[Federal Register Volume 63, Number 230 (Tuesday, December 1, 1998)]
[Proposed Rules]
[Pages 66104-66110]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32013]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 73 and 76

[MM Docket No. 98-204, FCC 98-305]


Revision of Broadcast and Cable EEO Rules and Policies

AGENCY: Federal Communications Commission.

ACTION: Proposed rules.

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SUMMARY: In this Notice of Proposed Rule Making (NPRM), the Commission 
proposes new broadcast and cable Equal Employment Opportunity (EEO) 
rules and policies. The NPRM proposes to retain the existing ban on 
discrimination and to promulgate recruitment-oriented outreach rules. 
The proposed EEO rules make clear that broadcasting and cable entities, 
including multichannel video programming distributors, are not required 
to employ a staff that reflects the racial or other composition of the 
community or to use racial preferences in hiring. The NPRM also 
proposes to streamline the Commission's broadcast EEO requirements, 
while, at the same time, maintaining an effective broadcast EEO 
program. These proposals include the possibility of granting 
administrative relief to small broadcasters and crediting joint 
recruitment efforts. Finally, the NPRM terminates the Commission's EEO 
streamlining proceeding in MM Docket No. 96-16, 60 FR 9964, March 12, 
1996, with the exception of the one petition for reconsideration filed 
in that docket, which will now be considered in this proceeding. The 
intended effect of the NPRM is to invite comments on all aspects of the 
Commission's proposals and on the Commission's belief that it has the 
statutory authority to retain the anti-discrimination provisions of its 
broadcast EEO rule.

DATES: Comments are due January 19, 1999; reply comments are due 
February 18, 1999. Written comments by the public on the proposed 
information collections are due January 19, 1999. Written comments must 
be submitted by the Office of Management and Budget (OMB) on the 
proposed information collections on or before February 1, 1999.

ADDRESSES: Federal Communications Commission, Office of the Secretary, 
445 12th Street, SW, Washington, D.C. 20554. Comments on the 
information collections contained herein should be submitted to Judy 
Boley, Federal Communications Commission, Room C-1804, 445 12th Street, 
SW, Washington, DC 20554, or via the Internet to [email protected], and to 
Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W., 
Washington, DC 20503 or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Hope Cooper or Kathy Harvey, Mass 
Media Bureau, Enforcement Division. (202) 416-1450. For additional 
information concerning the information collections, contact Judy Boley 
at 202-418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Proposed Rule Making in MM Docket No. 98-204, adopted 
November 19, 1998, and released November 20, 1998.
    The complete text of this NPRM, which was adopted in MM Docket No. 
98-204, is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M Street, NW., 
Washington, DC, and also may be purchased from the Commission's copy 
contractor, International Transcription Services, Inc., at 202-857-
3800, 1231 20th Street, NW, Washington, D.C. 20037.

Synopsis of Notice of Proposed Rule Making

    1. The NPRM proposes and requests comments regarding new broadcast 
and cable EEO rules and policies consistent with the D.C. Circuit's 
decision in Lutheran Church--Missouri Synod v. FCC, 141 F.3d 344 (D.C. 
Cir. 1998) (Lutheran Church), rehearing denied, September 15, 1998. In 
Lutheran Church, the D.C. Circuit held that the Commission's broadcast 
EEO program requirements were unconstitutional because they pressured 
stations to maintain a workforce reflecting the racial composition of 
their communities, thus inducing them to grant illegal hiring 
preferences on the basis of race. The court also remanded the case back 
to the Commission to determine whether it had the authority to 
promulgate its ban on employment discrimination, which was not 
invalidated.
    2. The NPRM proposes new broadcast and cable EEO rules which ensure 
non-discrimination in employment and broad dissemination of recruitment 
information. None of the proposals

[[Page 66105]]

