[Federal Register Volume 68, Number 4 (Tuesday, January 7, 2003)]
[Rules and Regulations]
[Pages 670-710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-171]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 73 and 76

[MM Docket No. 98-204; FCC 02-303]
RIN 4223


Review of the Commission's Broadcast and Cable Equal Employment 
Opportunity Rules and Policies

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document the Commission adopts a new broadcast Equal 
Employment Opportunity (EEO) rule in response to the decision of the 
U.S. Court of Appeals for the District of Columbia Circuit in MD/DC/DE 
Broadcasters Association v. FCC. The Commission also amends and 
modifies their EEO rules for multichannel video programming 
distributors (MVPDs). The EEO rules make clear that broadcasters and 
MVPDs 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 intended effect is to adopt effective EEO rules for the 
broadcasting and MVPD industries.

DATES: Effective March 10, 2003.

FOR FURTHER INFORMATION CONTACT: Lewis Pulley, Media Bureau, (202) 418-
1456 or via e-mail at [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Media Bureau's 
Second Report and Order (``2R&O'') MM 98-204; FCC 02-303, adopted 
November 7, 2002 and released November 20, 2002. The complete text of 
this 2R&O is available for inspection and copying during normal 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC and may also be purchased from the 
Commission's copy contractor, Qualex International, Portals II, 445 
12th Street,

[[Page 671]]

SW., Room CY-B-402, Washington, DC 20554, telephone (202) 863-2893, 
facsimile (202) 863-2898, or via e-mail [email protected].

Synopsis of Second Report and Order

I. Introduction

    1. In this 2R&O, we adopt a new broadcast equal employment 
opportunity (``EEO'') rule in response to the decision of the U.S. 
Court of Appeals for the District of Columbia Circuit in MD/DC/DE 
Broadcasters Association v. FCC, 236 F.3d 13, rehearing den. 253 F.3d 
732 (D.C. Cir. 2001), cert. denied, 122 S.Ct. 920 (2002) 
(``Association''). In addition, we amend our EEO rules and policies 
applicable to cable operators, and other multichannel video programming 
distributors (``MVPDs''), to conform them, as much as possible, to the 
broadcast EEO rule. The new broadcast EEO rule and modified EEO rules 
for MVPDs, adopted herein, emphasize outreach in recruitment to all 
qualified job candidates and ban discrimination on the basis of race, 
color, religion, national origin or gender. We are also issuing a Third 
Notice of Proposed Rule Making (``3rd NPRM'') requesting comment as to 
the applicability of our rules with respect to part-time employees.

II. Background

    2. We have administered regulations governing the EEO 
responsibilities of broadcast licensees since 1969, and of cable 
television operators since 1972. Our responsibilities in this area were 
codified with respect to cable television operators in 1984. They were 
further codified with respect to television broadcast licensees and 
extended to other MVPDs in 1992. In 1998, the U.S. Court of Appeals for 
the District of Columbia Circuit held that the Commission's EEO program 
requirements for broadcasters were unconstitutional in Lutheran Church-
Missouri Synod v. FCC.
    3. In 1998, we issued a Notice of Proposed Rule Making (``NPRM''), 
(63 FR 66104, December 1, 1998), for the purpose of adopting EEO rules 
for broadcast licensees and MVPDs consistent with the Court's decision 
in Lutheran Church. In 2000, we adopted new EEO program requirements 
for broadcasters, Report and Order (``R&O''), (65 FR 7448, February 15, 
2000). Substantially the same program requirements were applied to 
MVPDs. The Commission explained that the new rules required more ``than 
merely refraining from discrimination.'' They also required 
broadcasters and MVPDs ``to reach out in recruiting new employees 
beyond the confines of their circle of business and social contacts to 
all sectors of their communities [because] * * * repeated hiring 
without broad outreach may unfairly exclude minority and women job 
candidates * * * .'' The Commission concluded that nondiscrimination in 
hiring was not enough when not all potential applicants have had a fair 
opportunity to apply. ``Outreach in recruitment must be coupled with a 
ban on discrimination to effectively deter discrimination and ensure 
that a homogenous workforce does not simply replicate itself through an 
insular recruitment and hiring process.''
    4. The new rule contained two primary requirements--a prohibition 
on discrimination based on race, color, religion, national origin or 
gender in hiring, and a requirement that broadcasters reach out in 
recruiting new employees to ensure that all qualified individuals had 
an opportunity to apply for and be considered as job candidates. The 
core of the recruitment requirement was that broadcasters widely 
disseminate information concerning all job vacancies. The Commission 
concluded that this basic requirement ``is essential to meaningful 
outreach.'' The Commission left it largely to broadcasters' discretion 
concerning how they would fulfill this requirement, so long as their 
procedures were sufficient to ensure wide dissemination of information 
about all job openings to the entire community.
    5. In addition to the basic requirement of wide dissemination of 
information concerning job openings, the new rule provided broadcast 
licensees with two recruitment options. Under ``Option A,'' they were 
required to undertake two types of supplemental recruitment measures. 
The first measure required licensees to provide notification of job 
vacancies to any recruitment organization that requested such notice 
from the broadcaster. The second supplemental measure under Option A 
required broadcasters to participate in additional recruitment 
activities beyond the traditional recruitment that occurs with 
individual vacancies. These additional measures were to be selected 
from an open-ended menu of types of activities that included: Job 
fairs, job banks, scholarship programs, and community events related to 
employment opportunities in the industry, among others. Broadcasters 
were permitted to comply with the supplemental requirement by 
participating in activities other than the listed ones so long as they 
were designed to disseminate information about employment opportunities 
to candidates who might otherwise not learn of them. Broadcasters who 
selected Option A were required to maintain, but not routinely submit 
to the Commission, records documenting their compliance with the wide 
dissemination and supplemental recruitment requirements.
    6. The Commission also adopted an ``Option B'' for recruitment that 
permitted licensees to forego the supplemental recruitment measures 
required under Option A and to design their own outreach program to 
suit their needs, as long as they could demonstrate that their program 
is inclusive, i.e., that it widely disseminated job vacancies 
throughout the local community. The court held, however, that Option B 
was unconstitutional under the equal protection component of the Due 
Process Clause of the Fifth Amendment. The Commission filed for hearing 
and rehearing en banc, arguing that Option B was not essential to 
achieving its goal of ensuring that broadcasters engage in broad 
outreach in recruiting new employees and that it had made plain its 
intent that Option B be severable. The court denied rehearing.
    7. We issued the Second Notice of Proposed Rulemaking (``2NPRM''), 
(67 FR 1704, January 14, 2002) to request public comment on the 
adoption of new broadcast and MVPD EEO rules consistent with 
Association. An En Banc open hearing on the proposed rules was held 
before the full Commission on June 24, 2002. Having reviewed the 
suggestions contained in the comments submitted, both in writing and at 
the En Banc hearing, we are adopting new EEO rules that consist 
primarily of the elements of our former rules that the Court upheld as 
constitutional in Association, with modifications.

III. Summary

    8. In this order, we adopt new outreach requirements applicable to 
broadcast and MVPDs. We are also retaining the nondiscrimination rules 
applicable to broadcasters and MVPDs.
    9. The following is a summary of the three-pronged outreach 
requirement we are adopting as it relates to broadcasters:
    Prong 1: Widely disseminate information concerning each full-time 
(30 hours or more) job vacancy, except for vacancies filled in exigent 
circumstances;
    Prong 2: Provide notice of each full-time job vacancy to 
recruitment organizations that have requested such notice; and
    Prong 3: Complete two (for broadcast employment units with five to 
ten full-

[[Page 672]]

time employees or that are located in smaller markets) or four (for 
employment units with more than ten full-time employees located in 
larger markets) longer-term recruitment initiatives within a two-year 
period.
    The following is a summary of recordkeeping and reporting 
requirements:
    (a) Collect, but not routinely submit to the Commission: (i) 
Listings of all full-time job vacancies filled by the station 
employment unit, identified by job title; (ii) for each such vacancy, 
the recruitment sources used to fill the vacancy (including, if 
applicable, organizations entitled to notification, which should be 
separately identified), identified by name, address, contact person and 
telephone number; (iii) dated copies of all advertisements, bulletins, 
letters, faxes, e-mails, or other communications announcing vacancies; 
and (iv) documentation necessary to demonstrate performance of the 
Prong 3 menu options, e.g., job fairs, mentoring programs; (v) the 
total number of interviewees for each vacancy and the referral source 
for each interviewee; and (vi) the date each job was filled and the 
recruitment source that referred the hiree.
    (b) Place in the station public file annually a report including 
the following: (i) A list of all full-time vacancies filled during the 
preceding year, identified by job title; (ii) recruitment source(s) 
used to fill those vacancies (including organizations entitled to 
notification of vacancies pursuant to Prong 2), including the address, 
contact person, and telephone number of each source; (iii) a list of 
the recruitment sources that referred the people hired for each full-
time vacancy; (iv) data reflecting the total number of persons 
interviewed for full-time vacancies during the preceding year and the 
total number of interviewees referred by each recruitment source; and 
(v) a list and brief description of Prong 3 menu options implemented 
during the preceding year.
    (c) Submit the station's EEO public file report to the Commission 
as part of the renewal application and midway through the license term 
for the Commission's mid-term review for those stations subject to mid-
term review (television stations with five or more full-time employees 
and radio stations with more than ten full-time employees). EEO public 
file reports for the preceding two year period will be required because 
broadcasters have two years in which to complete the Prong 3 menu 
options. Broadcasters must also post the current EEO public file report 
on their web site, if they have one.
    10. The same requirements will apply to MVPDs, except as necessary 
to comply with different statutory requirements. The Commission is also 
required to certify that MVPD employment units are in compliance with 
the EEO requirements on an annual basis. To comply with the Prong 3 
requirements, MVPD employment units with six to ten full-time employees 
and employment units located in smaller markets will be required to 
undertake one recruitment initiative each year and larger employment 
units located in larger markets two recruitment initiatives per year. 
MVPD employment units are not subject to a renewal process at the 
Commission. Pursuant to section 634(e)(2) of the Communications Act, 
the Commission is required to conduct a more thorough review of each 
cable employment unit's EEO compliance every five years. Hence, MVPDs 
with six or more full-time employees will submit a copy of their most 
recent EEO public inspection file report to the Commission every five 
years.
    11. The Commission has implemented the MVPD annual reporting 
requirement under section 634 by FCC Forms 395-A (cable operators) and 
395-M (other MVPDs). We will create a new Form 396-C for all MVPDs that 
will encompass the same information concerning the unit's EEO outreach 
efforts that was formerly required in FCC Forms 395-A and 395-M. The 
prior forms were also used to collect data concerning the race/
ethnicity and gender of the unit's workforce. The form we are adopting 
today will not encompass such data because, as indicated below, we will 
defer action on the collection of workforce data.
    12. We are not acting at this time on issues raised in the 2NPRM 
concerning the broadcast annual employment report (FCC Form 395-B), 
which has in the past been used to collect data concerning the 
workforces of broadcast employment units, including data concerning the 
race/ethnicity and gender of those workforces. We are similarly not 
acting on a comparable form for MVPDs. The Office of Management and 
Budget (``OMB'') adopted new standards for classifying data on race and 
ethnicity in 1997 that must be incorporated in any such forms beginning 
in 2003. We must incorporate these new standards in our future forms. 
In addition, a party has raised issues concerning the collection and 
processing of the forms. Because the employment reports are filed on 
September 30 of each year, the next reports would not be due earlier 
than September 30, 2003.

IV. Discussion

A. Statutory Authority for EEO Program Requirements and Anti-
Discrimination Rules

1. EEO Rules Applicable to Multichannel Video Programming Distributors
    13. The Commission is explicitly authorized by section 634 of the 
Communications Act to adopt and enforce the MVPD EEO rules. Indeed, 
section 634 requires us to enforce EEO rules for MVPDs.
    14. Although the Commission is required by section 634 to enforce 
EEO ruless for the MVPD industry, Congress built into section 634 
flexibility by allowing the Commission to implement MVPD EEO rules by 
rulemaking rather than simply prescribing MVPD EEO requirements by 
statute; by stating in section 634(d)(2) that the ``rules shall specify 
the terms under which'' an entity shall take the actions specified in 
that section; and by providing in section 634(d)(4) that the Commission 
may amend the MVPD EEO rules ``from time to time to the extent 
necessary to carry out the provisions of this section.'' Our rulemaking 
authority, particularly under sections 634(d)(2) and 634(d)(4), permits 
us to adopt new, race-neutral outreach requirements and to revise the 
FCC Forms filed by MVPDs to make them consistent with our modified 
broadcast EEO rules.
    15. Section 634(d)(2) obligates the Commission to implement the 
listed requirements only ``to the extent possible,'' consistent with 
other conflicting requirements or limitations. The court's decision in 
Association delineates constitutional limitations with which we must 
reconcile the MVPD EEO rules. We believe that section 634(d)(2) permits 
the Commission to eliminate those provisions of the MVPD EEO rules that 
are similar to those struck down by the court in Association because it 
is not ``possible'' for the Commission to enforce a provision that a 
court has found unconstitutional. We modify the MVPD EEO rules in this 
2R&O to remove provisions similar to those found unconstitutional in 
Association. We also revise the forms filed by MVPDs to conform them 
with our modified rules.
2. EEO Rules Applicable to Broadcasters
    16. In 1992, Congress enacted section 334 of the Communications Act 
as part of the Cable Television Consumer Protection and Competition Act 
of 1992, Pub. L. 192-385, 106 Stat. 1460 (``1992

[[Page 673]]

