FEDERAL COMMUNICATIONS COMMISSION

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                   FEDERAL COMMUNICATIONS COMMISSION

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                 THE ADVISORY COMMITTEE ON DIVERSITY FOR
                    COMMUNICATIONS IN THE DIGITAL AGE

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                                   MONDAY
                               JUNE 14, 2004

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                         2:00 p.m. to 5:00 p.m.

                   Federal Communications Commission
                          445 12th Street, SW
                   Commission Meeting Room (TW-C305)
                             Washington, DC

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This transcript was produced from a recording provided
by the Federal Communications Commission.

                                 NEAL R. GROSS
                        COURT REPORTERS AND TRANSCRIBERS
                            1323 RHODE ISLAND AVE., N.W.
(202) 234-4433              WASHINGTON, D.C. 20005-3701    www.nealrgross.com
                                                                                              2
 1   P-R-O-C-E-E-D-I-N-G-S

 2                                                                       (10:20 a.m.)

 3              Ms. Johnson:                 Good         afternoon.     I‘m        Julia

 4   Johnson, and I wanted to call this meeting to order

 5   today and start off by thanking the FCC, Chairman

 6   Powell, the Commission and the staff for bringing us

 7   here again today.                    And, more specifically, the men

 8   and women that make up our committee.                                    I thought

 9   about        the       diversity          of       opinion,     thought,     ideas,

10   suggestion, and what I would call this esteemed body,

11   and I came up with ―Motley Crew‖.                               And I say that

12   because          Mr.     Chairman            and     commission,    you‘ve        put

13   together           a     group          of     people       that    think        very

14   differently              within           sub-committees,          within         the

15   organization, but it has made us stronger, it has

16   allowed          us      to       put         forth      our    first      set      of

17   recommendations,                 suggestions,            implementation        items

18   that we are hopeful that will be useful to you, Mr.

19   Chairman, and the commission as you move forward.

20   And, more importantly, it‘s a first step for us.                                         I

21   had several members already call me saying, ―What

22   next, when do we get to do step 2; I‘m not satisfied

23   with       step        1‖.        And     I    think      that‘s   the     kind     of

24   individual             and     the    kind      of      organization     that     you

25   wanted, and it‘s one that we truly appreciate, from



                                             NEAL R. GROSS
                                  COURT REPORTERS AND TRANSCRIBERS
                                      1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                   WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                             3

 1   the members of our committee to our subject matter

 2   experts.            I    know    Ari    and    Janelle      and      Marva       and

 3   there‘s Stacey Meaders, there‘s several individuals

 4   in the audience who will all be participating in

 5   today‘s meeting, as we move this forward.                                    And I

 6   wanted to just quickly overview the agenda and then

 7   turn       it     over    to    you     Mr.    Chair      for   remarks          and

 8   guidance and to the Commission also.                        We‘ve tried our

 9   best to communicate with the offices.                        We respect and

10   look to you all for your comments and your guidance

11   as we move forward.                   But we thought we‘d have our

12   subject          matter        chairs    after       comments         from       the

13   commissioners provide sub-committee reports just to

14   bring the world up to date with respect to what has

15   happened and transpired over the last several months.

16    From there, after we‘ve passed upon their official

17   reports,          and     entertained          questions        between          the

18   members, we will go into presentations of resolutions

19   and       items         that    require       official       vote        of      our

20   membership.              Towards       the    end,   we     will     then       take

21   comments from the public and questions for the last

22   wrap up sessions for today. And, with that, if there

23   are      no      other    preliminaries        as    it     relates        to    the

24   attendance, that‘s being noted, and taken care of,

25   and Jane, did you --

                                        NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701           www.nealrgross.com
                                                                                               4

 1                          Ms. Howard:          I just want to mention that

 2   Commissioner Copps had wanted to be here for the

 3   beginning, and he has a scheduling conflict, and he

 4   will be joining us later on.

 5                          Ms. Johnson: Any                  other       preliminary?

 6   Jane, Maureen and her group, they‘ve been, as you all

 7   know, stars and just tremendously valuable to this

 8   process and keeping us on track. Thank you Jane,

 9   Maureen.

10                          Mr. Powell:          I think my first order of

11   business          will       be    to     bring      a    copyright      trademark

12   infringement against Julia, because Motley Crew we

13   already used for the commission, so.                             You can‘t have

14   it.       Really,        I        always    feel         it‘s    redundant         but

15   important to just welcome you and express my deep

16   gratitude for your commitment to this cause and to

17   this public service effort.                          It really is important

18   that you understand, that we understand that your

19   work is a lot more than coming to this meeting, which

20   is every several months, but that it goes on day in

21   and day out by phone call, by e-mail, by instant

22   message, and, you know, we keep track of that and are

23   very        encouraged.             I‘m     as     encouraged         about        the

24   commitment of this set of individuals as I am by

25   almost           any    Federal         Advisory         Committee     I‘ve       been

                                          NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701             www.nealrgross.com
                                                                                          5

 1   associated with.              Not only the quality of talent and

 2   range represented by this group, but it‘s unwavering

 3   commitment          to   spend        extra-curricular        time,     if    you

 4   will, from your day jobs on such an important subject

 5   that‘s           difficult       to     find       workable    real        world

 6   solutions to is deeply noted, deeply appreciated, and

 7   we thank you.

 8                       It seems to me I grow ever more heartened

 9   as this group lengthens in the time it has spent on

10   these issues as it starts to bear some fruit.                            I look

11   forward to the sub-committee reports, but just I‘m

12   already enormously pleased to begin to see product.

13   We talked about this when we first got together, the

14   importance of this being more than discussion.                               That

15   it begin to drive toward workable solutions and real

16   product.          And I‘m just enormously pleased to see the

17   beginnings, just the beginnings of that in the form

18   of Best Practices and Guidelines that we‘ll hear some

19   more about, I assume, today and many of the other

20   recommendations that have been going forward.

21                       We    know     it‘s    easier     to    articulate        the

22   importance of this issue than it is to work through

23   the      complexities         of      having    had   to    bring     it     into

24   reality, and I think your expertise and resources and

25   thinking          have    led    to     that.       Indeed,    speaking         of

                                        NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                              6

 1   product, more than words, I do want to make you aware

 2   of an announcement.                 Tomorrow, we are going to issue

 3   a public notice by the media bureau to comment on

 4   ways to further the Section 257 Mandate, and to build

 5   on our earlier studies, often referred to as the

 6   Adoran Studies. Here‘s a copy of the press release

 7   that we‘ll be releasing probably in the morning that

 8   seeks            comments        specifically       on       constitutionally

 9   permissible ways to advance diversity with specific

10   consideration of how to reconcile the constitutional

11   jurisprudence of not only Adoran and Crosen, but to

12   take into account the recent Supreme Court rulings in

13   Gruder and Gratz in an effort to find a middle ground

14   that will advance what the Commission can permissibly

15   do and help empower you all as we develop further

16   rule        makings         on    how    to    advance        our       diversity

17   interests and our opportunity agenda.                               I would be

18   remiss if I didn‘t say that I want to commend those

19   who raised these concerns with us, helped craft ways

20   to     go        about    trying    to   get    these    studies          back      on

21   track.            That‘s what we expect from you all, and I

22   appreciate it.               And, hopefully, this will put some

23   more      fuel       in    the    tank   for    taking       us   where        we‘re

24   trying to go.              And so I just wanted to let you all be

25   the first ones to know that and let you know we look

                                         NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701           www.nealrgross.com
                                                                                           7

 1   forward to working on that as we start those rule

 2   makings.          So, with that, again I want to thank you

 3   for being here, thank you for your commitment, and

 4   anxiously           look       forward        to       the     sub-committee

 5   presentations and the work that you‘ve done so far.

 6   So, thank you.

 7                       Ms. Johnson:        Thank you Mr. Chairman. Mr.

 8   Adelstein.

 9                       Mr. Adelstein:                Thank       you.          Madam

10   Chairman, I really want to thank you for all your

11   leadership on bringing us to this point and all the

12   work      that‘s        been   done    by   all       the    members     of    the

13   committee, and for all of you that brought yourself

14   here today and have done so much to make this final

15   product          that    we    have,    not       a   final    product,        but

16   finally getting a product.                    We‘re glad to see that

17   you‘re putting pen to paper, and making some real

18   progress, and I look forward to hearing more about

19   your recommendations today.                   I got a chance to look

20   at the draft recommendations, and I think that you‘ve

21   really begun to dug in and thinking about where we

22   can go.          And it‘s helpful, you know.                 At each meeting

23   we‘ve had, I‘ve tried to stress the importance of

24   trying to think outside the box, and coming up with

25   new ideas and challenging us.                     And there‘s some ideas

                                       NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701         www.nealrgross.com
                                                                                8

 1   like that here.         Some of them are like the tax cut

 2   ideas and the Community Reinvestment Act are good.                         I

 3   used to work on those issues a lot on the Hill, but

 4   of course now I‘m in a position where I can‘t do much

 5   about them.       So, we want to hear about things even

 6   more that we can do, and there are some things in

 7   here on that front.            And we have room for even more

 8   thoughts and expertise from you on areas that are

 9   directly within our jurisdiction.               For example, I saw

10   some good ideas on wireless and auctions that we can

11   look at. Come up with a rationale to try to promote

12   minority ownership through that.                  But I really do

13   think that you need to push us as hard as you can.

14   As the Chairman indicated, that‘s what you‘re here

15   for, and that‘s what we need.               You know, we have to

16   do more here at the Commission, and I think all of us

17   are committed to trying to achieve the goals of this

18   committee, but we need you to be as far reaching as

19   you can in your recommendations for us to able to

20   accomplish       that     in     areas      within    our      direct

21   jurisdiction.

22                    We have a lot of questions; we have a lot

23   of big issues before us that we need your input on.

24   We have digital television transition we‘re in the

25   middle of.       We need to hear more about that.                  What

                                 NEAL R. GROSS
                        COURT REPORTERS AND TRANSCRIBERS
                            1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433         WASHINGTON, D.C. 20005-3701    www.nealrgross.com
                                                                                          9

 1   are public interest obligations that we need to put

 2   on broadcasters?               We want to hear more about that.

 3   And,       as    Chairman      mentioned,        Adoran.         What       about

 4   Adoran?          How do we deal with that?                      How can the

 5   Committee help us to understand, what the based on

 6   preferences are and Gruder and Adoran.

 7                       And, finally, I‘d like to comment on the

 8   Chairman‘s announcement, which is a very important

 9   one today. I‘m really pleased that we‘re putting out

10   tomorrow for comment the Section 257 studies, that

11   were released in December of 2000.                     A lot of work and

12   effort was put into those studies, and it‘s time for

13   us to use them in the way they were intended.                               And I

14   think it is right that us being pushed on that‘s

15   helpful to get those things finally out for comment.