create an incentive to hire on the basis of race or gender. In fact, 
the proposed rules remove all references to any comparison to minority 
and female labor force statistics, including sections concerning 
evaluation of employment profile and job turnover. One proposal would 
require entities to recruit for each vacancy with a certain number of 
national and/or local sources, including minority and female sources. 
The Commission believes that this kind of approach would ensure that 
all qualified potential applicants are informed of, and have an 
opportunity to apply for, vacancies. Another proposal would leave to an 
entity's good faith discretion what methods it would use to ensure 
broad dissemination of vacancy information. In order to provide 
guidance to entities, the proposed rules also clearly describe what 
records of EEO efforts must be kept by broadcast and cable entities, 
and detail how an entity should analyze its EEO program.
    3. The NPRM also proposes to reinstate the preexisting EEO 
requirement that broadcasters file an Annual Employment Report, but 
with the understanding that the Report's data would only be used to 
monitor industry employment trends.
    4. The NPRM retains the Commission's prohibition against employment 
discrimination and details the Commission's statutory authority to 
promulgate an employment non-discrimination rule as well as EEO program 
requirements. Specifically, the NPRM outlines the Commission's belief 
that Congress has ratified the Commission's authority to adopt 
broadcast EEO rules; that equal employment of minorities and women 
furthers the Commission's public interest goal of diversity of 
programming; and that the statutory goal of fostering minority and 
female ownership in the provision of commercial spectrum-based 
services, as directed by Section 309(j) of the Communications Act, is 
furthered by EEO requirements. With respect to broadcasters, the NPRM 
proposes modifying the anti-discrimination prohibition so that 
religious radio broadcasters may establish religious belief or 
affiliation as a bona fide occupational qualification for all station 
employees.
    5. The NPRM notes the Commission's intent to limit undue 
administrative burdens on broadcasters generally, and particularly on 
those licensees of smaller stations and other distinctly situated 
broadcasters, consistent with maintaining an effective EEO program. 
Specifically, the NPRM invites comment on whether and, if so, how the 
Commission can reduce undue burdens on stations with small staffs or 
those located in small markets. Options include exempting qualifying 
stations from EEO reporting and recordkeeping requirements entirely; or 
permitting qualifying stations the option of attending a minimum number 
of recruiting events annually, such as job fairs, in lieu of vacancy 
specific recruitment. Further, the NPRM invites comment on how to award 
credit for licensees generally who participate in joint recruitment 
efforts and minority training and internship programs. Finally, the 
NPRM terminates the Commission's EEO streamlining proceeding in MM 
Docket No. 96-16 (with the exception of the one petition for 
reconsideration filed in that docket, which will now be considered in 
this proceeding) because MM Docket No. 96-16 concerned the provisions 
of our EEO Rule invalidated by the Court.
    6. The NPRM invites comments on all aspects of the Commission's 
proposals and on the Commission's belief that it has the statutory 
authority to retain the anti-discrimination provisions of its broadcast 
EEO rule.

Initial Paperwork Reduction Act of 1995 Analysis

    This NPRM contains proposed information collection. The Commission, 
as part of its continuing effort to reduce paperwork burdens, invites 
the general public and OMB to comment on the information collections 
contained in this NPRM, as required by the Paperwork Reduction Act of 
1995, Public Law No. 104-13. Public and agency comments are due at the 
same time as other comments on this NPRM; OMB comments are due 60 days 
from date of publication of this NPRM in the Federal Register. Comments 
should address: (a) whether the proposed collection of information is 
necessary for the proper performance of the functions of the 
Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    This NPRM contains proposals that are proposed to affect the 
following existing information collections that collectively make up 
the Commission's EEO program.
Rules: 47 CFR 73.2080 and 76.75
Form Numbers: FCC 395-A, FCC 395-B, FCC 395-M, FCC 396, FCC 396-A
Respondents: Businesses or other for-profit, Not-for-profit 
institutions

    These estimates represent the existing burden as currently approved 
by OMB under the individual OMB approval numbers.

OMB Approval Number: 3060-0212
Title: Section 73.2080 Equal Employment Opportunity Program
Number of Respondents: 15,290
Estimated Time Per Response: 52 hours
Total Annual Burden: 679,744.

OMB Approval Number: 3060-0349
Title: Section 76.73/76.75--Cable TV EEO Policy and Programs
Number of Respondents: 5,600
Estimated time per response: 2,125 cable employment units/MVPD with 6 
or more employees will have an average burden of 52 hours/year; 3,475 
cable employment units/MVPD with fewer than 6 employees will have an 
average burden of 8 hours/year
Total annual burden: 138,300 hours.

OMB Approval Number: 3060-0095
Title: Annual Employment Report--Cable Television (FCC 395-A)
Number of Respondents: 2,564
Estimated time per response: 1.75 hours/form; 0.25/certification; 2.417 
hours/supplemental information sheet
Total annual burden: 4,683 hours.

OMB Approval Number: 3060-0390
Title: Broadcast Station Annual Employment Report (FCC 395-B)
Number of Respondents: 14,000
Estimated Time Per Response: 0.88 hours per report
Total Annual Burden: 12,320 hours.

OMB Approval Number: 3060-0574
Title: MVPD Annual Employment Report (FCC 395-M)
Number of Respondents: 155
Estimated time per response: 1.75 hours/form; 0.25/certification; 2.417 
hours/supplemental information sheet
Total annual burden: 233 hours.

OMB Approval Number: 3060-0113
Title: Broadcast Equal Employment Opportunity Program Report (FCC 396)
Number of Respondents: 235
Estimated Time Per Response: 3.0 hours per report
Total Annual Burden: 705 hours.