Cable Act''). Section 334 provides that ``the Commission shall not 
revise:''
    (1) The regulations concerning equal employment opportunity as in 
effect on September 1, 1992 (47 CFR 73.2080) as such regulations apply 
to television broadcast station licensees and permittees; or
    (2) The forms used by such licensees and permittees to report 
pertinent employment data to the Commission, 47 U.S.C. 334(a).
    The Conference Report accompanying this legislation indicates that 
section 334 ``codifies the Commission's equal employment opportunity 
rules, 47 CFR 73.2080'' for television licensees and permittees. 
Section 334 thus grants the Commission explicit authority to regulate 
the EEO practices of television broadcasters. Section 334 was enacted 
as part of section 22 of the 1992 Cable Act, which sets forth 
Congressional findings that, despite existing FCC EEO rules, there were 
few women and minorities in managerial positions in the MVPD and 
broadcast industries; that increased employment of women and minorities 
in managerial positions will advance the national policy favoring 
diversity of viewpoints in the electronic media; and that rigorous 
enforcement of EEO rules is required to effectively deter racial and 
gender discrimination.
a. Congressional Ratification
    17. The Commission has maintained nondiscrimination and EEO program 
requirements for broadcasters for more than 30 years. In 1968, the 
Commission concluded that the national policy against discrimination 
and the fact that broadcasters are licensed under the Communications 
Act to operate in the public interest required the Commission to 
consider allegations of employment discrimination in licensing 
broadcast stations. In 1969, the Commission adopted rules prohibiting 
broadcast stations from discriminating against any person in employment 
on the basis of race, color, religion, or national origin, and 
requiring stations to maintain a program designed to ensure equal 
opportunity in every aspect of station employment. It reiterated its 
view that discriminatory employment practices are incompatible with a 
station's obligation to operate in the public interest, and relied on 
sections 4(i), 303, 307, 308, 309 and 310 in adopting the new rules. 
Relying on its authority to license and regulate broadcasters in the 
public interest, the Commission has revised and extended its rules on 
numerous occasions since 1969 to, inter alia, refine its EEO program 
requirements, require licensees to file information concerning these 
programs and other statistical employment information with the 
Commission, and prohibit discrimination against, and require outreach 
to, women.
    18. Over the last 30 years, the Commission has vigorously enforced 
its EEO requirements, sanctioning broadcast licensees in numerous cases 
for failing to comply fully with those requirements. Commission 
decisions enforcing the EEO requirements have been challenged both by 
licensees who have been sanctioned for noncompliance and by petitioners 
who believed that Commission enforcement was not vigorous enough. 
Indeed, the Court of Appeals for the DC Circuit held more than 20 years 
ago that the Commission must investigate broadcasters' employment 
practices and, in assessing the character qualifications of broadcast 
licensees, consider whether they have engaged in intentional employment 
discrimination. And the Supreme Court observed in the seminal case 
addressing the scope of an agency's authority to serve the ``public 
interest'' that FCC regulation of the employment practices of its 
licensees ``can be justified as necessary to enable the FCC to satisfy 
its obligation under the Communications Act of 1934 * * * to ensure 
that its licensees' programming fairly reflects the tastes and 
viewpoints of minority groups.''
    19. During the three decades that the Commission has administered 
EEO program requirements and nondiscrimination rules, Congress has 
repeatedly expressed awareness of the rules and has not only acquiesced 
in them, but has also referred to them approvingly, confirming our view 
that the Commission has statutory authority to promulgate these rules. 
Congress has ratified the Commission's authority to adopt and enforce 
EEO requirements against broadcasters under its statutory mandate to 
license and regulate broadcasters in the public interest.
    20. In 1984, Congress enacted section 634 of the Communications Act 
as part of the Cable Communications Policy Act of 1984, Pub. L. 98-549, 
98 Stat. 2779 (``1984 Cable Act''). Although the Commission at that 
time already had rules in place regulating the EEO practices of cable 
operators as well as broadcasters, section 634 was intended to 
``codif[y] and strengthen[] the Commission's existing equal employment 
opportunity regulations.'' Section 634 granted the Commission broad 
authority to adopt rules banning employment discrimination by cable 
operators and requiring cable operators to ``establish, maintain, and 
execute a positive continuing program of specific practices designed to 
ensure equal opportunity in every aspect of its employment policies and 
practices * * *.''
    21. The legislative history of section 634 makes it unmistakably 
clear that Congress believed that the Commission already possessed 
authority to regulate the EEO practices of mass media entities--
broadcast as well as cable. The House Commerce Committee Report on the 
bill proposing the provisions on which section 634 was based explicitly 
confirmed the Commission's authority to adopt EEO rules. The House 
Commerce Committee stated:

    (1) It is well established that the Commission has the authority 
to regulate employment practices in the communications industry. 
Among the Commission's efforts in the equal employment opportunity 
(EEO) area over the last several years has been the enforcement of 
employment standards in the cable industry. Section 634 endorses and 
extends those standards.
    (2) Because of the potentially large impact cable programming 
and other services provided by the cable industry has on the public, 
the employment practices of the industry have an importance greater 
than that suggested by the number of its employees. The committee 
strongly believes that equal employment requirements are 
particularly important in the mass media area where employment is a 
critical means of assuring that program service will be responsive 
to a public consisting of a diverse array of population groups.

    22. In addition to the explicit recognition of the Commission's 
broad and ``well established'' authority to regulate employment 
practices in the communications industry, the legislative history of 
section 634 shows that Congress viewed the legislation as codifying, 
strengthening and building upon the Commission's pre-existing 
regulatory scheme, which it viewed as well within the Commission's 
statutory authority.
    23. Additional evidence of congressional ratification can be found 
in the Cable Television Consumer Protection and Competition Act of 
1992, which further strengthened the cable EEO requirements, extended 
those requirements to all MVPDs, and codified the Commission's EEO 
program and nondiscrimination requirements as applied to broadcast 
television licensees. Congress once again explicitly acknowledged the 
existence of the Commission's broadcast and cable EEO requirements and 
proclaimed that vigorous enforcement of those rules served the public 
interest. Congress made the following findings in section 22(a) of the 
1992 Cable Act:

    (1) Despite the existence of regulations governing equal 
employment opportunity,

[[Page 674]]

females and minorities are not employed in significant numbers in 
positions of management authority in the cable and broadcast 
television industries;
    (2) Increased numbers of females and minorities in positions of 
management authority in the cable and broadcast television 
industries advances the Nation's policy favoring diversity in the 
expression of views in the electronic media; and
    (3) Rigorous enforcement of equal employment opportunity rules 
and regulations is required in order to effectively deter racial and 
gender discrimination.

    By extending the cable EEO requirements to every entity that 
provides multiple channels of video programming, such as MMDS operators 
and DBS licensees, Congress was building upon and closing the gaps in 
the Commission's regulatory scheme, ensuring that every electronic mass 
media provider would be subject to EEO regulations enforced by the 
Commission.
    24. The 1992 Cable Act not only strengthened and extended the cable 
EEO requirements, it also codified the Commission's EEO requirements 
for broadcast television stations in section 334 of the Act. Section 
334 thus explicitly recognizes the existence of the Commission's 
broadcast EEO rule and requires the Commission to keep its EEO 
requirements in effect for television broadcasters.
    25. Section 22(g) of the 1992 Cable Act required the Commission to 
report to Congress within two years on ``the effectiveness of [the 
Commission's] procedures, regulations, policies, standards, and 
guidelines in promoting the congressional policy favoring increased 
employment opportunity for women and minorities in positions of 
management authority.'' The Commission was required to include in that 
report ``such legislative recommendations to improve equal employment 
opportunity in the broadcasting and cable industries as it deems 
necessary.'' Congress would not have directed the Commission to review 
the effectiveness of its broadcast and cable EEO policies and 
regulations then in effect, and recommend whether further legislative 
action was necessary, had Congress not believed that those policies and 
regulations were within the Commission's lawful authority. Section 
22(g) is further evidence of Congress's affirmative approval of the 
Commission's authority to adopt equal employment opportunity 
requirements for broadcasters.
    26. There is another compelling reason to find in the current 
statutory context that Congress has ratified our authority to regulate 
the EEO practices of broadcasters. The Supreme Court has held on 
numerous occasions that courts should interpret a statute ``as a 
symmetrical and coherent regulatory scheme'' and ``fit, if possible, 
all parts into an harmonious whole.'' In interpreting statutes granting 
administrative or judicial jurisdiction, the Supreme Court has held 
specifically that any interpretation of congressional intent that will 
result in a ``bizarre jurisdictional patchwork'' is to be disfavored 
absent legislative history or a persuasive functional argument to the 
contrary. In this case, Congress has explicitly granted the Commission 
authority to regulate the EEO practices of television broadcasters, 
cable operators, and all other MVPDs, including such relative newcomers 
as DBS and MMDS operators. Thus, rejecting the inference of 
congressional ratification would leave us in the anomalous situation of 
having jurisdiction to regulate the EEO practices of broadcast 
television and MVPDs, but not radio broadcasters. There is no 
indication in the legislative history that this was Congress's intent 
and none of the broadcasters commenting in this proceeding even 
attempts to explain why Congress would have intended such a result.
    27. The Commission since 1969 has interpreted the Communications 
Act's grant of authority to license and regulate broadcasters as the 
public interest, convenience and necessity require as authorizing the 
Commission to regulate the equal employment practices of broadcasters. 
Specifically, it has interpreted the statute as granting it authority 
to prohibit broadcast stations from engaging in employment 
discrimination and to require them to maintain programs designed to 
ensure equal opportunity in all aspects of station employment, 
including recruitment. It is that interpretation of the scope of the 
Commission's statutory authority under the Communications Act that 
Congress has ratified over the course of many years.

B. Broadcast and MVPD EEO Rules, Policies, and Forms

1. Anti-Discrimination Provisions
    28. In the 2NPRM we proposed to retain the nondiscrimination 
provisions of our broadcast and MVPD EEO rules. We noted that the anti-
discrimination provision of the broadcast EEO rule, Sec.  73.2080(a), 
was not challenged in Association. Nonetheless, in rejecting the 
contention that the unlawful Option B could be severed from the EEO 
rule, the court stated that the ``entire rule'' must be vacated. In 
order to avoid any confusion arising from the language in the court's 
decision, we recodify the nondiscrimination requirement. 
Nondiscrimination is an essential component of every licensee's 
obligation as a trustee of a valuable public resource. In Bilingual 
Bicultural Coalition on Mass Media, Inc. v. FCC, the court stated that 
``[a] documented pattern of intentional discrimination would put 
seriously into question a licensee's character qualifications to remain 
a licensee: intentional discrimination almost invariably would 
disqualify a broadcaster from a position of public trusteeship.'' 
Finally, we are required by statute to prohibit discrimination by 
broadcast television licensees and MVPDs.
    29. As proposed in the 2NPRM, we will retain our policy of 
generally deferring action on individual complaints of employment 
discrimination against broadcasters and MVPDs pending final action by 
the Equal Employment Opportunity Commission (``EEOC'') or other 
government agencies and/or courts established to enforce 
nondiscrimination laws. We will also retain the discretion to take 
action, notwithstanding the absence of a final decision by the EEOC or 
other agency/court, where the facts of a particular case so warrant. As 
indicated in the R&O, our policy generally reflects the fact that 
Congress intended the EEOC to be primarily responsible for the 
resolution of discrimination complaints and our separate adjudication 
of such complaints could result in duplicative or inconsistent 
decisions.
    30. The rule adopted by the R&O defined a ``religious broadcaster'' 
as ``a licensee which is, or is closely affiliated with, a church, 
synagogue, or other religious entity, including a subsidiary of such an 
entity, 47 CFR 73.2080(a).'' In the R&O, we clarified that, in the 
event of a controversy, we would determine on a case-by-case basis 
whether a licensee was a religious broadcaster by considering such 
factors as whether it operates on a non-profit basis, whether it has a 
distinct religious history, whether the entity's articles of 
incorporation set forth a religious purpose, and whether it carried 
religious programming.
2. Broadcast EEO Program Requirements
a. Rules and Policies
i. General Considerations
    31. Several broadcast commenters have challenged the basis for our 
adopting any EEO rule for broadcasters. Initially, they seek to 
characterize our proposals in the 2NPRM as constituting ``re-
regulation.'' In fact, we have never

[[Page 675]]

``de-regulated'' in this area; the court decisions that have 
invalidated various aspects of our EEO rules have been premised on 
specific legal defects found in our programs, not on a finding that 
nondiscrimination rules or outreach requirements are unnecessary.
    32. First, our concern is not limited to intentional 
discrimination. It is not based on Constitutional provisions or on 
Title VII, but on the public interest standard in the Communications 
Act. In adopting the Cable TelevisionConsumer Protection and 
Competition Act of 1992 (``Cable Act''), Congress expressly found in 
pertinent part: ``Rigorous enforcement of equal employment opportunity 
rules and regulations is required in order to effectively deter racial 
and gender discrimination.'' Congress has made it clear that the public 
interest standard is sufficiently broad to cover not only intentional 
discrimination, but also discrimination that may arise as a result of 
practices and policies that are not intentionally discriminatory. 
Further, our policy is not limited to imposing sanctions in response to 
specific past discrimination; it is also intended to deter 
discrimination in the first instance. Our policy is designed to prevent 
both intentional and unintentional discriminatory practices in the 
broadcast and MVPD industries, and to ensure equal opportunity in 
employment practices, including recruitment.
    33. Second, it is not necessary to find that the broadcast industry 
``as a whole'' has engaged in discrimination in order to justify 
regulations to prevent discrimination. We do not suspect that the 
entire broadcast industry, or even most of it, engages in intentional 
or unintentional discrimination.
    34. Third, although we commend the broadcast associations for the 
various activities detailed in their comments, they do not demonstrate 
that an EEO rule is unnecessary.
    35. Some broadcasters support the adoption of an EEO rule. Our 
proposed EEO requirements also are generally supported by the MVPD 
industry.
    36. Discrimination may be easy to hide and difficult to prove. 
Allegations of discrimination may never be fully litigated because a 
violator will elect to settle any litigation before it reaches the 
stage of a final judgment. It is thus impossible to quantify reliably 
the extent of actual discrimination that exists today.
    37. Many of the opponents of our EEO program cite language from the 
2R&O that ``[o]utreach in recruitment must be coupled with a ban on 
discrimination to effectively deter discrimination and ensure that a 
homogenous workforce does not simply replicate itself through an 
insular recruitment and hiring process.'' These parties contend that 
the broadcast workforce is not homogeneous and that it does not employ 
insular recruitment and hiring practices to replicate itself. The cited 
language was intended to explain why outreach in recruitment as well as 
a ban on discrimination is necessary to deter discrimination. We did 
not intend to suggest that every broadcast station has a homogeneous 
workforce. We recognize that in many significant respects the industry 
has become more diverse over the past decades. We attribute this in 
large measure to the fact that the industry has been subject to our 
various EEO requirements since 1969.
    38. We accordingly conclude that adoption of new outreach rules for 
broadcast and MVPDs is supported by the record in this case. The 
evidence in this proceeding demonstrates an ongoing need to deter 
discrimination and ensure equal employment opportunity in the 
broadcasting and MVPD industries. Moreover, Congress has made clear its 
intention that we should enact EEO rules for the broadcast and MVPD 
industries.
    39. Finally, as noted, our primary goal in adopting EEO program 
requirements is to ensure broad outreach in recruitment for broadcast 
and MVPD employment vacancies. We seek to do so in a manner that 
affords some flexibility to affected industries. The regulations we are 
adopting today provide sufficient flexibility. Entities will have broad 
discretion as to the type of recruitment sources they will use, the 
number of recruitment sources they will use, and the Prong 3 menu 
options they will implement. We are also providing that entities in 
smaller markets may implement fewer menu options than those in larger 
markets.
    ii. EEO Program and Related Provisions
    40. In the 2NPRM, we proposed a three-prong EEO program requirement 
designed to ensure equal opportunity to all potential applicants, 
including all races and both genders, without infringing on the rights 
of any group. The rules were further designed to be flexible enough to 
avoid imposing an undue burden and to apply reasonably and effectively 
to broadcasters and MVPDs in differing circumstances. Based on our 
review of the comments, reply comments and other presentations filed in 
this proceeding, we adopt the proposed program, with some 
modifications.
    41. Outreach Prong 1--Recruitment for All Full-time Vacancies. We 
will adopt the requirement that broadcasters recruit for all full-time 
vacancies, except in exigent circumstances. Recruitment for 
substantially all vacancies using sources designed to achieve broad 
outreach is necessary to ensure that all segments of the population 
have an equal opportunity to compete for broadcast (and MVPD) 
employment and that no segment is subjected to intentional or 
unintentional discrimination.
    42. The effectiveness of our requirements in the past does not 
justify eliminating them now. Nor can we justify such a conclusion 
based on recent outreach efforts by the broadcast industry commendable, 
given that this has been an area under high scrutiny for some time. We 
can draw no inference from these facts; therefore, regarding the likely 
behavior of licensees in the absence of any current on proposed EEO 
program. Second, our requirements provide sufficient flexibility to 
design recruitment programs appropriate for different positions and 
circumstances.
    43. In the 2NPRM, we recognized that there might be occasional 
exigent circumstances in which recruitment may not be feasible. We 
cited as an example the need to replace immediately an employee who 
departs without notice and whose duties cannot be fulfilled, even 
briefly, by other station employees. We stated in the R&O that we could 
not anticipate every circumstance which might justify filling a 
position without recruitment and indicated that we would rely on the 
good faith discretion of broadcasters. We nonetheless cautioned that we 
expected nonrecruited vacancies to be rare relative to the number of 
vacancies for which recruitment is conducted, because our rule 
generally requires recruitment for every vacancy. We will incorporate 
this approach in our new rules.
    44. The requirement that broadcasters recruit for every full-time 
vacancy, unless exigent circumstances exist, will become a component of 
our rule. Recruitment for only some openings could leave the most 
desirable positions open to a limited number of potential applicants, 
possibly excluding significant segments of the community. We will 
require that broadcasters develop and use for each vacancy a 
recruitment source or list of recruitment sources (which may be freely 
modified as circumstances warrant) sufficient to ensure wide 
dissemination of information about the opening. We will not dictate the 
number or type of sources that a broadcaster must use. If, however, the 
source or sources used cannot reasonably be expected,

