Revision of Broadcast and Cable EEO Rules and Policies

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 73 and 76

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

Revision of Broadcast and Cable EEO Rules and Policies

AGENCY: Federal Communications Commission.

ACTION: Proposed rules.

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SUMMARY: In this Notice of Proposed Rule Making (NPRM), the Commission

proposes new broadcast and cable Equal Employment Opportunity (EEO)

rules and policies. The NPRM proposes to retain the existing ban on

discrimination and to promulgate recruitment-oriented outreach rules.

The proposed EEO rules make clear that broadcasting and cable entities,

including multichannel video programming distributors, are not required

to employ a staff that reflects the racial or other composition of the

community or to use racial preferences in hiring. The NPRM also

proposes to streamline the Commission's broadcast EEO requirements,

while, at the same time, maintaining an effective broadcast EEO

program. These proposals include the possibility of granting

administrative relief to small broadcasters and crediting joint

recruitment efforts. Finally, the NPRM terminates the Commission's EEO

streamlining proceeding in MM Docket No. 96-16, 60 FR 9964, March 12,

1996, with the exception of the one petition for reconsideration filed

in that docket, which will now be considered in this proceeding. The

intended effect of the NPRM is to invite comments on all aspects of the

Commission's proposals and on the Commission's belief that it has the

statutory authority to retain the anti-discrimination provisions of its

broadcast EEO rule.

DATES: Comments are due January 19, 1999; reply comments are due

February 18, 1999. Written comments by the public on the proposed

information collections are due January 19, 1999. Written comments must

be submitted by the Office of Management and Budget (OMB) on the

proposed information collections on or before February 1, 1999.

ADDRESSES: Federal Communications Commission, Office of the Secretary,

445 12th Street, SW, Washington, D.C. 20554. Comments on the

information collections contained herein should be submitted to Judy

Boley, Federal Communications Commission, Room C-1804, 445 12th Street,

SW, Washington, DC 20554, or via the Internet to [email protected], and to

Timothy Fain, OMB Desk Officer, 10236 NEOB, 725--17th Street, N.W.,

Washington, DC 20503 or via the Internet to [email protected].

FOR FURTHER INFORMATION CONTACT: Hope Cooper or Kathy Harvey, Mass

Media Bureau, Enforcement Division. (202) 416-1450. For additional

information concerning the information collections, contact Judy Boley

at 202-418-0214, or via the Internet at [email protected].

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's

Notice of Proposed Rule Making in MM Docket No. 98-204, adopted

November 19, 1998, and released November 20, 1998.

The complete text of this NPRM, which was adopted in MM Docket No.

98-204, is available for inspection and copying during normal business

hours in the FCC Reference Center (Room 239), 1919 M Street, NW.,

Washington, DC, and also may be purchased from the Commission's copy

contractor, International Transcription Services, Inc., at 202-857-

3800, 1231 20th Street, NW, Washington, D.C. 20037.

Synopsis of Notice of Proposed Rule Making

1. The NPRM proposes and requests comments regarding new broadcast

and cable EEO rules and policies consistent with the D.C. Circuit's

decision in Lutheran Church--Missouri Synod v. FCC, 141 F.3d 344 (D.C.

Cir. 1998) (Lutheran Church), rehearing denied, September 15, 1998. In

Lutheran Church, the D.C. Circuit held that the Commission's broadcast

EEO program requirements were unconstitutional because they pressured

stations to maintain a workforce reflecting the racial composition of

their communities, thus inducing them to grant illegal hiring

preferences on the basis of race. The court also remanded the case back

to the Commission to determine whether it had the authority to

promulgate its ban on employment discrimination, which was not

invalidated.

2. The NPRM proposes new broadcast and cable EEO rules which ensure

non-discrimination in employment and broad dissemination of recruitment

information. None of the proposals

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create an incentive to hire on the basis of race or gender. In fact,

the proposed rules remove all references to any comparison to minority

and female labor force statistics, including sections concerning

evaluation of employment profile and job turnover. One proposal would

require entities to recruit for each vacancy with a certain number of

national and/or local sources, including minority and female sources.

The Commission believes that this kind of approach would ensure that

all qualified potential applicants are informed of, and have an

opportunity to apply for, vacancies. Another proposal would leave to an

entity's good faith discretion what methods it would use to ensure

broad dissemination of vacancy information. In order to provide

guidance to entities, the proposed rules also clearly describe what

records of EEO efforts must be kept by broadcast and cable entities,

and detail how an entity should analyze its EEO program.

3. The NPRM also proposes to reinstate the preexisting EEO

requirement that broadcasters file an Annual Employment Report, but

with the understanding that the Report's data would only be used to

monitor industry employment trends.

