[Federal Register Volume 67, Number 9 (Monday, January 14, 2002)]
[Proposed Rules]
[Pages 1704-1710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-870]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 76

[MM Docket Nos. 98-204, FCC 01-363]


Revision of Broadcast and Cable EEO Rules and Policies

AGENCY: Federal Communications Commission.

ACTION: Proposed rules.

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SUMMARY: This document proposes new broadcast and cable Equal 
Employment Opportunity (EEO) rules and policies. The document proposes 
to retain the Commission's ban on discrimination and to require 
broadcasters and cable entities to maintain an EEO program that would 
achieve broad and inclusive outreach in recruitment to ensure a fair 
opportunity for all job seekers; and provide administrative relief to 
small entities. The intended effect is to invite comments on all 
aspects of the Commission's proposals.

DATES: Comments are due March 15, 2002 and reply comments are due April 
15, 2002. Written comments by the public on the proposed information 
collections are due March 15, 2002. Written comments must be submitted 
by the Office of Management and Budget (OMB) on the proposed 
information collection(s) on or before March 15, 2002.

ADDRESSES: Federal Communications Commission, Office of the Secretary, 
445 12th Street, SW, Washington DC 20554. Comments on the information 
collections contained herein should be submitted to Judy Boley, Federal 
Communications Commission, Room 1-C804, 445 12th Street, SW, 
Washington, DC 20554, or via the Internet to [email protected], and to 
Edward C. Springer, OMB Desk Officer, Room 10236 NEOB, 725 17th Street, 
NW., Washington, DC 20503 or via the Internet to 
[email protected].

FOR FURTHER INFORMATION CONTACT: EEO Staff, Mass Media Bureau, (202) 
418-1450. For additional information concerning the information 
collection(s), contact Judy Boley at 202-418-0214, or via the Internet 
at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Second Notice of Proposed Rule Making (Second NPRM) in MM Docket No. 
98-204, FCC 01-363. This Second NPRM contains proposed information 
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA). 
OMB, the general public, and other Federal agencies are invited to 
comment on the proposed information collections contained in this 
proceeding.

[[Page 1705]]

Synopsis of Second Notice of Proposed Rule Making

    1. This Second NPRM adopts new broadcast and cable EEO rules and 
policies consistent with the decision of the Court in MD/DC/DE 
Broadcasters Association v. FCC, 236 F.3d 13, rehearing denied, 253 
F.3d 732 (D.C. Cir. 2001), petition for cert. filed, MMTC v. MD/DC/DE 
Broadcasters Association, No. 01-639 (October 17, 2001) (Association), 
which held that the EEO program requirements of the Commission's 
broadcast EEO rule were, in part, unconstitutional and therefore 
vacated the entire rule because the Court found that portions of the 
rule that it did not find unconstitutional could not be severed from 
the unconstitutional portion. The broadcast EEO rule was adopted by the 
Report and Order in MM Docket Nos. 98-204 and 96-16, 15 FCC Rcd 2329 
(2000) (Report and Order), recon. denied, 15 FCC Rcd 22548 (2000), 47 
CFR 73.2080. The Report and Order also adopted EEO rules for cable 
entities.
    2. The program initiatives of the EEO rule adopted by the Report 
and Order required that broadcasters widely disseminate information 
about job openings to ensure that all qualified applicants, including 
minorities and women, would be able to compete for jobs in the 
broadcast industry. The EEO rule did not specify the number or type of 
recruitment sources to be utilized in recruitment efforts. Rather, the 
rule afforded broadcasters two options from which they could choose, 
referred to as Option A and Option B.
    3. Option A required broadcasters to comply with two supplemental 
recruitment measures, in addition to the general requirement to recruit 
for all vacancies so as to achieve broad outreach. First, they were 
required to provide notice of openings to recruitment organizations 
that requested such notice. Second, they were required to engage in a 
certain number of outreach efforts beyond the traditional recruitment 
that occurs in response to individual vacancies, such as job fairs, 
internship programs, training programs, mentoring programs, and 
interaction with educational and community groups. Broadcasters who 
chose Option A were required to retain records sufficient to document 
their recruitment efforts and to document that they performed the 
supplemental recruitment measures. In addition, in order to permit an 
assessment of their program, they were required to track the 
recruitment sources of their interviewees and hires.
    4. Option B also included the general requirement to recruit for 
all vacancies but afforded broadcasters the opportunity to design their 
own program for achieving broad outreach without utilizing the 
supplemental recruitment measures specified under Option A. 
Broadcasters electing Option B were required to maintain records 
documenting their recruitment efforts. In order to permit a meaningful 
assessment of the success of the program in achieving broad outreach, 
broadcasters using Option B were required to track the recruitment 
source, racial/ethnic status, and gender of applicants.
    5. The Court in Association found that Option B violated the 
constitutional requirement of equal protection because it created 
pressure on broadcasters to make greater efforts to recruit for 
minorities with the result that some nonminority prospective applicants 
would be deprived of notice. The Court did not find any constitutional 
infirmity with Option A. However, it concluded that it was unable to 
sever the invalid Option B from the EEO rule, leaving a rule based only 
on Option A. Nonetheless, the Court indicated that the Commission could 
conduct a renewed rulemaking. Thus, this Second NPRM develops EEO 
requirements for broadcasters and cable entities that are consistent 
with the Court's decision in Association by requesting comments on 
proposals that generally follow those previously adopted under the 
former Option A.