[[Page 676]]

collectively, to reach the entire community, the broadcaster may be 
found in noncompliance with our EEO rule. A broadcaster may widely 
disseminate job postings through any combination of methods sufficient 
to ensure that its recruitment efforts are inclusive. Broadcasters may 
contact the FCC's EEO staff with any questions on this matter. We also 
clarify that the same recruitment sources need not be used for every 
hire. We do not require licensees to use recruitment sources that, in 
their good faith judgment, are unlikely to elicit responses from 
qualified applicants in light of the demands of a particular job. We do 
expect them, however, to use whatever recruitment source or sources can 
reasonably be expected to widely disseminate notice of the vacancy to 
qualified applicants. Although our rule seeks to achieve broad outreach 
to the community, this does not preclude the use of regional or 
national recruitment sources. We will accordingly give consideration to 
a broadcaster's use of such sources in assessing its EEO record. 
Whatever sources a licensee uses, however, or whatever a licensee's 
perception is regarding whether anyone in its community is qualified 
for a unique job, we are requiring that sources reach qualified 
potential applicants in the licensee's community. Licensees are not 
permitted to target any group in the community for exclusion from the 
recruitment process.
    45. With reference to the definition of community for purposes of 
the broad outreach requirement, we proposed in the 2NPRM to define 
``community'' as encompassing, at a minimum, the county in which a 
station is licensed or MVPD employees are primarily located, or the 
Metropolitan Statistical Area (``MSA'') in the case of counties located 
in an MSA. We will instead define ``community'' for the purpose of the 
broad outreach requirement in accordance with the approach taken in the 
Recon, (Memorandum Opinion and Order, 65 FR 76948, December 8, 2000). 
There, we left the definition of ``market'' or ``community'' to the 
licensee's good faith discretion. We indicated, that in making this 
determination, a broadcaster should assess the technical coverage of 
its station(s); its marketing, promotional, and advertising practices; 
the pertinent market definitions adopted by public agencies or 
commercial services, such as Nielsen and Arbitron; and requests for 
notices of job vacancies from locally-based community groups. We will 
adopt the same policy for purposes of our new rule. (Although we are 
according discretion regarding the definition of ``community,'' we 
expect broadcasters to be able to provide a reasonable explanation for 
their determinations should it become pertinent. We would be concerned 
if the circumstances suggested that a broadcaster is unreasonably 
defining its community in a manner that excludes certain areas or 
populations that it clearly does serve.)
    46. We require only that EEO recruitment sources be reasonably 
calculated to reach the entire community. We do not require that 
broadcasters demonstrate that any particular segment of the community 
actually was aware of any vacancy. Nor do we require that recruitment 
be targeted to a specific segment or that broadcasters prove that they 
obtained a response from a particular segment. Prong 1 neither requires 
nor precludes the use of any number or type of sources a broadcaster 
deems appropriate to achieve broad outreach. Further, we leave the 
definition of ``community'' to the licensee's good faith discretion. We 
also recognize that it is difficult for licensees to recruit for 
vacancies in exigent circumstances. Thus, Prong 1 allows broadcasters 
flexibility in implementing appropriate recruitment programs for their 
individual circumstances.
    47. Notwithstanding the greater availability of job-related 
Internet sites, the record does not reflect the extent to which the 
Internet has become well known as a principal resource for job seekers 
or the nature of any difficulties that Internet recruitment would 
create. We anticipated in the R&O that we would be able to assess the 
extent of any such difficulties based on our experience under the rules 
adopted therein. Because those rules were in effect for only a few 
months, we do not have the experience necessary to reach definitive 
conclusions in that respect.
    48. With regard to the access of minority and rural populations to 
the Internet, our concerns arose from a series of reports by the 
National Telecommunications and Information Administration (``NTIA'') 
in 1995, 1998 and 1999.
    49. Proponents of the use of the Internet as a sole recruitment 
source cite the improvements reflected in NTIA's 2002 report. Although 
the NTIA 2002 report shows increases in Internet usage, the report also 
indicates continuing disparities in usage among different segments of 
society. Indeed, only about half of all U.S. households had Internet 
service as of September 2001, and only slightly more than half of 
individuals used the Internet from any location. We are unable to 
conclude that Internet usage has become sufficiently widespread to 
justify allowing it to be used as the sole recruitment source. As we 
indicated in the R&O, we will continue to monitor the viability of the 
Internet as a recruitment source and will consider petitions seeking to 
demonstrate in the future that circumstances have changed sufficiently 
to warrant a change in our policy.
    50. As indicated in the R&O, we expect broadcasters to allow a 
reasonable time after recruitment is initiated for applications to be 
filed before the position is filled. We recognize that occasionally a 
shorter time might be necessary because of extraordinary circumstances. 
We caution that excessive instances of hires being made shortly after 
the initiation of recruitment could result in a finding of 
noncompliance if the evidence suggests that the broadcaster is not in 
good faith allowing adequate time for applicants to respond to its 
outreach efforts or is not considering their applications. Also, it is 
not the intention of our rule to prohibit word of mouth recruitment. 
Our purpose is to ensure that word-of-mouth recruitment practices are 
not the sole method of recruitment and that all members of the public 
have an opportunity to compete for available jobs. Broadcasters are 
free to use non-public recruitment sources and to interview and hire 
persons referred by such sources, so long as they also use public 
recruitment sources sufficient to achieve broad outreach and fairly 
consider the applications generated by those sources.
    51. We will continue our policy stated in the R&O that broadcasters 
may engage in joint recruitment efforts. Broadcasters may also rely 
upon the services of outside organizations or individuals to assist it 
in designing or implementing their recruitment efforts. Each 
broadcaster (or MVPD) remains individually responsible for compliance 
with our rule. No broadcaster (or MVPD) is required to use the services 
of an outside party.
    52. We will not require recruitment for internal promotions, nor 
will we require recruitment for temporary employees. Typically, we view 
temporary employees as including those hired as emergency replacements 
for absent regular employees or those hired to perform a particular job 
for a limited period of time. If a person is hired full-time to perform 
a regular station function for an extended period of time (e.g., more 
than six months), such a hire will be treated as a permanent hire for 
which recruitment would be required. We recognize that some 
broadcasters may wish to hire employees initially on

[[Page 677]]

a temporary basis with the possibility of retaining them on a permanent 
basis if their performance is satisfactory. In such circumstances, if 
recruitment is done at the time of the temporary hire, any later 
decision to convert the employee's status to full-time in the same, or 
essentially the same, job may be treated as a promotion. If an employee 
is hired as a temporary employee without recruitment, recruitment 
should occur if the employee is later considered for a permanent 
position. We caution that excessive instances of temporary hires being 
converted to permanent hires, without a meaningful opportunity for 
recruited applicants to compete, could result in a finding of 
noncompliance. (If an employee is hired with the expectation that 
successful completion of an initial probation will result in an 
eventual elevation to permanent status, we would not regard that as a 
temporary hire and would expect regular recruitment for that position.)
    53. We will continue to define ``full-time employee'' as a 
permanent employee whose regular work schedule is thirty hours or more 
per week. In the Recon, we indicated that, as in the case of temporary 
hires, if a part-time employee is initially hired after broad outreach 
to all segments of the community, the decision subsequently to convert 
him or her to full-time in the same, or essentially the same, job may 
be treated as a promotion. If the broadcaster did not engage in full 
recruitment at the time of the initial part-time hire it would have to 
recruit before converting the employee to full-time. Also, as in the 
case of temporary hires, excessive instances of temporary hires being 
converted to permanent hires without a meaningful opportunity for 
recruited applicants to compete could result in a finding of 
noncompliance. We will apply the same policy under the rule being 
adopted today.
    54. Outreach Prong 2--Notification to Community Groups. Under the 
Option A rules adopted in the R&O, we required that broadcasters and 
MVPDs provide notification of full-time job vacancies to organizations 
involved in assisting job seekers upon request by such organizations. 
We will incorporate this requirement into our new rules. This 
requirement provides a ``safety valve'' to ensure that no segment of 
the community is inadvertently omitted from recruitment efforts. 
Organizations or other entities with ties to specific segments of the 
labor force, such as persons with disabilities, college students, or 
members of different racial, ethnic, or religious groups could help 
broaden the reach of recruitment efforts. Organizations that come 
forward to request vacancy notifications may prove to be very 
productive referral sources. Further, this approach will enable 
interested groups to more closely monitor and, if necessary, seek to 
improve, broadcasters' recruitment efforts. We also expect broadcasters 
to make reasonable efforts to publicize the notification requirements 
so that qualifying groups are able to learn of the new procedure. Joint 
announcements by broadcasters or state broadcasters' associations--such 
as press releases, newspaper ads, and notices posted on the web site--
would satisfy the requirement to publicize. Similarly, broadcasters and 
MVPDs could satisfy this requirement by individually issuing such 
announcements, or by providing on-air announcements.
    55. We will provide broadcasters discretion to determine the method 
of providing notice to requesting parties. Such methods may include 
electronic mail and facsimile which may require fewer personnel and 
financial resources to fulfill the notification requirement than more 
traditional methods. For example, a broadcaster may maintain an 
electronic list of recruitment sources and notify all the sources 
simultaneously with a single e-mail when a vacancy occurs. We will also 
allow notifications to be made as part of joint recruitment efforts 
among broadcasters. However, each broadcaster participating in the 
joint recruitment efforts remains individually responsible for ensuring 
that requested notifications relating to its employment unit are made. 
For example, a state broadcast association may have a job bank that 
notifies certain sources on behalf of an employment unit when a vacancy 
becomes available at that employment unit. As long as the state 
broadcast association notifies all organizations requesting vacancy 
announcements from that employment unit as part of this process, the 
employment unit itself need not do so. Therefore, given the flexibility 
provided by electronic forms of notice and joint recruitment, we expect 
that the notification requirement will place minimal burdens on 
broadcasters.
    56. An organization that wishes to be notified of vacancies need 
only notify a broadcaster once in order to be entitled to notification 
of all future full-time vacancies. If a broadcaster is uncertain as to 
the status or continuing interest of a particular group, it is free to 
contact the group to resolve any questions. So long as the group 
indicates its continued interest in receiving notifications, it is 
entitled to receive them.
    57. The obligation to notify recruitment sources that request 
notice of vacancies is intended as a supplement to, not a substitute 
for, broadcasters' core, non-delegable obligation to widely disseminate 
information concerning all job vacancies. Although recruitment sources 
will have the right to ask broadcasters for notices of vacancies, they 
have no obligation to do so. And even if a broadcaster does not receive 
a single request for notice of vacancy information, it will 
nevertheless be responsible for ensuring that notice of vacancies is 
widely disseminated. If it fails to do so, it is not a legitimate 
excuse that no recruitment organizations requested notices.
    58. Prong 2 of the EEO rule requires broadcasters and MVPDs to 
provide requested notification of full-time job vacancies to 
organizations involved in assisting job seekers, regardless of whether 
they are minority or women's organizations.
    59. Outreach Prong 3--Menu Options. Under the rules adopted by the 
R&O, we required, under Option A, that broadcasters and MVPDs engage in 
a specified number of activities selected from a menu of options, such 
as job fairs, community events relating to broadcast employment, 
internship programs, scholarships, and similar activities. These 
activities are designed to go beyond the normal recruitment activities 
directed at filling particular vacancies. They are designed to 
encourage outreach to persons who may not be aware of the opportunities 
available in broadcasting or the MVPD industry or have not yet acquired 
the experience to compete for current vacancies. Interested members of 
the community will not only have access to information concerning 
specific job vacancies, but also will be encouraged to develop the 
knowledge and skills to pursue them. This approach remains justified 
and is not unduly burdensome. Various menu options encourage outreach 
to students and others who would benefit from training, mentoring and 
scholarships, which can work to enhance the employability of persons 
seeking jobs in the broadcasting or MVPD industries. These menu methods 
of outreach also are designed to further broaden outreach efforts to 
reach segments of the labor force who may be inadvertently omitted from 
vacancy-specific recruitment. As indicated, under this approach, 
broadcasters and MVPDs have great flexibility to design the types of 
recruitment activities best suited to their organizations and 
communities. In the rule we are adopting today, we will adopt this