4. The NPRM retains the Commission's prohibition against employment

discrimination and details the Commission's statutory authority to

promulgate an employment non-discrimination rule as well as EEO program

requirements. Specifically, the NPRM outlines the Commission's belief

that Congress has ratified the Commission's authority to adopt

broadcast EEO rules; that equal employment of minorities and women

furthers the Commission's public interest goal of diversity of

programming; and that the statutory goal of fostering minority and

female ownership in the provision of commercial spectrum-based

services, as directed by Section 309(j) of the Communications Act, is

furthered by EEO requirements. With respect to broadcasters, the NPRM

proposes modifying the anti-discrimination prohibition so that

religious radio broadcasters may establish religious belief or

affiliation as a bona fide occupational qualification for all station

employees.

5. The NPRM notes the Commission's intent to limit undue

administrative burdens on broadcasters generally, and particularly on

those licensees of smaller stations and other distinctly situated

broadcasters, consistent with maintaining an effective EEO program.

Specifically, the NPRM invites comment on whether and, if so, how the

Commission can reduce undue burdens on stations with small staffs or

those located in small markets. Options include exempting qualifying

stations from EEO reporting and recordkeeping requirements entirely; or

permitting qualifying stations the option of attending a minimum number

of recruiting events annually, such as job fairs, in lieu of vacancy

specific recruitment. Further, the NPRM invites comment on how to award

credit for licensees generally who participate in joint recruitment

efforts and minority training and internship programs. Finally, the

NPRM terminates the Commission's EEO streamlining proceeding in MM

Docket No. 96-16 (with the exception of the one petition for

reconsideration filed in that docket, which will now be considered in

this proceeding) because MM Docket No. 96-16 concerned the provisions

of our EEO Rule invalidated by the Court.

6. The NPRM invites comments on all aspects of the Commission's

proposals and on the Commission's belief that it has the statutory

authority to retain the anti-discrimination provisions of its broadcast

EEO rule.

Initial Paperwork Reduction Act of 1995 Analysis

This NPRM contains proposed information collection. The Commission,

as part of its continuing effort to reduce paperwork burdens, invites

the general public and OMB to comment on the information collections

contained in this NPRM, as required by the Paperwork Reduction Act of

1995, Public Law No. 104-13. Public and agency comments are due at the

same time as other comments on this NPRM; OMB comments are due 60 days

from date of publication of this NPRM in the Federal Register. Comments

should address: (a) whether the proposed collection of information is

necessary for the proper performance of the functions of the

Commission, including whether the information shall have practical

utility; (b) the accuracy of the Commission's burden estimates; (c)

ways to enhance the quality, utility, and clarity of the information

collected; and (d) ways to minimize the burden of the collection of

information on the respondents, including the use of automated

collection techniques or other forms of information technology.

This NPRM contains proposals that are proposed to affect the

following existing information collections that collectively make up

the Commission's EEO program.

Rules: 47 CFR 73.2080 and 76.75

Form Numbers: FCC 395-A, FCC 395-B, FCC 395-M, FCC 396, FCC 396-A

Respondents: Businesses or other for-profit, Not-for-profit

institutions

These estimates represent the existing burden as currently approved

by OMB under the individual OMB approval numbers.

OMB Approval Number: 3060-0212

Title: Section 73.2080 Equal Employment Opportunity Program

Number of Respondents: 15,290

Estimated Time Per Response: 52 hours

Total Annual Burden: 679,744.

OMB Approval Number: 3060-0349

Title: Section 76.73/76.75--Cable TV EEO Policy and Programs

Number of Respondents: 5,600

Estimated time per response: 2,125 cable employment units/MVPD with 6

or more employees will have an average burden of 52 hours/year; 3,475

cable employment units/MVPD with fewer than 6 employees will have an

average burden of 8 hours/year

Total annual burden: 138,300 hours.

OMB Approval Number: 3060-0095

Title: Annual Employment Report--Cable Television (FCC 395-A)

Number of Respondents: 2,564

Estimated time per response: 1.75 hours/form; 0.25/certification; 2.417

hours/supplemental information sheet

Total annual burden: 4,683 hours.

OMB Approval Number: 3060-0390

Title: Broadcast Station Annual Employment Report (FCC 395-B)

Number of Respondents: 14,000

Estimated Time Per Response: 0.88 hours per report

Total Annual Burden: 12,320 hours.

OMB Approval Number: 3060-0574

Title: MVPD Annual Employment Report (FCC 395-M)

Number of Respondents: 155

Estimated time per response: 1.75 hours/form; 0.25/certification; 2.417

hours/supplemental information sheet

Total annual burden: 233 hours.

OMB Approval Number: 3060-0113

Title: Broadcast Equal Employment Opportunity Program Report (FCC 396)

Number of Respondents: 235

Estimated Time Per Response: 3.0 hours per report

Total Annual Burden: 705 hours.