OMB Approval Number: 3060-0120
Title: Broadcast Equal Employment Opportunity Model Program Report (FCC 
396-A)
Number of Respondents: 2,068
Estimated Time Per Response: 1.0 hours per report
Total Annual Burden: 2,068 hours.
    Needs and Uses: This rulemaking proceeding is initiated to obtain 
comments concerning the

[[Page 66106]]

Commission's proposed EEO rules and policies that would be consistent 
with the D.C. Circuit's decision in Lutheran Church. This rulemaking 
proposes a new broadcasting EEO program rule and to change the 
Commission's cable EEO program rules emphasizing recruitment outreach 
programs. These information collections are necessary to monitor 
industry trends and to ensure that broadcast stations and cable 
entities do not engage in discriminatory practices and afford equal 
employment opportunity.

Initial Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act (RFA), the Commission 
has prepared this present Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules proposed in this NPRM. See 5 U.S.C. 603. [The 
RFA, see 5 U.S.C. 601 et. seq., has been amended by the Contract With 
America Advancement Act of 1996, Public Law No. 104-121, 110 Stat. 847 
(1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory 
Enforcement Fairness Act of 1996 (SBREFA).] Written public comments are 
requested on this IRFA. Comments must be identified as responses to the 
IRFA and must be filed by the deadlines for comments on the NPRM. The 
Commission will send a copy of the NPRM, including this IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration. See 5 
U.S.C. 603(a). In addition, the NPRM and IRFA (or summaries thereof) 
will be published in the Federal Register. See id.

A. Need for, and Objectives of, the Proposed Rule Changes

    The D.C. Circuit court in Lutheran Church held that the 
Commission's EEO minority outreach requirements for broadcasters were 
unconstitutional and remanded to the Commission to determine whether we 
have authority to enforce an employment non-discrimination rule. The 
NPRM seeks comment on proposed new EEO rules and policies for broadcast 
and cable entities, including multichannel video programming 
distributors (MVPDs), that are designed to be consistent with the 
Lutheran Church decision. We also request comment on our statutory 
authority to retain the anti-discrimination prong of our EEO rules. We 
invite comment on EEO rules which seek to ensure that broadcast 
stations and cable entities do not engage in discriminatory practices. 
In addition, our proposed rules would require broadcasters and cable 
entities to establish and maintain an EEO program designed to provide 
equal opportunity for minorities and women. Another proposal would 
grant administrative relief to small entities based on various 
criteria. One of the criteria proposed involves the number of employees 
at a station, e.g., if a station has 10 or fewer full-time employees, 
it would be entitled to relief. The Commission's earlier attempt at 
implementing a similar proposal was declared arbitrary and capricious 
by the court in Office of Communications of the United Church of Christ 
v. FCC, 560 F.2d 529, 532 (2nd Cir. 1977) because the Commission had 
failed to provide a reasoned justification for departing from its prior 
precedent. Therefore, the Commission requests that commenters who favor 
this proposal provide ample evidence as to why this type of station 
deserves this type of relief. To accomplish the goals set forth, the 
NPRM proposes: (1) to initiate a new broadcasting EEO program rule and 
to change the Commission's cable EEO program rules, that would 
emphasize recruitment outreach and provide that entities are not to use 
racial, ethnic, or gender preferences in hiring; and (2) to permit 
administrative relief to small entities that meet proposed qualifying 
factors.

B. Legal Basis

    Authority for the actions proposed in this NPRM may be found in 
Sections 1, 4(i), 4(k), 257, 301, 303(r), 307, 308(b), 309, 334, 403, 
and 634 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 154(k), 257, 301, 303(r), 307, 308(b), 309, 334, 403, and 554.

C. Recording, Recordkeeping, and Other Compliance Requirements

    The NPRM proposes that broadcasters and cable entities be required 
to retain records to demonstrate that they have recruited for each 
hire. Such recordkeeping may include: listings of recruiting sources 
utilized for each vacancy; copies of all advertisements, bulletins and 
letters announcing vacancies; and compilations totaling the race, 
ethnic origin, and gender of all applicants generated by each 
recruiting source according to vacancy.