[[Page 678]]

requirement while providing additional flexibility by incorporating 
additional menu options that have been suggested by the parties. We are 
also reducing the number of menu options that employment units located 
in smaller markets must perform.
    60. The first three specific menu options include participation in 
at least four job fairs by station personnel who have substantial 
responsibility for hiring decisions; hosting at least one job fair; or 
co-sponsoring at least one job fair with an organization in the 
business and professional community whose membership includes 
substantial participation of women and minorities. Job fairs are a 
useful method to reach a broad range of individuals who are interested 
in employment in the industry. The fourth option is participation in at 
least four activities sponsored by community groups active in broadcast 
employment issues, including conventions, career days, workshops and 
similar activities. The fifth option is the establishment of an 
internship program designed to assist members of the community to 
acquire skills needed for broadcast employment. Such an endeavor would 
serve the goal of broad outreach by increasing the number of qualified 
potential employees not only for one broadcaster, but for all 
broadcasters in the area. The sixth option is participation in general 
(as opposed to vacancy-specific) outreach efforts by such means as job 
banks or Internet programs such as those described in the model program 
developed by NASBA. While such sources may be used as recruitment 
sources when specific vacancies occur, they can also be useful even 
when there is no specific vacancy to elicit interest from persons who 
may later be considered for a specific position. The seventh option is 
participation in scholarship programs directed to students desiring to 
pursue a career in broadcasting. The benefit of this outreach is that 
it attracts students of both genders and all races to careers in 
broadcasting, ultimately increasing the number of qualified potential 
employees. The eighth and ninth options are, respectively, the 
establishment of training and mentoring programs designed to enable 
station personnel to acquire skills that could qualify them for higher 
level positions. These options would not be satisfied by ordinary 
training required for employees to perform their current positions. 
These options are rather intended to increase employee skills so they 
can qualify for higher positions.
    61. The tenth option is participation in at least four events or 
programs relating to career opportunities in broadcasting sponsored by 
educational institutions. Such participation again serves the purpose 
of increasing the universe of potential employees from which 
broadcasters attract job applicants. The eleventh option includes 
sponsorship of at least two events in the community designed to inform 
the public as to employment opportunities in broadcasting. Such 
activities can serve to increase public awareness of the opportunities 
available in broadcasting. The twelfth option would entail listing each 
upper-level opening in a job bank or newsletter of a media trade group 
with a broad-based membership, including participation of women and 
minorities.
    62. The thirteenth option will consist of providing assistance to 
outside non-profit entities in the maintenance of web sites that 
provide counseling on the process of searching for broadcast employment 
and/or other career development assistance pertinent to broadcasting. 
The fourteenth option consists of providing training to management 
level personnel as to methods of ensuring equal employment opportunity 
and preventing discrimination. The fifteenth option consists of 
providing training to personnel of outside recruitment organizations 
that would enable them to better refer job candidates for broadcast 
positions.
    63. The sixteenth option (which was the thirteenth option in our 
former rule) includes participation in activities other than the 
fifteen listed options that the licensee has designed to further the 
goal of disseminating information about employment opportunities in 
broadcasting to job candidates who might otherwise be unaware of such 
opportunities. This will provide flexibility for worthwhile initiatives 
that broadcasters may develop but that are not strictly within the 
scope of the menu options we have specified. The inclusion of this 
option makes it clear that the list of menu options is an open-ended 
list intended to guide, rather than limit, broadcasters and MVPDs.
    64. In the R&O, we required station employment units with more than 
ten full-time employees to implement four of these options every two 
years. If that time period is less than two years, the number of menu 
options may be reduced proportionally to the amount of time available. 
If a station is required generally to perform four menu options every 
two years, it would be expected to perform one for each six-month 
period between the effective date of the rule and the next regular 
pertinent anniversary. Although we ordinarily do not dictate when a 
broadcaster must complete its menu options during the regular two-year 
period, when a broadcaster owns a station or stations for less than the 
full two-year period, it must complete the prorated number of menu 
options within the available time period. We will require employment 
units with five to ten full-time employees as well as employment units 
in certain smaller markets to perform two of the menu options every two 
years.
    65. We will also permit broadcasters to perform menu options on a 
joint basis, either with other broadcasters, organizations such as 
state broadcaster associations, or with a corporate licensee's 
corporate headquarters. A station seeking credit for a particular menu 
option performed on a joint basis must have a meaningful involvement in 
the activity for which credit is sought. It is not sufficient for the 
station merely to lend its name to an activity or provide money where 
the activity is otherwise entirely conducted by another entity such as 
a trade association or the licensee's corporate headquarters. In the 
Recon, we discussed a number of circumstances where credit might be 
sought for activities engaged in on a joint basis. This discussion 
remains applicable to joint efforts engaged in pursuant to the rules we 
are adopting herein.
    66. We note that the term ``sponsor'' as used in connection with 
several options set forth in Sec.  73.2080(c)(2) of the old rule, which 
we also use in our new rule, was apparently misunderstood by some as 
referring only to a financial contribution. Our intent for the purpose 
of these options is that a ``sponsor'' should have a meaningful input 
into the planning and implementation of a specified event. Simply 
lending one's name or making a monetary contribution would not be 
sufficient. Events can be jointly sponsored, so long as each 
broadcaster seeking credit for sponsoring the event is actively 
involved in planning and implementing the event.
    67. With respect to the maintenance of a scholarship program by a 
corporate licensee, it is reasonable for a corporate licensee to 
maintain a scholarship program for those employment units it owns. Any 
such scholarship program should incorporate involvement by the 
employment units for which credit will be claimed in such areas as the 
design of the program, the solicitation of prospective scholarship 
recipients, the interviewing and selection of scholarship recipients, 
on-air promotion of the program, and evaluation of the effectiveness of 
the program. While each

[[Page 679]]

employment unit need not be involved in every aspect of the program, 
meaningful involvement in the program is essential to ensure that the 
employment unit is fulfilling its responsibility under our rule. In 
addition, the number of employment units seeking credit for a 
scholarship program should bear a reasonable relationship to the number 
or type of scholarships awarded by the corporate licensee.
    68. Unrelated broadcasters may also jointly maintain a scholarship 
program, which could be done through a state or local broadcast 
association, including efforts by such associations to coordinate 
regional efforts. We believe that the program should incorporate 
meaningful involvement by each broadcaster seeking credit for the 
initiative in such areas as the design of the program, the solicitation 
of prospective scholarship recipients, the interviewing and selection 
of scholarship recipients, on-air promotion of the program, and 
evaluation of the effectiveness of the program. As in the case of 
corporate scholarship programs, the number or type of scholarships 
awarded by the joint scholarship program would have to bear a 
reasonable relationship to the number of employment units seeking 
credit for it.
    69. With respect to mentoring, internships, or training programs 
administered by a corporate licensee, employment units of the licensee 
could claim credit for such a program even if not implemented in the 
community where the employment unit is located, but only so long as 
personnel from the employment units are participants in the mentoring, 
internships or training program. Similar questions arose under our 
former rule as to job fairs hosted by a corporate licensee. We would 
credit individual employment units with cohosting the job fair only to 
the extent that personnel from the unit were involved in planning and 
implementing the job fair. Employment units of the licensee could be 
credited with attendance at the job fair, but only if personnel from 
the employment unit with substantial responsibility in making hiring 
decisions at the unit in fact participated in the job fair. Although 
the corporate headquarters can assist in the implementation of menu 
options, personnel from the respective employment units must also be 
involved in implementation should they seek credit for participation.
    70. The EEO rules adopted by the R&O under Option A required 
broadcasters and MVPDs to engage in activities selected from a broad 
menu of options, such as job fairs, community events relating to 
broadcast employment, internship programs, scholarships, and similar 
activities. These Prong 3 activities are designed to go beyond the 
normal recruitment activities directed at filling particular vacancies 
in order to encourage outreach to persons who may not be aware of the 
opportunities available in broadcasting or the MVPD industry or have 
not yet acquired the experience to compete for current vacancies. 
Interested members of the community will not only have access to 
information concerning specific job vacancies, but also will be 
encouraged to develop the knowledge and skills to pursue them. Prong 3 
activities are intended as a method to reach segments of the community 
who might otherwise be omitted, possibly inadvertently, from vacancy-
specific recruitment efforts.
    71. Outreach Requirements of Religious Broadcasters. In the NPRM, 
we proposed to adopt a policy under which religious broadcasters that 
elected to apply a religious qualification to all of their employees 
were not required to comply with the broad outreach recruitment 
requirement or the menu options, but they must make reasonable, good 
faith efforts to recruit applicants, without regard to race, color, 
national origin or gender, among those who are qualified based on their 
religious belief or affiliation. We adopt that policy. This approach 
reflects our judgment that the more specific recruitment requirements 
described above may not be suited to recruitment that is limited to 
members of a certain religious faith. This requirement will also apply 
to religious broadcasters that elect to establish a religious 
qualification for some, but not all, of their positions, with respect 
to those positions that are subject to the religious qualification. 
Such religious broadcasters, with respect to other positions not 
subject to a religious qualification, must comply with prongs one and 
two. A religious broadcaster that treats five or more its full-time 
positions as non-religious are required to comply with the prong three 
menu options because, in regard to those positions, the station is in a 
comparable position to stations that have five or more full-time 
employees and none subject to a religious qualification. A religious 
broadcaster electing to treat none of its positions as subject to a 
religious qualification would be required to comply with all three 
prongs. Once an entity establishes its qualifications as a religious 
broadcaster, it has the discretion to define the religious 
qualification it seeks to establish. Thus, it may define the 
qualification generally as encompassing an entire denomination; more 
specifically as encompassing only persons who share a particular 
doctrinal belief; or even more specifically as encompassing only 
persons who are members of a particular church or religious 
organization. We do not intend to inquire into a religious 
broadcaster's definition of its religious qualification. All we require 
is that some effort be made to notify persons who meet the definition 
established by the religious broadcaster itself as to the availability 
of employment at the religious broadcaster's station.
    72. Outreach Requirements for International Stations. In the Recon, 
we indicated that international broadcast stations licensed pursuant to 
section 73, Subpart F, Sec.  73.701, et seq., would be subject to our 
EEO requirements, except for the public file requirement, given that 
such stations are not required to have a public file. We are continuing 
this requirement in the new rules.
    73. Recordkeeping. We will require broadcasters to retain 
documentation concerning their compliance with the three recruitment 
prongs, as proposed in the 2NPRM. This documentation must be retained 
by the station, but will not be routinely submitted to the Commission. 
The data must be provided to the Commission upon request in the event 
of an investigation or audit. The documentation includes: (1) Listings 
of all full-time job vacancies filled by the station employment unit, 
identified by job title; (2) for each such vacancy, the recruitment 
sources used to fill the vacancy (including, if applicable, 
organizations entitled to notification, which should be separately 
identified), identified by name, address, contact person and telephone 
number; (3) dated copies of all advertisements, bulletins, letters, 
faxes, e-mails, or other communications announcing vacancies; and (4) 
documentation necessary to demonstrate performance of the Prong 3 menu 
options, including sufficient information to disclose fully the nature 
of the initiative and the scope of the station's participation, 
including the station personnel involved. This documentation will allow 
us to verify compliance with our rules; we find no reason to believe 
that this minimal record retention requirement imposes an unreasonable 
burden on broadcasters or MVPDs.
    74. We also sought comments in the 2NPRM as to whether we should 
require the retention of documentation concerning the recruitment 
sources that referred hires and interviewees.

[[Page 680]]

    75. Our rule focuses on the process of recruitment, not the results 
thereof. It is nonetheless necessary to have some means of assessing 
whether the process has been conducted in good faith and whether the 
process is working as intended. We expect that broadcasters and MVPDs 
will analyze the results of their recruitment efforts to ensure that 
they actually achieve broad outreach. This requires knowledge of what 
recruitment sources have been productive in generating qualified 
applicants. Records of the recruitment sources of the most qualified 
applicants--those interviewed or hired--will be helpful in this regard. 
We will accordingly require that broadcasters and MVPDs maintain 
records reflecting the referral sources of interviewees and hires.
    76. We will not require the retention of records of the recruitment 
sources of applicants. Data concerning the recruitment sources of 
interviewees and hires is sufficient for the limited purpose of 
determining whether the program is being conducted in good faith and 
working as intended. Further, although it is minimally burdensome to 
ascertain the recruitment sources of interviewees and hires because 
they are readily available to provide this information if it is not 
reflected in the jobseeker's application, tracking the recruitment 
source of all applicants may require additional efforts to collect this 
information. This may place an inordinate burden on broadcasters and 
MVPDs, particularly in light of the fact that information concerning 
applicants in the aggregate does not necessarily reflect sources of 
qualified applicants.
    77. We will require that all records documenting outreach efforts 
be retained until the grant of the renewal application covering the 
license term during which the hire or activity occurs, except that, if 
a licensee acquired a station pursuant to an assignment or transfer 
that required Commission approval of FCC Form 314 or 315 during the 
license term, it need not retain records pertaining to the outreach 
efforts of a prior licensee. In order to minimize any burden associated 
with this requirement, records may be maintained in an electronic 
format, e.g., by scanning pertinent documents into a computer format. 
Absent a showing of extraordinary circumstances, we will not credit 
claimed activities that cannot be supported by records.
    78. In the case of religious broadcasters that apply a religious 
qualification to some or all of their hires, they need only retain, in 
the case of hires subject to the qualification, documentation as to the 
full-time vacancies filled, the recruitment sources used, the date each 
vacancy was filled, and the recruitment sources of the hires. This 
information is pertinent to monitoring whether the broadcaster made 
reasonable, good faith efforts to recruit among persons who meet the 
applicable religious qualification.
    79. Public File. We will adopt the requirement that broadcasters 
place in their public file annually, on the anniversary of the date 
they are due to file their renewal applications, an EEO public file 
report containing the following information: (1) A list of all full-
time vacancies filled by the station employment unit during the 
preceding year, identified by job title; (2) for each such vacancy, the 
recruitment source(s) used to fill the specific vacancy (including 
organizations entitled to notification of vacancies pursuant to Prong 
2, which should be separately identified), including the address, 
contact person, and telephone number of each source; (3) a list of the 
recruitment sources that referred the people hired for each full-time 
vacancy; data reflecting the total number of persons interviewed for 
full-time vacancies during the preceding year and, for each recruitment 
source used in connection with any such vacancies, the total number of 
interviewees referred by that source; and (4) a list and brief 
description of Prong 3 menu options implemented during the preceding 
year. Religious broadcasters with hires subject to a religious 
qualification need include, for full-time vacancies subject to the 
qualification, only the information called for in (1) and (2) above, 
along with information concerning the recruitment sources that referred 
the persons hired.
    80. Some broadcasters object that documentation concerning a 
station's EEO efforts should not be made available to the public. To 
the contrary, as we indicated in the R&O, the public has an important 
role in monitoring broadcaster compliance with our EEO rule. The EEO 
public file report is designed to facilitate meaningful public input. 
We recognize broadcaster concerns that the availability of this 
information could trigger unwarranted, even frivolous, filings. The 
possibility of abuses by some does not warrant depriving the public of 
its right to participate in the process of monitoring and enforcing our 
EEO rule, which directly impacts them.
    81. We will also require that broadcasters post the EEO public file 
report on their web site, if they have one. (Although the reports must 
be retained in the public file until final action has been taken on the 
station's next renewal application, all reports need not be maintained 
on the station's Web site. The requirement to post a station's EEO 
public file report on its Web site extends only to the current report. 
Also, we require only that the information contained in the EEO public 
file report be placed on the Web site. A scanned copy of the actual 
paper report contained in the public file need not be placed on the Web 
site; any legible format may be used.) The purpose of this requirement 
is to facilitate access by persons within the service area. We do not 
believe that our requirement to place EEO public file report 
information on a station's Web site is unreasonable or overly 
burdensome.
    82. Broadcasters are free to use any format in their public file 
report to avoid unnecessary duplication as long as the report clearly 
provides the information requested. For instance, if a broadcaster used 
the same recruitment sources for all its vacancies, it may maintain a 
single list of those sources, indicating that they were used for all 
vacancies. If a broadcaster used different sources for different 
vacancies, it may maintain a master list of all its sources and use a 
cross-reference system to show which sources were used for which 
vacancies.
    83. The EEO public file report need not be routinely submitted to 
the Commission, except in two instances. The EEO public file reports 
covering the two-year period preceding the filing of a renewal 
application must be submitted with that application as an attachment to 
Form 396, and will be one basis for our review of the broadcaster's 
compliance at renewal time. Also, for stations subject to mid-term 
reviews, the EEO public file reports for the two-year period preceding 
the mid-term review must be filed with the Commission and will be one 
basis for mid-term reviews. Renewal and mid-term review procedures are 
discussed in greater detail.
    84. Because the filing dates for the EEO public file reports are 
tied to the date of filing of renewal applications, the due dates will 
apply to a given station regardless of when the licensee acquired the 
station. Consequently, if there is a substantial change of ownership 
requiring approval pursuant to FCC Form 314 or FCC Form 315 during the 
one-year period covered by an EEO public file report, the new licensee 
must place the report in the public file by the due date. The 
information contained in the report would encompass only EEO efforts 
undertaken by the new licensee.