OMB Approval Number: 3060-0120

Title: Broadcast Equal Employment Opportunity Model Program Report (FCC

396-A)

Number of Respondents: 2,068

Estimated Time Per Response: 1.0 hours per report

Total Annual Burden: 2,068 hours.

Needs and Uses: This rulemaking proceeding is initiated to obtain

comments concerning the

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Commission's proposed EEO rules and policies that would be consistent

with the D.C. Circuit's decision in Lutheran Church. This rulemaking

proposes a new broadcasting EEO program rule and to change the

Commission's cable EEO program rules emphasizing recruitment outreach

programs. These information collections are necessary to monitor

industry trends and to ensure that broadcast stations and cable

entities do not engage in discriminatory practices and afford equal

employment opportunity.

Initial Regulatory Flexibility Analysis

As required by the Regulatory Flexibility Act (RFA), the Commission

has prepared this present Initial Regulatory Flexibility Analysis

(IRFA) of the possible significant economic impact on small entities by

the policies and rules proposed in this NPRM. See 5 U.S.C. 603. [The

RFA, see 5 U.S.C. 601 et. seq., has been amended by the Contract With

America Advancement Act of 1996, Public Law No. 104-121, 110 Stat. 847

(1996) (CWAAA). Title II of the CWAAA is the Small Business Regulatory

Enforcement Fairness Act of 1996 (SBREFA).] Written public comments are

requested on this IRFA. Comments must be identified as responses to the

IRFA and must be filed by the deadlines for comments on the NPRM. The

Commission will send a copy of the NPRM, including this IRFA, to the

Chief Counsel for Advocacy of the Small Business Administration. See 5

U.S.C. 603(a). In addition, the NPRM and IRFA (or summaries thereof)

will be published in the Federal Register. See id.

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

The D.C. Circuit court in Lutheran Church held that the

Commission's EEO minority outreach requirements for broadcasters were

unconstitutional and remanded to the Commission to determine whether we

have authority to enforce an employment non-discrimination rule. The

NPRM seeks comment on proposed new EEO rules and policies for broadcast

and cable entities, including multichannel video programming

distributors (MVPDs), that are designed to be consistent with the

Lutheran Church decision. We also request comment on our statutory

authority to retain the anti-discrimination prong of our EEO rules. We

invite comment on EEO rules which seek to ensure that broadcast

stations and cable entities do not engage in discriminatory practices.

In addition, our proposed rules would require broadcasters and cable

entities to establish and maintain an EEO program designed to provide

equal opportunity for minorities and women. Another proposal would

grant administrative relief to small entities based on various

criteria. One of the criteria proposed involves the number of employees

at a station, e.g., if a station has 10 or fewer full-time employees,

it would be entitled to relief. The Commission's earlier attempt at

implementing a similar proposal was declared arbitrary and capricious

by the court in Office of Communications of the United Church of Christ

v. FCC, 560 F.2d 529, 532 (2nd Cir. 1977) because the Commission had

failed to provide a reasoned justification for departing from its prior

precedent. Therefore, the Commission requests that commenters who favor

this proposal provide ample evidence as to why this type of station

deserves this type of relief. To accomplish the goals set forth, the

NPRM proposes: (1) to initiate a new broadcasting EEO program rule and

to change the Commission's cable EEO program rules, that would

emphasize recruitment outreach and provide that entities are not to use

racial, ethnic, or gender preferences in hiring; and (2) to permit

administrative relief to small entities that meet proposed qualifying

factors.

B. Legal Basis

Authority for the actions proposed in this NPRM may be found in

Sections 1, 4(i), 4(k), 257, 301, 303(r), 307, 308(b), 309, 334, 403,

and 634 of the Communications Act of 1934, as amended, 47 U.S.C. 151,

154(i), 154(k), 257, 301, 303(r), 307, 308(b), 309, 334, 403, and 554.

C. Recording, Recordkeeping, and Other Compliance Requirements

The NPRM proposes that broadcasters and cable entities be required

to retain records to demonstrate that they have recruited for each

hire. Such recordkeeping may include: listings of recruiting sources

utilized for each vacancy; copies of all advertisements, bulletins and

letters announcing vacancies; and compilations totaling the race,

ethnic origin, and gender of all applicants generated by each

recruiting source according to vacancy.

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

the Rules Would Apply

1. Definition of a ``Small Business''

The RFA directs the Commission to provide a description of and,

where feasible, an estimate of the number of small entities that may be

affected by the proposed rules. 5 U.S.C. 604(a)(3). Under the RFA,

small entities may include small organizations, small businesses, and

small governmental jurisdictions. 5 U.S.C. 601(6). The RFA, 5 U.S.C.