Paperwork Reduction Act

    This Second NPRM contains a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and the Office of Management and 
Budget (OMB) to comment on the information collection(s) contained in 
this Second NPRM, as required by the Paperwork Reduction Act of 1995, 
Public Law 104-13. Public and agency comments are due at the same time 
as other comments on this Second NPRM; OMB notification of action is 
due March 15, 2002. 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.
    OMB Control Number: 3060-XXXX.
    Title: Second NPRM--Review of the Commission's Broadcast and Cable 
EEO Rules and Policies.
    Form No.: None.
    Type of Review: New collection.
    Respondents: Business or other for-profit; not-for-profit 
institutions.
    Number of Respondents: 251--16,425.
    Estimated Time Per Response: 10 minutes--42.0 hours.
    Total Annual Burden: 394--528,238.
    Total Annual Costs: $0--$100,000.
    Needs and Uses: This Second NPRM seeks comments on a new broadcast 
EEO rule and policy consistent with the decision in Association wherein 
the court found unconstitutional one of two options for achieving broad 
outreach. Adoption of any revised EEO rule or policy would likely 
require changes to the following information collections: 3060-0095 
Annual Employment Report--Cable Television (FCC 395-A); 3060-0113 
Broadcast EEO Program Report (FCC 396); 3060-0120 Broadcast EEO Model 
Program Report (FCC 396-A); 3060-0212 Sec. 73.2080 EEO Program; 3060-
0349 Cable EEO Requirements (Secs. 76.73, 76.75, 73.79, 76.1702; 3060-
0390 Broadcast Station Annual Employment Report (FCC 395-B); 3060-0574 
MVPD Annual Employment Report (FCC 395-M); and 3060-0922 Broadcast 
Statement of Compliance (FCC 397). Any revisions to these collections 
would be subject to OMB review and approval at the final rule stage.

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 Second 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 Second NPRM. The Commission will send a copy of the Second 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 Second 
NPRM and IRFA (or summaries thereof) will be

[[Page 1706]]

published in the Federal Register. See id.

