicit bids from SDBs for spinoff properties.
Year First Proposed: 1999.
Relevance of SDB Definition: Yes.
Appendix B--Second Supplemental Initial Regulatory Flexibility Analysis
1. As required by the Regulatory Flexibility Act, as amended
(``RFA'') \4\ the Commission has prepared this Second Supplemental
Initial Regulatory Flexibility Analysis (``Second Supplemental
IRFA'') of the possible significant economic impact on a substantial
number of small entities of the policies and rules considered in the
Second Further Notice of Proposed Rule Making (``Second FNPRM'').
Written public comments are requested on this Second Supplemental
IRFA. Comments must be identified as responses to the Second
Supplemental IRFA and must be filed by the deadlines for comments on
the Second FNPRM. The Commission will send a copy of the Second
FNPRM, including this Second Supplemental IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration (``SBA'').\5\ In
addition, the Second FNPRM and the Second Supplemental IRFA (or
summaries thereof) will be published in the Federal Register.\6\
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\4\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been
amended by the Contract With America Advancement Act of 1996, Pub.
L. No. 104-121, 110 Stat. 847 (1996) (``CWAAA''). Title II of the
CWAAA is the Small Business Regulatory Enforcement Fairness Act of
1996 (``SBREFA'').
\5\ See 5 U.S.C. 603(a).
\6\ See id.
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A. Need for, and Objectives of, the Proposed Rules
2. The Further Notice of Proposed Rule Making in MB Docket Nos.
06-121, et al.,\7\ invites comment on how to address the issues
raised by the opinion of the U.S. Court of Appeals for the Third
Circuit in Prometheus Radio Project v. FCC,\8\ and, pursuant to
section 202(h) of the Telecommunications Act of 1996, on whether the
media ownership rules are ``necessary in the public interest as the
result of competition.'' \9\ In Prometheus, the court affirmed some
Commission decisions and
[[Page 44465]]
remanded others for further Commission justification or
modification.\10\ In the Second FNPRM, we seek additional comment on
specific proposals advocated by the Diversity and Competition
Supporters (collectively, ``MMTC'') to foster minority and female
ownership. In addition, the Commission will consolidate into the
broadcast ownership proceeding the record established in MB Docket
No. 04-228, in which the Commission solicited public comment on
constitutionally permissible ways to further the mandates of Section
257 of the Telecommunications Act of 1996,\11\ which directs the
Commission to identify and eliminate market entry barriers for small
telecommunications businesses, and Section 309(j) of the
Communications Act of 1934, as amended (the ``Act''),\12\ which
requires the Commission to further opportunities in the allocation
of spectrum-based services for small businesses and businesses owned
by women and minorities. The Commission previously published a
Supplemental IRFA in connection with the FNPRM. We issue this Second
Supplemental IRFA in order to invite comment on the effects on small
entities, including minorities and women, of the proposals
identified in this Second FNPRM. We particularly solicit comment
from all small business entities, including minority-owned and
women-owned small businesses.
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\7\ 2006 Quadrennial Regulatory Review--Review of the
Commission's Broadcast Ownership Rules and Other Rules Adopted
Pursuant to Section 202 of the Telecommunications Act of 1996,
Further Notice of Proposed Rule Making, 71 FR 45511, August 9, 2006
(``FNPRM'').
\8\ Prometheus Radio Project, et al. v. F.C.C., 373 F.3d 372
(2004) (``Prometheus''), stay modified on rehearing, No. 03-3388 (3d
Cir. Sept. 3, 2004) (``Prometheus Rehearing Order''), cert. denied,
73 U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04-1020, 04-1033, 04-
1036, 04-1045, 04-1168 and 04-1177); see also 2002 Biennial
Regulatory Review--Review of the Commission's Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the
Telecommunications Act of 1996, 68 FR 46286, August 5, 2003 (``2002
Biennial Review Order'').
\9\ See Telecommunications Act of 1996, Pub. L. No. 104-104, 110
Stat. 56, sec. 202(h) (1996) (``1996 Act''); Consolidated
Appropriations Act, 2004, Pub. L. No. 108-199, sec. 629, 118 Stat. 3
(2004) (``Appropriations Act'') (amending sections 202(c) and 202(h)
of the 1996 Act). Section 202(h) requires the Commission to
periodically review its media ownership rules to determine ``whether
any of such rules are necessary in the public interest as the result
of competition'' and to ``repeal or modify any regulation it
determines to be no longer in the public interest.''
\10\ See Prometheus Rehearing Order. Accordingly, except for
revisions to the local radio ownership rule, the rule changes made
in the 2002 Biennial Review Order remain stayed, and the preexisting
ownership rules remain in effect.
\11\ 47 U.S.C. 257.
\12\ 47 U.S.C. 309(j).
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B. Legal Basis