16   We need to do that.

17                       Another area that I‘d like to see from

18   input from you on, I‘ve been reading a lot in the

19   paper        just   today      and    recently       about      the    debates

20   surrounding         the     Nielsen     Media        Research     New       Local

21   People Meter, and whether that‘s going to have an

22   impact on so many aspects of what we‘re talking about

23   here today.          Implications of how you measure minority

24   viewing          will   flow     to    many      other     areas       in     the

25   industry.         While    I   know    that      a   lot   of    members        of

                                      NEAL R. GROSS
                             COURT REPORTERS AND TRANSCRIBERS
                                 1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433              WASHINGTON, D.C. 20005-3701         www.nealrgross.com
                                                                                         10

 1   Congress and the GAO and scholars and some courts are

 2   looking at this right now.                       I think the FCC should

 3   also understand fully how the new system works to

 4   ensure that all television audiences, whether they be

 5   Spanish speakers or other minorities, are fairly and

 6   accurately represented, and we need to get the bottom

 7   of this as well as all the others that are looking

 8   into this, and we need your guidance in getting that

 9   done.            So    you    have       a     burdensome      and      sometimes

10   frustrating mission before you, but anything worth

11   doing is worth going through the pain to get there.

12   So, I encourage you to continue those efforts, and I

13   thank you for all that you‘ve done up to this point.

14

15                         Ms. Johnson:            Thank you.       And thank you

16   for your support. With that, we can go into our sub-

17   committee         reports.           I    believe      first    is      financial

18   issues, and Frank Montero is going to lead in that

19   discussion.

20                         Mr. Montero:            Thank          you,              Madam

21   Chairwoman.           I    wanted        to    start   by,    first       of     all,

22   thanking          Ginger        Lew       of     the    Telecommunications

23   Development Fund who did an incredible amount of work

24   in compiling all the white papers on this report, and

25   also to thank Allison Alexander and Michelle Talburn,

                                         NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701           www.nealrgross.com
                                                                                              11

 1   Ash Johnson and Piper Rudnick who volunteered a lot

 2   of their time in compiling this information.                                          And,

 3   lastly,            but         certainly        not         least,         to        thank

 4   Commissioner Rivera for his original report, which

 5   was ground-breaking, and it‘s still as relevant today

 6   as     it        was    when    it     was    originally          released.            The

 7   Financial Issues sub-committee presents a summary of

 8   the key issues and recommendations relating to the

 9   financial               barriers         facing         minorities              in     the

10   broadcasting and telecommunications industry.                                        These

11   issues           and     recommendations            are      based       on      initial

12   research conducted by the members of the Financial

13   Issues                 sub-committee.              These           are           initial

14   recommendations,                inasmuch       as      we   are        continuing        to

15   review additional issues, such as the desirability of

16   diversionary interest and broadcast licenses and the

17   potential              expansion       in    our       amendment        to      existing

18   government              initiative          programs        to     foster        greater

19   access           to     capital        for    socially           and    economically

20   disadvantaged              businesses,          including,             particularly,

21   women and minority-owned businesses.

22                           In 1982, the FCC determined that lack of

23   financing              posed     the     single        greatest         obstacle         to

24   minority ownership of telecommunications properties.

25    Unfortunately, as we revisit the issue in 2004, the

                                            NEAL R. GROSS
                                COURT REPORTERS AND TRANSCRIBERS
                                    1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                 WASHINGTON, D.C. 20005-3701               www.nealrgross.com
                                                                                         12

 1   obstacle has remained, as evidenced by the continuing

 2   low levels of ownership of broadcast stations and of

 3   FCC licenses and new services.

 4                          In         1997-98,            NTIA       conducted               a

 5   comprehensive                study    of    minority-ownership            of     full

 6   power commercial, radio, and television stations in

 7   the      United            States.        The   study        culminated     in    the

 8   release of a written report and painted a dismal

 9   picture               of      the     ownership          opportunities            for

10   minorities.                 Specifically,        the     NTIA    report,       which

11   focused on minority broadcast ownership for the 1

12   year period between August of 1997 and August of

13   1998, concluded that, ―Although minority ownership of

14   broadcast stations had increased over prior years,

15   the increases were not commensurate with the overall

16   growth           of    the     broadcasting           industry‖.         The     NTIA

17   report           also       concluded       that,       ―Access     to     capital

18   remains           one        of     the    significant          impediments         to

19   ownership for minorities‖.                      The NTIA report predicted

20   that these trends would continue to keep minority

21   ownership at relatively low levels.                                A prediction

22   that, distressingly, appears to be correct.

23                          In 2001, approximately 8,751 television

24   and radio stations filed FCC Ownership Reports.                                     Of

25   the stations that filed the report, only 303, that is

                                           NEAL R. GROSS
                                  COURT REPORTERS AND TRANSCRIBERS
                                      1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                   WASHINGTON, D.C. 20005-3701        www.nealrgross.com
                                                                                           13

 1   3.5%, identified one or more minorities who, in the

 2   aggregate, had a greater than 50% voting interest in

 3   the broadcasting licensee entity.                               These more recent

 4   numbers are just 4/10 of 1% higher than the aggregate

 5   minority           ownership          numbers      reported          in    the     NTIA

 6   Report reported for 1997-98.                         The lack of significant

 7   change highlights the need to examine the driving

 8   forces behind this lack of progress.

 9                           Numerous factors have contributed to the

10   lack          of        progress         of       minority          ownership         of

11   broadcasting                  and     telecommunications                  businesses.

12   Including,              the        evolution      of      the      FCC‘s    multiple

13   ownership rules, the elimination of the Minority Tax

14   Certificate                  Program,       and        the       thresholds         for

15   determining              minority        ownership           and    control        with

16   respect            to        the     issuance        of      tax     certificates,

17   consolidation within the broadcasting industry, the

18   use      of      competitive          bidding      to     award      licenses       for

19   spectrum based services, and the limited success of

20   the FCC in achieving congressional goals to promote

21   the acquisition of such licenses by minorities, and

22   the       lack          of     incentives         for      increased        minority

23   ownership for non-spectrum based services.

24                           In    1981,     the    FCC      created      the    Advisory

25   Committee           for        Alternative         Financing         for    Minority

                                            NEAL R. GROSS
                                  COURT REPORTERS AND TRANSCRIBERS
                                      1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                   WASHINGTON, D.C. 20005-3701          www.nealrgross.com
                                                                                              14

 1   Opportunities                 in      Telecommunications,             chaired            by

 2   former           FCC    Chairman,         Henry     Rivera,        which      explored

 3   ways for minorities to finance the acquisition of

 4   telecommunications                    properties.                That         advisory

 5   committee,             comprised          of    many    industry         leaders         in

 6   finance and telecommunications, summarized its major

 7   recommendations                in     a    report      to    the    FCC       entitled

 8   ―Strategies               for         Advancing         Minority           Ownership,

 9   Opportunities             in       Telecommunications.‖                  The      Rivera

10   report           focused        on    barriers         to   capital          faced       by

11   minority               entrepreneurs              in        telecommunications.

12   Although the Rivera report was released more than two

13   decades            ago,         its       key      recommendations                remain

14   applicable             today.          The      Rivera      advisory         committee

15   studied           the    ability          of    minority      entrepreneurs              to

16   purchase an existing telecommunications system.                                        The

17   recommendation and key findings to improve financing

18   for minority broadcast entrepreneurs generally fall

19   within three categories.                        One: Educating the minority

20   entrepreneur; Two: Educating the lending and venture

21   capital community; and Three: Changing FCC rules.

22                           The    Rivera         report   offered       a     number        of

23   suggestions              for       educating        minority        entrepreneurs

24   including              developing         a     primer      to     help       minority

25   entrepreneurs, increasing the level of awareness in

                                            NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701                www.nealrgross.com
                                                                                            15

 1   the      minority           business       community      and     of     the      risks

 2   involved              in      telecommunications                ventures,            and

 3   preparing a tax bibliography and collect materials

 4   that discuss various tax advantages.

 5                         With       respect to educating and lending,

 6   the      lending           and    venture       capital        communities,          the

 7   Rivera report suggested helping lenders become more

 8   aware of the existence and availability of federal

 9   and        state           loan     guarantee           programs,          surveying

10   financial institutions to augment existing surveys to

11   determine             the    kinds     of       financing       available,           and

12   exploring the benefits that investment banker‘s could

13   provide to minorities.

14                         The Rivera report recommended a number of

15   changes          to    FCC        policy    and       rules     with     regard        to

16   improving             opportunities             for    minorities          including

17   granting          rules          waivers    to        permit    an     established

18   broadcaster to acquire equity interest in a minority

19   controlled             property,       that       otherwise          would      exceed

20   multiple          ownership           limits;          clarifying         the       1978

21   statement             of     policy        on     minority        ownership            in

22   broadcasting               facilities       to    indicate        that       minority

23   general partners holding more than 20%, but less than

24   50% interest can exercise control and meet the test

25   for tax certificates at distress sales; amending the

                                          NEAL R. GROSS
                                 COURT REPORTERS AND TRANSCRIBERS
                                     1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                  WASHINGTON, D.C. 20005-3701            www.nealrgross.com
                                                                                                  16

 1   multiple ownership rules to permit venture capital

 2   companies to increase their equity participation in

 3   minority         operated            entities;               expanding           the       tax

 4   certificate            policy        to       include          such      non-broadcast

 5   properties as cable, common carrier and land mobile;

 6   adopting           a         capitalization                  feature            for        tax

 7   certificates to enable share holders with less than

 8   controlling             interests             in       a     minority           owned        or

 9   controlled         entity           to     sell     their       interests            to    the

10   controlling shareholders and become eligible for tax

11   certificates; and exploring and expanding the rights

12   to     sellers         as     creditors,           including          the      rights        of

13   reversionary            interests            in    a       broadcast         licensee        in

14   those cases where the seller provides financing.

15                       On       January         20,       2004,      the    on      Financial

16   Issues heard from financial advisors and experts, who

17   identified potential barriers to capital access. In

18   addition, suggestions were made to address some of

19   these issues.               A copy of the comments is now located

20   FCC      Advisory           Committee‘s            web       page       in     the      FCC‘s

21   website.               Subsequently,               some       committee           members,

22   including          myself,          held      one      of    more       meetings          with

23   industry         experts            to      gather          further          information.

24   While       most       of     the    information             is     anecdotal,            some

25   consistent themes emerged. The Senior Lenders sub-

                                              NEAL R. GROSS
                                 COURT REPORTERS AND TRANSCRIBERS
                                     1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                  WASHINGTON, D.C. 20005-3701                  www.nealrgross.com
                                                                                             17

 1   group reached out to representatives of the National

 2   Bankers Association, the American Community Bankers,

 3   and     the       Independent         Community        Bankers         of    America.