601(3), generally defines the term ``small business'' as having the

same meaning as the term ``small business concern'' under the Small

Business Act, 15 U.S.C. 632. A small business concern is one which: (1)

is independently owned and operated; (2) is not dominant in its field

of operation; and (3) satisfies any additional criteria established by

the Small Business Administration (SBA). Pursuant to 4 U.S.C. 601(3),

the statutory definition of a small business applies ``unless an agency

after consultation with the Office of Advocacy of the SBA and after

opportunity for public comment, establishes one or more definitions of

such term which are appropriate to the activities of the agency and

publishes such definition(s) in the Federal Register.'' While we

tentatively believe that the SBA's definition of ``small business''

greatly overstates the number of radio and television broadcast

stations that are small businesses and is not suitable for purposes of

determining the impact of the proposals on small television and radio

stations, for purposes of this NPRM, we utilize the SBA's definition in

determining the number of small businesses to which the rules would

apply. We reserve the right, however, to adopt a more suitable

definition of ``small business'' as applied to radio and television

broadcast stations or other entities subject to the rules proposed in

this NPRM and to consider further the issue of the number of small

entities that are radio and television broadcasters or other small

media entities in the future. See Report and Order in MM Docket No. 93-

48 (Children's Television Programming), 11 FCC Rcd 10660, 10737-38

(1996), 61 FR 43981, August 12, 1996, citing 5 U.S.C. 601(3). The new

rules would apply to broadcast stations and cable entities, including

multichannel video programming distributors (MVPDs).

2. Issues in Applying the Definition of a ``Small Business''

We could not precisely apply the foregoing definition of ``small

business'' in developing our estimates of the number of small entities

to which the rules will apply. Our estimates reflect our best judgments

based on the data available to us.

An element of the definition of ``small business'' is that the

entity not be dominant in its field of operation. We are unable at this

time to define or

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quantify the criteria that would establish whether a specific radio or

television station is dominant in its field of operation. Accordingly,

the following estimates of small businesses to which the new rules will

apply do not exclude any radio or television station from the

definition of a small business on this basis and are therefore

overinclusive to that extent. An additional element of the definition

of ``small business'' is that the entity must be independently owned

and operated. We could not fully apply this criterion, and our

estimates of small businesses to which the rules may apply may be

overinclusive to this extent. The SBA's general size standards are

developed taking into account these two statutory criteria. This does

not preclude us from taking these factors into account in making our

estimates of the numbers of small entities.

With respect to applying the revenue cap, the SBA has defined

``annual receipts'' specifically in 13 CFR 121.104, and its

calculations include an averaging process. We do not currently require

submission of financial data from licensees that we could use in

applying the SBA's definition of a small business. Thus, for purposes

of estimating the number of small entities to which the rules apply, we

are limited to considering the revenue data that are publicly

available, and the revenue data on which we rely may not correspond

completely with the SBA definition of annual receipts.

Under SBA criteria for determining annual receipts, if a concern

has acquired an affiliate or been acquired as an affiliate during the

applicable averaging period for determining annual receipts, the annual

receipts in determining size status include the receipts of both firms.

13 CFR 121.104(d)(1). The SBA defines affiliation in 13 CFR 121.103. In

this context, the SBA's definition of affiliate is analogous to our

attribution rules. Generally, under the SBA's definition, concerns are

affiliates of each other when one concern controls or has the power to

control the other, or a third party or parties controls or has the

power to control both. 13 CFR 121.103(a)(1). The SBA considers factors

such as ownership, management, previous relationships with or ties to

another concern, and contractual relationships, in determining whether

affiliation exists. 13 CFR 121.103(a)(2). Instead of making an

independent determination of whether television stations were

affiliated based on SBA's definitions, we relied on the databases

available to us to provide us with that information.

3. Estimates Based on Census Data

The rules proposed in this NPRM will apply to television and radio

stations. The Small Business Administration defines a television

broadcasting station that has no more than $10.5 million in annual

receipts as a small business. 13 CFR 121.201, Standard Industrial Code

(SIC) 4833. Television broadcasting stations consist of establishments

primarily engaged in broadcasting visual programs by television to the

public, except cable and other pay television services. Economics and

Statistics Administration, Bureau of Census, U.S. Department of

Commerce, 1992 Census of Transportation, Communications and Utilities,

Establishment and Firm Size, Series UC92-S-1, Appendix A-9 (1995).

Included in this industry are commercial, religious, educational, and

other television stations. Also included are establishments primarily

engaged in television broadcasting and which produce taped television

program materials. Id. Separate establishments primarily engaged in

producing taped television program materials are classified under

another SIC number. Id.; SIC 7812 (Motion Picture and Video Tape

Production); SIC 7922 [Theatrical Producers and Miscellaneous

Theatrical Services (producers of live radio and television programs)].