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

    This Second NPRM requests comments concerning a new broadcast equal 
employment opportunity rule and policies consistent with the decision 
of the U.S. Court of Appeals for the District of Columbia Circuit in 
Association. The Court therein found unconstitutional one of two 
options for achieving broad outreach provided by the broadcast EEO 
outreach requirements adopted in the Report and Order, 47 CFR 73.2080. 
The Court found the option invalid because nonminority job applicants 
were less likely to receive notification of job openings under that 
recruitment option. The Court further found that the other option 
provided by the EEO rule, although not invalid, could not be severed 
from the one unconstitutional option and therefore it vacated the 
entire rule. The outreach provisions adopted by the Report and Order 
were designed to ensure that all persons have the opportunity to 
participate in the broadcasting industry by requiring that broadcasters 
engage in broad and inclusive outreach in connection with their hiring 
efforts.
    Because the Commission continues to believe in the importance of 
achieving broad and inclusive outreach and that this can be achieved in 
a manner consistent with the Court's decision, we are issuing this 
Second NPRM for the purpose of developing EEO rules to replace those 
found unlawful by the Court. In addition to considering a new broadcast 
EEO rule, we will also consider new rules applicable to cable entities, 
including multichannel video program distributors (MVPDs). Thus, in the 
Report and Order, we adopted EEO requirements applicable to cable 
entities which were generally the same as the requirements applicable 
to broadcasters, except where necessary to comply with statutory 
requirements applicable only to cable entities. The Court in 
Association did not address our requirements applicable to cable 
entities. However, it remains our belief that the EEO requirements for 
cable entities should, to the extent possible, conform to the 
requirements applicable to broadcasters. The Court in Association did 
not address those aspects of our broadcast and cable EEO rules that 
prohibit discrimination in hiring practices and we do not believe the 
Court intended to invalidate such requirements. The Second NPRM 
accordingly proposes to readopt our antidiscrimination requirements.
    Hence, the Second NPRM seeks comment on proposed EEO rules and 
policies for broadcast and cable entities, including multichannel video 
programming distributors. The rules are designed to replace existing 
requirements that were found to be unconstitutional in part by the 
Court in Association, or are, in light of the Court's decision, 
constitutionally suspect in part. Specifically, we request comment on 
our proposal to retain the anti-discrimination prong of our EEO rules. 
In addition, we request comment on proposals to require broadcasters 
and cable entities to establish and maintain an EEO program that would 
emphasize recruitment outreach; discourage entities from preferring 
members of any racial, ethnic, or gender group in hiring or recruitment 
practices; and provide administrative relief to small entities that 
meet proposed qualifying factors.

B. Legal Basis

    Authority for the actions proposed in this Second 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

    As noted, the purpose of this rule making is to replace our prior 
EEO rule that was found to be unconstitutional in part by eliminating 
that portion determined to be unconstitutional. Hence, this Second NPRM 
anticipates that any recording, recordkeeping and compliance 
requirements of the new rule will not exceed those provided for in the 
former rule.
    Specifically, the Second NPRM proposes that some EEO materials be 
kept in the public inspection file, that all broadcasters and cable 
entities adhere to the EEO rules' general anti-discrimination 
provisions, and that broadcasters and cable entities widely disseminate 
information concerning job vacancies.
    The Second NPRM also proposes that broadcasters and cable entities 
undertake two supplemental recruitment measures described herein. As 
proposed, the first supplemental recruitment measure would require 
broadcasters and cable entities to provide notification of full-time 
job vacancies to any requesting organization if the organization 
regularly distributes information about employment opportunities or 
refers job seekers to employers. Depending on the size of a station's 
staff, the second supplemental recruitment measure would require 
broadcasters to engage in at least four (for station employment units 
with more than ten full-time employees) or two (for station employment 
units with five to ten full-time employees) of the following menu 
options every two years: participation in at least four job fairs by 
station personnel who have substantial responsibility in the making of 
hiring decisions; hosting of at least one job fair; co-sponsoring at 
least one job fair with organizations in the business and professional 
community whose membership includes substantial participation of women 
and minorities; participation in at least four events sponsored by 
organizations representing groups present in the community interested 
in broadcast employment issues (including conventions, career days, 
workshops, and similar activities); establishment of an internship 
program designed to assist members of the community to acquire skills 
needed for broadcast employment; participation in job banks, internet 
programs, and other programs designed to promote outreach generally; 
participation in scholarship programs designed to assist students 
interested in pursuing a career in broadcasting; establishment of 
training programs designed to enable station personnel to acquire 
skills that could qualify them for higher level positions; 
establishment of a mentoring program for station personnel; 
participation in at least four events or programs sponsored by 
educational institutions relating to career opportunities in 
broadcasting; sponsorship of at least two events in the community 
designed to inform and educate members of the public as to employment 
opportunities in broadcasting; listing of each upper-level category 
opening in a job bank or newsletter of media trade groups whose 
membership includes substantial participation of women and minorities; 
and participation in other activities designed by the station 
employment unit reasonably calculated to further the goal of 
disseminating information as to employment opportunities in 
broadcasting to job candidates who might otherwise be unaware of such 
opportunities. Cable employment units with more than ten full-time 
employees would engage in at least two options from the supplemental 
recruitment measures menu every year and cable employment units with 
six to ten full-time employees would engage in at least one option 
every year.
    In addition, the Second NPRM proposes that broadcasters and cable 
entities retain records to demonstrate that they have recruited for all 
full-time