 4   The purpose of these sessions was to discuss, One:

 5   establishing                an    education      program        for       local       and

 6   regional banks on valuation and structuring loans to

 7   the broadcasting and communications industries; Two:

 8   establishing                an     education          program          for     banking

 9   regulators on valuation, assessing and charactering

10   loans            to     the        broadcasting         and       communications

11   industry;             and        Three:    Establishing            an        education

12   program for secondary market purchases of senior debt

13   on valuation, structuring and the relative security

14   of     loans          to     the     broadcasting        and      communications

15   industry.

16                          In terms of going forward, the Financial

17   Issues           would like to submit the following proposals

18   for consideration and review by the full committee.

19   The Subcommittee recommends that these proposals be

20   recommended to the Commission for its consideration.

21                          One:       Reinstatement         of    a    tax        deferral

22   program.              The FCC‘s tax certificate policy used tax

23   deferrals to encourage owners of broadcast and cable

24   properties             to     sell    their     business          to    minorities.

25   Resurrecting as much as possible the tax certificate

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 1   policy would address many of the obstacles facing

 2   minority         entrepreneurs        and    enable       them     to      obtain

 3   sufficient capital to acquire licenses and compete in

 4   broadcast and telecommunications services, even those

 5   services that are subject to competitive bidding.                                If

 6   adopted,         the    policy       would      apply      not        only       to

 7   broadcasting           and    cable        properties,         but      to     all

 8   spectrum            based           and         non-spectrum                 based

 9   telecommunications services.

10                      We‘ve placed on the Advisory Committee‘s

11   web page, a white paper on tax incentive programs,

12   which        contains     and    discusses        the     sub-committee‘s

13   recommendation to the committee that it commend to

14   the        Commission         the     profound          value         of       the

15   reinstitution of a tax deferral program.

16                      Two:      Adopt    incentive         based        plans       to

17   promote broader access to capital.                        Since 1973, the

18   Commission has periodically adopted, or administered

19   incentive based plans to foster minority ownership.

20   The comparative hearing policy, the tax certificate

21   policy, the distress sale policy, the Clearchannel

22   eligibility criteria and the Mickey Leland rule. Each

23   of     these     incentives         were    premised      on     enabling             a

24   regality to receive otherwise unavailable benefits

25   when it took steps to advance minority ownership.

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 1   This       win/win     paradigm     consistently          enjoyed       nearly

 2   universal support from the industry, the civil rights

 3   community and members of the FCC.

 4                     The      Subcommittee          has      proposed          four

 5   proposals, each of which is outlined in the white

 6   paper on incentive based regulations, a copy of which

 7   is on the FCC‘s web page, the Advisory Committee‘s

 8   web page, and incorporated here by reference.

 9                     These proposals contemplate, One: Waivers

10   of the structural ownership rules, including sales of

11   stations to socially and economically disadvantaged

12   businesses,          incubator      and    financing          programs       and

13   share times.

14                     Two: Waivers of the attribution rules.

15                     Three:      First    place     in    line     for     future

16   monopolies.

17                     Four: Waivers of the construction permit

18   expiration rule.

19                     The Subcommittee regards these proposals

20   as     worthy     of    consideration           as    means     to    promote

21   broader access to capital and it recommends that the

22   committee commend these proposals to the commission.

23                     And finally, Number Three: Retention and

24   improvement of the distress sale policy. In 1977,

25   Chairman         Wyling     convened      the        Minority        Ownership

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 1   Taskforce to address the extreme under inclusion of

 2   minorities in broadcast station ownership.                                       One of

 3   its      recommendations              was    the       adoption      of      a     policy

 4   under which a broadcaster, in a hearing for non-

 5   renewal or revocation of its license, could elect

 6   before the hearing to sell the station to a minority

 7   owned company for no more than 75 percent of the fair

 8   market           value.        In   this     way,       the    licensee          in    the

 9   distress of possible loss of license can avoid the

10   hearing while still incurring substantial financial

11   penalty, save the commission the time and expense of

12   trying the hearing and subsequent appeals, and place

13   the station in the hands of a qualified operator who

14   would        have       few     other       opportunities           to     acquire            a

15   station.

16                        The      distress        sale      policy       is      still       in

17   effect.            It     has    resulted         in    approximately              thirty

18   transactions              involving         the    sale       of     approximately

19   forty        stations          to     minorities.             Its     history          and

20   operation            are         detailed          at         length          in       the

21   Subcommittee‘s                white     paper      on     the       distress          sale

22   policy.           Again, a copy of which is on the Advisory

23   Committee‘s website and incorporated herein.

24                        The        Subcommittee           recommends           that       the

25   Committee express the sense of the body that the

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 1   Commission should, One: Reaffirm the viability and

 2   routine applicability of the distress sale policy,

 3   and      Two:          In    the   operation          of    the     distress         sale

 4   policy, assess each distress sale purchaser‘s ability

 5   to promote diversity.                      For example, by requiring a

 6   showing of the bona fides of the purchaser‘s company,

 7   its commitment to promoting diversity and providing

 8   service for a substantial length of time and its

 9   plans to serve the needs of the public and to correct

10   any deficiencies in station operations caused by the

11   distress sale summon.

12                           In         addition            to          these           three

13   recommendations, the FCC has several ongoing issues

14   which        it         is    considering,         which          may    result         in

15   additional proposals being submitted to the committee

16   at a later time.                    Moreover, as I said, the backup

17   materials on these three proposals located in the on

18   the Advisory Committee‘s website, and I invite all of

19   you to review those materials.                         Thank you.

20                           Ms. Johnson: Thank                 you     Frank.             Any

21   questions as it relates to the report?                                      And as a

22   point            of     clarification,          we         will     take      up      the

23   resolutions in the next phase of our discussions.

24   So,       to          the    extent      that     there           are   substantive

25   questions regarding the resolutions, we‘ll take those

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 1   up in Phase Two.              Any questions as to the report in

 2   general?          Seeing none, is there a motion to accept

 3   the report?            Motion second.           Show it approved without

 4   objection.         Thank you.

 5                      Next,      we     will       have    the    Transactional

 6   Transparency and Outreach.                  Mr. Hillard.

 7                      Mr. Hillard: The             members       of   your       staff

 8   that have assisted us, and also the Commission staff,

 9   the members of the Transactional Subcommittee, and

10   our advisors and also thanks to Chairman Powell and

11   each       of    the    members      of    the     commission        for      their

12   support in our endeavor here.

13                      As, in a summary sort of way, we have

14   come       to    call     our      Transaction         Subcommittee           focus

15   essentially enhancing, looking for measures that can

16   enhance the accessible and visible deal flow that

17   promotes          diversity           of        ownership          and        other

18   participation in the communications industry.                                   That

19   has some overlap with the financials, and in many

20   ways, as you‘ll see, cooberates some of the findings

21   of the Financial Issue Subcommittee that Frank just

22   gave the report on.                For our purposes, we‘ve engaged

23   in      addition         to     kind       of      weekly      well-attended

24   conference calls and discussions.                      In addition, about

25   fifteen to twenty hours of phone interviews with a

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 1   host of public and private entities to really lay the

 2   foundation for our Subcommittee‘s consideration.

 3                      I wanted to I think share with you for

 4   starters the core of our conclusions thus far and

 5   maybe the paradigm observation, that both has some

 6   immediate relevance, but also some lessons underneath

 7   it. Time after time with a consistency throughout our

 8   interviews, to bordering on near unanimity, was the

 9   observation that the most important thing that the

10   Commission         could        do    to    promote        diversity,        is     to

11   achieve          the     reinstatement           of    a     tax    certificate

12   program.

13                      Now,        that‘s       a   measure       obviously        which

14   ultimately, as Commissioner Adelstein indicated, up

15   to Congress.              But it does point out I think some

16   important factors that also doesn‘t take us, if you

17   will,       off    the    hook.          As     we    began    to    study       that

18   observation,             what    it        meant,      we     concluded          that

19   underneath              that         were       some         very       important

20   observations.             And, essentially, come down to three

21   observations that we made in our report to the full

22   Committee.             And if I could just leave those, because

23   they‘re          about      a    sentence            each,    and      about        as

24   compressed as we can make them.

25                      First, is that FCC programs which create

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 1   demonstrable            economic        advantages          targeted          to

 2   diversity are profoundly superior and more effective

 3   than       any   other        single    programs      or     policies         in

 4   promoting this goal.                In effect, where the Commission

 5   is either given by virtue, and we‘ll get to in a

 6   second, by Congress, an economic coin that it can

 7   use, or creates, in effect, a significant economic

 8   advantages. Our due diligence has shown that that far

 9   surpasses other programs. It doesn‘t take anything

10   away from the importance of a broad based approach,

11   but this was a fairly compelling observation that

12   came to us.

13                     Second,       is     that      Congress     has    created

14   basically        two       authorizations,         historically,         which

15   would        place     such    programs       that    have    a     kind      of

16   economic         coin       under      the       stewardship        of      the

17   Commission.          The first was the tax certificates, and

18   the second was the designated entity program that

19   accompanies          the    federal      auction      of     FCC    licenses

20   protocol.

21                     Third       was    that     these   stewardships          and

22   authorizations are subject to removal by Congress, if

23   it perceives abuse or lack of effective and proactive

24   use of the authorities.                Case in point, I think we‘ve

25   all come to recognize as a significant loss, was the

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 1   repeal of the tax certificate program and I think it

 2   was circa 1995.

 3                       So, basically looking at will Congress or

 4   will the Commissions be able to create this kind of

 5   program with a specific economic coin, we viewed it

 6   as being an especially effective tool. And on that

 7   basis, at this point we‘ve made, in addition to our

 8   formal recommendation, which we‘ll get to a little

 9   bit later in the meeting today, thee recommendations

10   of actions that the commission could take.

11                       One is again, I think echoing some of the

12   other            recommendations         already,         is    that         the

13   commission, we recommend to the full Committee to

14   then recommend to the Commission, that it consider

15   taking a unified public and high priority role in

16   advocacy          of   creation     of    a     tax   deferral        or     tax

17   incentive program.            We haven‘t at this point tried to

18   measure what those specifically should be.                            We felt

19   the weight of our recommendation should really be to

20   the importance of a concerted and unified and really

21   public approach on that.                 Something that really goes

22   well beyond what has been a historical process, I

23   think is fair to say, a certain amount of fanfare,

24   but really inability to move it either by initiatives

25   by folks in Congress, or otherwise to really move it

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 1   to     the       goal    line.          I    think       the    current        budget

 2   difficulties probably underscore the importance of

 3   this becoming a priority – our recommendations become

 4   a concerted priority to the Commission.