[[Page 681]]

    85. The EEO public file report will be filed for station employment 
units, rather than only for individual stations. A ``station employment 
unit'' will be defined, as it was under our former rule, as including a 
station or group of commonly owned stations in the same market that 
shared at least one employee. We will leave the definition of the 
``market'' to each licensee's good faith discretion. In making this 
determination a licensee should assess the technical coverage of its 
station(s); its marketing, promotional, and advertising practices; the 
pertinent market definitions adopted by public agencies or commercial 
services, such as Nielsen and Arbitron; and requests for notices of job 
vacancies from locally-based community groups. We expect a licensee to 
be able to provide a reasonable explanation for its determination 
should it become an issue. Finally, stations in the same market should 
be considered part of the same employment unit even if the licenses are 
held by different business entities that are commonly owned or 
controlled. We would view licensees as commonly owned for the purpose 
of the EEO rule if 50 percent or more of the voting control of the 
licensees is held by the same persons or entities.
    86. If a station is subject to a time brokerage agreement, the 
licensee's EEO public file report should include data concerning only 
its own recruitment efforts for full-time positions and not the efforts 
of the broker. If a licensee is a broker of another station or stations 
in the same market as an employment unit including a station or 
stations of which it is the licensee, the licensee's EEO public file 
report should include data concerning its EEO efforts at both the owned 
and brokered stations. If a licensee-broker does not own a station in 
the same market as the brokered station, then it shall include 
information concerning its EEO efforts at the brokered station in the 
EEO public file report for its own station that is geographically 
closest to the brokered station. The same policy will apply to EEO 
forms filed at mid-term (where applicable) (Form 397) and at renewal 
(Form 396), discussed. Non-licensee brokers are not required to file 
EEO public file reports because they are not licensees. If a broker is 
controlled directly or indirectly by a licensee or licensees, it should 
be considered a licensee-broker.
    87. We recognize that there may be some employment units that are 
located in markets that include stations licensed to communities in 
more than one state that are in different renewal groups. As a result, 
the date of the last renewal application filing differs for some 
stations in the same employment unit, so that there could arguably be 
two dates governing the placing of the EEO public file report in the 
public file because that date is based on the anniversary of the filing 
of the last renewal application. The same problem arises with respect 
to the filing of mid-term reports (FCC Form 397), discussed. It is not 
our intent that employment units comply with these requirements more 
than once merely because they include stations in more than one renewal 
group. We will generally expect employment units in this situation to 
proceed in accordance with the schedule for only one of the renewal 
groups included in their unit. There may be rare instances involving 
television stations when it will be necessary for us to request a 
supplemental filing in order to comply with the statutory requirement 
that we conduct mid-term reviews of television licensees' EEO 
compliance.
    88. An employment unit consisting of stations in more than one 
renewal group may select the renewal group that it will use for the 
purpose of determining the filing dates for its annual public file 
reports and its mid-term report, where applicable, in accordance with 
the following criteria. If the employment unit includes a television 
station, the dates for the television station should ordinarily govern, 
in order to accommodate the statutory requirement for mid-term review 
of television licensees' EEO compliance. Apart from this situation, the 
renewal group that will determine the employment unit's EEO filing 
schedule should be selected so as to minimize the time between the date 
for placing the EEO public file report in the public file and the date 
for the filing of renewal applications for stations located in renewal 
groups that have different renewal filing dates than the renewal group 
used to determine the employment unit's EEO filing schedule.
    89. There may also be circumstances in which an employment unit 
consists of television and radio stations that are part of the same 
renewal group, except that the renewal schedule for radio is one year 
earlier than the schedule for television. In these circumstances, the 
filing schedule for television stations should be used for purposes of 
filing the mid-term report (FCC Form 397) for the employment unit, if 
it is subject to the requirement to file a mid-term report. This report 
would cover all stations in the employment unit. Thus, there would be 
no need to file a separate mid-term report for the radio station(s). 
Because the date for placing the annual public file report in the 
public file is the same for both radio and television, the most recent 
public file report should be submitted with the renewal applications 
for both television and radio stations in the employment unit.
    90. Renewal applications must still be filed separately for each 
station in accordance with the regular schedule for the station's 
renewal group. FCC Form 396, the EEO form submitted with the renewal 
application, discussed below, requires that the licensee attach the EEO 
public file report that is ordinarily placed in the public file 
simultaneously with the filing of the renewal application, as well as 
the report for the prior year. When a station is part of an employment 
unit that is using the EEO filing schedule for another renewal group, 
the station should submit with its FCC Form 396 the most recent EEO 
public file report prepared for the employment unit. If the licensee 
feels that the most recent EEO public file report does not accurately 
reflect the employment unit's EEO program as of the date of the filing 
of the renewal application, it should disclose any pertinent facts as 
part of the narrative statement also required by the FCC Form 396.
    91. Low power television (LPTV) stations are subject to the 
broadcast EEO rule by virtue of a cross-reference contained in Sec.  
74.780 of the Commission's Rules. (Licensees of low power FM (LPFM) 
stations are subject to the Commission's prohibition against employment 
discrimination. See 47 CFR 73.881. LPFM licensees are not required to 
comply with any EEO program requirements. As we stated in the LPFM R&O, 
``[b]ecause we anticipate that the vast majority of this class of 
licensees will employ very few (if any) full-time, paid employees, we 
do not intend to require LPFM licensees to comply with any EEO program 
requirements we adopt in our rulemaking proceeding.'') LPTV stations 
are not required to maintain a public file. As indicated in the Recon, 
we will not expect them to prepare an EEO public file report, although 
LPTV stations with five or more full-time employees must comply with 
the recordkeeping requirements. Class A television stations are subject 
to the requirement to maintain a public file and are fully subject to 
the EEO rule, including the requirement to prepare an EEO public file 
report.
    92. Enforcement. We will adopt the enforcement process proposed in 
the 2NPRM, which is similar to that adopted in the R&O, except that we 
are eliminating the requirement that broadcasters certify compliance 
with the EEO rule in the second and sixth years of their license term. 
We will conduct

[[Page 682]]

mid-term review of television stations with five or more full-time 
employees and radio stations with more than ten full-time employees, 
using FCC Form 397. We treat television stations differently from radio 
stations because of the requirements of section 334 of the 
Communications Act which does not permit us to exempt television 
stations with five to ten full-time employees from the mid-term 
requirement.
    93. We will also monitor EEO compliance through random audits and 
targeted investigations resulting from information received as to 
possible violations. Each year we will select for audit approximately 
five percent of all licensees in the radio and television services, 
ensuring that, even though the number of radio licensees is 
significantly larger than television licensees, both services are 
represented in the audit process. Initially, the inquiry may request 
the contents of the station's public file. Further inquiry or inquiries 
may be conducted requesting additional documentation of recruitment 
efforts that is not in the public file. Based on the circumstances of 
the case, the inquiry could potentially include, but not be limited to, 
(1) A request for data covering any period of the license term; and (2) 
interviews of witnesses, including any complainant and present or 
former station employees.
    94. Licensees will be subject to a variety of sanctions and 
remedies for EEO rule violations or deficiencies. Some examples of 
violations or deficiencies might include: engaging in employment 
discrimination in hiring or promotions; failure to file a mid-term 
review when due; failure to file an EEO public file report when due; 
failure to file Form 396 when due; misrepresentation of outreach 
efforts or other information; non-responsiveness or evasion in 
responding to a written Commission inquiry; failure to recruit for all 
vacancies absent exigent circumstances; failure to widely disseminate 
information concerning vacancies for full-time positions; failure to 
analyze routinely the adequacy of the various program elements in 
achieving broad outreach to all segments of the community; failure to 
undertake the required Prong 3 menu options; and failure to notify 
organizations that request vacancy notices. Also, it may constitute a 
violation of the EEO rule if, based on all of the evidence, we 
determine that a licensee has attempted to evade our requirements 
through token or sham efforts.
    95. We take the EEO rules and obligations we establish here very 
seriously, and fully expect broadcasters and MVPDs to do the same. We 
remind licensees that it is as true today as it was 20 years ago that a 
``documented pattern of intentional discrimination would put seriously 
into question a licensee's character qualification to remain a 
licensee.'' We intend to carefully monitor compliance with our EEO 
rules. Sanctions and remedies that may be issued by the Commission for 
deficiencies in licensees' EEO compliance include admonishments, 
reporting conditions, forfeitures, short term renewal of license, or 
designation for hearing for possible revocation of license or denial of 
renewal. The appropriate sanction or remedy will be determined on a 
case-by-case basis. Sanctions will be greater in cases involving 
recidivism, continuous EEO non-compliance, or intentional 
discrimination. In particular, if sufficiently egregious violations are 
found, we will not hesitate to designate for hearing.
    96. We will also be taking steps to ensure that broadcasters, 
MVPDs, and the public are aware of and able to comply with the EEO 
rules and policies. First, we will continue to maintain an EEO page on 
the Commission's Web site. In addition, our Consumer & Governmental 
Affairs Bureau (CGB) will provide information to the public on the new 
rules adopted by the Commission. CGB will make a factsheet on the rules 
available to the public through our consumer centers and our Web site. 
Commission staff will continue to participate in conferences held 
throughout the country that deal with broadcast and MVPD EEO issues. 
Finally, as always, our EEO staff is available to answer more specific 
questions and provide informal guidance regarding the rules. We 
encourage the industry and the public to take advantage of these 
resources.
    97. Forms Relating to EEO Compliance. We readopt the forms adopted 
in the R&O, incorporating the changes discussed above. Primarily, we 
eliminate the portion of the forms that provided for an election 
between Option A and Option B because our present rule does not provide 
for an election. We also will not reissue the Initial Election 
Statement, which required a licensee to choose between Option A and 
Option B. We are addressing here only forms relating to our EEO 
outreach requirements. As indicated, FCC Form 395-B, the Annual 
Employment Report, which is being deferred, is unrelated to the 
implementation and enforcement of our EEO program.
    98. We readopt, with modifications, FCC Form 396, which is filed by 
broadcasters as part of their renewal applications. We will delete the 
Option A/Option B election. The form as adopted by the R&O also 
required the broadcaster to certify that it complied with the EEO rule 
during the two-year period preceding the filing of the report; to 
attach a copy of its EEO public file for the preceding year; and to 
provide a narrative statement demonstrating how the station achieved 
broad outreach during the preceding two years. The licensee must still 
certify to the accuracy of the forms it submits to the Commission; it 
just need not draw a legal conclusion as to whether the facts it 
submits demonstrate compliance with our rules. We will modify the form 
to eliminate the certification requirement. We will require the 
submission of the EEO public file report due at the time of the filing 
of the Form 396 along with the form filed one year before that. This is 
because we allow two years for the performance of the Prong 3 menu 
options. We recognize that in some instances a station may have been 
sold during the prior two years. In that case, the licensee at the time 
of renewal need only submit EEO public file reports relating to its own 
operation of the station.
    99. The version of Form 396 adopted by the R&O included the 
following question: ``Have any complaints been filed before any body 
having competent jurisdiction under federal, state, territorial or 
local law, alleging unlawful discrimination in the employment practices 
of the station(s)?'' In the 2NPRM, we stated that the form required the 
reporting of ``pending'' discrimination complaints. We did not clarify 
the period of time to which the word ``pending'' referred, e.g., 
pending at any time during the most recent license term or pending at 
the time a renewal application is filed. We will require the reporting 
of all complaints filed during the most recent license term, consistent 
with our past practice. This will avoid unnecessary litigation and 
involves little additional burden. Form 396 requests information 
concerning the disposition or current status of the complaint, and the 
Commission will consider complaints only to the extent they are deemed 
relevant.
    100. FCC Form 396-A is to be used for applications for the 
construction of a new broadcast station or for the sale of an existing 
broadcast station. We will readopt this form but delete references to 
the Option A/Option B election.
    101. We adopted in the R&O FCC Form 397, ``Broadcast Statement of 
Compliance,'' which was to be submitted in the second, fourth, and 
sixth years of the license term for the

[[Page 683]]

purpose of certifying whether the licensee's station employment unit 
complied with the EEO rule during the preceding two years. In the 
2NPRM, we proposed to use the Form 397 only for the purpose of filing 
mid-term reviews, renaming it the ``Broadcast Mid-term Report.'' We 
will adopt this proposal. Form 397 will be filed by licensees subject 
to mid-term review. We will modify Form 397 to eliminate the reference 
to an election. In addition, consistent with our discussion concerning 
Form 396, we will eliminate the compliance certification requirement 
and instead require submission of EEO public file reports for the two 
years preceding the filing (unless the earlier report does not pertain 
to the current licensee because of a sale). Two groups of television 
stations would be required by our new rules to file mid-term reports in 
2003: New Jersey and New York filings would be due by February 1, 2003, 
and Delaware and Pennsylvania filings would be due by April 1, 2003. 
Because of the extremely short time between the anticipated effective 
date of the rules and the filing dates, we will not require stations in 
these groups to file mid-term reports in 2003.
    102. Provisions for Small Stations and Small Markets. The rule 
adopted by the R&O exempted from the outreach provisions (but not the 
nondiscrimination provisions) station employment units that had fewer 
than five full-time (30 hours per week or more) employees. As noted, a 
``station employment unit'' referred to a station or group of commonly 
owned stations in the same market that shared at least one employee. We 
will include this exemption in our new rule. We also provided in the 
R&O that station employment units with five to ten full-time employees 
would be required to perform only two, rather than four, Prong 3 menu 
options every two years. We will incorporate this requirement in our 
new rule. In addition, we will extend it to certain small market 
stations. We further provided in the R&O that radio station employment 
units with five to ten full-time employees would be exempt from the 
mid-term review requirement. We did not extend this relief to 
television stations because of the requirements of section 334 of the 
Communications Act. We will include this exemption for radio in our new 
rule.
    103. In the 2NPRM, we asked whether we should expand the exemption 
for small stations to include employment units with ten or fewer 
employees. We also asked whether we should modify the requirement that 
stations with more than 10 full-time employees complete four menu 
options every two years. Smaller stations with five to 10 or fewer 
full-time employees are required to complete two menu options every two 
years. We further asked whether we should treat all stations with five 
or more full-time employees that are located in smaller markets like 
smaller stations. Having reviewed the record, we find no basis for 
increasing the pertinent exemptions, except that we find some 
modification warranted with respect to the menu option requirements 
applicable to stations in smaller markets.
    104. With one exception, we find no basis in the record to provide 
additional exemptions from our rule beyond those referenced. First, we 
reject as unsupported in the record any suggestion that the rule we 
adopt today imposes unreasonable burdens on small broadcasters. As a 
general matter, the rule imposes minimal burdens. In addition, small 
broadcasters are permitted to perform fewer menu options, and most 
likely will have fewer hires, resulting in fewer records to keep and 
fewer job vacancies requiring recruitment under the rule. Further, as 
we found in the R&O, small stations provide entry-level opportunities 
in the broadcast industries and make up approximately \1/3\ of the 
broadcast industry. If we were to exempt such a large number of 
stations from the EEO rule--stations that may provide entry level 
opportunities for people new to broadcasting--we would undermine the 
central purpose of our EEO rule. We decline to do so.
    105. We find that it would be appropriate, to modify our Prong 3 
menu option requirement for stations in smaller markets. We recognize 
that smaller markets may not have the resources in the community to 
support some of the activities contemplated in Prong 3. We did not 
address this problem in the R&O because small market stations that 
found the menu option requirement burdensome could elect to proceed 
under Option B. That alternative will not be available under our new 
rule. We will accordingly provide that small market stations will be 
required to perform only two, rather than four, menu options during a 
two year period.
    106. We will define the scope of this exemption as extending to any 
station employment unit consisting solely of a station or stations 
licensed to a community that is located in a county that is outside of 
all metropolitan areas, as defined by OMB, or is located in a 
metropolitan area that has a population of fewer than 250,000 persons. 
This will operate to reduce requirements for stations in most markets 
below the 100 largest markets using definitional criteria that are 
readily ascertainable from government sources. (The most recent OMB 
definition of metropolitan areas is contained in OMB Bulletin No. 99-04 
(June 30, 1999). See http://www.whitehouse.gov/omb/inforeg/msa-bull99-04.html. Metropolitan areas with a population of fewer than 250,000 are 
defined as Level C and D MSAs or primary MSAs (PMSAs). OMB Bulletin No. 
99-04 may be used initially to define areas subject to this provision. 
OMB has adopted new metropolitan area standards and will announce 
definitions of areas based on the new standards and Census 2000 data in 
2003. Standards for Defining Metropolitan and Micropolitan Statistical 
Areas, (65 FR 82228, December 27, 2000).)
    107. In the Recon, we adopted a policy pursuant to which an owner 
who has a controlling interest (50 percent or greater voting control) 
in a licensee would not be considered a station employee for purposes 
of the EEO rule, even if he or she worked at the station. We concluded 
that such an owner's employment at the station would be more an 
incident of ownership rather than a normal employment relationship 
because the owner could not be in any normal sense hired or fired. We 
declined to extend this policy to lesser ownership interests because 
the circumstances pertaining to their employment might vary widely and 
we could not assume that the employment was primarily an incident of 
ownership. Fletcher, Heald & Hildreth, P.L.C. (``FHH''), on behalf of 
its clients, filed a petition for reconsideration, urging that owners 
with 20 percent or greater interests should not be treated as 
``employees'' for purposes of the EEO rule. We will not consider owners 
holding a 20 percent or greater voting interest in a licensee as 
station ``employees'' for EEO purposes. This will be subject to the 
proviso, however, that no single owner has positive control (greater 
than 50 percent voting control) of the licensee. In that circumstance, 
the principal enjoying positive control would be in a position to 
determine whether other stockholders could be employed at the station, 
and only he or she could properly claim employment as an incident of 
ownership. Absent that circumstance, it is reasonable to believe that a 
20 percent or greater owner's employment position is an incident of 
ownership. Someone who owns a 20 percent interest in a licensee company 
is not truly an

