Identifying and Eliminating Market Entry Barriers for Small Businesses

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[General Docket No 96-113; FCC 96-216]

Identifying and Eliminating Market Entry Barriers for Small

Businesses

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; notice of inquiry.

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SUMMARY: The attached Notice of Inquiry (NOI) commences a proceeding to

examine barriers to small business entry into the telecommunications

marketplace. Section 101 of the Telecommunications Act of 1996 (1996

Telecommunications Act) adds new Section 257 to the Communications Act,

which requires the Commission, within 15 months after enactment, to

complete a proceeding to identify and eliminate market entry barriers

for entrepreneurs and other small businesses in the provision and

ownership of telecommunications services and information services, or

in the provision of parts or services to providers of

telecommunications services and information services. Through this NOI,

the Commission initiates an omnibus Section 257 proceeding and will

undertake specific initiatives that further the objective of reducing

market entry barriers for small businesses. The record developed in

connection with these intiatives also will, assist us in achieving our

mandate under Section 309(j) of the Communications Act of 1934 to

disseminate licenses for auctionable spectrum-based services to small

businesses, rural telephone companies, and businesses owned by women

and minorities, as well as in fulfilling our general obligation to

serve the public interest.

DATES: Comments must be submitted on or before July 24, 1996 and reply

comments are due on or before August 23, 1996.

ADDRESSES: Comments and reply comments may be mailed to the Office of

the Secretary, Federal Communications Commission, Washington, D.C.

20554.

panies, and businesses owned by women

and minorities, as well as in fulfilling our general obligation to

serve the public interest.

DATES: Comments must be submitted on or before July 24, 1996 and reply

comments are due on or before August 23, 1996.

ADDRESSES: Comments and reply comments may be mailed to the Office of

the Secretary, Federal Communications Commission, Washington, D.C.

20554.

FOR FURTHER INFORMATION CONTACT: Linda L. Haller, Office of General

Counsel, at (202) 418-1720 or S. Jenell Trigg, Office of Communications

Business Opportunities, at (202) 418-0990.

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

Notice of Inquiry which was adopted on May 10, 1996, and released on

May 21, 1996. The complete text of this NOI is available for inspection

and copying during normal business hours in the FCC Reference Center

(room 239), 1919 M Street, N.W., Washington, D.C., on-line at the

Office of Communications Business Opportunities' web site via the FCC's

Internet Home Page at www.fcc.gov., and may also be purchased from the

Commission's copy contractor, International Transcription Service (202)

857-3800, 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.

I. Introduction

1. Section 101 of the Telecommunications Act of 1996 (1996

Telecommunications Act),\1\ adds new Section 257 to the Communications

Act of 1934.\2\ Section 257 requires the Commission, within 15 months

after enactment, to complete a proceeding ``for the purpose of

identifying and eliminating, by regulations pursuant to its authority

under this Act * * * market entry barriers for entrepreneurs and other

small businesses in the provision and ownership of telecommunications

services and information services, or in the provision of parts or

services to providers of telecommunications services and information

services.'' \3\ In implementing Section 257, the Commission must

``promote the policies and purposes of this Act favoring diversity of

media voices, vigorous economic competition, technolog

small businesses in the provision and ownership of telecommunications

services and information services, or in the provision of parts or

services to providers of telecommunications services and information

services.'' \3\ In implementing Section 257, the Commission must

``promote the policies and purposes of this Act favoring diversity of

media voices, vigorous economic competition, technological advancement,

and promotion of the public interest, convenience and necessity.'' \4\

Every three years following the completion of the market entry barriers

proceeding, the Commission must report to Congress on regulations that

have been issued to eliminate barriers and any statutory barriers that

the Commission recommends be eliminated.\5\

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\1\ Telecommunications Act of 1996, Public Law No. 104-104, 110

Stat. 56 (1996).

\2\ 47 U.S.C. 151 et seq.

\3\ 47 U.S.C. 257(a).

\4\ 47 U.S.C. 257(b).

\5\ 47 U.S.C. 257(c).

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2. This Notice of Inquiry (NOI) commences the Commission's omnibus

Section 257 proceeding. We also will undertake specific initiatives

that further the objective of Section 257 to reduce market entry

barriers for small businesses. The record developed in connection with

these initiatives also will assist us in achieving our mandate under

Section 309(j) of the Act \6\ to disseminate licenses for auctionable

spectrum-based services to small businesses, rural telephone companies,

and businesses owned by women and minorities, as well as in fulfilling

our general obligation to serve the public interest.\7\

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also will assist us in achieving our mandate under

Section 309(j) of the Act \6\ to disseminate licenses for auctionable

spectrum-based services to small businesses, rural telephone companies,

and businesses owned by women and minorities, as well as in fulfilling

our general obligation to serve the public interest.\7\

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\6\ 47 U.S.C. 309(j).

\7\ See, e.g., 47 U.S.C. Sec. 214 (Commission must certify that

public convenience or necessity requires construction or extension

of lines); 47 CFR Sec. 303 (Commission must regulate radio as public

interest, convenience or necessity requires); 47 U.S.C. 307(a)

(Commission must grant radio licenses that serve the public

convenience, interest, or necessity).

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3. We also inquire whether small businesses owned by minorities or

women face unique entry barriers. We explore this area because the

legislative history of Section 257 suggests that Congress was concerned

about the underrepresentation of minority or women-owned small

businesses in the telecommunications market and sought to increase

competition by diversifying ownership.\8\ In addition, Section 309(j)

specifically requires that we further opportunities for businesses

owned by women and minorities in the provision of spectrum-based

services, because a portion of small telecommunications businesses

under Section 257 are owned by women and minorities, and because

evidence suggests that these entities encounter unique market barriers.

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quires that we further opportunities for businesses

owned by women and minorities in the provision of spectrum-based

services, because a portion of small telecommunications businesses

under Section 257 are owned by women and minorities, and because

evidence suggests that these entities encounter unique market barriers.

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\8\ The Congressional Record provides:

[W]hile we should all look forward to the opportunities

presented by new, emerging technologies, we cannot disregard the

lessons of the past and the hurdles we still face in making certain

that everyone in America benefits equally from our country's maiden

voyage into cyberspace. I refer to the well-documented fact that

minority and women-owned small businesses continue to be extremely

under represented in the telecommunications field. * * * Underlying

this amendment [Section 257] is the obvious fact that diversity of

ownership remains a key to the competitiveness of the U.S.

telecommunications marketplace.