There were 1,509 full-service television stations operating in the

nation in 1992. FCC News Release No. 31327, Jan. 13, 1993; Economics

and Statistics Administration, Bureau of Census, U.S. Department of

Commerce, Appendix A-9. That number has remained fairly constant as

indicated by the approximately 1,584 operating full-service television

broadcasting stations in the nation as of October 1998. FCC News

Release, Broadcast Station Totals as of October 30, 1998 (released

November 18, 1998). For 1992 1 the number of television

stations that produced less than $10.0 million in revenue was 1,155

establishments. (The amount of $10 million was used to estimate the

number of small business establishments because the relevant Census

categories stopped at $9,999,999 and began at $10,000,000. No category

for $10.5 million existed. Thus, the number is as accurate as it is

possible to calculate with the available information.) Thus, the

proposed rules will affect approximately 1,584 television stations;

approximately 77%, or 1,219 of those stations are considered small

businesses. (We use the 77 percent figure of TV stations operating at

less than $10 million for 1992 and apply it to the 1998 total of 1,584

TV stations to arrive at stations categorized as small businesses.)

These estimates may overstate the number of small entities since the

revenue figures on which they are based do not include or aggregate

revenues from non-television affiliated companies. We recognize that

the proposed rules may also affect minority and women owned stations,

some of which may be small entities. In August 1998, minorities owned

and controlled 32 (2.6%) of 1,209 commercial television stations in the

United States. Minority Commercial Broadcast Ownership in the United

States, U.S. Dep't. of Commerce, National Telecommunications and

Information Administration, The Minority Telecommunications Development

Program (MTDP) (August 1998). (MTDP considers minority ownership as

ownership of more than 50% of a broadcast corporation's stock, voting

control in a broadcast partnership, or ownership of a broadcasting

property as an individual proprietor. Id. The minority groups included

in this report are Black, Hispanic, Asian, and Native American.)

According to the U.S. Bureau of the Census, in 1987 women owned and

controlled 27 (1.9%) of 1,342 commercial and non-commercial television

stations in the United States. See Comments of American Women in Radio

and Television, Inc. in MM Docket No. 94-149 and MM Docket No. 91-140,

at 4 n.4 (filed May 17, 1995), citing 1987 Economic Censuses, Women-

Owned Business, WB87-1, U.S. Department of Commerce, Bureau of the

Census, August 1990 (based on 1987 Census). After the 1987 Census

report, the Census Bureau did not provide data by particular

communications services (four-digit Standard Industrial Classification

(SIC) Code), but rather by the general two-digit SIC Code for

communications (#48). Consequently, since 1987, the U.S. Census Bureau

has not updated data on ownership of broadcast facilities by women, nor

does the FCC collect such data. However, the Commission recently

amended its Annual Ownership Report Form 323 to require information on

the gender and race of broadcast license owners in future filings. See

1998 Biennial Regulatory Review--Streamlining of Mass Media

Applications, Rules and Processes, Report and Order, MM Docket No. 98-

43 (adopted October 22, 1998).

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\1\ Census for Communications' establishments are performed

every five years ending with a ``2'' or ``7''. See Economics and

Statistics Administration, Bureau of Census, U.S. Department of

Commerce, supra note 53, III.

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The proposed rule changes would also affect radio stations. The SBA

defines a radio broadcasting station that has no more than $5 million

in annual receipts as a small business. 13 CFR 121.201, SIC 4832. A

radio broadcasting station is an establishment primarily engaged in

broadcasting aural programs by radio to the public. Economics and

Statistics Administration, Bureau of Census, U.S. Department of

Commerce, Appendix A-9. Included in this industry are commercial,

religious, educational, and other radio stations. Id. Radio

broadcasting stations which primarily are engaged in radio broadcasting

and which produce radio program materials are similarly included. Id.

However, radio stations which are separate establishments and are

primarily engaged in producing radio program material are classified

under another SIC number. Id. The 1992 Census indicates that 96 percent

(5,861 of 6,127) of radio station establishments produced less than $5

million in revenue in 1992. The Census Bureau counts multiple radio

stations located at the same facility as one establishment. Therefore,

each co-located AM/FM combination counts as one establishment. Official

Commission records indicate that 11,334 individual radio stations were

operating in 1992. FCC News Release No. 31327, Jan. 13, 1993. As of

October 1998, official Commission records indicate that 12,448 radio

stations are currently operating. FCC News Release, Broadcast Station

Totals as of October 30, 1998 (released November 18, 1998).