[[Page 684]]

employee of the licensee, holding a position that would be subject to 
recruitment, and thus should be permitted to work at the station 
without first requiring outside recruitment. FHH suggests that we 
should, as a safeguard, require that the owners have made a capital 
contribution. We do not find this necessary. Legitimate ownership 
interests may exist that do not involve a capital contribution. In the 
event of alleged abuse of this exception, we will consider all relevant 
factors, including the extent of an asserted owner's capital 
contribution to determine the legitimacy of a claimed ownership 
interest.
3. MVPD EEO Program Requirements
a. Rules and Policies
    108. We will adopt substantially the same outreach program, 
recordkeeping and reporting requirements for MVPDs, as we have for 
broadcasters. The only distinctions will arise in light of the specific 
requirements imposed by section 634 of the Communications Act. We 
monitor the EEO programs pursuant to annual reports which have 
contained employment and program data, as required by statute. We will 
be creating a new form that will contain only program data. As 
mentioned, we are deferring consideration of a new form for MVPDs that 
requires employment data. Because our review of MVPD EEO compliance is 
an annual review pursuant to section 634, we define the Prong 3 menu 
options requirement for MVPDs in terms of performing two initiatives 
annually for those with more than ten full-time employees or one 
initiative annually for those with six to ten full-time employees. With 
respect to the definition of ``community'' for the purpose of 
determining broad outreach, we are leaving the definition of 
``community'' for this purpose to the reasonable good faith discretion 
of the entity concerned. We will apply the same policy to MVPDs. MVPDs 
should use pertinent criteria, including the location of the system, 
pertinent market definitions adopted by public agencies or commercial 
services, and requests for notices of job vacancies from locally-based 
community groups. They should also consider what areas actually produce 
job applicants. MVPDs should engage in broad outreach throughout the 
entire local community from which they can reasonably expect to elicit 
applicants, whether or not that community is defined by its franchise 
area.
    109. MVPD compliance with the EEO requirements is monitored 
pursuant to annual reports filed by MVPDs: FCC Form 395-A (for cable 
operators) and FCC Form 395-M (for other MVPDs). The only substantive 
modification required by the new rules adopted today is the elimination 
of the Option A/Option B election. In addition, we will combine these 
forms. The two forms are virtually identical except for a section in 
the Form 395-A requiring cable operators to list the communities in 
which they operate. In view of the similarity of the two forms, we do 
not find any necessity for having separate forms for cable operators 
and other MVPDs. Both forms request information concerning the entity's 
EEO outreach program. In addition, both forms request information as to 
the gender and racial/ethnic composition of the entity's workforce, 
analogous to the broadcast Form 395-B. As in the broadcast context, the 
data concerning the entity's workforce is no longer pertinent to the 
administration of our EEO outreach requirements. We will adopt at this 
time a single form, FCC Form 396-C, which will include the portions of 
Forms 395-A and 395-M relating to EEO outreach, but not the portion 
eliciting data concerning the entity's workforce, for use by all MVPDs. 
We will consider the adoption of a new form for eliciting workforce 
data from MVPDs as part of the future R&O in which we will also address 
the broadcast Form 395-B.

C. Constitutional Issues

    110. The court in Association upheld Option A of the EEO rule as 
constitutional because it found that broadcasters were not pressured to 
recruit minorities and women under Option A. The recruitment outreach 
provisions we are adopting in this 2R&O and 3rd NPRM are the same in 
all material respects as the basic requirements of Option A. In 
enforcing the EEO rule, the Commission will not pressure employers to 
favor anyone on the basis of race, ethnicity, or gender. As a race and 
gender neutral regulation, the EEO rule we are adopting today raises no 
equal protection concerns.

V. Conclusion

    111. In this 2R&O, we adopt a new broadcast EEO rule and set of 
policies, and we amend our MVPD EEO rules and policies. We remain 
committed both to prohibiting discrimination in employment and 
requiring broad and inclusive outreach in recruitment by broadcasters 
and cable entities.

VI. Procedural Matters

    112. Final Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act (``RFA''), 5 U.S.C. 603, an Initial 
Regulatory Flexibility Analysis (``IRFA'') was incorporated in the 
2NPRM. The Commission sought written public comments on the possible 
significant economic impact of the proposed policies and rules on small 
entities in the NPRM, including comments on the IRFA. Pursuant to the 
Regulatory Flexibility Act, 5 U.S.C. 604, a Final Regulatory 
Flexibility Analysis (``FRFA'') is contained in Appendix B.
    113. Paperwork Reduction Act of 1995 Analysis. The actions herein 
have been analyzed with respect to the Paperwork Reduction Act of 1995 
and found to impose new or modified reporting and recordkeeping 
requirements or burdens on the public. Implementation of these new or 
modified reporting and recordkeeping requirements will be subject to, 
and become effective upon, approval by the Office of Management and 
Budget as prescribed by the Act.

VII. Final Regulatory Flexibility Analysis

    114. As required by the RFA, an IRFA was incorporated into the 
2NPRM in this proceeding. The Commission sought written public comments 
on the possible significant economic impact of the proposed policies 
and rules on small entities in the 2NPRM, including comments on the 
IRFA. This Final Regulatory Flexibility Analysis (FRFA) conforms to the 
RFA.

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

    115. This 2R&O adopts new equal employment opportunity (EEO) rules 
and policies for broadcasters and multi-channel video program 
distributors (MVPDs) consistent with the decision of the U.S. Court of 
Appeals for the District of Columbia Circuit in MD/DC/DE Broadcasters 
Association v. FCC, 236 F.3d 13, rehearing den. 253 F.3d 732 (D.C. Cir. 
2001), cert. denied, 122 S.Ct. 920 (2002) (Association). The Court 
therein found unconstitutional one of two options for achieving broad 
outreach provided by the broadcast EEO outreach requirements adopted in 
the R&O, and codified as Sec.  73.2080 of the Commission's rules, 47 
CFR 73.2080. The Court found the option invalid because it found that 
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 rule, although not invalid, could 
not be severed from the one unconstitutional option and therefore it 
vacated the entire rule.

[[Page 685]]

B. Summary of Significant Issues Raised by the Public Comments in 
Response to the IRFA

    116. One comment was filed specifically in response to the IRFA. 
The American Cable Association (ACA) proposes the following relief for 
smaller MVPDs serving fewer than 15,000 subscribers or, in the 
alternative, employing ten or fewer employees: an exemption from the 
EEO outreach requirements, streamlined recordkeeping and reporting 
requirements, and a streamlined FCC Form 395-A (Cable Television Annual 
Employment Report). ACA states that for many smaller companies, 
compliance with EEO outreach, recordkeeping, and reporting requirements 
imposes substantial administrative burdens and costs. ACA also filed 
these same comments regarding small MVPDs in response to the 2NPRM. We 
note that the 2R&O considers ACA's concerns and provides relief to 
small MVPD employment units.

C. Recording, Recordkeeping, and Other Compliance Requirements

    117. The purpose of this rulemaking is to replace our prior EEO 
rule that was found in part to be unconstitutional. Hence, the 
recording, recordkeeping, and compliance requirements of the new rule 
will not exceed those under the former rule. We note that the Small 
Business Administration (SBA) approved our approach for small broadcast 
stations and small MVPDs under our former rule. Generally, no special 
skills will be necessary to comply with the requirements.
    118. The 2R&O requires that broadcasters and MVPDs recruit for all 
full-time job vacancies except in exigent circumstances, that some EEO 
materials be kept in the public inspection file, and that all 
broadcasters and MVPDs adhere to the EEO rules' general anti-
discrimination provisions.
    119. In addition, broadcasters and MVPDs must undertake two 
additional recruitment measures. The first recruitment measure requires 
broadcasters and MVPDs to provide notification of full-time job 
vacancies to any requesting organization if the organization is 
involved in assisting job seekers. Depending on the size or location of 
a station's staff, the second recruitment measure requires broadcasters 
to engage in at least four (for station employment units with more than 
ten full-time employees in larger markets) or two (for station 
employment units with five to ten full-time employees or if they are 
located in a small market) 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 and mentoring 
programs designed to enable station personnel to acquire skills that 
could qualify them for higher level positions; 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 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; providing assistance to outside non-profit entities in the 
maintenance of web sites that provide counseling on the process of 
searching for broadcast employment and/or other career development 
assistance pertinent to broadcasting; providing training to management 
level personnel as to methods of ensuring equal employment opportunity 
and preventing discrimination; providing training to personnel of 
outside organizations interested in broadcast employment opportunities 
that would enable them to better refer job candidates for broadcast 
positions; and participation in other activities designed by the 
station employment unit to further the goal of disseminating 
information about employment opportunities in broadcasting to job 
candidates who might otherwise be unaware of such opportunities. MVPD 
units in larger markets with more than ten full-time employees engage 
in at least two options from the recruitment measures menu every year 
and MVPD units with six to ten full-time employees or those located in 
small markets engage in at least one option every year.
    120. Also, broadcasters and MVPDs must retain records to 
demonstrate that they have recruited for all full-time permanent 
positions. Such recordkeeping includes: 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 and recruitment 
source of each hire, the number of interviewees referred by each 
recruitment source, and documentation showing proof of participation in 
menu options. Broadcasters' records must be maintained until grant of 
the renewal application for the term during which the hiring activity 
occurred. MVPDs would retain their records for a minimum of seven 
years. In order to lessen any burdens, records may be maintained in an 
electronic format, e.g., by scanning pertinent documents into a 
computer format.
    121. Stations and MVPDs must place annually the following EEO 
records in their local public inspection file: listings of full-time 
vacancies filled during the preceding year, recruitment sources used 
for each vacancy, 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, the total number of interviewees 
referred by each recruitment source, a list of the recruitment source 
that referred each full-time hiree, and a brief description of the menu 
option items undertaken during the preceding year. Station units retain 
the materials in their file until final action has been taken on the 
station's next license renewal application, and cable entities retain 
their materials for a period of five years.
    122. Most broadcasters must 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 MVPDs with 
six or more full-time employees submit copies of their EEO public 
inspection file to the Commission every five years. Broadcasters' 
submissions cover only the last two years of EEO activity. MVPDs' 
submissions cover only the last

[[Page 686]]

year of EEO activity. Broadcasters must post their current EEO public 
file report on their web site, if they have one.
    123. Also, broadcasters subject to mid-term review must file Form 
397 (Broadcast Mid-Term Report) and place a copy of the Report in the 
public inspection file. Broadcasters must also place a copy of Form 396 
(Broadcast EEO Program Report) and Form 396-A (Broadcast Model EEO 
Program Report for the construction or sale of a station) in the public 
inspection file.
    124. We also note that we have provided relief to broadcast and 
MVPD entities located in small markets. While this is not specifically 
a small entity relief, this action also lessens compliance burdens.