142 Cong. Rec. H1141 at H1176-77 (daily ed. Feb. 1, 1996)

(statement of Rep. Collins).

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II. Background

4. The primary purpose of this inquiry is to fulfill our mandate

under Section 257 to identify and eliminate market barriers for small

businesses in the provision and ownership of telecommunications and

information services, and in the provision of parts or services to

providers of telecommunications services and information services

------------------------------------------

II. Background

4. The primary purpose of this inquiry is to fulfill our mandate

under Section 257 to identify and eliminate market barriers for small

businesses in the provision and ownership of telecommunications and

information services, and in the provision of parts or services to

providers of telecommunications services and information services. We

interpret ``market entry barriers'' to include obstacles that deter

entrepreneurs from forming small businesses, barriers that impede entry

into the telecommunications market by existing small businesses, and

obstacles that small telecommunications businesses face in providing

service or expanding within the telecommunications industry, e.g.,

those that inhibit a paging company from expanding into a new

geographic area or new service such as cellular.

5. The legislative history of Section 257 essentially parallels the

language of the enacted provision. The Conference Report states: ``The

conference agreement adopts the House provisions with minor

modifications as a new Section 257 of the Communications Act.'' \9\

There was no provision in the Senate bill and the House amendment

stated: ``Section 250 [now Section 257] requires the Commission to

adopt rules that identify and eliminate market entry barriers for

entrepreneurs and small businesses in the provision and ownership of

telecommunications and information services. The Commission must review

these rules and report to Congress every three years on how it might

prescribe or eliminate rules to promote the purposes of this section.''

\10\

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minate market entry barriers for

entrepreneurs and small businesses in the provision and ownership of

telecommunications and information services. The Commission must review

these rules and report to Congress every three years on how it might

prescribe or eliminate rules to promote the purposes of this section.''

\10\

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\9\ 142 Cong. Rec. H1078-03, H1113-14, Joint Explanatory

Statement of the Committee of Conference at 23.

\10\ 142 Cong. Rec. H1078-03 at H1113. In debates preceding

passage of the 1996 Telecommunications Act, two members of Congress

expressed the view that Section 257 would cover conduct including

that precluded by new Section 222(e), 47 U.S.C. Sec. 222(e), which

prohibits local telephone service providers from charging

discriminatory or unreasonable rates, or setting discriminatory or

unreasonable terms or conditions, in selling subscriber lists to

independent directory publishers. 142 Cong. Rec. H1145-06 at H1160

(daily ed. Feb. 1, 1996) (statement of Rep. Barton); 142 Cong. Rec.

E184-03 (daily ed. Feb. 6, 1996) (extension of remarks by Rep.

Paxon).

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6. Small businesses play a significant role in the U.S. economy.

According to the U.S. Small Business Administration (SBA), in 1992 (the

last year for which information is available), small businesses

constituted the vast majority of all employers, employed 53% of the

private work force, and provided 50% of all receipts. Research also has

shown that small firms innovate at a per person rate twice that of

large firms, spend more money on research and development (R&D), and

more efficiently convert R&D efforts to new products than large

firms.\11\ Furthermore, small businesses are able to serve narrower

niche markets that may not be easily or profitably served by large

corporations, especially as large telecommunications expand globally

at small firms innovate at a per person rate twice that of

large firms, spend more money on research and development (R&D), and

more efficiently convert R&D efforts to new products than large

firms.\11\ Furthermore, small businesses are able to serve narrower

niche markets that may not be easily or profitably served by large

corporations, especially as large telecommunications expand globally.

Despite the role of small businesses in the economy, and the growth of

the telecommunications market,\12\ small businesses currently

constitute only a small portion of telecommunications companies.\13\

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\11\ ``Report of the FCC Small Business Advisory Committee to

the Federal Communications Commission Regarding Gen Docket 90-314,''

reprinted at 8 FCC Rcd 7820, 7828 (1993) (SBAC PCS Report) (citing

Joint Petition for Further Rulemaking of Advanced Mobilecomm

Technologies, Inc. and Digital Spread Spectrum Technologies, Inc.,

in Gen Docket 90-314, Exhibit # 3, at 12-13).

\12\ For example, according to Edge Media, worldwide revenues

for Personal Communications Services (PCS) could grow to $31 billion

for equipment and services by the year 2000, The Telecommunications

Industry A Market Opportunity Analysis, Federal Communications

Commission, Office of Communications Business Opportunities (June

1995) (1995 OCBO Analysis) at 17 & n.30 (citing 1995

Telecommunications Market Review and Forecast, North American

Telecommunications Association), and PCS is expected to have 13.5

million subscribers by the year 2000, id. at 1. The cellular market

itself is growing rapidly: subscribership increased from

approximately 5 million in 1990 to over 24 million in 1994. Id. The

cable industry generated nearly $23 billion in 1994 and revenues

will likely continue to climb, given that over 65% of all households

with television sets subscribe to cable for video programming and

over 95% of the country is wired for cable. Id. at 3

cellular market

itself is growing rapidly: subscribership increased from

approximately 5 million in 1990 to over 24 million in 1994. Id. The

cable industry generated nearly $23 billion in 1994 and revenues

will likely continue to climb, given that over 65% of all households

with television sets subscribe to cable for video programming and

over 95% of the country is wired for cable. Id. at 3.

\13\ For example, the SBAC noted that SBA sales and employment

data for the period 1989-1991 indicated that while the total number

of small telecommunications enterprises had increased, cumulative

market share possessed by those businesses decreased significantly.

``Report of the FCC Small Business Advisory Committee to the Federal

Communications Commission Regarding Gen Docket 90-314,'' reprinted

at 8 FCC Rcd 7820, 7826 (1993) (SBAC PCS Report). Stated

differently, bigger businesses were commanding larger portions of

telecommunications revenues. Of a total of 990 firms in Standard

Industrial Code 4812 (radiotelephone industries) in 1989, 971 firms

with 249 employees or less possessed a 35.1% cumulative market share

in 1991, compared to 927 firms in the same employment size range

with a cumulative market share of 52.5% in 1989. Id. In contrast,

there were a total of 19 firms with over 249 employees commanding a

64.9% cumulative market share in 1991, compared to 21 firms of the

same size range with a cumulative market share of 47.5% in 1989.