 5                       Second,        is       that    with       respect       to     the

 6   designated          entity       program,           as    the       one    kind       of

 7   remaining          economic        coin       program,         brought       to     the

 8   commission by Congress, two aspects were, which the

 9   Subcommittee wished to make observations.                                 One is the

10   need       to     have      a   program        of    very       conscience          and

11   continuous maintenance and kind of upgrades, if you

12   will, of the rules.                This is to ensure that they‘re,

13   like the process that folks pointed to at the time of

14   the repeal of the tax certificate, whether it was a

15   perceived process of abuse.                         To make sure that that

16   public perception is avoided.

17                       One example we posed was the question of,

18   for      example        a   high    network          test      as    one     of     the

19   criteria so that the program wouldn‘t be subjected to

20   criticism, in affect a subsidy for the rich.                                 This is

21   really part of an approach of an ongoing maintenance

22   of a special set of tools that Congress has entrusted

23   to the Commission.

24                       The second is enhancement.                      This is again

25   a toolbox, a set of measures which the Commission has

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 1   been granted substantial flexibility. The Commission

 2   would observe that there has been a lot of pressure

 3   to create in effect a decline of both the measures

 4   and expanse of the designated entity tools. We would

 5   suggest that this is kind of a paradigm of the low

 6   hanging fleet, if you will, with upcoming auctions

 7   and other matters of substantial breadth that the

 8   Commission could consider in making sure that those

 9   measures are fully utilized.

10                    Then,       lastly,       we     have      proposed           and

11   received I believe, an indication of support from the

12   commission,       provide expertise and analytical help,

13   that again I think echoing some of the comments of

14   the        recommendations          of     the      Financial             Issues

15   Subcommittee, a specific program where the Commission

16   may be in effect able to create its own economic

17   advantage coin.            We‘ve characterized this as a kind

18   of      diversity       credits       program.         This      is      not          a

19   recommendation at this point, but really a signaling

20   of an area of interest by the Subcommittee to explore

21   that and come back in the future with some suggested,

22   some        specific     measures        and     how      they      might        be

23   implemented by the Commission. We look forward, as a

24   Subcommittee, to refining these measures and working

25   with all the other subcommittees. This has been an

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 1   area of very earnest effort by all of the members of

 2   our Subcommittee and our assistants.                               And at that

 3   point, Madam Chairman, I‘m open to any questions or

 4   additional comments.

 5                       Ms. Johnson: Any questions?                        Is there a

 6   motion to accept?             Oh, I‘m sorry.               Mr. Chair.

 7                       Chairman Powell:            Just       one    point     Steve.

 8   Because I think it should direct your work perhaps in

 9   a more productive way.                   The point about sort of an

10   integrated high profile role of the Commission and

11   lobbying.          It is important, and I understand we have

12   legal restrictions that prohibit us from lobbying,

13   and so we can push that line to a point, but my

14   observation is the kind of concerted push necessary

15   to     get       this   legislation         more      from    bill       stage     to

16   reality stage is bigger than this institution will

17   legally be permitted to engage.                        And so, it seems to

18   me one of the things the Committee can do usefully is

19   to       discuss        and     explore             sort     of        legislative

20   organizational           efforts         within       your       own    group      or

21   through organizations that you work with, etc., etc.,

22   etc.       to     create      the      kind     of     effective         advocacy

23   necessary to move legislation further. I don‘t offer

24   what this is, but only to suggest that you know at

25   the end of the day you all have a lot of connections

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 1   beyond                your        recommendation                to       government

 2   organizations, and thinking about the best way to

 3   employ those efforts might be the most productive

 4   path.            We‘ve done a lot of talking about the tax

 5   certificate, we‘ve written up ads, not to say we

 6   can‘t do more, but I think one of the things we

 7   always bump into is how much we can permissibly do

 8   without being contravening the lobbying restrictions.

 9                          Mr. Hillard: I             take        that     as        a    very

10   productive comment. I think it‘s good.

11                          Ms. Johnson: Any                 other        comments           or

12   questions? Is there a motion to accept?                                      Show it

13   approved then?                  Show it approved without objection?

14   Thank you.              Next report, Mr. Riley Temple, the Chair

15   for New Technology.

16                          Mr. Riley:           Thank       you     Madam       Chairman.

17   I am, this is my inaugural, this is my debut as the

18   Chair of the Subcommittee on New Technologies, and I

19   don‘t know whether a thank you as an order or not.

20   But I‘m here.                 The New Technologies Subcommittee has

21   three sets of recommendations to talk about today.                                          I

22   won‘t            go    into       the      detail        on     that        on       those

23   recommendations right now, because we will do that

24   during the time set aside for presentation of the

25   resolution             and      action       items,      and     they‘re             rather

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 1   detailed.             I will tell you that we have spent the

 2   last, the time in between the two meetings, convening

 3   many taskforces and working groups to develop these

 4   recommendations.              And, Mr. Chairman, I do think the

 5   comment with respect to lobbying is a timely and apt,

 6   with respect to some of our recommendations as well

 7   because we do have some recommendations which will

 8   call for rule changes and/or legislation.                                And so

 9   it‘s very helpful to be reminded of the limitations

10   that the Commission operates under with respect to

11   that      and     that    our    job    is    not     finished      by    simply

12   making the recommendation, but also to find out ways

13   in which we need to achieve it.

14                         I want to briefly mention that and to

15   thank the people who have helped us to develop these

16   recommendations,             before     I    go   on   to    discuss        them.

17   And, they include, Pete Renee of Cilantro, Sabrino

18   Calhoun          of    Cochs,    Depac       Masand    of    Latara,        Keith

19   Machen of Inflection, Tony Cooke-Bush, Lynn Kennedy,

20   ex-commission             Tyrone       Brown,        and     here      at      the

21   Commission, we consulted with several people here as

22   subject matter experts, not to seek approval, by to

23   help       us     to     frame    the       issues     and     to   make       the

24   recommendations               stronger         and      more        inherently

25   consistent with the other recommendations that were

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 1   coming forward.            Particularly, Michelle Ellison, John

 2   Malletta, Jane Mago, Ray Stewart, and of course Kyle

 3   Dixon.           And we want to thank you for all of your

 4   help.

 5                       Today, we will, you have before you on

 6   the       FCC‘s      web    page,       some       recommendations             for

 7   diversifying ownership in the FM radio band that were

 8   developed by the Subcommittee with the help of David

 9   Honig.           And the recommendations, we‘ve come up with

10   nine ways, and asked the FCC to study the means by

11   which these can be achieved.                  We will not bring those

12   up today for your consideration.                         They‘re not quite

13   ready. Unfortunately, David had an illness in the

14   intervening time and we were not able to get them

15   ready for your consideration, but we would ask you to

16   please study those and we will prepare them for your

17   consideration at our meeting in September.                                David,

18   did you want to take a second to talk about those?

19                       Mr. Honig:        Only        to    say    that    we     were

20   blessed to have the input from a number of experts,

21   both       engineers       and    attorneys        in    the    NAB     and      in

22   private bar, in communications companies in taking,

23   and      actually     a    must     longer        list   of    potential         FM

24   reform ideas, narrowing it down to nine and focusing

25   those so that they would be achievable.                         And, we were

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 1   trying to do this with the idea that these were low

 2   hanging fruit, were race neutral and were mostly de-

 3   regulatory and we hope to have them ready of course

 4   in September, but it was encouraging to know that

 5   there are actually are as many as possibly nine such

 6   things that the commission could do that meet all of

 7   those criteria.

 8                         Mr. Temple:          Thank you. Speaking of low

 9   hanging          fruit,       it     was     our        objective      in      these

10   recommendations to only look at those issues and come

11   up        with         recommendations               that      were          easily

12   recommendable.               I think we exceeded our goal of low

13   hanging fruit and I think we‘ve exceeded it by much.

14                         What     you      will      hear      about      today        is

15   something that is technology specific, which are a

16   series           of      recommendations                 promoting          access,

17   opportunities            and       spectrum-based           technologies          and

18   emerging technologies.                     Recommendations that would

19   require FCC rule changes or legislation and those

20   that       would       not.        They      would       address      access        to

21   capital,         recommendations             to      facilitate       access        to

22   communications               properties           and     opportunities           and

23   investments, and regulatory reduction recommendations

24   for unlicensed services and technologies and license

25   spectrum.          Additionally, not technology specific, is

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 1   our series of recommendations regarding a supplier

 2   diversity program, which is a detailed proposal and

 3   program designed to assist minorities and women to

 4   seek       business      prospects      and      contacts          within        the

 5   communications            industry         and         looking          at       the

 6   development of programs for mentors, the initiation

 7   and development of a resource center and business

 8   development        programs.        That        is     our    report          Madam

 9   Chairman, we will talk about it further later in the

10   meeting.

11                     Ms. Johnson: Thank             you.        Any       questions

12   regarding the report?             Seeing none. Is there a motion

13   to accept?

14                     Mr. Powell:       So moved.

15                     Ms. Johnson:         Is there a second?

16                     Committee Member:             Second.

17                     Ms. Johnson:          So then, accepted without

18   objection.            Thank     you.            And,     finally,            Career

19   Advancement, Ms. Jenny Alonzo.

20                     Ms. Alonzo:          Hello everyone.                Thank you

21   Madam Chairman.           I want to say Madam Woman.                      First I

22   want        to   thank    the     Committee          members          who       very

23   graciously gave of their time to help us put together

24   this Best Practices Report.                      First, of course, is

25   Henry Rivera from Bisson & Elkins, Decker Anstrom

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 1   from Landmark Communications, Matt Wang from Showtime

 2   Networks, Maria Brennen from AWRT, Benita Fitzgerald-

 3   Mosley from Women in Cable and Communications, Joan

 4   Gerberding,           formerly    of    Nassau     Media        Partners          and

 5   AWRT,       Priscilla       Hill-Ardoin      from       SBC,     David         Honig

 6   from MMTC, and Vonya McCann from Sprint. In addition,

 7   we     want      to   thank     the    subject     matter        experts          who

 8   definitely helped kept - keep us sane.                         Weldon Lathan

 9   and      Sylvia       James     from    Holland         &    Knight,         George

10   Rivera,          formerly     president      of     the       U.S.       Hispanic

11   Chamber of Commerce, Dan Mason from Dan Mason, LLC,

12   Punan Mather from MGM Grand Mirage, S. Jenelle Trigg

13   from Levanthal, Centre & Lerman, and Lou Visconti of

14   Diversity, Inc. And, of course, we want to thank the

15   FCC      staffers,       Jane    Mago,     Jamila           Bess-Johnson          and

16   Maureen McLaughlin, who were very, very helpful in

17   helping us get through this process.                            And then of

18   course, our fabulous leader, Julia Johnson. So thank

19   you so much for all your help.                     The Committee wants

20   to formally let you know that we so much appreciate

21   your       work.       In     addition,     the    Committee            wants       to

22   publicly thank the Law Office of Fatima Faffana &

23   Associates,           who     helped      put      together            the       Best

24   Practices Report.               It is a fine document, and one

25   that      took     painstaking         hours,     and       we‘re     just       very

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 1   thankful that she stuck with us and didn‘t throw in

 2   the towel.