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

1. Definition of a ``Small Business''
    125. The new rules would apply to broadcast stations and MVPDs. 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 rules adopted herein. Under the RFA, small entities may 
include small organizations, small businesses, and small governmental 
jurisdictions. 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 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.''
    126. A small organization is generally ``any not-for-profit 
enterprise which is independently owned and operated and is not 
dominant in its field.'' Nationwide, as of 1992, there were 
approximately 275,801 small organizations. Finally, ``small 
governmental jurisdiction'' generally means ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than 50,000.'' As of 1992, there 
were approximately 85,006 such jurisdictions in the United States. This 
number includes 38,978 counties, cities, and towns; of these, 37,566, 
or 96 percent, have populations of fewer than 50,000. The United States 
Bureau of the Census (Census Bureau) estimates that this ratio is 
approximately accurate for all governmental entities. Thus, of the 
85,006 governmental entities, we estimate that 81,600 (91 percent) are 
small entities.
2. Issues in Applying the Definition of a ``Small Business''
    127. 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.
    128. 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. 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.
    129. 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.
    130. 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. 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. The SBA considers factors such as ownership, 
management, previous relationships with or ties to another concern, and 
contractual relationships, in determining whether affiliation exists. 
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
    131. The rules to be adopted pursuant to this 2R&O will apply to 
broadcast television and radio stations. The SBA defines a television 
broadcasting station that has no more than $12.0 million in annual 
receipts as a small business. Television broadcasting stations consist 
of 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 are 
establishments primarily engaged in television broadcasting and which 
produce taped television program materials. Separate establishments 
primarily engaged in producing taped television program materials are 
classified under other North American Industry Classification (NAICS) 
numbers.
    132. There were 1,695 full-service television stations operating as 
of December 2001. According to Census Bureau data for 1997, there were 
906 Television Broadcasting firms, total, that operated for the entire 
year. Of this total, 734 firms had annual receipts of $9,999,999.00 or 
less and an additional 71 had receipts of $10 million to 
$24,999,999.00. Thus, under this standard, the majority of firms can be 
considered small.
    133. The SBA defines a radio broadcasting station that has no more 
than $6 million in annual receipts as a small business. A radio 
broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Radio broadcasting stations which primarily are engaged in 
radio broadcasting and which produce radio program materials are 
similarly included. Radio stations which are

[[Page 687]]

separate establishments and are primarily engaged in producing radio 
program material are classified under another NAICS number. According 
to Census Bureau data for 1997, there were 4,476 Radio Stations 
(firms), total, that operated for the entire year. Of this total 4,265 
had annual receipts of $4,999,999.00 or less, and an additional 103 
firms had receipts of $5 million to $9,999,999.00. Under this standard, 
the great majority of firms can be considered small.
    134. The 2R&O also amends EEO rules applicable to MVPDs. SBA has 
developed a definition of a small entity for cable and other program 
distribution, which includes all such companies generating $12.5 
million or less in annual receipts. This definition includes direct 
broadcast satellite services (DBS), multipoint distribution systems 
(MDS), and local multipoint distribution service (LMDS). According to 
Census Bureau data for 1997, there were 1,311 firms within the industry 
category Cable and Other Program Distribution, total, that operated for 
the entire year. Of this total, 1,180 firms had annual receipts of 
$9,999,999.00 or less, and an additional 52 firms had receipts of $10 
million to $24,999,999.00. Under this standard, the majority of firms 
can be considered small.
    135. 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. 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. Since then, some of those 
companies may have grown to serve more than 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.
    136. 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.'' The Commission has determined that there are 67,700,000 
subscribers in the United States. 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. Based on 
available data, we find that the number of cable operators serving 
677,000 subscribers or less totals approximately 1,450. Since we do not 
request nor collect information on whether 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.
    137. MDS: MDS involves a variety of transmitters, which are used to 
relay programming to the home or office. 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. This definition of a small entity in the context of MDS auctions 
has been approved by the SBA. These stations were licensed prior to 
implementation of section 309(j) of the Communications Act of 1934, as 
amended. Licenses for new MDS facilities are now awarded to auction 
winners in Basic Trading Areas (BTAs) and BTA-like areas. 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.
    138. 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. 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. These regulations defining ``small entity'' in the 
context of LMDS auctions have been approved by the SBA. 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.
    139. DBS: Because DBS provides subscription services, it falls 
within the SBA-recognized definition of ``Cable and Other Program 
Distribution.'' This definition provides that a small entity is one 
with $12.5 million or less in annual receipts. Currently, there are 
nine DBS authorizations, 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.
    140. 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. 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, approximately 
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

    141. 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.
    142. This 2R&O sets forth the Commission's new EEO rules and 
procedures, and considers the significant alternatives presented in the 
comments. We have determined that our finalized rules fulfill our 
public interest goals while maintaining minimal

[[Page 688]]

regulatory burdens and ease and clarity of administration.
    143. The 2NPRM proposed to exempt small staff stations from 
specific EEO recordkeeping and reporting requirements as had been the 
case under our previous EEO rule. Under our former EEO rule, station 
employment units with fewer than five full-time employees were exempt 
from the rule's outreach provisions; station employment units with five 
to ten full-time employees performed only two, rather than four, menu 
options every two years; and radio station employment units with five 
to ten full-time employees were exempt from the mid-term review 
requirement. In addition, MVPD employment units employing six to ten 
full-time employees performed only one menu option each year as opposed 
to the two options required otherwise. MVPDs with fewer than six full-
time employees were not required to demonstrate compliance with the EEO 
program requirements. The 2R&O adopts this same relief. Thus, the EEO 
rule does not impose unreasonable burdens on small broadcasters or 
MVPDs.
    144. We provide this relief because entities with small staffs have 
limited personnel and financial resources to carry out EEO 
requirements. The exception for small businesses provides them with 
some relief of any recordkeeping and reporting costs. We believe that 
the relief to small broadcasters and MVPDs balances the importance of 
deterring discrimination and achieving broad outreach in broadcast and 
MVPD employment practices against the need to maintain minimal 
regulatory burdens.
    145. The 2NPRM asked whether the Commission should increase the 
number of employees below which broadcasters would be exempt from the 
EEO outreach requirements to include employment units with ten or fewer 
employees. We also asked whether to increase the threshold for the 
lesser number of menu options, or permit the lesser number for stations 
in smaller markets. As noted, we received one comment directly in 
response to the IRFA. In addition, we received a few general comments 
that are pertinent. As discussed in the 2R&O, the National Association 
of Broadcasters (NAB) supports exempting stations with fewer than ten 
full-time employees. NAB explains that such stations face unique 
obstacles in complying with our rule because of a lack of personnel and 
resources, difficulties in competing with larger stations, and a lack 
of access to resources necessary to implement menu options. NAB also 
contends that stations in smaller markets face difficulties similar to 
those facing stations with fewer that ten full-time employees. The 
Association of Public Television Stations supports an exemption from 
the EEO rule for stations with ten or fewer employees because of the 
funding problems of small public television stations, especially those 
outside of top 100 markets, and difficulties experienced in attracting 
and retaining minority employees. The Local Television Group (LTVG) 
asks the Commission to exempt stations with fewer than 100 employees, 
in order to parallel Equal Employment Opportunity Commission rules. 
Minority Media and Telecommunications Council (MMTC), the National 
Organization for Women (NOW), American Women in Radio and Television 
(AWRT), the National Association for the Advancement of Colored People 
(NAACP), and the Lawyers' Committee for Civil Rights Under Law oppose 
an increase in the exemptions, citing primarily the opportunity for 
entry into the industry provided by small stations.
    146. The ACA asks for an exemption from the EEO outreach 
requirements, streamlined recordkeeping and reporting requirements, and 
a streamlined FCC Form 395-A (Cable Television Annual Employment 
Report) for cable systems with fewer than 15,000 subscribers or, in the 
alternative, employing ten or fewer employees. ACA explains that the 
Commission previously provided relief to systems with fewer than 15,000 
subscribers in the context of rate regulation, and that compliance with 
EEO outreach and recordkeeping imposes substantial administrative 
burdens for smaller cable companies.
    147. Fletcher Heald & Hildreth, P.L.C. (FH&H) requests that the 
Commission adopt a policy that when an owner has a controlling interest 
(20% or greater voting control) in a licensee, he or she would not be 
considered a station employee for purposes of the EEO rule, even if he 
or she in fact worked at the station.
    148. We recognize that smaller markets may not have the resources 
in the community to support many of the required menu options. 
Accordingly, the EEO rule adopted in the 2R&O provides that small 
market systems will be permitted to perform only two, rather than four, 
menu options during a two-year period.
    149. The EEO rule also will not consider owners holding a 20% or 
greater voting interest in a licensee as station employees for EEO 
purposes. This policy could assist small operators by reducing the 
number of full-time employees an entity would have when assessing its 
eligibility for a small entity exemption or other small business 
relief.
    150. We find no basis in the record to provide any additional 
exemptions from our rule. Generalized claims as to the alleged burdens 
by commenters are unsupported by evidence. The rule we are adopting 
today does not impose unreasonable burdens on small entities. Nor does 
the rule impose hardships comparable to those involved in rate 
regulation. Further, as we found in the R&O, small entities provide 
much needed entry-level employment opportunities in the industry.
    151. With respect to streamlining reporting/recordkeeping 
requirements, we will replace Form 395-A with a new form, the FCC Form 
396-C. MVPD compliance with the EEO rule's requirements is monitored 
pursuant to annual reports filed by MVPDs which must be placed in an 
entity's public file. The Form 396-C requires information concerning 
the entity's EEO outreach program and not its workforce. We will 
consider the adoption of a new form eliciting workforce data in a 
future R&O.
    152. In order to lessen any burdens, the 2R&O does not require the 
retention of records of the recruitment sources of applicants as this 
may require additional efforts to contact applicants who did not 
provide the information in the application. Also, records may be 
conveniently maintained in an electronic format, e.g., by scanning 
pertinent documents into a computer format.
Report to Congress
    153. The Commission will send a copy of the 2R&O, including this 
FRFA, in a report to be sent to Congress pursuant to the Congressional 
Review Act, 5 U.S.C. 801(a)(1)(A). In addition, the Commission's 
Consumer and Governmental Affairs Bureau, Reference Information Center, 
will send a copy of this 2R&O, including this FRFA, to the Chief 
Counsel for Advocacy of the Small Business Administration. A copy of 
the 2R&O and FRFA (or summaries thereof) will also be published in the 
Federal Register. See 5 U.S.C. 604(b).
Ordering Clause
    154. Pursuant to the authority contained 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, 2R&O is adopted, 
and part 73 and part 76 of the Commission's rules are amended. It is 
our intention in adopting these rule

[[Page 689]]

changes that, if any provision of the rules, or the application thereof 
to any person or circumstance, is held to be unlawful, the remaining 
portions of the rules not deemed unlawful and the application of such 
rules to other persons or circumstances shall remain in effect to the 
fullest extent permitted by law.
    155. The late-filed comments and reply comments in this proceeding 
are considered as part of the record in this proceeding.
    156. Pursuant to the Congressional Review Act, the new rules and 
amendments will become effective either March 10, 2003, or upon receipt 
by Congress of a report in compliance with the Congressional Review 
Act, 5 U.S.C. 801, whichever is later, and the information collection 
contained in these rules will become effective March 10, 2003, 
following OMB approval, unless a notice is published in the Federal 
Register stating otherwise. We will not require television broadcast 
licensees to file EEO mid-term reports in 2003.
    157. FCC Forms 395A, 395B and 395M, and Sec. Sec.  73.3612 of the 
Commission's rules, 47 CFR 73.3612 (Annual Employment Report) and Sec.  
76.1802 of the Commission's rules, 47 CFR 76.1802 (Equal Employment 
Opportunity) will remain suspended pending further action on workforce 
data collection issues.
    158. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, shall send a copy of this 2R&O, including 
the Final Regulatory Flexibility Analysis, to the Chief Counsel for 
Advocacy of the Small Business Administration.
    159. MM Docket No. 98-204 will remain open for the limited purpose 
of considering the issues raised in the 3rd NPRM, and to facilitate any 
additional proceedings upon further order of the Commission.

List of Subjects in 47 CFR Parts 73 and 76

    Cable television, Equal employment opportunity.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.

Rule Changes

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 73 and 76 as follows:

PART 73--RADIO BROADCAST SERVICES

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

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


    2. Section 73.2080 is revised to read 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, Class A 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 and 
nondiscrimination in every aspect of station employment policy and 
practice. Under the terms of its program, a station shall:
    (1) Define the responsibility of each level of management to ensure 
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 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. Under the terms of its 
program, a station employment unit must:
    (1) Recruit for every full-time 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 qualification for a job position are not 
required to comply with these recruitment requirements with respect to 
that job position or positions, but will be expected to make 
reasonable, good faith efforts to recruit applicants 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, national origin, 
religion, or gender.
    (i) A station employment unit shall use recruitment sources for 
each vacancy sufficient in its reasonable, good faith judgment to 
widely disseminate information concerning the vacancy.
    (ii) In addition to such recruitment sources, a station employment 
unit shall provide notification of each full-time vacancy to any 
organization that distributes information about employment 
opportunities to job seekers or refers job seekers to employers, upon 
request by such organization. To be entitled to notice of vacancies, 
the requesting organization must provide the station employment unit 
with its name, mailing address, e-mail address (if applicable), 
telephone number, and contact person, and identify the category or 
categories of vacancies of which it requests notice. (An organization 
may request notice of all vacancies).
    (2) Engage in at least four (if the station employment unit has 
more than ten full-time employees and is not located in a smaller 
market) or two (if it has five to ten full-time employees and/or is 
located entirely in a smaller market) of the following initiatives 
during each two-year period beginning with the date stations in the 
station employment unit are required to file renewal applications, or 
the second, fourth or sixth anniversaries of that date.

[[Page 690]]

    (i) Participation in at least four job fairs by station personnel 
who have substantial responsibility in the making of hiring decisions;
    (ii) Hosting of at least one job fair;
    (iii) Co-sponsoring at least one job fair with organizations in the 
business and professional community whose membership includes 
substantial participation of women and minorities;
    (iv) 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;
    (v) Establishment of an internship program designed to assist 
members of the community to acquire skills needed for broadcast 
employment;
    (vi) Participation in job banks, Internet programs, and other 
programs designed to promote outreach generally (i.e., that are not 
primarily directed to providing notification of specific job 
vacancies);
    (vii) Participation in scholarship programs designed to assist 
students interested in pursuing a career in broadcasting;
    (viii) Establishment of training programs designed to enable 
station personnel to acquire skills that could qualify them for higher 
level positions;
    (ix) Establishment of a mentoring program for station personnel;
    (x) Participation in at least four events or programs sponsored by 
educational institutions relating to career opportunities in 
broadcasting;
    (xi) Sponsorship of at least two events in the community designed 
to inform and educate members of the public as to employment 
opportunities in broadcasting;
    (xii) 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;
    (xiii) Provision of assistance to unaffiliated non-profit entities 
in the maintenance of web sites that provide counseling on the process 
of searching for broadcast employment and/or other career development 
assistance pertinent to broadcasting;
    (xiv) Provision of training to management level personnel as to 
methods of ensuring equal employment opportunity and preventing 
discrimination;
    (xv) Provision of training to personnel of unaffiliated non-profit 
organizations interested in broadcast employment opportunities that 
would enable them to better refer job candidates for broadcast 
positions;
    (xvi) 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.
    (3) Analyze its recruitment program on an ongoing basis to ensure 
that it is effective in achieving broad outreach to potential 
applicants, and address any problems found as a result of its analysis.
    (4) Periodically analyze measures taken to:
    (i) Disseminate the station's equal employment opportunity program 
to job applicants and employees;
    (ii) Review seniority practices to ensure that such practices are 
nondiscriminatory;
    (iii) Examine rates of pay and fringe benefits for employees having 
the same duties, and eliminate any inequities based upon race, national 
origin, color, religion, or sex discrimination;
    (iv) Utilize media for recruitment purposes in a manner that will 
contain no indication, either explicit or implicit, of a preference for 
one race, national origin, color, religion or sex over another;
    (v) Ensure that promotions to positions of greater responsibility 
are made in a nondiscriminatory manner;
    (vi) Where union agreements exist, cooperate with the union or 
unions in the development of programs to ensure all persons of equal 
opportunity for employment, irrespective of race, national origin, 
color, religion, or sex, and include an effective nondiscrimination 
clause in new or renegotiated union agreements; and
    (vii) Avoid the use of selection techniques or tests that have the 
effect of discriminating against any person based on race, national 
origin, color, religion, or sex.
    (5) Retain records to document that it has satisfied the 
requirements of paragraphs (c)(1) and (2) of this section. Such 
records, which may be maintained in an electronic format, shall be 
retained until after grant of the renewal application for the term 
during which the vacancy was filled or the initiative occurred. Such 
records need not be submitted to the FCC unless specifically requested. 
The following records shall be maintained:
    (i) Listings of all full-time job vacancies filled by the station 
employment unit, identified by job title;
    (ii) For each such vacancy, the recruitment sources utilized to 
fill the vacancy (including, if applicable, organizations entitled to 
notification pursuant to paragraph (c)(1)(ii) of this section, which 
should be separately identified), identified by name, address, contact 
person and telephone number;
    (iii) Dated copies of all advertisements, bulletins, letters, 
faxes, e-mails, or other communications announcing vacancies;
    (iv) Documentation necessary to demonstrate performance of the 
initiatives required by paragraph (c)(2) of this section, including 
sufficient information to fully disclose the nature of the initiative 
and the scope of the station's participation, including the station 
personnel involved;
    (v) The total number of interviewees for each vacancy and the 
referral source for each interviewee; and
    (vi) The date each vacancy was filled and the recruitment source 
that referred the hiree.
    (6) Annually, on the anniversary of the date a station is due to 
file its renewal application, the station shall place in its public 
file, maintained pursuant to Sec.  73.3526 or Sec.  73.3527, and on its 
web site, if it has one, an EEO public file report containing the 
following information (although if any broadcast licensee acquires a 
station pursuant to FCC Form 314 or FCC Form 315 during the twelve 
months covered by the EEO public file report, its EEO public file 
report shall cover the period starting with the date it acquired the 
station):
    (i) A list of all full-time vacancies filled by the station's 
employment unit during the preceding year, identified by job title;
    (ii) For each such vacancy, the recruitment source(s) utilized to 
fill the vacancy (including, if applicable, organizations entitled to 
notification pursuant to paragraph (c)(1)(ii) of this section, which 
should be separately identified), identified by name, address, contact 
person and telephone number;
    (iii) The recruitment source that referred the hiree for each full-
time vacancy during the preceding year;
    (iv) Data reflecting the total number of persons interviewed for 
full-time vacancies during the preceding year and the total number of 
interviewees referred by each recruitment source utilized in connection 
with such vacancies; and
    (v) A list and brief description of initiatives undertaken pursuant 
to paragraph (c)(2) of this section during the preceding year.
    (d) Small Station Exemption. The provisions of paragraphs (b) and 
(c) of this section shall not apply to station employment units that 
have fewer than five full-time employees.