The proposed rule changes would also affect small cable entities,

including MVPDs. SBA has developed a definition of a small entity for

cable and other pay television services, which includes all such

companies generating $11 million or less in annual receipts. 13 CFR

121.201 (SIC 4841). This definition includes cable system operators,

closed circuit television services, direct broadcast satellite services

(DBS), multipoint distribution systems (MDS), satellite master antenna

systems, and subscription television services. According to the Bureau

of the Census, there were 1,423 such cable and other pay television

services generating less than $11 million in revenue that were in

operation for at least one year at the end of 1992. 1992 Economic

Census Industry and Enterprise Receipts Size Report, Table 2D, SIC 4841

(U.S. Bureau of the Census data under contract to the Office of

Advocacy of the U.S. Small Business Administration). We discuss these

services to provide a more succinct estimate of small entities:

Cable Systems: The Commission has developed, with SBA's approval,

its own definition of small cable system operators. Under the

Commission's rules, a ``small cable company'' is one serving fewer than

400,000 subscribers nationwide. 47 CFR 67.901(3). The Commission

developed this definition based on its determination that a small cable

system operator is one with annual revenues of $100 million or less.

Implementation of Sections of the 1992 Cable Act: Rate Regulation,

Sixth Report and Order and Eleventh Order on Reconsideration, 10 FCC

Rcd 6393 (1995), 60 FR 544919, September 15, 1995. Based on our most

recent information, we estimate that there were 1,439 cable operators

that qualified as small cable companies at the end of 1995. Paul Kagan

Associates, Inc., Cable TV Investor, Feb. 29, 1996 (based on figures

for Dec. 30, 1995). Since then, some of those companies may have grown

to serve over 400,000 subscribers, and others may have been involved in

transactions that caused them to be combined with other cable

operators. Consequently, we estimate that there are fewer than 1,439

small entity cable system operators that may be affected by the rules

proposed herein.

The Communications Act also contains a definition of a small cable

system operator, which is ``a cable operator that, directly or through

an affiliate, serves in the aggregate fewer than 1% of all subscribers

in the United States and is not affiliated with any entity or entities

whose gross annual revenue in the aggregate exceeds $250,000,000.'' 47

U.S.C. 543(m)(2). The Commission has determined that there are

61,700,000 subscribers in the United States. Therefore, we found that

an operator serving fewer than 617,000 subscribers shall be deemed a

small operator, if its annual revenues, when combined with the total

annual revenues of all of its affiliates, do not exceed $520 million in

the aggregate. 47 CFR 76.1403(b) (SIC 4833). Based on available data,

we find that the number of cable operators serving 617,000 subscribers

or less totals 1,450. Paul Kagan Associates, Inc., Cable TV Investor,

Feb. 29, 1996 (based on figures for Dec. 30, 1995). Although it seems

certain that some of these cable system operators are affiliated with

entities whose gross annual revenues exceed $250,000,000, we are unable

at this time to estimate with greater precision the number of cable

system operators that would qualify as small cable operators under the

definition in the Communications Act.

MDS: The Commission has defined ``small entity'' for purposes of

the auction of MDS as an entity that, together with its affiliates, has

average gross annual revenues that are not more than $40 million for

the preceding three calendar years. 47 CFR 21.961(b)(1). This

definition of a small entity in the context of MDS auctions has been

approved by the SBA. See Amendment of Parts 21 and 74 of the

Commission's Rules With Regard to Filing Procedures in the Multipoint

Distribution Service and in the Instructional Television Fixed Service

and Implementation of Section 309(j) of the Communications Act--

Competitive Bidding, MM Docket No. 94-31 and PP Docket No. 93-253,

Report and Order, 10 FCC Rcd 9589 (1995), 60 FR 36524, July 17, 1995.

The Commission completed its MDS auction in March 1996 for

authorizations in 493 basic trading areas (BTAs). Of 67 winning

bidders, 61 qualified as small entities. (One of these small entities,

O'ahu Wireless Cable, Inc., was subsequently acquired by GTE Media

Ventures, Inc., which did not qualify as a small entity for purposes of

the MDS auction.)

MDS also includes licensees of stations authorized prior to the

auction. The SBA has developed a definition of small entities for pay

television services, which includes all such companies generating $11

million or less in annual receipts. 13 CFR 121.201. This definition

includes multipoint distribution systems, and thus applies to MDS

licensees and wireless cable operators which did not participate in the

MDS auction. Information available to us indicates that there are 832

of these licensees and operators that do not generate revenue in excess

of $11 million annually. Therefore, for purposes of this IRFA, we find

there are approximately 892 small MDS providers as defined by the SBA

and the Commission's auction rules, and some of these providers may be

subject to our amended EEO rules.

DBS: As of October 1997, there were nine DBS licensees, some of

which were not in operation. The Commission does not collect annual

revenue data for DBS and, therefore, is unable to ascertain the number

of small DBS licensees that could be impacted by these proposed rules.

Although DBS services requires a great investment of capital for

operation, we acknowledge that there are several new entrants in this

field that may not yet have generated $11 million in annual receipts,

and therefore may be categorized as small businesses, if independently

owned and operated.