Id.; see also FCC, ``Telecommunications Industry Revenue: TRS Fund

Worksheet Data'' (February 1996) at Table 21 (of all 1,347 local

exchange carriers (LEC) filing FCC Form 431 Telecommunications Relay

Service (TRS) Fund Worksheets, the top fifth represent 98% of all

LEC revenues; of all 97 interexchange carriers (IXC) filing TRS Fund

Worksheets, the top fifth represent 99% of all IXC revenues);

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

Competitive Bidding, Fifth Report and Order, 9 FCC Rcd 5532, 5578,

59 Fed. Reg

arriers (LEC) filing FCC Form 431 Telecommunications Relay

Service (TRS) Fund Worksheets, the top fifth represent 98% of all

LEC revenues; of all 97 interexchange carriers (IXC) filing TRS Fund

Worksheets, the top fifth represent 99% of all IXC revenues);

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

Competitive Bidding, Fifth Report and Order, 9 FCC Rcd 5532, 5578,

59 Fed. Reg. 37,566 (1994) (Competitive Bidding Fifth Report and

Order) (comments of DCR Communications asserting that ten large

companies--the six RBOCs, AirTouch (formerly owned by Pacific

Telesis), McCaw (now owned by AT&T), GTE and Sprint--control nearly

86 percent of the cellular industry, and that nine of these ten

companies control 95% of the cellular population and licenses in the

50 BTAs that have one million or more people).

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III. Identifying Market Barriers

A. General Market Barriers

7. In this section, we first request commenters to provide profile

data about small telecommunications businesses, including financing

sources and terms, services provided, markets served, geographic areas

of operation, and employee workforce. This information will assist us

in identifying market barriers and designing appropriate measures to

eliminate barriers. Commenters may submit individualized or aggregated

data. We request commenters to provide the following information in as

much detail as possible regarding particular services, including but

not limited to PCS, cellular, paging, SMR, satellite, radio,

television, wired cable, wireless cable, local exchange, long-distance,

access, on-line, messaging, and international services, and resale of

any such service, as well as information regarding businesses that

provide parts or services to providers of telecommunications services

and information services:

ular services, including but

not limited to PCS, cellular, paging, SMR, satellite, radio,

television, wired cable, wireless cable, local exchange, long-distance,

access, on-line, messaging, and international services, and resale of

any such service, as well as information regarding businesses that

provide parts or services to providers of telecommunications services

and information services:

(1) Ownership structure, including identity of owner(s) by gender

and racial group,14 as well as percentage of minority or female

control;

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\14\ Consistent with the definition of ``minority'' in our

rules, minority identification should be Black, Hispanic, American

Indian, Alaskan Native, Asian, or Pacific Islander, as appropriate.

See, e.g., 47 CFR Secs. 1.1621(b) and 24.720(i); see also Race and

Ethnic Standards for Federal Statistics and Administration

Reporting, OMB Statistical Policy Directive, No. 15 (1977).

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(2) Communications service(s) provided;

(3) Geographic region(s) served;

(4) Primary markets (e.g., businesses, residences, government);

(5) Number of employees, job categories (i.e., officials and

managers, professionals, technicians, clerical), and employee

composition in job categories by race and gender.

(6) Capital requirements for entry or expansion;

(7) Funding sources and methods of raising capital;

(8) Revenue, income and profit levels.

8. To help fulfill our responsibilities under Sections 257 and

309(j), we request comment on the following questions regarding market

barriers.

Comments should be as specific as possible and identify with

particularity the types of services and geographic regions covered.

(1) What obstacles do small businesses face in accessing capital

and credit?

(2) Do small businesses obtain capital and credit under terms and

conditions less favorable than those provided large businesses? If so,

why?

llowing questions regarding market

barriers.

Comments should be as specific as possible and identify with

particularity the types of services and geographic regions covered.

(1) What obstacles do small businesses face in accessing capital

and credit?

(2) Do small businesses obtain capital and credit under terms and

conditions less favorable than those provided large businesses? If so,

why?

(3) What difficulties do small businesses face in their dealings

with suppliers, vendors, contractors, or FCC licensees?

(4) What obstacles do small businesses face in their abilities to

resell, interconnect, or benefit from economies of scale?

(5) Do high deposit requirements deter small business entry into

resale?

(6) Do small businesses have difficulty attracting or retaining

clients?

(7) Do small businesses have difficulty dealing with trade

associations and other private entities?

(8) Do small businesses have particular difficulties in obtaining

government contracts, licenses, franchises, or other government

benefits? Have small businesses faced any such problems regarding FCC

policies or rules?

(9) Do contracts for a single bidder to serve a large volume and

diversity of companies through one contract disadvantage small

businesses?

(10) Do small businesses encounter difficulties attracting

strategic partners?

(11) In forming alliances with other entities, are small businesses

required to do so under unfavorable terms and conditions for the small

business?

(12) Are there unique obstacles that small businesses face in

entering or operating in the telecommunications field that are not

faced by small businesses operating in other sectors (for example, in

the retail or service sectors)?

gic partners?

(11) In forming alliances with other entities, are small businesses

required to do so under unfavorable terms and conditions for the small

business?

(12) Are there unique obstacles that small businesses face in

entering or operating in the telecommunications field that are not

faced by small businesses operating in other sectors (for example, in

the retail or service sectors)?

(13) Do small businesses experience difficulties identifying and

obtaining access to spectrum?

9. We request comment on how these impediments vary depending on

the particular service provided. What particular types of businesses

have difficulty getting started, operating, and expanding? Does the

cost of capital differ for small broadcast stations versus small

wireless providers? Does the cost of capital vary depending on the

particular type of wireless (paging, SMR, PCS, etc.) or broadcast

(television or radio) service offered? Do any other market entry

barriers exist? For what services? Parties should comment on the

geographic scope of any identified barrier, i.e., does the barrier

exist nationwide, or in particular regions or locales? For any barrier,

commenters also should identify whether it is a statutory

requirement,15 government regulation, or external factor, e.g.,

difficulty obtaining loans.