[[Page 691]]

    (e) Definitions. For the purposes of this rule:
    (1) A full-time employee is a permanent employee whose regular work 
schedule is 30 hours per week or more.
    (2) A station employment unit is a station or a group of commonly 
owned stations in the same market that share at least one employee.
    (3) A smaller market includes metropolitan areas as defined by the 
Office of Management and Budget with a population of fewer than 250,000 
persons and areas outside of all metropolitan areas as defined by the 
Office of Management and Budget.
    (f) Enforcement. The following provisions apply to employment 
activity concerning full-time positions at each broadcast station 
employment unit (defined in this part) employing five or more persons 
in full-time positions, except where noted.
    (1) All broadcast stations, including those that are part of an 
employment unit with fewer than five full-time employees, shall file a 
Broadcast Equal Employment Opportunity Program Report (Form 396) with 
their renewal application. Form 396 is filed on the date the station is 
due to file its application for renewal of license. If a broadcast 
licensee acquires a station pursuant to FCC Form 314 or FCC Form 315 
during the period that is to form the basis for the Form 396, 
information provided on its Form 396 should cover the licensee's EEO 
recruitment activity during the period starting with the date it 
acquired the station. Stations are required to maintain a copy of their 
Form 396 in the station's public file in accordance with the provisions 
of Sec. Sec.  73.3526 and 73.3527.
    (2) The Commission will conduct a mid-term review of the employment 
practices of each broadcast television station and each radio station 
that is part of an employment unit of more than ten full-time employees 
four years following the station's most recent license expiration date 
as specified in Sec.  73.1020. Each such licensee is required to file 
with the Commission the Broadcast Mid-Term Report (FCC Form 397) four 
months prior to that date. If a broadcast licensee acquires a station 
pursuant to FCC Form 314 or FCC Form 315 during the period that is to 
form the basis for the Form 397, its Report should cover the licensee's 
EEO recruitment activity during the period starting with the date it 
acquired the station.
    (3) If a station is subject to a time brokerage agreement, the 
licensee shall file Forms 396, Forms 397, and EEO public file reports 
concerning only its own recruitment activity. If a licensee is a broker 
of another station or stations, the licensee-broker shall include its 
recruitment activity for the brokered station(s) in determining the 
bases of Forms 396, Forms 397 and the EEO public file reports for its 
own station. If a licensee-broker owns more than one station, it shall 
include its recruitment activity for the brokered station in the Forms 
396, Forms 397, and EEO public file reports filed for its own station 
that is most closely affiliated with, and in the same market as, the 
brokered station. If a licensee-broker does not own a station in the 
same market as the brokered station, then it shall include its 
recruitment activity for the brokered station in the Forms 396, Forms 
397, and EEO public file reports filed for its own station that is 
geographically closest to the brokered station.
    (4) Broadcast stations subject to this section shall maintain 
records of their recruitment activity necessary to demonstrate that 
they are in compliance with the EEO rule. Stations shall ensure that 
they maintain records sufficient to verify the accuracy of information 
provided in Forms 396, Forms 397, and EEO public file reports. To 
determine compliance with the EEO rule, the Commission may conduct 
inquiries of licensees at random or if it has evidence of a possible 
violation of the EEO rule. In addition, the Commission will conduct 
random audits. Specifically, each year approximately five percent of 
all licensees in the television and radio services will be randomly 
selected for audit, ensuring that, even though the number of radio 
licensees is significantly larger than television licensees, both 
services are represented in the audit process. Upon request, stations 
shall make records available to the Commission for its review.
    (5) The public may file complaints throughout the license term 
based on a station's Form 397 or the contents of a station's public 
file. Provisions concerning filing, withdrawing, or non-filing of 
informal objections or petitions to deny license renewal, assignment, 
or transfer applications are delineated in Sec. Sec.  73.3584 and 
73.3587-3589 of the Commission's rules.
    (g) Sanctions and Remedies. The Commission may issue appropriate 
sanctions and remedies for any violation of this rule.

PART 76--MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE

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

    Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a, 
307, 308, 309, 312, 317, 325, 503, 521, 522, 531, 532, 533, 534, 
535, 536, 537, 543, 544, 544a, 545, 548, 549, 552, 554, 556, 560, 
561, 571, 572, 573.


    4. Section 76.75 is amending by revising the section heading and 
paragraphs (b), (f), (g), (h), (i), and (j); and removing paragraph 
(k), to read as follows:


Sec.  76.75  Specific EEO program requirements.

* * * * *
    (b) Establish, maintain and carry out a positive continuing program 
of outreach activities designed to ensure equal opportunity and 
nondiscrimination in employment. The following activities shall be 
undertaken by each employment unit:
    (1) Recruit for every full-time 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 multichannel video programming distributor to grant 
preferential treatment to any individual or group based on race, 
national origin, color, religion, age, or gender.
    (i) An employment unit shall use recruitment sources for each 
vacancy sufficient in its reasonable, good faith judgment to widely 
disseminate information concerning the vacancy.
    (ii) In addition to using such recruitment sources, a multichannel 
video programming distributor employment unit shall provide 
notification of each full-time vacancy to any organization that 
distributes information about employment opportunities to job seekers 
or refers job seekers to employers, upon request by such organization. 
To be entitled to notice of vacancies, the requesting organization must 
provide the multichannel video programming distributor employment unit 
with its name, mailing address, e-mail address (if applicable), 
telephone number, and contact person, and identify the category or 
categories of vacancies of which it requests notice. (An organization 
may request notice of all vacancies).
    (2) Engage in at least two (if the unit has more than ten full-time 
employees and is not located in a smaller market) or one (if the unit 
has six to ten full-time employees and/or is located, in whole or in 
part, in a smaller market) of the following initiatives during each 
twelve-month period preceding the filing of an EEO program annual 
report:
    (i) Participation in at least two job fairs by unit personnel who 
have substantial responsibility in the making of hiring decisions;
    (ii) Hosting of at least one job fair;

[[Page 692]]

    (iii) Co-sponsoring at least one job fair with organizations in the 
business and professional community whose membership includes 
substantial participation of women and minorities;
    (iv) Participation in at least two events sponsored by 
organizations representing groups present in the community interested 
in multichannel video programming distributor employment issues, 
including conventions, career days, workshops, and similar activities;
    (v) Establishment of an internship program designed to assist 
members of the community in acquiring skills needed for multichannel 
video programming distributor employment;
    (vi) Participation in job banks, Internet programs, and other 
programs designed to promote outreach generally (i.e., that are not 
primarily directed to providing notification of specific job 
vacancies);
    (vii) Participation in a scholarship program designed to assist 
students interested in pursuing a career in multichannel video 
programming communications;
    (viii) Establishment of training programs designed to enable unit 
personnel to acquire skills that could qualify them for higher level 
positions;
    (ix) Establishment of a mentoring program for unit personnel;
    (x) Participation in at least two events or programs sponsored by 
educational institutions relating to career opportunities in 
multichannel video programming communications;
    (xi) Sponsorship of at least one event in the community designed to 
inform and educate members of the public as to employment opportunities 
in multichannel video programming communications;
    (xii) 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;
    (xiii) Provision of assistance to unaffiliated non-profit entities 
in the maintenance of web sites that provide counseling on the process 
of searching for multichannel video programming employment and/or other 
career development assistance pertinent to multichannel video 
programming communications;
    (xiv) Provision of training to management level personnel as to 
methods of ensuring equal employment opportunity and preventing 
discrimination;
    (xv) Provision of training to personnel of unaffiliated non-profit 
organizations interested in multichannel video programming employment 
opportunities that would enable them to better refer job candidates for 
multichannel video programming positions;
    (xvi) Participation in other activities reasonably calculated by 
the unit to further the goal of disseminating information as to 
employment opportunities in multichannel video programming to job 
candidates who might otherwise be unaware of such opportunities.
* * * * *
    (f) A multichannel video programming distributor shall analyze its 
recruitment program on an ongoing basis to ensure that it is effective 
in achieving broad outreach, and address any problems found as a result 
of its analysis.
    (g) Analyze on an ongoing basis its efforts to recruit, hire, 
promote and use services without discrimination on the basis of race, 
national origin, color, religion, age, or sex and explain any 
difficulties encountered in implementing its equal employment 
opportunity program. For example, this requirement may be met by:
    (1) Where union agreements exist, cooperating with the union or 
unions in the development of programs to ensure all persons equal 
opportunity for employment, and including an effective 
nondiscrimination clause in new or renegotiated union agreements;
    (2) Reviewing seniority practices to ensure that such practices are 
nondiscriminatory;
    (3) Examining rates of pay and fringe benefits for employees having 
the same duties, and eliminating any inequities based upon race, 
national origin, color, religion, age, or sex discrimination;
    (4) Evaluating the recruitment program to ensure that it is 
effective in achieving a broad outreach to potential applicants.
    (5) Utilizing media for recruitment purposes in a manner that will 
contain no indication, either explicit or implicit, of a preference for 
one race, national origin, color, religion, age, or sex over another; 
and
    (6) Avoiding the use of selection techniques or tests that have the 
effect of discriminating against qualified minority groups or women.
    (h) A full-time employee is a permanent employee whose regular work 
schedule is 30 hours per week or more.
    (i) The provisions of paragraphs (b)(1)(ii), (b)(2), (c), and (f) 
of this section shall not apply to multichannel video programming 
distributor employment units that have fewer than six full-time 
employees.
    (j) For the purposes of this rule, a smaller market includes 
metropolitan areas as defined by the Office of Management and Budget 
with a population of fewer than 250,000 persons and areas outside of 
all metropolitan areas as defined by the Office of Management and 
Budget.
    5. Section 76.77 is revised to read as follows:


Sec.  76.77  Reporting requirements and enforcement.

    (a) EEO program annual reports. Information concerning a unit's 
compliance with the EEO recruitment requirements shall be filed by each 
employment unit with six or more full-time employees on FCC Form 396-C 
on or before September 30 of each year. If a multichannel video 
programming distributor acquires a unit during the twelve months 
covered by the EEO program annual report, the recruitment activity in 
the report shall cover the period starting with the date the entity 
acquired the unit.
    (b) Certification of Compliance. The Commission will use the 
recruitment information submitted on a unit's EEO program annual report 
to determine whether the unit is in compliance with the provisions of 
this subpart. Units found to be in compliance with these rules will 
receive a Certificate of Compliance. Units found not to be in 
compliance will receive notice that they are not certified for a given 
year.
    (c) Investigations. The Commission will investigate each unit at 
least once every five years. Employment units are required to submit 
supplemental investigation information with their regular EEO program 
annual reports in the years they are investigated. If an entity 
acquires a unit during the period covered by the supplemental 
investigation, the information submitted by the unit as part of the 
investigation shall cover the period starting with the date the 
operator acquired the unit. The supplemental investigation information 
shall include a copy of the unit's EEO public file report for the 
preceding year.
    (d) Records and inquiries. Employment units subject to this subpart 
shall maintain records of their recruitment activity in accordance with 
Sec.  76.75 to demonstrate whether they are in compliance with the EEO 
rules. Units shall ensure that they maintain records sufficient to 
verify the accuracy of information provided in their EEO program annual 
reports and the supplemental investigation responses required by Sec.  
76.1702 to be kept in a unit's public file. To determine compliance 
with the EEO rules, the Commission may conduct inquiries of

[[Page 693]]

employment units at random or if the Commission has evidence of a 
possible violation of the EEO rules. Upon request, employment units 
shall make records available to the Commission for its review.
    (e) Public complaints. The public may file complaints based on EEO 
program annual reports, supplemental investigation information, or the 
contents of a unit's public file.
    (f) Sanctions and remedies. The Commission may issue appropriate 
sanctions and remedies for any violation of the EEO rules.

    6. Section 76.1702 is revised to read as follows:


Sec.  76.1702  Equal employment opportunity.

    (a) Every employment unit with six or more full-time employees 
shall maintain for public inspection a file containing copies of all 
EEO program annual reports filed with the Commission pursuant to Sec.  
76.77 and the equal employment opportunity program information 
described in paragraph (b) of this section. These materials shall be 
placed in the unit's public inspection file annually by the date that 
the unit's EEO program annual report is due to be filed and shall be 
retained for a period of five years. The file shall be maintained at 
the central office and at every location with six or more full-time 
employees. A headquarters employment unit file and a file containing a 
consolidated set of all documents pertaining to the other employment 
units of a multichannel video programming distributor that operates 
multiple units shall be maintained at the central office of the 
headquarters employment unit. The multichannel video programming 
distributor shall provide reasonable accommodation at these locations 
for undisturbed inspection of its equal employment opportunity records 
by members of the public during regular business hours.
    (b) The following equal employment opportunity program information 
shall be included annually in the unit's public file, and on the unit's 
web site, if it has one, at the time of the filing of its FCC Form 396-
C:
    (1) A list of all full-time vacancies filled by the multichannel 
video programming distributor employment unit during the preceding 
year, identified by job title;
    (2) For each such vacancy, the recruitment source(s) utilized to 
fill the vacancy (including, if applicable, organizations entitled to 
notification pursuant to Sec.  76.75(b)(1)(ii) of this section, which 
should be separately identified), identified by name, address, contact 
person and telephone number;
    (3) The recruitment source that referred the hiree for each full-
time vacancy during the preceding year;
    (4) Data reflecting the total number of persons interviewed for 
full-time vacancies during the preceding year and the total number of 
interviewees referred by each recruitment source utilized in connection 
with such vacancies; and
    (5) A list and brief description of the initiatives undertaken 
pursuant to Sec.  76.75(b)(2) during the preceding year, if applicable.

BILLING CODE 6712-01-P

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Appendix--Forms

    Note: The following appendix will not appear in the Code of 
Federal Regulations.

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[FR Doc. 03-171 Filed 1-2-03; 11:55 am]
BILLING CODE 6712-01-C