[[Page 1707]]

permanent positions. Under the proposal, such recordkeeping would 
include: listings of all full-time vacancies filled, listings of 
recruitment sources, the address/contact person/telephone number of 
each recruitment source, dated copies of advertisements and other 
documentation announcing vacancies, listings of those organizations 
which requested notification of vacancies, the total number of 
interviewees for each vacancy, the date of each hire, and proof of 
participation in menu options. The Second NPRM notes that our former 
rule required licensees and cable entities to keep track of the 
referral source of all interviewees and hirees. The Second NPRM 
requests comments as to whether this information is necessary in order 
to validate that outreach is actually effective, or if other 
information should be required. The Second NPRM further proposes that 
broadcasters' records be maintained until grant of the renewal 
application for the term during which the hiring activity occurred. 
Cable entities would retain their records for a minimum of seven years.
    The Second NPRM also proposes that stations and cable employment 
units place annually the following EEO records in their local public 
inspection file: listings of full-time vacancies filled, recruitment 
sources used for each vacancy during the preceding year, the address/
contact person/telephone number of each recruitment source, an 
indication of the organizations requesting notification, the total 
number of persons interviewed for full-time vacancies during the 
preceding year, and a brief description of the menu option items 
undertaken during the preceding year. The Second NPRM asks if stations 
and cable employment units should track the recruitment source of all 
full-time hirees and/or interviewees referred by each recruitment 
source for a vacancy. Such information would also be updated in the 
local public inspection file on an annual basis. Further, under the 
proposal, station units are to retain the materials in their file until 
final action has been taken on the station's next license renewal 
application, and cable entities are to retain their materials for a 
period of five years.
    Further, the Second NPRM proposes that most broadcasters submit the 
contents of their station's EEO public inspection file to the FCC as 
part of their renewal application and midway through the license term 
for the Commission's mid-term review (for those subject to mid-term 
review), and that cable entities with six or more full-time employees 
submit copies of their EEO public inspection file to the Commission 
every five years. However, broadcasters would limit their submissions 
to cover only the last 12 months of EEO activity.
    Also, the Second NPRM proposes that broadcasters file a Broadcast 
Mid-Term Report (Form 397) and place a copy of the Report in the public 
inspection file. Broadcasters would also continue placing a copy of 
Form 396 (Broadcast EEO Program Report) in the public inspection file. 
However, broadcasters would no longer be required to place a copy of 
their station's Form 395-B (Broadcast Station Annual Employment Report) 
in the public file. Cable employment units would continue placing a 
copy of Forms 395-A (Cable Television Annual Employment Report) or 395-
M (Multi-Channel Video Program Distributor Annual Employment Report) in 
their public file.
    The Second NPRM proposes that all broadcasters and cable entities, 
with the exception of small entities, comply with these recordkeeping 
and recording requirements. The proposed exception for small businesses 
would provide them with some relief of any disparate recordkeeping and 
reporting costs.