 3                      The Committee was formed in September of

 4   2003,       and   at    that      point,     we   established           that     we

 5   wanted to reach out to the industry and seek best

 6   practices         initiatives.             Our     first        attempt        was

 7   reaching          out      to        industry       organizations              and

 8   foundations.              We    basically         went     out     to     thirty

 9   associations and four foundations. Unfortunately, the

10   response at that time was not very good, it was about

11   six responses.           What we got from the field was that a

12   lot of these organizations are just not set up to

13   understand         what        the     internal,         you     know,        best

14   practices are of the corporations that they service.

15    So we then decided in January that we were going to

16   reach out to corporations directly.                              And at that

17   time, we made a list of about thirty-three, basically

18   companies         who    are    well    known      for     their      diversity

19   efforts,         and    we‘re     happy    to     report       that     eighteen

20   responses came back, and with some wonderful best

21   practices programs.               So, at this point, I would like

22   to direct you to our report titled, Progress Reform

23   Recommendation              for        the        Career          Advancement

24   SubScommittee. It‘s in the back of the book that in

25   the report section.                  Right. Okay. We have submitted

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 1   for the review of the Advisory Committee, a draft

 2   report           entitled,        Workplace        Diversity,      A        Global

 3   Necessity and an Ongoing Commitment, further known as

 4   Best       Practices        Report.          Shortly       after       we    have

 5   received input from the full Committee in today‘s

 6   meeting, we will recommend that the report be posted

 7   on the Advisory Committee‘s web page, and that the

 8   Advisory Committee ask the Commission to take steps

 9   to notify regulatees of the existence of the Best

10   Practices Report, and encourage regulatees to review

11   it carefully.             We also recommend that the commission

12   help promote this report, and participate in industry

13   conferences promoting the best of the best practices.

14   Once      the      Subcommittee       has     had    the   opportunity          to

15   review and approve the best of the best.

16                       As mentioned, we started back on January

17   26th      looking      at     corporate        diversity      initiatives.

18   And, we asked the companies that we‘ve added to focus

19   on – I‘m going to have you turn to next page, because

20   at this point I think it‘s kind of explanatory from

21   the last meeting that we had the organizations focus

22   on those five specific points.                       So, I‘d rather take

23   you to what we asked the companies to focus on in

24   this second wave, as of January.                       That is, we asked

25   them       to     focus      on    recruitment,        post     hiring         job

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 1   placement,             mentoring,          management        training,          work

 2   assignments,                 including        rotation          into        revenue

 3   producing work, opportunities to serve on the visible

 4   Committee          or        industry      taskforces,       committees          and

 5   projects, performance evaluation, rating, and testing

 6   standards untainted by prejudice, compensation and

 7   benefits,              access         to      informal           networks          of

 8   communication, favoring a harassment free or family

 9   friendly working conditions, layoff and termination

10   criteria.                The     Subcommittee             commission         Fatima

11   Faffana,         as     noted       before,    an    attorney         in    private

12   practice specializing in media and telecom diversity

13   issues, to review the companies responses and help us

14   draft the Best Practices Report under the guidance,

15   of course, of the Subcommittee. A draft is provided

16   today, and the full report will provide a, shortly

17   upon receipt, of comments from the members of the

18   full       Committee.            We     commend      it    to    the       Advisory

19   Committee,             and    ask     that    it     be    provided        to    the

20   Commission for its review and edification.

21                          Chapter 9 of the Best Practices Report,

22   the role of the FCC‘s Diversity Committee, contains

23   respondents‘ suggestions on the subject of our own

24   work.            Two    companies          suggested      that    a    recurring

25   report or benchmark on diversity best practices would

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 1   be useful.             We note that broadcast cable and other

 2   multi-video            program       distributors          must      file       EEO

 3   program data, identifying steps they have taken to

 4   broaden their outreach efforts and means to prevent

 5   discrimination. While these steps primarily involve

 6   recruitment rather than career advancement, they do

 7   provide a starting point for an annual review of

 8   industry best practices.

 9                         Consequently, in the coming months, we

10   will explore whether and how the Commission should

11   undertake a best practices benchmarking study.                                    In

12   considering           its     next    step,      the   Subcommittee             has

13   reviewed the 2003 report by the Radio Television News

14   Directors Association; RTNDA‘s report provides this

15   longitudinal           data    on    minority      employment           and     key

16   broadcasting positions.                   As you can see, the numbers

17   are definitely on a downtrend.                   It appears from these

18   statistics,            that     in    just       two   years,          minority

19   employment has declined 26 percent in total TV news

20   workforce, 39 percent in total radio news workforce,

21   59 percent in TV general managers and 56 percent in

22   radio general managers.                    According to an MMTC 2001

23   study,           52    percent       of     minorities        employed            in

24   broadcasting work for minority owned stations.                               Thus,

25   the      actual       number    of    minorities       employed         in     non-

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 1   minority owned businesses, or stations, is far lower

 2   than       the    RTNDA‘s       statistics           indicate.           MMTC       also

 3   reports that the 2003 statistics given above, are

 4   about the same as twenty years ago.                                In light of

 5   these statistics, coupled with the shrinking number

 6   of broadcast jobs, and only slow growth in cable jobs

 7   overall, it appears that recruitment based missions

 8   alone are no longer an adequate strategy by which the

 9   Commission         can      promote           equal         opportunity              and

10   diversity.

11                     A    meaningful           EEO       program,           regulatory

12   strategy, must also focus on career development and

13   retention.        We     may    consider            drafting       a     regulatory

14   proposal along these lines, and then will consider

15   whether and how the Commission might need to gather

16   statistical        and     anecdotal          information          in      order       to

17   develop such an initiative.                         Consequently, we will

18   consider         whether       it     might     be     desirable            for      the

19   Commission to conduct field hearings on employees‘

20   and employers‘ experiences with career advancement

21   initiatives        and     on       the   methods          used    in      fostering

22   career advancement.                 Going forward, the Subcommittee

23   will seek resource assistance, for example, fiscal,

24   additional         staffing,           etc.         from     the       Commission,

25   including data on its internal workplace diversity

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 1   efforts          and    statistical        tools     for    the     purpose         of

 2   understanding            what     has     worked      for     the     Commission

 3   itself.          We respectfully submit this report.                            Thank

 4   you.

 5                          Ms. Johnson: Thank you. Any questions? Is

 6   there a motion to accept?                    Second?       So then, accepted

 7   without          objection      or     question.         Thank       you.         Any

 8   comments          as     to   the      first     phase      or    any      of     the

 9   Subcommittee reports?                   Seeing none – I‘m sorry Mr.

10   Chairman?

11                          Chairman       Powell:          Just       one      overall

12   comment          that    I    wanted      to    make     having       heard       the

13   Subcommittee reports.                  While valuable, it would seem

14   to me it‘s still a lot seemed very broadcast centric

15   still.           And I think that‘s fine as far as it goes,

16   but I have to say I look forward into the future and

17   I think we‘re talking about diversity in the digital

18   age, I see an enormous amount of transformation going

19   on and a lot of emerging technologies in industries

20   that are probably going to dominate the communication

21   cosmos for the generation of our children.                               And I it

22   would seem to me that if we‘re staying on mark, we

23   should be focusing a little more deeply as well on

24   those        technologies         and     those      industries         that      are

25   really showing that kind of progress.                             For example,

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 1   in the new emerging technologies, because I think it

 2   would recommend slightly different strategies.                                     For

 3   example, I think there‘s an enormous component about

 4   generationally,                about         diversity         for        emerging

 5   technologies.            I mean this has probably passed us by.

 6    This        is    for    whether       my    15-year-old‘s           picture        in

 7   diversity in these industries when they begin to be

 8   dominant in his adult life are different than what‘s

 9   gone before.              And I think it is important to be

10   working on the more mature industries that have a

11   history, but I also think that it‘s just as important

12   to      be        exploring,      more         aggressively,            both       the

13   statistics, the representation, the strategies for a

14   lot of other things.                    Because I think also, there

15   are, if you take that, so there‘s                           the notion that

16   maybe part of efforts should be focused on youth,

17   educational programs, high school programs, college-

18   level        programs      that    exposed          minority    children           and

19   women to these experiences could be more important in

20   those fields than it is in almost any other field.

21   There‘s also new communities that are, in essence,

22   traditionally             not     the        core    regulatees           of      this

23   institution.             The    entire        software      industry           lives,

24   largely outside of direct FCC responsibility, but it

25   may be the most critical industry                           segment of the

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 1   information age, of these all.                         All of these things

 2   are       quickly         going      to     become         software     run       and

 3   organized.               And    so    who‘s     writing        that    software?

 4   Who‘s employing those people who write the software?

 5   Who are the software entrepreneurs who are                                   – you

 6   know, today Decker and I were joking about how, was

 7   it     Starz        is     experimenting             with    movies     on     real

 8   networks.               Well, if that‘s where movies are going,

 9   then I sure hope that that‘s an area of focus for

10   diversity, because I do believe, in a not so distant

11   future, that stuff is going to supplant a lot of what

12   we‘re thinking about. So I think that this whole new

13   communities we need to think about how to sort of

14   reach       out     and     bring      into     our     process       and    to   be

15   thinking about them.                   Particularly, since a lot of

16   them are not direct regulatees of the Commission.

17                           I also think there a lot of folks out

18   there doing very, very interesting things.                                  And how

19   do     we        find    them   and       network      them?      How       can   we

20   introduce           people      to     people        who    are   doing       these

21   things?            You know I‘ve been to Silicon Valley five

22   times in the seven years that I‘ve been here, and I

23   think there are some fascinating minority activity in

24   the Valley.              How do we get more people to meet, know

25   them, network with them, watch careers, join with

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 1   them in developing things. And I think that would be

 2   important.           And, I think that again, not to belabor

 3   the point, but when I think about how to make sure my

 4   child is in employable in the 21st century, and that

 5   he doesn‘t come home to live in my basement, I just

 6   don‘t know how he‘s not going to be technologically

 7   literate.         What are the technology literacy programs?

 8    How       do    I   make    sure    that       he‘s      both     technology

 9   literate and seems to have the skills that are going

10   to be placed a premium on in the future.                            There‘s a

11   big debate about that by the way, in the outsourcing

12   literature.           So, why do the jobs go to India?                         How

13   can they be kept in the United States?                            And what‘s

14   the education, the public policy, the programs that

15   make that happen. You know I would just love to see a

16   little more effort on those things too.                          Because I‘m

17   not so sure that I want whatever we do to be great

18   for a year or two, and then becomes overtaken by a

19   sort      of     secular    events     that     are    transforming            the

20   industry.            And I also just think there‘s probably

21   talent out there that we could tap into, if we‘re

22   looking more broadly.             So, that‘s not meant to be too

23   much of a criticism, and I think the work has been

24   terrific, but I did see almost the center of most

25   presentations            revolved        around           sort        of       the

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 1   broadcasting experience.