D. Description and Estimate of the Number of Small Entities to Which 
the Rules Would Apply

1. Definition of a ``Small Business''
    The RFA directs the Commission to provide a description of and, 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules. 5 U.S.C. 604(a)(3). Under the RFA, 
small entities may include small organizations, small businesses, and 
small governmental jurisdictions. 5 U.S.C. 601(6). The RFA, 5 U.S.C. 
601(3), generally defines the term ``small business'' as having the 
same meaning as the term ``small business concern'' under the Small 
Business Act, 15 U.S.C. 632. A small business concern is one 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 Small Business Administration (SBA). Pursuant to 4 U.S.C. 601(3), 
the statutory definition of a small business applies ``unless an agency 
after consultation with the Office of Advocacy of the SBA 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.'' While we 
tentatively believe that the SBA's definition of ``small business'' 
greatly overstates the number of radio and television broadcast 
stations that are small businesses and is not suitable for purposes of 
determining the impact of the proposals on small television and radio 
stations, for purposes of this NPRM, we utilize the SBA's definition in 
determining the number of small businesses to which the rules would 
apply. We reserve the right, however, to adopt a more suitable 
definition of ``small business'' as applied to radio and television 
broadcast stations or other entities subject to the rules proposed in 
this NPRM and to consider further the issue of the number of small 
entities that are radio and television broadcasters or other small 
media entities in the future. See Report and Order in MM Docket No. 93-
48 (Children's Television Programming), 11 FCC Rcd 10660, 10737-38 
(1996), 61 FR 43981, August 12, 1996, citing 5 U.S.C. 601(3). The new 
rules would apply to broadcast stations and cable entities, including 
multichannel video programming distributors (MVPDs).
2. Issues in Applying the Definition of a ``Small Business''
    We could not precisely apply the foregoing definition of ``small 
business'' in developing our estimates of the number of small entities 
to which the rules will apply. Our estimates reflect our best judgments 
based on the data available to us.
    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 to define or

[[Page 66107]]

quantify the criteria that would establish whether a specific radio or 
television station is dominant in its field of operation. Accordingly, 
the following estimates of small businesses to which the new rules will 
apply do not exclude any radio or television station from the 
definition of a small business on this basis and are therefore 
overinclusive to that extent. An additional element of the definition 
of ``small business'' is that the entity must be independently owned 
and operated. We could not fully apply this criterion, and our 
estimates of small businesses to which the rules may apply may be 
overinclusive to this extent. The SBA's general size standards are 
developed taking into account these two statutory criteria. This does 
not preclude us from taking these factors into account in making our 
estimates of the numbers of small entities.
    With respect to applying the revenue cap, the SBA has defined 
``annual receipts'' specifically in 13 CFR 121.104, and its 
calculations include an averaging process. We do not currently require 
submission of financial data from licensees that we could use in 
applying the SBA's definition of a small business. Thus, for purposes 
of estimating the number of small entities to which the rules apply, we 
are limited to considering the revenue data that are publicly 
available, and the revenue data on which we rely may not correspond 
completely with the SBA definition of annual receipts.
    Under SBA criteria for determining annual receipts, if a concern 
has acquired an affiliate or been acquired as an affiliate during the 
applicable averaging period for determining annual receipts, the annual 
receipts in determining size status include the receipts of both firms. 
13 CFR 121.104(d)(1). The SBA defines affiliation in 13 CFR 121.103. In 
this context, the SBA's definition of affiliate is analogous to our 
attribution rules. Generally, under the SBA's definition, concerns are 
affiliates of each other when one 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). The SBA considers factors 
such as ownership, management, previous relationships with or ties to 
another concern, and contractual relationships, in determining whether 
affiliation exists. 13 CFR 121.103(a)(2). Instead of making an 
independent determination of whether television stations were 
affiliated based on SBA's definitions, we relied on the databases 
available to us to provide us with that information.
3. Estimates Based on Census Data