An alternative way to classify small entities is by the number of

employees. We estimate that the total number of full-service broadcast

stations with 4 or

[[Page 66109]]

fewer employees is 5,186. We base this estimate on a compilation of

1997 Broadcast Station Annual Employment Reports (FCC Form 395-B),

performed by staff of the Equal Employment Opportunity Branch, Mass

Media Bureau, FCC. Similarly, we estimate that in 1997, the total

number of cable employment units with six or more full-time employees

was 2,750, and that 1,900 cable employment units employed fewer than

six full-time employees. Also, in 1997, the total number of other MVPDs

employing six or more full-time employees was 725, and 225 such MVPDs

employed less than six full-time employees.

E. Steps Taken to Minimize Significant Economic Impact on Small

Entities, and Significant Alternatives Considered

This NPRM solicits comment on a variety of alternatives discussed

herein. Any significant alternatives presented in the comments will be

considered. As an example, the NPRM requests comment on whether we

should grant administrative relief to stations with small staffs or in

small markets. Finally, the NPRM seeks comment on whether to raise the

employment threshold for EEO reporting and recordkeeping requirements.

This change may create a new definition of small business requiring

approval from the SBA before doing so.

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

Rules

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

other rules.

List of Subjects

47 CFR Part 0

Organization and functions (Government agencies)

47 CFR Part 73

Radio, Equal employment opportunity, Reporting and recordkeeping

requirements, Television

47 CFR Part 76

Cable television, Equal employment opportunity, Reporting and

recordkeeping requirements

Federal Communications Commission.

Magalie Roman Salas,

Secretary.

Proposed Rule Changes

For the reasons discussed in the preamble, the Federal

Communications Commission proposes to amend 47 CFR parts 0, 73 and 76

as follows:

PART 0--COMMISSION ORGANIZATION

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

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

2. Section 0.283 is amended by revising paragraph (b)(1)(iii) to

read as follows:

Sec. 0.283 Authority delegated.

* * * * *

(b) * * *

(1) * * *

(iii) present documented allegations of failure to comply with the

Commission's Equal Employment Opportunity rules and policies.

* * * * *

PART 73--RADIO BROADCAST SERVICES

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

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

4. Section 73.2080 is revised as follows:

Sec. 73.2080 Equal employment opportunities (EEO).

(a) General EEO policy. Equal opportunity in employment shall be

afforded by all licensees or permittees of commercially or

noncommercially operated AM, FM, TV or international broadcast stations

(as defined in this part) to all qualified persons, and no person shall

be discriminated against in employment by such stations because of

race, color, religion, national origin, or sex. Religious radio

broadcasters may establish religious belief or affiliation as a job

qualification for all station employees. However, they cannot

discriminate on the basis of race, color, national origin or gender

from among those who share their religious affiliation or belief. For

purposes of this rule, a religious broadcaster is a licensee which is,

or is closely affiliated with, a church, synagogue, or other religious

entity, including a subsidiary of such an entity.

(b) General EEO program requirements. Each broadcast station shall

establish, maintain, and carry out a positive continuing program of

specific practices designed to ensure equal opportunity in every aspect

of station employment policy and practice. Under terms of its program,

a station shall:

(1) Define the responsibility of each level of management to ensure

a vigorous enforcement of its policy of equal opportunity, and

establish a procedure to review and control managerial and supervisory

performance;

(2) Inform its employees and recognized employee organizations of

the positive equal employment opportunity policy and program and enlist

their cooperation;

(3) Communicate its equal employment opportunity policy and program

and its employment needs to sources of qualified applicants without

regard to race, color, religion, national origin, or sex, and solicit

their recruitment assistance on a continuing basis;

(4) Conduct a continuing program to exclude all unlawful forms of

prejudice or discrimination based upon race, color, religion, national

origin, or sex from its personnel policies and practices and working

conditions; and

(5) Conduct a continuing review of job structure and employment

practices and adopt positive recruitment, job design, and other

measures needed to ensure genuine equality of opportunity to

participate fully in all organizational units, occupations, and levels

of responsibility.

(c) Specific EEO program requirements. Each broadcast station shall

establish, maintain, and carry out a positive continuing program of

specific practices designed to ensure equal opportunity and non-

discrimination in every aspect of station employment policy and

practice. Under the terms of its program, a station must:

(1) Recruit for every job vacancy in its operation. A job filled by

an internal promotion is not considered a vacancy for which recruitment

is necessary. Religious radio broadcasters who establish religious

affiliation as a bona fide occupational qualification for a job

position are not required to comply with these recruitment requirements

with respect to that job position only, but will be expected to make

reasonable, good faith efforts to recruit minorities and women who are

qualified based on their religious affiliation. Nothing in this section

shall be interpreted to require a broadcaster to grant preferential

treatment to any individual or group based on race, color, ethnic

origin, religion, or gender.