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\15\ Section 257 requires that we report to Congress any

statutory barriers that the Commission recommends be eliminated. 47

U.S.C. 257(c).

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10. We also request comment on how these difficulties are

influenced by size. Are impediments to entry and expansion greater for

very small businesses? For example, does the cost of capital increase

as the size of a small business decreases? Do very small businesses

encounter greater difficulties in dealings with suppliers, vendors, or

contractors than larger small businesses?

B. Unique Market Entry Barriers

st comment on how these difficulties are

influenced by size. Are impediments to entry and expansion greater for

very small businesses? For example, does the cost of capital increase

as the size of a small business decreases? Do very small businesses

encounter greater difficulties in dealings with suppliers, vendors, or

contractors than larger small businesses?

B. Unique Market Entry Barriers

11. In this section, we seek information to help us identify any

unique obstacles that small telecommunications businesses owned by

women or minorities encounter in forming firms, providing service, or

expanding in the telecommunications market. We explore this area

because first, the legislative history of Section 257 suggests Congress

was concerned about the underrepresentation of minority and women-owned

small businesses in the telecommunications market and sought to

increase competition by diversifying ownership. Second, Section 309(j)

specifically requires that we further opportunities for businesses

owned by women and minorities in the provision of spectrum-based

services. Third, based on our licensing information and other

statistical data, we know that a portion of small communications

businesses are owned by women and minorities and there is evidence that

these entities encounter unique market barriers.

12. Evidence demonstrates that a principal barrier is minority or

female status, rather than race or gender-neutral factors, and that

this barrier contributes directly to low participation rates. For

example, in the 1992 Small Business Act, Congress found that businesses

owned by minorities or women have particular difficulties in obtaining

capital.16 In the Women's Business Ownership Act of 1988,17

Congress found that women as a group are subject to discrimination that

adversely affects their ability to raise or secure capital

barrier contributes directly to low participation rates. For

example, in the 1992 Small Business Act, Congress found that businesses

owned by minorities or women have particular difficulties in obtaining

capital.16 In the Women's Business Ownership Act of 1988,17

Congress found that women as a group are subject to discrimination that

adversely affects their ability to raise or secure capital. In 1993,

the National Foundation for Women Business Owners found that women-

owned firms are 22% more likely to report difficulties with banks than

are businesses at large, and that removal of financial barriers would

encourage stronger growth among women-owned businesses, resulting in

much greater growth throughout the economy.18 Further, in a 1992

Report to the President and Congress, the National Women's Business

Council cited lack of access to capital as the most pervasive barrier

to success for women business owners.19

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\16\ 1992 Small Business Act, sections 112(4) and 33(a)(4).

\17\ Public Law No. 100-533 (1988).

\18\ ``Financing the Business, A Report on Financial Issues from

the 1992 Biennial Membership Survey of Women Business Owners,'' The

National Foundation for Women Business Owners (October 1993).

\19\ ``Annual Report to the President and Congress,'' National

Women's Business Council (1992) at 11.

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aw No. 100-533 (1988).

\18\ ``Financing the Business, A Report on Financial Issues from

the 1992 Biennial Membership Survey of Women Business Owners,'' The

National Foundation for Women Business Owners (October 1993).

\19\ ``Annual Report to the President and Congress,'' National

Women's Business Council (1992) at 11.

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13. As to communications businesses specifically, the American

Women in Radio and Television, Inc. asserts that ``[b]ased on their

gender, women today confront significant barriers in raising the amount

of capital necessary to seize the ownership opportunity. This lack of

access to capital has contributed directly to the low level of female

ownership of mass media facilities.'' The Commission has recognized

that ``considerable evidence has been presented showing that the

primary impediment to minorities seeking to enter the communications

industry or to increase their mass media holdings has been lack of

access to capital.'' In April 1995, the National Telecommunications and

Information Administration (NTIA) found that ``there are real barriers

to minority participation in telecommunications, and that minorities

often lack access to the types and amount of capital required to form

and expand telecommunications businesses.'' Congressional testimony

regarding minority discrimination in telecommunications shows that

controlling for education, work experience, age, gender, and other

factors, bank loan dollars, per dollar of owner equity investment, are

160% higher for white firms ($1.85) than black firms ($1.16).20

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\20\ Policies and Rules Regarding Minority and Female Mass Media

Ownership of Mass Media Facilities, Notice of Proposed Rulemaking,

10 FCC Rcd 2788, 2791, 60 Fed. Reg. 6,068 (1995) (Minority/Female

Mass Media Ownership NPRM).

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firms ($1.16).20

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\20\ Policies and Rules Regarding Minority and Female Mass Media

Ownership of Mass Media Facilities, Notice of Proposed Rulemaking,

10 FCC Rcd 2788, 2791, 60 Fed. Reg. 6,068 (1995) (Minority/Female

Mass Media Ownership NPRM).

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14. The relatively low representation of women or minority-owned

communications businesses also suggests that these types of businesses

encounter unique obstacles in entering the telecommunications industry.

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

1.9% (27) of 1,342 commercial television stations and 3.8% (394) of

10,244 commercial radio stations in the

United States.21 In 1994, minorities owned and controlled 2.7% of

the commercial television stations and 2.9% of the commercial radio

stations in the United States.22 According to the Census Bureau,

in 1992, Blacks owned 3.5% of the entities characterized generally as

communications firms 23 and women owned 31%; and most of these

businesses were solely-owned.24

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\21\ 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

us).

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, we sought comment on whether the Annual Ownership Report

Form 323 should be amended to include information on the gender and

race of broadcast license owners. Minority/Female Mass Media

Ownership NPRM, 10 FCC Rcd at 2797.

\22\ ``Analysis and Compilation of Minority-Owned Commercial

Broadcast Stations in the United States,'' U.S. Department of

Commerce, National Telecommunications and Information

Administration, The Minority Telecommunications Development Program

(MTDP) (September 1994). These percentages are based on reported

ownership of 1,155 commercial television stations and 9,973

commercial radio stations. MTDP considers ``minority ownership'' as

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

have voting control in a broadcast partnership.'' Id. Of the 11,128

combined radio and television stations nationwide, minorities owned

2.9% (323). Id.