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. 603(b)(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 5 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.'' 5 
U.S.C. 601(3). The new rules would apply to broadcast stations and 
cable entities, including 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 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

[[Page 1708]]

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 to be adopted pursuant to this Second NPRM will apply to 
television and radio stations. The SBA defines a television 
broadcasting station that has no more than $10.5 million in annual 
receipts as a small business. 13 CFR 121.201, North American Industry 
Classification System (NAICS) code 513120. 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. Id.; see 
Executive Office of the President, Office of Management and Budget, 
Standard Industrial Classification Manual (1987), at 283, which 
describes ``Television Broadcasting Stations'' (SIC code 4833, now 
NAICS code 51312) as: ``Establishments primarily engaged in 
broadcasting visual programs by television to the public, except cable 
and other pay television services. Included in this industry are 
commercial, religious, educational and other television stations. Also 
included here are establishments primarily engaged in television 
broadcasting and which produce taped television program materials.'' 
Also included are establishments primarily engaged in television 
broadcasting and which produce taped television program materials. 1992 
Census, Series UC92-S-1, at Appendix A-9. Separate establishments 
primarily engaged in producing taped television program materials are 
classified under other NAICS numbers. Id.; formerly SIC code 7812 
(Motion Picture and Video Tape Production) (NAICS code 512110); 
formerly SIC code 7922 (Theatrical Producers and Miscellaneous 
Theatrical Services) (producers of live radio and television programs) 
(NAICS codes 512110, 512191, 512290).
    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 1,686 operating full-service television 
broadcasting stations in the nation as of September 2001. FCC News 
Release, Broadcast Station Totals as of September 30, 2001 (released 
October 30, 2001). 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 1,686 television stations; approximately 77%, or 1,298 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 2001 total of 1,686 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. Department 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. 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, 13 FCC Rcd 23,056 (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, note 53, III.
---------------------------------------------------------------------------

    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, NAICS codes 
513111 and 513112. 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 NAICS 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

[[Page 1709]]

records indicate that 11,334 individual radio stations were operating 
in 1992. FCC News Release No. 31327, Jan. 13, 1993. As of September 
2001, official Commission records indicate that 13,012 radio stations 
are currently operating. FCC News Release, Broadcast Station Totals as 
of September 30, 2001 (released October 30, 2001).
    The 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 
(NAICS codes 513210 and 513220). This definition includes cable system 
operators, closed circuit television services, direct broadcast 
satellite services (DBS), multipoint distribution systems (MDS), local 
multipoint distribution service (LMDS), 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). 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 
67,700,000 subscribers in the United States. See FCC Announces New 
Subscriber Count for the Definition of Small Cable Operator, Public 
Notice DA 01-158 (January 24, 2001). Therefore, we found that an 
operator serving fewer than 677,000 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 $250 million in the 
aggregate. 47 CFR 76.1403(b) (SIC 4833). Based on available data, we 
find that the number of cable operators serving 677,000 subscribers or 
less totals approximately 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: MDS involves a variety of transmitters, which are used to 
relay programming to the home or office. For purposes of this item, MDS 
includes the single channel Multipoint Distribution Service (MDA) and 
the Multichannel Multipoint Distibution Service (MMDS). The Commission 
has defined ``small entity'' for purposes of the 1996 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 1.2110(a)(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. 
94-131 and PP Docket No. 93-253, Report and Order, 10 FCC Rcd 9589 
(1995). These stations were licensed prior to implementation of section 
309(j) of the Communications Act of 1934, as amended. 47 U.S.C. 309(j). 
Hundreds of stations were licensed to incumbent MDS licensees prior to 
implementation of section 309(j) of the Communications Act of 1934, 47 
U.S.C. 309(j). For these pre-auction licenses, the applicable standard 
is SBA's small business size standard for ``other telecommunications'' 
(annual receipts of $11 million or less). See 13 CFR 121.201. Licenses 
for new MDS facilities are now awarded to auction winners in Basic 
Trading Areas (BTAs) and BTA-like areas. Id. A BTA is the geographic 
area by which the MDS is licensed. See Rand McNally, 1992 Commercial 
Atlas and Marketing Guide, 123rd Edition, pp. 36-39. The MDS auctions 
resulted in 67 successful bidders obtaining licensing opportunities for 
493 BTAs. Of the 67 auction winners, 61 met the definition of a small 
business. There are approximately 2,000 MDS/MMDS/LMDS stations 
currently licensed. We conclude that there are 1,595 MDS/MMDS/LMDS 
providers that are small businesses as deemed by the SBA and the 
Commission's auction rules.
    LMDS: The auction of the 1,030 LMDS licenses began on February 18, 
1998, and closed on March 25, 1998. The Commission defined ``small 
entity'' for LMDS licenses as an entity that has average gross revenues 
of less than $40 million in the three previous calendar years. See 
Local Multipoint Distribution Service, Second Report and Order, 12 FCC 
Rcd 12545 (1997). An additional classification for ``very small 
business'' was added and is defined as an entity that, together with 
its affiliates, has average gross revenues of not more than $15 million 
for the preceding three calendar years. Id. These regulations defining 
``small entity'' in the context of LMDS auctions have been approved by 
the SBA. See Letter to Daniel Phythyon, Chief, Wireless 
Telecommunications Bureau, FCC, from A. Alvarez, Administrator, SBA 
(January 6, 1998). There were 93 winning bidders that qualified as 
small entities in the LMDS auctions. A total of 93 small and very small 
business bidders won approximately 277 A Block licenses and 387 B Block 
licenses. On March 27, 1999, the Commission reauctioned 161 licenses; 
there were 40 winning bidders. Based on this information, we conclude 
that the number of small LMDS licenses will include the 93 winning 
bidders in the first auction and the 40 winning bidders in the 
reauction, for a total of 133 small entity LMDS providers as defined by 
the SBA and the Commission's auction rules.
    DBS: Because DBS provides subscription services, it falls within 
the SBA-recognized definition of ``Cable