 2                          Mr. Montero:          Could I make a comment?

 3                          Chairman Powell:             Sure.

 4                          Mr. Montero: Because,                Mr.   Chairman,       you

 5   actually based, or you may not remember, you made a

 6   very similar observation during our last meeting in

 7   the winter where you said the focus tends to always

 8   drift back to broadcasting.                         And it got me thinking

 9   about, and he‘s right.                     Why are we always coming to

10   broadcasting?                I‘m on the Transactional Committee and

11   on the Finance Committee, and after having so many

12   discussions                with    people,     it    occurred      to     me     that

13   certainly          one       of    the    reasons,        from    the   financing

14   part, and from the transactional part, why it always

15   drifts back to broadcasting, after discussions with

16   people, is because broadcasting is one of the few

17   telecommunications industries that I think still has

18   a very vibrant secondary market. I mean, there aren‘t

19   very many telecommunications sectors out there where

20   you see hundreds of properties changing hands every

21   month.           Maybe thousands during the course of a year.

22   I mean there‘s been a lot of consolidation, but you

23   also       have        a    whole    lot     of     cable    systems     changing

24   hands.           You       don‘t    see    a      whole     lot   of    satellite

25   television             providers         changing     hands,      or    satellite

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 1   radio companies changing hands, or I-LAX.                               Maybe you

 2   have a secondary market in C-LEX, although C-LEX have

 3   gotten dinged up so bad.                       But having – in the market

 4   –    but         in   broadcasting         is,      and    particularly         radio

 5   broadcasting,             is     one      of     the       few     communications

 6   sectors           that    this    Commission           regulates,      where       you

 7   have      a      lot     of    properties        changing         hands,    there‘s

 8   still a very vibrant secondary market, and people are

 9   still making money.                   I mean the values are going up.

10    So there‘s actually something to invest in and with

11   the hopes of making money back. And I think that‘s

12   why.          That‘s where the money is happening, that‘s

13   where the transactions -- again from my two areas,

14   where the money is going and where the transactions

15   are      happening            tends     to     be     in    broadcasting,          and

16   particularly in radio broadcasting.                              I don‘t see very

17   many venture capital funds or entrepreneurs out there

18   saying, ―You know what, I‘d like to buy a bunch of

19   cable systems, or I‘d like to but, or I want to see

20   if we can invest in‖.

21                          Chairman Powell:               Let me make just one

22   quick point.                  I think that‘s fair, except for the

23   goal of diversity seems to be not to be sort of

24   condemned to the hand me downs of what exists.                                            I

25   mean, Jeff C. Trodden, who‘s the CEO of Vonage, who‘s

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 1   changing          the      way     phone     companies          service,        and

 2   probably for centuries on end could be black.                                          I

 3   could go on and on in the changes I‘ve seen just in

 4   two years that are about invention and entry. And I

 5   think that that‘s important.                       I don‘t mean to – your

 6   point‘s well taken and these industries are always a

 7   challenge.          But sometimes the greatest opportunity is

 8   before they truly have matured and risen to the point

 9   where capital demands, mass market demands have put

10   them well out of reach.                 I mean sometimes you have to

11   sort of grow a garden as opposed to buy one you know

12   in full bloom.               But I think that to me, I could be

13   wrong, but my greatest hope is for those statistics

14   to really be moving about minority representation.                                     A

15   lot of focus has to be put on sort of initial growth

16   as well. Because, I just don‘t know that I believe

17   there‘s          enough     out    there.     But     I   see    what      you‘re

18   saying.

19                       Ms. Johnson: Mr. Temple.

20                       Mr. Temple:          I think, Mr. Chairman, your

21   comments obviously are very well taken, and certainly

22   the New Technologies sub-committee took it to heart

23   and      our      recommendations          today      focus      on    supplier

24   diversity with high regard to technology, and also

25   spectrum,                 non-broadcast               spectrum               based

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 1   recommendations.              All that being said, this is still

 2   very much the beginning of our process, and since we

 3   talked earlier about low hanging fruit, since the

 4   broadcast          industry        is    there     to    be    analyzed           very

 5   quickly and fairly easily, I think we would be remiss

 6   if we did not cover that territory very early on and

 7   get it out of the way.                   Which I think is what we‘re

 8   doing.

 9                          Ms. Johnson: Decker.

10                          Mr. Anstrom: Just             briefly,             and             I

11   appreciate we‘ve got an agenda to stay with as well,

12   but I do think the Chairman‘s point is an important

13   one though, and just take another minute on this,

14   which is to take the example about where the DC funds

15   are today.              I mean there are literally hundreds of

16   companies being born this year that are going to grow

17   off of broadband.                  That don‘t have anything to do

18   with any of the commission‘s regulatory activities.

19   And      it      may    be   that       we   don‘t      have    a      regulatory

20   solution, but I for one would hope, and I was pleased

21   going through the sub-committee reports that there

22   are elements of this that we really keep an eye on

23   using things like best practices to really spotlight

24   ways       in    which       the   commission        can       use     its      bully

25   pulpit, frankly, if nothing else to bring to light

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 1   and to recognize people and companies that are doing

 2   it right in these new emerging industries.                           And maybe

 3   there‘s not a regulatory role for the commission, but

 4   in some ways we‘ve made it much more impactful by

 5   highlighting,               well    here‘s        someone    who‘s    done       it

 6   really well and challenging people to do that.                              And I

 7   think the two fit together very well, in terms of

 8   focusing         on     traditional          industry.         But    the      big

 9   growth, fifteen, twenty, thirty years from now, is

10   going to be in things that are being invented today

11   by the VC funds.

12                         Ms. Johnson:         Anthony.

13                         Mr.    Gee:       As    a      representative      of    the

14   private equity venture capital world, I think we did

15   struggle         in    the     New    Technologies          sub-committee        to

16   deal with technology.                  And part of the -- I think the

17   way we addressed it was looking at capital, to be

18   very frank with you.                   Both capital and sort of the

19   networks that you talked about.                         How in fact do you

20   get the new entrepreneurs to be able to partner with,

21   in some cases, the more established companies, so

22   that they can get their first ten, twenty customers?

23    How do you create the next Vonage?                           How do you get

24   capital and access to the entrepreneurs that sort of

25   need it most, because I think you‘re right.                               If you

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 1   look       at    the    landscape       in   the     next      five,       ten      or

 2   fifteen years, it probably would be very different.

 3   The problem is, if in fact we don‘t get capital to

 4   those entrepreneurs of color, then in many cases it

 5   may be the same.             Just new players.

 6                      Ms. Johnson:         Commissioner.

 7                      Commissioner         Copps:           This      is      just         a

 8   comment on this discussion.                      I certainly agree with

 9   the Chairman that there is so much yet for me to do

10   and the new technology space, trying to get people

11   into       the    emerging       industries        is     as       critical          as

12   anything, but I just want to underscore that the

13   efforts on broadcasting are so critical because the

14   effects of ownership in broadcasting reach far beyond

15   just       the    economy       and     just       the       nature       of        the

16   workplace.             It     affects    everything           we     see       as       a

17   culture,         and    the     knowledge        and     information            that

18   people get to make decisions, the impressions that

19   people make about different types of cultures and

20   different types of ethnic groups and different types

21   of activities that are happening in this country and

22   if     there‘s         not    diversity,       and      it     was      extremely

23   disturbing to see some of the numbers that we saw

24   today about the ownership.                       I think it‘s going to

25   have a really negative impact on our society as a

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 1   whole            if        we     don‘t        get      those        numbers         up      in

 2   broadcasting.                    Not that I have any special bias, I

 3   think            every            aspect         is       important,            but        the

 4   externalities,                   if     you     will      of     the    importance           of

 5   having            minority               and        diversity          ownership             in

 6   broadcasting are in some ways more profound and more

 7   exaggerated than in any other field that we oversee

 8   or regulate.

 9                              Ms. Johnson:          Steve.

10                              Mr. Hillard:               Madam Chairman. First of

11   all      I       agree          with     a     number       of   the    comments           the

12   Chairman              just       made     about       the      new     and     developing

13   industries.                 I think one of the things that we found

14   in our discussions was we tended to focus on license

15   transfers,                 if      you       will,      and      either         from       the

16   commission and creating them under the best measures

17   program,              or    transfers          of     broadcast        licenses.             In

18   part, because it seemed to be the most effective

19   place for this commission as a regulator to create

20   programs              that       could        have     an      effect    there.              We

21   struggled a lot and have had ongoing, and will be

22   having more discussions about some new industries and

23   that sort of thing.                            But I think part of it is

24   there‘s a natural tendency to focus there not because

25   of, well there‘s always more vision that could be

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 1   applied, but it‘s a place where the commission can

 2   apply the tools that make an effect kind of in the

 3   present. Maybe an additional factor is the importance

 4   of ownership and getting into the business tends to

 5   build places of entry and new technologies and that

 6   sort of things for parties, and this is a place where

 7   the commission can put its shoulder to the wheel if

 8   you      will    to    make     some    differences         in     who     gets

 9   involved both in telecom and broadcast.

10                     Ms. Johnson: Mr.          Chairman,        stay        tuned.

11   We      hear     the    challenge,        and    we       understand        the

12   opportunity.           And I don‘t remember which sub-group,

13   but often times you start off with the low hanging

14   fruit being the comfort zone.                   You‘re challenging us

15   to go beyond that, and I‘m hearing from the committee

16   members in the different sub-committees that we‘re

17   stepping up to that challenge in that there‘s been

18   conversations regarding commercialization of military

19   research and how do you field the technologies and

20   determine         what‘s       out      there,        and        put     those

21   entrepreneurs with those venture capitalists and do

22   some things in the new technology area.                          That those

23   ideas are being followed, I believe quite a few,

24   through Mr. Riley Temple‘s group, as well as others,

25   and I think in the coming months you‘ll see the next

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 1   phase with those kinds of ideas, and partnering with

 2   other agencies and looking for different intellectual

 3   capital to bring to the table to find and ferret out

 4   those real new opportunities unexplored.