\23\ ``Communications'' firms are a subcategory in a larger

grouping called ``transportation and public utilities.''

\24\ ``1992 Survey of Black-Owned Businesses,'' U.S. Department

of Commerce, Economics and Statistics Administration, Bureau of the

Census (``1992 Black-Owned Businesses''); ``1992 Survey of Women-

Owned Businesses,'' U. S. Department of Commerce, Economics and

Statistics Administration, Bureau of the Census (1992 Women-Owned

Businesses''). These figures represent firms classified by the

Census Bureau as Standard Industrial Classification Code (SIC) #48

and 1,517 Black-owned firms out of 43,666 total communications firms

and 13,592 women-owned firms out of 43,665 total communications

firms

d Businesses,'' U. S. Department of Commerce, Economics and

Statistics Administration, Bureau of the Census (1992 Women-Owned

Businesses''). These figures represent firms classified by the

Census Bureau as Standard Industrial Classification Code (SIC) #48

and 1,517 Black-owned firms out of 43,666 total communications firms

and 13,592 women-owned firms out of 43,665 total communications

firms.

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15. Finally, the participation level of minority or women-owned

businesses in the Commission's spectrum auctions so far suggests that

these entities may face unique obstacles. Because auctions will

continue and various factors influence participation,25 we are not

able to fully assess participation by women and minorities. Figures

preliminarily indicate, however, that participation in auctions without

bidding incentives for minorities and women is lower than participation

in auctions with incentives. For example, in the broadband PCS auction

for A and B blocks, which concluded in March 1995, no minority-owned

businesses won a broadband PCS license and only one license (for one of

the lower-priced markets) was won by a woman-owned business. In the MDS

auction, which concluded on March 28, 1996, 7.7% of the eligible

bidders claimed woman-owned status; 8.4% of the eligible bidders

claimed minority-owned status. Of the 67 winners, 5.9% indicated they

were women-owned; 7.5% indicated they were minority-owned.26 In

the 900 MHz SMR auction, which concluded on April 15, 1996, 7.8% of the

eligible bidders claimed woman-owned status and 3.9% claimed minority-

owned status. Of the 80 successful bidders, 6.3% indicated they were

women-owned; 5% indicated they were minority-owned

claimed minority-owned status. Of the 67 winners, 5.9% indicated they

were women-owned; 7.5% indicated they were minority-owned.26 In

the 900 MHz SMR auction, which concluded on April 15, 1996, 7.8% of the

eligible bidders claimed woman-owned status and 3.9% claimed minority-

owned status. Of the 80 successful bidders, 6.3% indicated they were

women-owned; 5% indicated they were minority-owned. Statistics for the

PCS C block auction, which ended May 6, 1996, were higher, even though

no competitive bidding incentives were available for businesses owned

by minorities or women: 27 13.3% of the eligible bidders claimed

woman-owned status, 18.0% claimed minority-owned status; 28 and of

the 89 successful bidders, 16.9% indicated they were woman-owned; 28.1%

indicated they were minority-owned.29

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\25\ Factors that may influence participation, include for

example, the type of service, presence of incumbents, projected cost

of a successful bid, capital requirements for offering service,

access to capital, license coverage area, availability of Commission

bidding incentives, and the extent of Commission outreach to small

minority or women-owned businesses and new entrants.

\26\ ``Multipoint Distribution Service Questions and Answers,''

FCC Auctions, Press Information (released March 29, 1996) at 3.

\27\ In the Competitive Bidding Sixth Report and Order, the

Commission noted that many minority-owned and women-owned applicants

prepared to bid in the C Block auction in reliance on race and

gender-based incentives. Thus, their rate of participation is likely

higher than it would have been in the absence of any pre-auction

incentives. See Amendment of Part 20 and 24 of the Commission's

Rules--Broadband PCS Competitive Bidding and the Commercial Radio

Service Spectrum Cap, Notice of Proposed Rulemaking, WT Docket No.

96-59, GN Docket No. 90-314, 61 Fed. Reg. 13,133 (released March 20,

1996) (D, E & F Block NPRM) at para

of participation is likely

higher than it would have been in the absence of any pre-auction

incentives. See Amendment of Part 20 and 24 of the Commission's

Rules--Broadband PCS Competitive Bidding and the Commercial Radio

Service Spectrum Cap, Notice of Proposed Rulemaking, WT Docket No.

96-59, GN Docket No. 90-314, 61 Fed. Reg. 13,133 (released March 20,

1996) (D, E & F Block NPRM) at para. 27 (citing Implementation of

Section 309(j) of the Communications Act--Competitive Bidding, Sixth

Report and Order, 11 FCC Rcd 136, 60 Fed. Reg. 37,786 (1996).

\28\ Id.

\29\ ``Distribution of Licenses in PCS C-Block Auction,'' FCC

Auctions, Press Information (released May 6, 1996).

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16. By comparison, auctions that offered incentives for women and

minority-owned businesses yielded higher participation by those

entities (both as bidders and winners).

For example, in the July 1994 IVDS auction, 22.5% of the registered

bidders claimed status as minority-owned, and 33.2% as women-owned; of

the auctioned licenses, 23.6% were awarded to bidders claiming

minority-owned status, and 38.2% to bidders claiming women-owned

status.30 In the nationwide narrowband PCS auction, also held in

July 1994, of the 29 qualified bidders, 20.1% claimed minority-owned

status and 10.3% claimed women-owned status.31 None of the winners

were minority or women-owned businesses. In the Fall 1994 regional

narrowband PCS auction, which offered a larger bidding credit than was

available in the nationwide narrowband PCS auction, of the 28 qualified

bidders, 35.7% claimed minority-owned status, and 28.6 % claimed women-

owned status.32 Of the nine winners, 22.2% claimed minority-owned

status, and 33.3% claimed women-owned status.33

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and PCS auction, which offered a larger bidding credit than was

available in the nationwide narrowband PCS auction, of the 28 qualified

bidders, 35.7% claimed minority-owned status, and 28.6 % claimed women-

owned status.32 Of the nine winners, 22.2% claimed minority-owned

status, and 33.3% claimed women-owned status.33

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\30\ ``Visitor's Auction Guide, FCC Auction, Broadband Personal

Communications Services'' (December 5, 1994) (1994 FCC Visitor's

Auction Guide) at Section IX.