    The rules proposed in this NPRM will apply to television and radio 
stations. The Small Business Administration defines a television 
broadcasting station that has no more than $10.5 million in annual 
receipts as a small business. 13 CFR 121.201, Standard Industrial Code 
(SIC) 4833. Television broadcasting stations consist of establishments 
primarily engaged in broadcasting visual programs by television to the 
public, except cable and other pay television services. Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce, 1992 Census of Transportation, Communications and Utilities, 
Establishment and Firm Size, Series UC92-S-1, Appendix A-9 (1995). 
Included in this industry are commercial, religious, educational, and 
other television stations. Also included are establishments primarily 
engaged in television broadcasting and which produce taped television 
program materials. Id. Separate establishments primarily engaged in 
producing taped television program materials are classified under 
another SIC number. Id.; SIC 7812 (Motion Picture and Video Tape 
Production); SIC 7922 [Theatrical Producers and Miscellaneous 
Theatrical Services (producers of live radio and television programs)].
    There were 1,509 full-service television stations operating in the 
nation in 1992. FCC News Release No. 31327, Jan. 13, 1993; Economics 
and Statistics Administration, Bureau of Census, U.S. Department of 
Commerce, Appendix A-9. That number has remained fairly constant as 
indicated by the approximately 1,584 operating full-service television 
broadcasting stations in the nation as of October 1998. FCC News 
Release, Broadcast Station Totals as of October 30, 1998 (released 
November 18, 1998). For 1992 1 the number of television 
stations that produced less than $10.0 million in revenue was 1,155 
establishments. (The amount of $10 million was used to estimate the 
number of small business establishments because the relevant Census 
categories stopped at $9,999,999 and began at $10,000,000. No category 
for $10.5 million existed. Thus, the number is as accurate as it is 
possible to calculate with the available information.) Thus, the 
proposed rules will affect approximately 1,584 television stations; 
approximately 77%, or 1,219 of those stations are considered small 
businesses. (We use the 77 percent figure of TV stations operating at 
less than $10 million for 1992 and apply it to the 1998 total of 1,584 
TV stations to arrive at stations categorized as small businesses.) 
These estimates may overstate the number of small entities since the 
revenue figures on which they are based do not include or aggregate 
revenues from non-television affiliated companies. We recognize that 
the proposed rules may also affect minority and women owned stations, 
some of which may be small entities. In August 1998, minorities owned 
and controlled 32 (2.6%) of 1,209 commercial television stations in the 
United States. Minority Commercial Broadcast Ownership in the United 
States, U.S. Dep't. of Commerce, National Telecommunications and 
Information Administration, The Minority Telecommunications Development 
Program (MTDP) (August 1998). (MTDP considers minority ownership as 
ownership of more than 50% of a broadcast corporation's stock, voting 
control in a broadcast partnership, or ownership of a broadcasting 
property as an individual proprietor. Id. The minority groups included 
in this report are Black, Hispanic, Asian, and Native American.) 
According to the U.S. Bureau of the Census, in 1987 women owned and 
controlled 27 (1.9%) of 1,342 commercial and non-commercial television 
stations in the United States. See Comments of American Women in Radio 
and Television, Inc. in MM Docket No. 94-149 and MM Docket No. 91-140, 
at 4 n.4 (filed May 17, 1995), citing 1987 Economic Censuses, Women-
Owned Business, WB87-1, U.S. Department of Commerce, Bureau of the 
Census, August 1990 (based on 1987 Census). After the 1987 Census 
report, the Census Bureau did not provide data by particular 
communications services (four-digit Standard Industrial Classification 
(SIC) Code), but rather by the general two-digit SIC Code for 
communications (#48). Consequently, since 1987, the U.S. Census Bureau 
has not updated data on ownership of broadcast facilities by women, nor 
does the FCC collect such data. However, the Commission recently 
amended its Annual Ownership Report Form 323 to require information on 
the gender and race of broadcast license owners in future filings. See 
1998 Biennial Regulatory Review--Streamlining of Mass Media 
Applications, Rules and Processes, Report and Order, MM Docket No. 98-
43 (adopted October 22, 1998).
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    \1\ Census for Communications' establishments are performed 
every five years ending with a ``2'' or ``7''. See Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce, supra note 53, III.