 5                       Chairman Powell:        Just       giving    one      last

 6   point       and   then   I‘ll    leave      it    alone.        Lest    I    be

 7   accused of techno-ecstasy or something.                          The only

 8   reason it‘s a challenge, because Steve, your point

 9   raises a good one, which is in the seven years watch

10   our portfolio expand exponentially, we have way more

11   rules than, or influences than you may think at first

12   blush if you really surveyed the depth.                     Just look at

13   our      meeting     agenda.        We‘ve       done     everything       from

14   unlicensed spectrum for wi-fi, broadband over power

15   line,       ultra    wideband     technologies,          voice   over       IP,

16   satellite delivered internet.                     I mean, this is a

17   steady diet at the commission, within our regulatory

18   purview in which we dramatically influence the course

19   of these emerging industries.                    This is not just, oh

20   these people are really cool and they live in Silicon

21   Valley, go say hi to them, and it has nothing to do

22   with our policy.             I would actually submit to you,

23   more of our resources today are dedicated to those

24   things than other things that might be more notable

25   for various reasons, but if you looked at the total

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 1   time and resources of the commission and its rules,

 2   there are much more of that then you might think.

 3   Some       are        licensees,       some     aren‘t      but     are      still

 4   subject, or will be influenced by the rules that we

 5   adopt.           And so, I guess I‘m challenging myself as

 6   well as the creativity of weaving diversity into the

 7   future           of    communications         is    to      keep       a     broad

 8   examination of all the kinds of things that we are

 9   playing in, and ask yourself every single time, all

10   right, are we going to do broadband over power line,

11   is there any diversity component here?                            We‘re going

12   to do wi-fi, is unlicensed a preferable vehicle for

13   minority interest?              By the way, if it‘s an access to

14   capital issue, it sure as hell lowers the price of

15   getting into the wireless business.                      I mean if you‘re

16   a T-Mobile and you have to come buy Spectrum for

17   $3,000,000,000.00, it‘s tough to get a new minority

18   company in there, but if it‘s free, I mean that‘s a

19   major        advance       in    the     access     to      capital        for         a

20   particular form of delivery.                       Not just, there are

21   issues.           But, I‘ve been to five Indian reservations

22   this year in which every single one of them, with

23   very little resources, are providing broadband and

24   building              companies         using      wireless            internet

25   technologies in a way that they could never have

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 1   possibly hoped to compete before.                          And part of that

 2   is a commitment in our rules to the unlicensed model,

 3   as well as understanding for rural areas and other

 4   areas,           that   it    lowers     costs        and    provides           real

 5   opportunities for people.                 So, it‘s just a challenge

 6   to be keeping sight to all of the things we do.                                 I‘ll

 7   let it go.

 8                       Ms. Johnson: Any          final         comments        there?

 9   Seeing none.            Commissioner Copps, welcome.

10                       Commissioner Copps:                Thank you.

11                       Ms. Johnson: And             we         will       have             a

12   placeholder for you to provide comments if you‘d like

13   now.

14                       Commissioner Copps:                No,    I    don‘t        want

15   to interrupt the seriatim of the discussion, I might

16   make some comments as we go along.

17                       Ms. Johnson: Okay.

18                       Commissioner Copps:                I     would        endorse

19   what my friend Jonathan just said here though about

20   the immediacy of the problem when we‘re talking about

21   some       of      these     figures     on      employment,          not       just

22   ownership          of   minority       media,     but       general       station

23   manager, radio general manager and all that. That‘s

24   truly alarming.              And I tried to impart some sense of

25   urgency.           I think the first time I came in and met

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 1   with this group, and the situation more urgent today,

 2   nothing‘s gotten better I don‘t think since we met

 3   the first time.            So your job is even more immediate,

 4   and I do agree with what‘s been said here up to a

 5   point about the necessity to go out and tackle those

 6   emerging industries, but that don‘t mean we can let

 7   go of any of the industries that are here right now,

 8   because          they   might    own    these     emerging      industries

 9   before we get too much further down the line, and I

10   think we‘ve got to worry a little bit about that too.

11                       Ms. Johnson: Okay, well this is actually

12   a natural breaking point between the reports and the

13   resolutions. We can proceed with those, or comments.

14    Commissioner, comments?               Okay.     Thank you.

15                       Commissioner Copps:             I‘m sorry, what?

16                       Ms. Johnson: This is a natural breaking

17   point        between      the    sub-committee        reports     and      the

18   resolutions.            If you‘d like to speak now, that‘s —-

19                       Commissioner Copps:             No, I didn‘t have

20   any speech, I really did come down to listen, I mean

21   I know I‘ve looked through the recommendations, I was

22   trying to listen up in the office to some of the

23   discussion here.              I really applaud all of the hard

24   work that‘s going on, but I‘m just a big believer in

25   pushing, pushing, pushing.                 And I‘m a believer in you

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 1   pushing us, and I‘m a believer in us pushing you to

 2   really go as far as we can on all this and really

 3   getting out there on the edge of the envelope and

 4   seeing, in light of the Michigan decision, whether

 5   maybe there‘s more that can be done in certain ways.

 6    Differentiating between what it is that we‘re going

 7   to ask Congress to do and what we can do here.                                    The

 8   Chairman says we do a lot of things here, I agree

 9   with that, a lot of different areas.                           And there‘s a

10   potential, I think, to have an impact in diversity

11   across a broad range of issues, we just have to think

12   innovatively and think creatively, and that‘s what I

13   thank you all for doing and we look forward to doing

14   that.            But,       just     keep     that     sense        of     urgency

15   uppermost.              I     mean     this        country,     as       you      all

16   appreciate, to me is founded on its diversity, its

17   strength         is    its    diversity        and    our     media       and     our

18   communications              industries        have     an     obligation            to

19   reflect that diversity and to nurture that diversity,

20   and that‘s what this is all about I think.

21                         Ms. Johnson: Thank            you.     Thank        you     for

22   your        participation.              Also        wanted     to        recognize

23   Commissioner            Tristani.      I    think      she‘s    still           here.

24   Welcome.         We appreciate your involvement.                         Thank you

25   very much.

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 1                      Mr. Temple:          I    just     have      one      closing

 2   comment on that prior discussion.

 3                      Ms. Johnson: Yes.

 4                      Mr. Temple:          Since we have a lot of the

 5   people in the room who are subject matter experts,

 6   and a lot of good minds around the room, I think one

 7   of the issues that we come up against all the time

 8   is,      you     know   the    Chairman       talks       about     the      newer

 9   technologies, what is the FCC‘s jurisdictional hook

10   that can be leveraged?                And that‘s not always clear.

11    And I think that‘s the critical issue.                             We need a

12   jurisdictional hook, and we need to exploit that.

13                      Ms. Johnson: Excellent.                Thank you.

14                      Mr. Temple:          Okay.

15                      Ms. Johnson: And,              with     that       we       will

16   transition         into     our    presentations           of   resolutions.

17   The      action     items.      Starting          first    with     Frank       and

18   financial issues. I think you have three resolutions

19   to propose.         And we‘ll take, we‘ll vote individually.

20    So I believe we‘ll start with your tax incentive

21   program.

22                      Mr. Montero: You want to start with the

23   tax incentive program?

24                      Ms. Johnson: Yes sir, if that works for

25   you.

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 1                     Mr. Montero: That‘s fine.

 2                     Participant: For           convenience,          these       are

 3   in the book that you have in front of you just there

 4   should be a tab for each of the resolutions.

 5                     Mr. Montero: The                 first           resolution

 6   submitted by the Financial Issues sub-committee reads

 7   as     follows,       ―Be   it      resolved        that    the         Advisory

 8   Committee        on   Diversity       for        Communications          in    the

 9   Digital Age, urges the adoption of a federal program

10   that would use the deferral of federal capital gains

11   tax liability as an incentive to make available to

12   socially and economically disadvantaged persons and

13   businesses        the       opportunity            to     acquire         assets

14   necessary         to        enter        the        broadcasting               and

15   telecommunications marketplace.‖

16                     Ms. Johnson:           Okay.          And there was an

17   accompanying white paper?

18                     Mr. Montero: Yeah.                 Did    you       want       to

19   actually go through the whole white paper?

20                     Ms. Johnson: Do           we     need     to     --     you‘ve

21   provided a summary earlier.

22                     Mr. Montero: Yeah, you‘ve already gotten

23   a summary of it earlier.                    Although, are the white

24   papers in – yes they are.

25                     Ms.    Johnson:           Yes,        white    papers        are

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 1   attached.

 2                     Mr. Montero:            Okay, they‘re actually in

 3   the book here, which provides a history of the tax

 4   incentive         program.            Particularly,             the      earlier

 5   minority         tax   certificate         program.             Some     of     the

 6   considerations           and    allegations          that       led      to     its

 7   demise, but as well as some of the considerations by

 8   industry and government as to why it‘s, at least we

 9   have found it to be, a fairly universally endorsed

10   program and one that is very much needed.                                 And as

11   you‘ve heard here, several of the sub-committees here

12   have all endorsed the return of some kind of a tax

13   incentive program.

14                     Ms. Johnson: Jane, did you have -–

15                     Ms. Mago: I just wanted to note for the

16   record. The resolutions and the white papers have

17   been on the website contained under the submissions

18   for the June 14th meeting.                 What you have in the book

19   here       is    simply     the     printout      of       what       has      been

20   available on the website for your consideration.

21                     Unidentified:               Move         to     adopt         the

22   resolutions.

23                     Ms. Johnson: Motion                and        second.         Any

24   discussion?        Benita.

25                     Ms. Fitzgerald Mosley:                    Yes, regarding

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 1   the     Chairman‘s       comment     about      lobbying       efforts       and

 2   really the restriction upon the FCC to do that.                              Did

 3   you all give any consideration to what ways in which,

 4   what things you might employ -

 5                      Mr. Montero:         We did.       And, in fact, we

 6   actually, it came up in several conversations because

 7   we had interviews with representatives of legislators

 8   as to what they would like to see as far as increased

 9   involvement by the commission staff, and we actually

10   pointed          out   some     of    the       restrictions         on      the

11   commissioners          in     that    respect.            We   rooted        the

12   language of the resolution very carefully and for

13   precisely that reason. Earlier drafts had said that

14   we would urge to the FCC to adopt such a program, it

15   was pointed out that the FCC couldn‘t adopt such a

16   program, that it really required, really an amendment

17   to the Internal Revenue Code.                    And so some of that

18   really had to come from the Hill.                    So the resolution

19   is fairly broad in its nature in that it doesn‘t urge

20   the FCC to act, it just generally urges the adoption

21   of a federal program that would introduce the capital

22   gains deferral mechanism to achieve those ends.                                     I

23   mean clearly, again, I think the FCC can play a role.

24   In its reports to the Hill, it has endorsed a tax

25   incentive program.             It‘s actually done it two times

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 1   in     a    row        in   the    257    reports.         There       are    again

 2   limitations on the ability to ―lobby‖ whatever falls

 3   into that definition.                    But again, to the extent that

 4   these reports and these resolutions of this committee

 5   will be seen by those beyond the FCC, I think what we

 6   were getting at is that we wanted to send a message

 7   not just to the FCC, but also to Capitol Hill and

 8   also to any other governmental instrumentalities or

 9   the industry that might be reviewing these to see

10   that this is the position we take is that a program

11   like this should be, we urge the re-adoption of a

12   program such as this.