\31\ Id. at Section VIII.

\32\ Id. at Section VII.

\33\ Id.

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17. We seek a broad and comprehensive record from which to

determine whether the experiences of women and particular minority

groups in entering and participating in the telecommunications market

warrant adopting more significant gender or race-based incentives for

minority or women-owned small businesses. Parties may submit personal

accounts of individual experiences, studies, reports, statistical data,

or any other relevant information.

18. Commenters should address whether there are particular barriers

to entry and expansion based on a small business owner's race or

gender. If so, for which services? Do barriers differ by service, e.g.,

radio, television, advanced television, DBS, PCS, equipment

manufacturing? What specific obstacles do women and minorities

encounter in trying to start small communications businesses? Are there

problems endemic to small women and minority-owned telecommunications

businesses but not to small businesses owned by women and minorities in

other industries (e.g., retail, real estate), and if so, why? Are any

such difficulties the result of race/gender neutral factors such as

economic status, geographic location, level of experience? Are

differences in capital requirements determinative? What other factors

play a role? Commenters should address to what extent any impediment

ot to small businesses owned by women and minorities in

other industries (e.g., retail, real estate), and if so, why? Are any

such difficulties the result of race/gender neutral factors such as

economic status, geographic location, level of experience? Are

differences in capital requirements determinative? What other factors

play a role? Commenters should address to what extent any impediments

are unique to small businesses owned by women or minorities, rather

than small businesses generally.

19. Discrimination can be a market entry barrier. Parties may

submit evidence of past or current discrimination based on race or

gender. Judicial findings of discrimination are

not required.34 Evidence of discrimination can be derived from a

variety of sources, including academic research studies, adjudications,

legislative findings, statistical data, and personal accounts. To the

extent possible, evidence should relate to a particular racial, ethnic,

or gender group.

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\34\ Parties should be mindful, however, that to the extent it

is applicable to federal action, Croson requires that the government

have a `` `strong basis in evidence for its conclusion that remedial

action was necessary,' '' City of Richmond v. J.A.Croson, 488 U.S.

469, 500 (1989) (quoting Wygant, 476 U.S. at 277); see also

Memorandum Regarding Adarand to General Counsels from Walter

Dellinger, Assistant Attorney General, Office of Legal Counsel, U.S.

Department of Justice (dated June 28, 1995) (DOJ Memorandum) at 11.

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on was necessary,' '' City of Richmond v. J.A.Croson, 488 U.S.

469, 500 (1989) (quoting Wygant, 476 U.S. at 277); see also

Memorandum Regarding Adarand to General Counsels from Walter

Dellinger, Assistant Attorney General, Office of Legal Counsel, U.S.

Department of Justice (dated June 28, 1995) (DOJ Memorandum) at 11.

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20. Women and minority owned businesses may have experienced

discrimination or difficulty in obtaining government licenses. These

experiences may have impeded the ability of such entities to enter the

communications market, and consequently, impeded subsequent

opportunities. We seek evidence of discrimination or unfavorable

treatment by any governmental or public entity with respect to

communications-related licenses, contracts or other benefits. It has

been argued to the Commission that as a result of our system of

awarding broadcast licenses in the 1940s and 1950s, no minority held a

broadcast license until 1956 or won a comparative hearing until 1975

35 and that special incentives for minority businesses ``are

needed in order to compensate for a very long history of official

actions which deprived minorities of meaningful access to the

radiofrequency spectrum.'' 36 We solicit comment on this

particular argument.

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\35\ See ``Statement of David Honig, Executive Director,

Minority Media and Telecommunications Council,'' En Banc Advanced

Television Hearing, MM Docket No. 87-268 (December 12, 1995) at 2-3

& n.2.

\36\ Id. at n.2 citing Southland Television Co., 10 RR 699, 750,

recon. denied, 20 FCC 159 (1955) (awarding a Shreveport VHF license

to the owner of a segregated movie theaters because such segregation

`would be legal under the laws of [Louisiana]').''

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on Hearing, MM Docket No. 87-268 (December 12, 1995) at 2-3

& n.2.

\36\ Id. at n.2 citing Southland Television Co., 10 RR 699, 750,

recon. denied, 20 FCC 159 (1955) (awarding a Shreveport VHF license

to the owner of a segregated movie theaters because such segregation

`would be legal under the laws of [Louisiana]').''

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21. Race or gender discrimination in employment may impede

participation and advancement in the communications industry.

Employment provides business knowledge, judgment, technical expertise,

and entrepreneurial acumen, and other experience that is valuable in

attaining ownership positions. For example, the Commission has found

that employment in the broadcast industry is a valuable stepping stone

to broadcast ownership.37

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\37\ See Streamlining Broadcast EEO Rule and Policies, Vacating

the EEO Forfeiture Policy Statement and Amending Section 1.80 of the

Commission's Rules to Include Forfeiture Guidelines, MM Docket No.

96-16, FCC 96-49, 61 Fed. Reg. 9,964 (released February 16, 1996)

(1996 EEO Order & NPRM) at para. 4 (``employment discrimination in

the broadcast industry . . . imped[es] opportunities for minorities

and women to learn the operating and management skills necessary to

become media owners and entrepreneurs''); see also Policy Statement,

Standards for Assessing Forfeitures for Violations of the Broadcast

EEO Rules, 9 FCC Rcd 929, 930, 59 Fed. Reg. 12,606 (1994) (EEO

Forfeiture Policy Statement), vacated on other grounds, 1996 EEO

Order and NPRM (``increased employment opportunities are the

foundation for increasing opportunities for minorities and women in

all facets of the communications industry, including participation

in ownership'').

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929, 930, 59 Fed. Reg. 12,606 (1994) (EEO

Forfeiture Policy Statement), vacated on other grounds, 1996 EEO

Order and NPRM (``increased employment opportunities are the

foundation for increasing opportunities for minorities and women in

all facets of the communications industry, including participation

in ownership'').

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22. We seek any evidence that employment discrimination in the

communications industry has been a barrier to entry in the

telecommunications market by small businesses owned by minorities or

women. Submissions should be detailed and should explain why the

commenter believes the conduct at issue (e.g., failure to hire or

promote) was based on race or gender discrimination, rather than the

result of a race or gender-neutral factor (e.g., no job vacancy, job

applicant not qualified for the position).