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[[Page 66108]]

    The proposed rule changes would also affect radio stations. The SBA 
defines a radio broadcasting station that has no more than $5 million 
in annual receipts as a small business. 13 CFR 121.201, SIC 4832. A 
radio broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Economics and 
Statistics Administration, Bureau of Census, U.S. Department of 
Commerce, Appendix A-9. Included in this industry are commercial, 
religious, educational, and other radio stations. Id. Radio 
broadcasting stations which primarily are engaged in radio broadcasting 
and which produce radio program materials are similarly included. Id. 
However, radio stations which are separate establishments and are 
primarily engaged in producing radio program material are classified 
under another SIC number. Id. The 1992 Census indicates that 96 percent 
(5,861 of 6,127) of radio station establishments produced less than $5 
million in revenue in 1992. The Census Bureau counts multiple radio 
stations located at the same facility as one establishment. Therefore, 
each co-located AM/FM combination counts as one establishment. Official 
Commission records indicate that 11,334 individual radio stations were 
operating in 1992. FCC News Release No. 31327, Jan. 13, 1993. As of 
October 1998, official Commission records indicate that 12,448 radio 
stations are currently operating. FCC News Release, Broadcast Station 
Totals as of October 30, 1998 (released November 18, 1998).
    The proposed rule changes would also affect small cable entities, 
including MVPDs. SBA has developed a definition of a small entity for 
cable and other pay television services, which includes all such 
companies generating $11 million or less in annual receipts. 13 CFR 
121.201 (SIC 4841). This definition includes cable system operators, 
closed circuit television services, direct broadcast satellite services 
(DBS), multipoint distribution systems (MDS), satellite master antenna 
systems, and subscription television services. According to the Bureau 
of the Census, there were 1,423 such cable and other pay television 
services generating less than $11 million in revenue that were in 
operation for at least one year at the end of 1992. 1992 Economic 
Census Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841 
(U.S. Bureau of the Census data under contract to the Office of 
Advocacy of the U.S. Small Business Administration). We discuss these 
services to provide a more succinct estimate of small entities:
    Cable Systems: The Commission has developed, with SBA's approval, 
its own definition of small cable system operators. Under the 
Commission's rules, a ``small cable company'' is one serving fewer than 
400,000 subscribers nationwide. 47 CFR 67.901(3). The Commission 
developed this definition based on its determination that a small cable 
system operator is one with annual revenues of $100 million or less. 
Implementation of Sections of the 1992 Cable Act: Rate Regulation, 
Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC 
Rcd 6393 (1995), 60 FR 544919, September 15, 1995. Based on our most 
recent information, we estimate that there were 1,439 cable operators 
that qualified as small cable companies at the end of 1995. Paul Kagan 
Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures 
for Dec. 30, 1995). Since then, some of those companies may have grown 
to serve over 400,000 subscribers, and others may have been involved in 
transactions that caused them to be combined with other cable 
operators. Consequently, we estimate that there are fewer than 1,439 
small entity cable system operators that may be affected by the rules 
proposed herein.
    The Communications Act also contains a definition of a small cable 
system operator, which is ``a cable operator that, directly or through 
an affiliate, serves in the aggregate fewer than 1% of all subscribers 
in the United States and is not affiliated with any entity or entities 
whose gross annual revenue in the aggregate exceeds $250,000,000.'' 47 
U.S.C. 543(m)(2). The Commission has determined that there are 
61,700,000 subscribers in the United States. Therefore, we found that 
an operator serving fewer than 617,000 subscribers shall be deemed a 
small operator, if its annual revenues, when combined with the total 
annual revenues of all of its affiliates, do not exceed $520 million in 
the aggregate. 47 CFR 76.1403(b) (SIC 4833). Based on available data, 
we find that the number of cable operators serving 617,000 subscribers 
or less totals 1,450. Paul Kagan Associates, Inc., Cable TV Investor, 
Feb. 29, 1996 (based on figures for Dec. 30, 1995). Although it seems 
certain that some of these cable system operators are affiliated with 
entities whose gross annual revenues exceed $250,000,000, we are unable 
at this time to estimate with greater precision the number of cable 
system operators that would qualify as small cable operators under the 
definition in the Communications Act.
    MDS: The Commission has defined ``small entity'' for purposes of 
the auction of MDS as an entity that, together with its affiliates, has 
average gross annual revenues that are not more than $40 million for 
the preceding three calendar years. 47 CFR 21.961(b)(1). This 
definition of a small entity in the context of MDS auctions has been 
approved by the SBA. See Amendment of Parts 21 and 74 of the 
Commission's Rules With Regard to Filing Procedures in the Multipoint 
Distribution Service and in the Instructional Television Fixed Service 
and Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, MM Docket No. 94-31 and PP Docket No. 93-253, 
Report and Order, 10 FCC Rcd 9589 (1995), 60 FR 36524, July 17, 1995. 
The Commission completed its MDS auction in March 1996 for 
authorizations in 493 basic trading areas (BTAs). Of 67 winning 
bidders, 61 qualified as small entities. (One of these small entities, 
O'ahu Wireless Cable, Inc., was subsequently acquired by GTE Media 
Ventures, Inc., which did not qualify as a small entity for purposes of 
the MDS auction.)
    MDS also includes licensees of stations authorized prior to the 
auction. The SBA has developed a definition of small entities for pay 
television services, which includes all such companies generating $11 
million or less in annual receipts. 13 CFR 121.201. This definition 
includes multipoint distribution systems, and thus applies to MDS 
licensees and wireless cable operators which did not participate in the 
MDS auction. Information available to us indicates that there are 832 
of these licensees and operators that do not generate revenue in excess 
of $11 million annually. Therefore, for purposes of this IRFA, we find 
there are approximately 892 small MDS providers as defined by the SBA 
and the Commission's auction rules, and some of these providers may be 
subject to our amended EEO rules.
    DBS: As of October 1997, there were nine DBS licensees, some of 
which were not in operation. The Commission does not collect annual 
revenue data for DBS and, therefore, is unable to ascertain the number 
of small DBS licensees that could be impacted by these proposed rules. 
Although DBS services requires a great investment of capital for 
operation, we acknowledge that there are several new entrants in this 
field that may not yet have generated $11 million in annual receipts, 
and therefore may be categorized as small businesses, if independently 
owned and operated.
    An alternative way to classify small entities is by the number of 
employees. We estimate that the total number of full-service broadcast 
stations with 4 or

[[Page 66109]]

fewer employees is 5,186. We base this estimate on a compilation of 
1997 Broadcast Station Annual Employment Reports (FCC Form 395-B), 
performed by staff of the Equal Employment Opportunity Branch, Mass 
Media Bureau, FCC. Similarly, we estimate that in 1997, the total 
number of cable employment units with six or more full-time employees 
was 2,750, and that 1,900 cable employment units employed fewer than 
six full-time employees. Also, in 1997, the total number of other MVPDs 
employing six or more full-time employees was 725, and 225 such MVPDs 
employed less than six full-time employees.