(2) Analyze its efforts to recruit, hire and promote without

discrimination on the basis of race, ethnic origin, color, religion,

and gender and address any difficulties encountered in implementing its

equal employment opportunity program. As part of its license renewal

application, a station shall submit a statement detailing its analysis

of such efforts for the 12 months prior to license expiration. Analysis

should occur on an ongoing

[[Page 66110]]

basis. A station's analysis shall include measures taken to:

(i) Disseminate its equal employment opportunity program to job

applicants and employees;

(ii) Review seniority practices to ensure that such practices are

non-discriminatory;

(iii) Examine rates of pay and fringe benefits for employees having

the same duties, and eliminating any inequities based upon race, ethnic

origin, color, religion, or sex discrimination;

(iv) Assess the productivity of recruiting sources;

(v) Utilize media for recruitment purposes in a manner that will

contain no indication, either explicit or implicit, of a preference for

one race, ethnic origin, color, religion or sex over another;

(vi) Offer promotions of qualified minorities and women in a

nondiscriminatory fashion to positions of greater responsibility;

(vii) Where union agreements exist, cooperate with the union or

unions in the development of programs to assure qualified minority

persons or women of equal opportunity for employment, and include an

effective non-discrimination clause in new or renegotiated union

agreements; and

(viii) Avoid the use of selection techniques or tests that have the

effect of discriminating against qualified minority groups or women.

(3) Retain records to prove that it has satisfied the requirements

of (c)(1) and (c)(2) of this section. Such recordkeeping shall include:

(i) Listings of recruiting sources utilized for each vacancy and

the date the vacancy was filled;

(ii) Dated copies of all advertisements, bulletins and letters

announcing vacancies; and

(iii) Compilations totaling the race, ethnic origin, and gender of

all applicants generated by each recruiting source according to

vacancy.

(d) Mid-term review for television broadcast stations. The

Commission will conduct a mid-term review of the employment practices

of each broadcast television station four years following the station's

most recent license expiration date as specified in Sec. 73.1020 of

this part. Television licensees are required to submit a narrative

statement, as described in paragraph (c)(2) of this section, four

months before the date specified in the previous sentence.

(e) Enforcement. The Commission will review a station's EEO program

at renewal time and may conduct random audits, including on-site

audits, throughout the license term to enforce this rule.

(f) Sanctions. The Commission may impose appropriate sanctions for

any violation of this rule.

PART 76--CABLE TELEVISION SERVICE

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

4Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,

307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,

534, 535, 536, 537, 543, 544, 544a, 545, 548, 552, 554, 556, 558,

560, 561, 571, 572, 573.

46. Section 76.75 is amended by revising paragraphs (b), (c) and

(f) and by adding paragraph (g) to read as follows:

Sec. 76.75 EEO program requirements.

* * * * *

(b) Recruit for every job vacancy in its operation. A job filled by

an internal promotion is not considered a vacancy for which recruitment

is necessary. Nothing in this section shall be interpreted to require a

cable entity to grant preferential treatment to any individual or group

based on race, ethnic origin, color, or gender.

(c) Retain records to prove that it has satisfied the requirements

of (b) and (f) of this section. Such recordkeeping shall include:

(1) Listings of recruiting sources utilized for each vacancy and

the date the vacancy was filled;

(2) Dated copies of all advertisements, bulletins and letters

announcing vacancies; and

(3) Compilations totaling the race, ethnic origin, and gender of

all applicants generated by each recruiting source according to

vacancy.

* * * * *

(f) Analyze its efforts to recruit, hire, promote and use services

without discrimination on the basis of race, ethnic origin, color,

religion, and gender and explain any difficulties encountered in

implementing its equal employment opportunity program. As part of its

Form 395-A/395-M supplemental investigation, an employment unit shall

submit a statement detailing its analysis of such efforts for the

previous 12 months. Analysis should occur on an ongoing basis. A unit's

analysis shall include measures taken to:

(1) Where union agreements exist, cooperate with the union or

unions in the development of programs to assure qualified minority

persons or women of equal opportunity for employment, and include an

effective non-discrimination clause in new or renegotiated union

agreements;

(2) Review seniority practices to ensure that such practices are

non-discriminatory;

(3) Examine rates of pay and fringe benefits for employees having

the same duties, and eliminating any inequities based upon race, ethnic

origin, color, religion, age, or sex discrimination;

(4) Assess the productivity of recruiting sources;

(5) Utilize media for recruitment purposes in a manner that will

contain no indication, either explicit or implicit, of a preference for

one race, ethnic origin, color, religion, age, or sex over another; and

(6) Avoid the use of selection techniques or tests that have the

effect of discriminating against qualified minority groups or women.

(g) The Commission may impose appropriate sanctions for cable

entities not found to be in compliance with paragraphs (b), (c), or (f)

of this section.

[FR Doc. 98-32013 Filed 11-30-98; 8:45 am]

BILLING CODE 6712-01-P