IV. Eliminating Market Barriers

A. Small Businesses Generally

23. Section 257 requires that after identifying market barriers, we

prescribe regulations to eliminate those barriers. In implementing this

mandate, first, how should we define small businesses under Section

257? By number of employees, gross revenue, net revenue, assets, or any

other factor? Should we adopt a general size standard or specific

standards for particular services (e.g., broadcast, PCS)? For example,

the Commission's current Section 309(j) definitions are based on gross

revenues and assets. Are there other factors the Commission should

consider in defining what constitutes a small business? Should the

Commission explore minimum capital requirements, debt/equity ratios,

cash flow, net worth or other indicia of a business' ability to enter

and compete in the marketplace? To formulate a policy using such

indicia, the Commission would need specific financial information for

small businesses generally, and requests that commenters recommending

new approaches indicate the type of information needed by the

Commission.

capital requirements, debt/equity ratios,

cash flow, net worth or other indicia of a business' ability to enter

and compete in the marketplace? To formulate a policy using such

indicia, the Commission would need specific financial information for

small businesses generally, and requests that commenters recommending

new approaches indicate the type of information needed by the

Commission.

24. Second, we seek comments and proposals regarding ways to

eliminate market entry barriers and enhance opportunities for small

businesses in communications services, including, e.g., wireline,

wireless, mass media, cable, satellite. What types of incentives or

requirements would be most effective in eliminating market entry

barriers? Commenters may propose new initiatives or suggest changes to

existing rules or make any other recommendation. Proposals may address,

for example, sale of subscriber lists to independent directory

publishers as recognized by Congress in enacting Section 257,38 or

any other area. Commenters should provide data to support their

proposals. Because Section 257 states that in prescribing rules to

eliminate barriers we must rely on our rulemaking authority under

provisions of the Act other than Section 257, we also request that

commenters identify specific rulemaking provisions in the Act, e.g.,

Section 4(i) 39 that would support any such proposals.

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\38\ See supra note 10 (citing legislative history of Section

257).

\39\ 47 U.S.C. 154(i).

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n 257, we also request that

commenters identify specific rulemaking provisions in the Act, e.g.,

Section 4(i) 39 that would support any such proposals.

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\38\ See supra note 10 (citing legislative history of Section

257).

\39\ 47 U.S.C. 154(i).

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25. Our Section 309(j) competitive bidding incentives for small

businesses are examples of the types of mechanisms we could adopt in

furtherance of our Section 257 mandate. Have bidding credits,

installment payments, and reduced upfront payments enhanced

opportunities for small business participation? Did the Commission's

outreach efforts in providing information to prospective bidders

enhance small business participation in each auction? If commenters

believe the Commission's existing mechanisms could be modified to

enhance opportunities for small businesses, please explain how, or

suggest new approaches. In addition, we seek preliminary views on how

the Section 309(j) incentives have operated in the five completed

auctions employing small business incentives.40 For example, we

are aware of concerns that due to the high level of bidding in the PCS

C Block auction successful bidders may find it difficult later on to

secure the necessary financial resources to build out their systems,

and may ultimately encounter problems in the market against established

competitors like incumbent cellular providers and the generally large,

well-financed winners of PCS A and B block licenses.41 How do we

balance the

desire to do more with the need to ensure that larger businesses do not

usurp measures designed to aid small businesses? Do we need to do more

to make sure that small businesses have meaningful opportunities to

participate in the provision of spectrum-based services?

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PCS A and B block licenses.41 How do we

balance the

desire to do more with the need to ensure that larger businesses do not

usurp measures designed to aid small businesses? Do we need to do more

to make sure that small businesses have meaningful opportunities to

participate in the provision of spectrum-based services?

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\40\ Bidding ended in the IVDS MSA auction on July 29, 1994,

regional narrowband PCS auction on November 8, 1994, MDS auction on

March 28, 1996, 900 MHz SMR auction on April 15, 1996, and the C

Block auction on May 6, 1996.

\41\ ''$6 Billion Bid so Far in Latest F.C.C. Auction For

Airwaves,'' N.Y. Times, February 14, 1996, at D1 Column 6 (noting

concerns of one industry consultant that the C Block auction was

overvaluing the wireless market by 20%); ``Billions Pledged at

Wireless License Auction,'' Washington Post, February 17, 1996 at B1

Column 1 (noting that even with the Commission's liberal payment

terms for small businesses, which some analysts figure amounts to a

40-60% discount, small businesses may find difficulty surviving if

the market proves soft or glutted with competitors).

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B. Minority or Women-Owned Small Businesses

26. In Part III.B. above, we request data to identify whether small

businesses owned by minorities or women experience unique market

barriers. In this section, we explore whether there is sufficient

evidence of market barriers to justify special incentives to eliminate

those barriers. We do so because governmental action that takes race or

gender into account is subject to particular constitutional standards:

strict scrutiny for race-based incentives; intermediate scrutiny for

gender-based incentives. We discuss these standards below and then seek

comment on possible incentives that would satisfy the standards while

at the same time furthering the mandate of Section 257.

We do so because governmental action that takes race or

gender into account is subject to particular constitutional standards:

strict scrutiny for race-based incentives; intermediate scrutiny for

gender-based incentives. We discuss these standards below and then seek

comment on possible incentives that would satisfy the standards while

at the same time furthering the mandate of Section 257.

1. Constitutional Standards

27. The Constitution limits the power of government to classify

individuals based on race or gender. Thus, federal incentive programs

that take race or gender into account must satisfy constitutional

standards. Courts reviewing government programs have applied different

standards of review and reached various results depending on whether

the classification covers race or gender and whether the classification

burdens or benefits its subjects. Race-based programs must be narrowly

tailored to further a compelling governmental interest. Gender-based

programs must be substantially related to serve an important

governmental interest.

28. In Adarand Constructors, Inc. v. Pena, 42 the Supreme

Court held that the federal government's use of race-based criteria for

decisionmaking must satisfy the requirements of strict scrutiny.43

The Court wrote:

\42\ 115 S. Ct. 2097 (1995).