E. Steps Taken to Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    This NPRM solicits comment on a variety of alternatives discussed 
herein. Any significant alternatives presented in the comments will be 
considered. As an example, the NPRM requests comment on whether we 
should grant administrative relief to stations with small staffs or in 
small markets. Finally, the NPRM seeks comment on whether to raise the 
employment threshold for EEO reporting and recordkeeping requirements. 
This change may create a new definition of small business requiring 
approval from the SBA before doing so.

F. Federal Rules that Overlap, Duplicate, or Conflict with the Proposed 
Rules

    The proposed rules do not overlap, duplicate or conflict with any 
other rules.

List of Subjects

47 CFR Part 0

    Organization and functions (Government agencies)

47 CFR Part 73

    Radio, Equal employment opportunity, Reporting and recordkeeping 
requirements, Television

47 CFR Part 76

    Cable television, Equal employment opportunity, Reporting and 
recordkeeping requirements

Federal Communications Commission.
Magalie Roman Salas,
Secretary.

Proposed Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission proposes to amend 47 CFR parts 0, 73 and 76 
as follows:

PART 0--COMMISSION ORGANIZATION

    1. The authority citation for part 0 continues to read as follows:

    Authority: Secs. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155.

    2. Section 0.283 is amended by revising paragraph (b)(1)(iii) to 
read as follows:


Sec. 0.283  Authority delegated.

* * * * *
    (b) * * *
    (1) * * *
    (iii) present documented allegations of failure to comply with the 
Commission's Equal Employment Opportunity rules and policies.
* * * * *

PART 73--RADIO BROADCAST SERVICES

    3. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 303, 334 and 336.

    4. Section 73.2080 is revised as follows:


Sec. 73.2080  Equal employment opportunities (EEO).

    (a) General EEO policy. Equal opportunity in employment shall be 
afforded by all licensees or permittees of commercially or 
noncommercially operated AM, FM, TV or international broadcast stations 
(as defined in this part) to all qualified persons, and no person shall 
be discriminated against in employment by such stations because of 
race, color, religion, national origin, or sex. Religious radio 
broadcasters may establish religious belief or affiliation as a job 
qualification for all station employees. However, they cannot 
discriminate on the basis of race, color, national origin or gender 
from among those who share their religious affiliation or belief. For 
purposes of this rule, a religious broadcaster is a licensee which is, 
or is closely affiliated with, a church, synagogue, or other religious 
entity, including a subsidiary of such an entity.
    (b) General EEO program requirements. Each broadcast station shall 
establish, maintain, and carry out a positive continuing program of 
specific practices designed to ensure equal opportunity in every aspect 
of station employment policy and practice. Under terms of its program, 
a station shall:
    (1) Define the responsibility of each level of management to ensure 
a vigorous enforcement of its policy of equal opportunity, and 
establish a procedure to review and control managerial and supervisory 
performance;
    (2) Inform its employees and recognized employee organizations of 
the positive equal employment opportunity policy and program and enlist 
their cooperation;
    (3) Communicate its equal employment opportunity policy and program 
and its employment needs to sources of qualified applicants without 
regard to race, color, religion, national origin, or sex, and solicit 
their recruitment assistance on a continuing basis;
    (4) Conduct a continuing program to exclude all unlawful forms of 
prejudice or discrimination based upon race, color, religion, national 
origin, or sex from its personnel policies and practices and working 
conditions; and
    (5) Conduct a continuing review of job structure and employment 
practices and adopt positive recruitment, job design, and other 
measures needed to ensure genuine equality of opportunity to 
participate fully in all organizational units, occupations, and levels 
of responsibility.
    (c) Specific EEO program requirements. Each broadcast station shall 
establish, maintain, and carry out a positive continuing program of 
specific practices designed to ensure equal opportunity and non-
discrimination in every aspect of station employment policy and 
practice. Under the terms of its program, a station must:
    (1) Recruit for every job vacancy in its operation. A job filled by 
an internal promotion is not considered a vacancy for which recruitment 
is necessary. Religious radio broadcasters who establish religious 
affiliation as a bona fide occupational qualification for a job 
position are not required to comply with these recruitment requirements 
with respect to that job position only, but will be expected to make 
reasonable, good faith efforts to recruit minorities and women who are 
qualified based on their religious affiliation. Nothing in this section 
shall be interpreted to require a broadcaster to grant preferential 
treatment to any individual or group based on race, color, ethnic 
origin, religion, or gender.
    (2) Analyze its efforts to recruit, hire and promote without 
discrimination on the basis of race, ethnic origin, color, religion, 
and gender and address any difficulties encountered in implementing its 
equal employment opportunity program. As part of its license renewal 
application, a station shall submit a statement detailing its analysis 
of such efforts for the 12 months prior to license expiration. Analysis 
should occur on an ongoing