[[Page 1710]]

and Other Pay Television Services.'' 13 CFR 121.201, NAICS codes 513210 
and 513220. This definition provides that a small entity is one with 
$11.0 million or less in annual receipts. Id. Currently, there are four 
DBS providers, though there are only two DBS companies in operation at 
this time. We neither request nor collect annual revenue information 
for DBS services, and are unable to determine the number of DBS 
operators that would be considered a small business under the SBA 
definition.
    An alternative way to classify small entities is by the number of 
employees. Based on available data, we estimate that in 1997 the total 
number of full-service broadcast stations with four or fewer employees 
was 5186, of which 340 were television stations. We base these 
estimates on a compilation performed by the Equal Employment 
Opportunity Staff, Mass Media Bureau, FCC. Similarly, we estimate that 
in 1997, 1900 cable employment units employed fewer than six full-time 
employees. Also, in 1997, 296 MVPD employment units employed fewer than 
six full-time employees. We also estimate that in 1997, the total 
number of full-service broadcast stations with five to ten employees 
was 2145, of which 200 were television stations. Similarly, we estimate 
that in 1997, 322 cable employment units employed six to ten full-time 
employees. Also, in 1997, 65 MVPD employment units employed six to ten 
full-time employees.

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

    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. 5 U.S.C. 603(c).
    One of the alternatives that this Second NPRM proposes is that 
broadcasters with station employment units of five to ten full-time 
employees be provided some relief from EEO program requirements, and 
that station employment units of fewer than five full-time employees be 
exempt altogether, with the exception that all broadcasters be subject 
to the nondiscrimination requirement and report any employment 
discrimination complaints filed against them. In addition, cable 
employment units, including MVPD employment units, employing six to ten 
full-time employees would be provided some relief from the proposed EEO 
program requirements, and cable employment units with fewer than six 
full-time employees would not be required to demonstrate compliance 
with the proposed EEO program requirements. We consider this 
alternative because entities with small staffs have limited personnel 
and financial resources to carry out EEO requirements. Furthermore, 
these proposed rules streamline and clarify recordkeeping requirements, 
thereby benefiting all entities, including those with fewer employees. 
It is our belief that the proposed alternative balances the importance 
of deterring discrimination and achieving broad outreach in broadcast 
and cable employment practices against the need to maintain minimal 
regulatory burdens and the ease and clarity of administration.

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 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.
William F. Caton,
Deputy Secretary.
[FR Doc. 02-870 Filed 1-11-02; 8:45 am]
BILLING CODE 6712-01-P