\43\ Prior to Adarand, the standard differed for federal and

state programs. Compare Fullilove v. Klutznick, 448 U.S. 448 (1980)

(federal program evaluated under intermediate scrutiny) with City of

Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) (state program

evaluated under strict scrutiny).

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[W]e hold today that all racial classifications, imposed by

whatever federal, state, or local governmental actor, must be

analyzed by a reviewing court under strict scrutiny. In other words,

such classifications are constitutional only if they are narrowly

tailored measures that further compelling governmental

interests.44

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[W]e hold today that all racial classifications, imposed by

whatever federal, state, or local governmental actor, must be

analyzed by a reviewing court under strict scrutiny. In other words,

such classifications are constitutional only if they are narrowly

tailored measures that further compelling governmental

interests.44

\44\ Id. at 2113.

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By this decision, the Court rejected its earlier legal analysis in

Metro Broadcasting, Inc. v. FCC,45 which had applied the

intermediate scrutiny standard of judicial review to the Commission's

broadcasting distress sale and comparative preference policies for

minorities.46

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\45\ 497 U.S. 547 (1990).

\46\ In Metro Broadcasting, the Court held:

[B]enign race-conscious measures mandated by Congress--even if

those measures are not ``remedial'' in the sense of being designed

to compensate victims of past governmental or societal

discrimination--are constitutionally permissible to the extent that

they serve important governmental objectives within the power of

Congress and are substantially related to achievement of those

objectives.

Id. at 564-65.

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29. Overruling this aspect of Metro Broadcasting, the Court in

Adarand clarified the permissible scope of affirmative action. First,

the Court rejected the notion that the characterization of a racial

classification as ``benign'' should entitle it a lower level of

judicial review. Second, the Court applied to federal minority

preference programs the strict scrutiny standard it had applied to a

local contracting set-aside program in City of Richmond v. J.A

darand clarified the permissible scope of affirmative action. First,

the Court rejected the notion that the characterization of a racial

classification as ``benign'' should entitle it a lower level of

judicial review. Second, the Court applied to federal minority

preference programs the strict scrutiny standard it had applied to a

local contracting set-aside program in City of Richmond v. J.A. Croson

Co.47 Yet in doing so, the Court emphasized its intention not to

impinge upon the federal government's ability to actively combat both

the practice and the continuing effects of discrimination. A majority

of the Court rejected any notion that strict scrutiny review is

``strict in theory, but fatal in fact.'' As Justice O'Connor stated in

Adarand, ``[t]he unhappy persistence of both the practice and the

lingering effects of racial discrimination against minority groups in

this country is an unfortunate reality, and government is not

disqualified from acting in response to it.'' 48 In rejecting the

Metro Broadcasting standard, the Court nonetheless reasoned that

because the Constitution protects individuals rather than groups, any

governmental action based upon a racial group classification should be

subject to ``detailed judicial inquiry.'' 49

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\47\ 488 U.S. 469 (1989).

\48\ Adarand, 115 S. Ct. at 2117.

\49\ Id. at 2113.

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30. Thus, Adarand established a new strict scrutiny standard for

federal minority programs, based upon the two prong analysis of Croson:

ed judicial inquiry.'' 49

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\47\ 488 U.S. 469 (1989).

\48\ Adarand, 115 S. Ct. at 2117.

\49\ Id. at 2113.

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30. Thus, Adarand established a new strict scrutiny standard for

federal minority programs, based upon the two prong analysis of Croson:

(1) the governmental interest underlying the affirmative action measure

be ``compelling;'' and (2) the measure adopted must be ``narrowly

tailored'' to serve that interest. Because a federal minority program

has not yet been subjected to strict scrutiny pursuant to Adarand,

judicial guidance regarding the strict scrutiny standard thus far is

limited to Croson and lower court decisions applying strict scrutiny to

state and local programs.50

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\50\ See Hopwood v. Texas, 78 F.3d 932 (5th Cir. 1996) petition

for cert. filed (holding that the University of Texas School of Law

may not use race as a factor in law school admissions).

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31. Under these cases, the most clearly permissible compelling

governmental interest is remedying the effects of present or past

discrimination. Thus, federal minority incentive programs that serve a

remedial interest are likely to satisfy the compelling governmental

interest prong. Discrimination can be that committed by the government

itself, or by private actors within the government's jurisdiction (such

that the government was a ``passive participant'' or facilitated the

perpetuation of a system of exclusion). The government must identify

with some precision the discrimination to be redressed,51

including evidence of discrimination against particular minority

groups.52 General, historical discrimination is an insufficient

predicate

y private actors within the government's jurisdiction (such

that the government was a ``passive participant'' or facilitated the

perpetuation of a system of exclusion). The government must identify

with some precision the discrimination to be redressed,51

including evidence of discrimination against particular minority

groups.52 General, historical discrimination is an insufficient

predicate. ``[A]n amorphous claim that there has been past

discrimination in a particular industry cannot justify the use of an

unyielding racial quota.'' 53 In addition, the government should

have a ``strong basis,'' approaching a ``prima facie case of

constitutional or statutory violation'' 54 of the rights of

minorities. Croson permits remedial relief on the basis of ``evidence

of a pattern of individual discriminatory acts * * * supported by

appropriate statistical proof.'' 55 Post-Croson cases have held

that statistical evidence can be probative of discrimination in the

remedial setting,56 and that anecdotal evidence can buttress

statistical evidence.57

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\51\ Croson requires that a government ``identif[y]

discrimination with the particularity required by the Fourteenth

Amendment.'' Croson, 488 U.S at 492, 499, 509; see also DOJ

Memorandum at 22.

\52\ Croson 488 U.S. at 506 (``The random inclusion of racial

groups that, as a practical matter, may never have suffered from

discrimination in the construction industry in Richmond suggests

that perhaps the city's purpose was not in fact to remedy past

discrimination.'')

\53\ Id. at 499.

\54\ Id. at 500.

\55\ Id. at 509.

\56\ See, e.g., Peightal v. Metropolitan Dade County, 26 F.3d

1548, 1556 (11th Cir. 1994) (statistical evidence constitutes

``requisite `strong basis in evidence' mandated by Croson'').

\57\ See, e.g., Coral Construction Co., 941 F.2d at 919

(convincing anecdotal and statistical evidence can be ``potent'');