[[Page 66110]]

basis. A station's analysis shall include measures taken to:
    (i) Disseminate its equal employment opportunity program to job 
applicants and employees;
    (ii) Review seniority practices to ensure that such practices are 
non-discriminatory;
    (iii) Examine rates of pay and fringe benefits for employees having 
the same duties, and eliminating any inequities based upon race, ethnic 
origin, color, religion, or sex discrimination;
    (iv) Assess the productivity of recruiting sources;
    (v) Utilize media for recruitment purposes in a manner that will 
contain no indication, either explicit or implicit, of a preference for 
one race, ethnic origin, color, religion or sex over another;
    (vi) Offer promotions of qualified minorities and women in a 
nondiscriminatory fashion to positions of greater responsibility;
    (vii) Where union agreements exist, cooperate with the union or 
unions in the development of programs to assure qualified minority 
persons or women of equal opportunity for employment, and include an 
effective non-discrimination clause in new or renegotiated union 
agreements; and
    (viii) Avoid the use of selection techniques or tests that have the 
effect of discriminating against qualified minority groups or women.
    (3) Retain records to prove that it has satisfied the requirements 
of (c)(1) and (c)(2) of this section. Such recordkeeping shall include:
    (i) Listings of recruiting sources utilized for each vacancy and 
the date the vacancy was filled;
    (ii) Dated copies of all advertisements, bulletins and letters 
announcing vacancies; and
    (iii) Compilations totaling the race, ethnic origin, and gender of 
all applicants generated by each recruiting source according to 
vacancy.
    (d) Mid-term review for television broadcast stations. The 
Commission will conduct a mid-term review of the employment practices 
of each broadcast television station four years following the station's 
most recent license expiration date as specified in Sec. 73.1020 of 
this part. Television licensees are required to submit a narrative 
statement, as described in paragraph (c)(2) of this section, four 
months before the date specified in the previous sentence.
    (e) Enforcement. The Commission will review a station's EEO program 
at renewal time and may conduct random audits, including on-site 
audits, throughout the license term to enforce this rule.
    (f) Sanctions. The Commission may impose appropriate sanctions for 
any violation of this rule.

PART 76--CABLE TELEVISION SERVICE

    5. The authority citation for part 76 continues to read as follows:

    4Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533, 
534, 535, 536, 537, 543, 544, 544a, 545, 548, 552, 554, 556, 558, 
560, 561, 571, 572, 573.

    46. Section 76.75 is amended by revising paragraphs (b), (c) and 
(f) and by adding paragraph (g) to read as follows:


Sec. 76.75  EEO program requirements.

* * * * *
    (b) Recruit for every job vacancy in its operation. A job filled by 
an internal promotion is not considered a vacancy for which recruitment 
is necessary. Nothing in this section shall be interpreted to require a 
cable entity to grant preferential treatment to any individual or group 
based on race, ethnic origin, color, or gender.
    (c) Retain records to prove that it has satisfied the requirements 
of (b) and (f) of this section. Such recordkeeping shall include:
    (1) Listings of recruiting sources utilized for each vacancy and 
the date the vacancy was filled;
    (2) Dated copies of all advertisements, bulletins and letters 
announcing vacancies; and
    (3) Compilations totaling the race, ethnic origin, and gender of 
all applicants generated by each recruiting source according to 
vacancy.
* * * * *
    (f) Analyze its efforts to recruit, hire, promote and use services 
without discrimination on the basis of race, ethnic origin, color, 
religion, and gender and explain any difficulties encountered in 
implementing its equal employment opportunity program. As part of its 
Form 395-A/395-M supplemental investigation, an employment unit shall 
submit a statement detailing its analysis of such efforts for the 
previous 12 months. Analysis should occur on an ongoing basis. A unit's 
analysis shall include measures taken to:
    (1) Where union agreements exist, cooperate with the union or 
unions in the development of programs to assure qualified minority 
persons or women of equal opportunity for employment, and include an 
effective non-discrimination clause in new or renegotiated union 
agreements;
    (2) Review seniority practices to ensure that such practices are 
non-discriminatory;
    (3) Examine rates of pay and fringe benefits for employees having 
the same duties, and eliminating any inequities based upon race, ethnic 
origin, color, religion, age, or sex discrimination;
    (4) Assess the productivity of recruiting sources;
    (5) Utilize media for recruitment purposes in a manner that will 
contain no indication, either explicit or implicit, of a preference for 
one race, ethnic origin, color, religion, age, or sex over another; and
    (6) Avoid the use of selection techniques or tests that have the 
effect of discriminating against qualified minority groups or women.
    (g) The Commission may impose appropriate sanctions for cable 
entities not found to be in compliance with paragraphs (b), (c), or (f) 
of this section.

[FR Doc. 98-32013 Filed 11-30-98; 8:45 am]
BILLING CODE 6712-01-P