13                          Ms. Mago: I think it‘s fair to call this

14   sort of a sense of a committee resolution.                                   I mean

15   you‘re making a statement as to your broad belief

16   that such a program is something useful, which is the

17   kind of thing that we‘ve heard in each and every sub-

18   committee meeting.

19                          Commissioner Copps:                But     if    I     could

20   just take a crack at that too, you know there‘s,

21   there            are    different        levels      of        representational

22   activity or lobbying or whatever you want to call it.

23    And I‘m not aware of anything that precludes an

24   independent agency from developing a fairly specific

25   list       of      options        for    Congress     to       consider      as    it

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 1   endeavors to achieve overall objectives.                               And I think

 2   that‘s           one    area   where    we    have        been    a     little       bit

 3   remiss, whether it‘s talking about this in diversity,

 4   whether           it‘s    talking      about        how    we     get      broadband

 5   deployed across the country.                        You know I think it‘s

 6   our responsibility to go out, get the facts, get

 7   recommendations and share that with the Congress and

 8   say     here‘s          what   we   think     is     the    problem,           here         a

 9   number of ways to do it, they can be rather specific.

10    I     don‘t           think   that    comes        under        any     prohibited

11   lobbying activities to do something like that.

12                          Ms. Johnson: Thank you.              Mr. Temple.

13                          Mr. Temple:        The         fact            that          this

14   specifically does not, I think raise on the Hill.

15   Members of Congress routinely ask the commission for

16   its wish list, and I would assume that if we pass on

17   these recommendations that it‘s expected that these

18   items will make it onto such wish lists, if it‘s

19   adopted by the full commission.

20                          Ms. Mago: Yes, and as Frank noted, this

21   has been on the commission‘s wish list.                                      And so,

22   that‘s why this one I believe is more a sense of this

23   body.        The commission has had this on its wish list,

24   and will continue to do so.                         But, this is to get a

25   sense from you all.

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 1                     Mr. Montero: And             I    don‘t       think     that         I

 2   overstate,       and    I     welcome        any     of    my     fellow       sub-

 3   committee members to challenge me, but I do think

 4   that the sense certainly of the sub-committee was to

 5   urge the FCC or any other governmental bodies to do

 6   to take whatever steps are necessary and appropriate

 7   to reintroduce this program.                       So, to the extent that

 8   you have any permissible activity to definitely do

 9   it.

10                     Ms. Johnson: Thank you. There‘s a motion

11   and a second?          Any further discussion?                    Seeing none,

12   then be vote, all those in favor.                          Opposed. Show it

13   approved unanimously. Thank you.

14                     Ms. Mago: And we will note that on the

15   phone we have Andy Barrett and Jamie Howard are on

16   the phone, and I assume that they both said aye to

17   this as well?           Hearing no objection, I think they

18   said aye.        Mr. Montero.

19                     Mr. Montero: The             next       one    is    the     sub-

20   committee‘s         recommendation            on     the        distress       sale

21   policy, which is likewise one of the three items that

22   I     referenced       in     my     earlier         report.           And,     our

23   resolution reads as follows: Be it resolved that the

24   Advisory Committee, on diversity of communication in

25   the       digital      age,        recommends         that       the     Federal

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 1   Communications Commission reaffirm the viability and

 2   routine applicability of the distress sale policy.

 3   To       protect         the     public         interest,              and      ensure

 4   transparency in the operation of the distress sale

 5   policy, it is recommended that the Commission assess

 6   each      distress        sale    purchaser‘s          ability          to    promote

 7   diversity and require a showing of the bona-fide‘s of

 8   the purchaser‘s company, its commitment to promoting

 9   diversity          and    providing        service         for    a    substantial

10   length of time, and its plans to serve the needs of

11   the      public,         and    to     correct        any       deficiencies           in

12   station          operations          caused     by     the       distress           sale

13   seller.

14                       Again, the white paper is attached to it.

15    And with regard to this proposal, Madam Chairman, I

16   might       also    note       that,     in    fact    with       the        next    two

17   proposals          that     David       Honig        was       very,     very       much

18   involved in, as were others, in the preparation of

19   these resolutions.                So, as questions come in, I may

20   also ask to further David on some of the discussion.

21                       Ms. Johnson: Thank                you.        Is         there          a

22   motion?          Second?             Motion     and        a     second.             Any

23   discussion?          Seeing none. By voice vote, all those in

24   favor?           Opposed?        So this is approved unanimously.

25   Congratulations.               And, third issue.

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 1                    Mr. Montero: Last             recommendation         of    the

 2   sub-committee         on     Finance     is      on   incentive          based

 3   regulations, and it reads: Be it resolved that the

 4   Advisory Committee on Diversity for Communications in

 5   the       Digital     Age,     recommends         that       the     Federal

 6   Communications Commission consider the four proposals

 7   listed below, as a means to promote broader access to

 8   capital for socially and economically disadvantaged

 9   businesses.         They are:

10                    1.     Waivers of the structural ownership

11   rules;

12                    2.    Waivers of the attribution rules;

13                    3.        First    place       in    line    for      future

14   duopolies; and

15                    4.      Waivers of the construction permit

16   expiration rule.

17                    Ms. Johnson: Is there a motion?                   Is there

18   a second?        Any questions regarding the motion and/or

19   the discussion papers?              Seeing none?         Then by voice

20   vote, all those in favor?                  Opposed?          Show it then

21   approved unanimously. Congratulations.                   And does that

22   conclude your action items?

23                    Mr. Montero: It           does       Madam        Chairman.

24   Thank you.

25                    Ms. Johnson: Thank you Sir.                 Next, Steve.

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 1                     Mr. Hillard: I‘d              like     to    direct        the

 2   committee members‘ attention to the tab indicated as

 3   Adoption of the Transactional Opportunity Rule.                                     I

 4   wanted to make a few comments, and then allow any of

 5   our sub-committee members, if they have comments and

 6   in particular, David Honig, who did assist a lot on

 7   getting through a number of difficult questions that

 8   the sub-committee members assessed in developing this

 9   proposal.

10                     This was a matter of which we viewed as

11   effectively consigned to the Diversity Committee for

12   its review and potential recommendation and within

13   our orbit of focus as sub-committee.                         I can tell you

14   that as we undertook the rule, which I‘ll I guess

15   read in the simple form here in a second, which was

16   basically        it    would    be,    I   guess       with    the    resolve

17   language: Be it resolved that the Advisory Committee

18   on Diversity for Communications in the Digital Age

19   urges the adoption by the commission of the following

20   rule:

21                     No     FCC       licensee       shall        discriminate

22   intentionally against a qualified person or entity

23   with       respect     to    the      offering         for    sale    or     the

24   entertaining of offers to purchase, any FCC licensed

25   facility because of race, color, national origin or

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 1   gender.

 2                       As we examined this, we strove to find

 3   the       balance        between      the        merits      of       a      clear

 4   articulation by the commission of this policy, as

 5   well as the workability and pragmatics and potential

 6   effect upon the marketplace, which is explored at

 7   some length in the white paper.                     But this addressed

 8   everything from the confidentiality concerns of the

 9   seller to concerns of other groups, such as media

10   brokers who we spent a substantial time vetting this

11   rule with to their satisfaction that it was workable.

12    So, with the permission of the Madam Chairman, and

13   David, if you had some additional comments --

14                       Mr. Honig:        No, I think I agree with the

15   presentation, and I‘m happy to take questions.

16                       Ms. Johnson: Okay, and with that is there

17   a motion?           There‘s a motion to move?                     Is there a

18   second?          Any discussion or questions for Mr. Honig?

19                       Mr. Temple:        I have a question.

20                       Ms. Johnson: Mr. Temple.

21                       Mr. Temple:        The       categories          for       non-

22   discrimination.            How did you arrive at those, and did

23   you      think     of    including      others?            Such     as     sexual

24   orientation, for example.

25                       Mr. Honig:        The    categories           are      really

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 1   drawn from the parallel is Section 2080A, Part 73,

 2   the EEO Rule.            It‘s this, actually this proposal was

 3   first raised several years ago in connection with the

 4   EEO rule, and the commission felt it ought to stand

 5   by itself and be treated as an ownership related

 6   matter, but the definitions are the same as those in

 7   the EEO rule, and we‘ll track them for consistency.

 8                      Ms. Johnson: Any other questions?                        With

 9   that, on a voice vote, all those in favor?                          Opposed.

10    Show it approved unanimously.                    Thank you very much.

11    New Technologies. Mr. Temple.

12                      Mr. Temple:         I‘d like to have both Ari

13   Fitzgerald and Marva Brown Johnson to take seats at

14   the end of the table. They are subject matter experts

15   for      both     of   the    recommendations        that      we    will      be

16   considering today.              First, Marva Brown Johnson is a

17   force        of   nature      otherwise      known        as   Marva      Brown

18   Johnson. She has been essential to the work of the

19   New Technologies sub-committee, and has been one of

20   the driving engines of the sub-committee, and all of,

21   in     fashioning,       all    of    the    recommendations           of    the

22   committee, one of the many blessings of having Roscoe

23   Young on the Diversity Committee, has been that he

24   brought Marva Brown Johnson to us.                        Marva would you

25   summarize         your       draft   of     the    Supplier         Diversity

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 1   Program recommendation.

 2                       Ms. Brown Johnson:               Certainly,                 and

 3   thank you for the introduction.                     In fact, that‘s why

 4   I was being a bit schizophrenic as to whether I was

 5   really representing Roscoe and myself today?                                And I

 6   just wanted to thank you all for the opportunity,

 7   first of all.            The New Technologies sub-committee put

 8   forth        the    recommendation          that     the     FCC      and      this

 9   committee          establish       the   New      Technologies          Supplier

10   Diversity Program, and just as an overview, I‘d like

11   to start by giving an overview of the program, and

12   what we see as the flagship aspect of the program,

13   and then I‘d like to open it up for questions, if

14   people           would    like     to    ask      questions        about        the

15   establishment of the program, or what some of the

16   objectives          of     the     program        will      be.         Just      to

17   highlight, we did want to incorporate many of the

18   suggestions that Chairman Powell made earlier this

19   afternoon.           Also        suggestions        we‘ve         heard        from

20   Commissioner Copps when we spoke initially in our

21   initial interviews with some of the chairmen.                                  And,

22   the focus was truly on opening opportunities for all

23   different types of technology advancement within the

24   communications            sector.        Because         there     is    such          a

25   marked shift towards convergence, I think we talked

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 1   about earlier whether or not we focused on broadcast,

 2   or whether or not we‘re going to focus on wire line,

 3   probably in ten years from now, that conversation

 4   will be moot, it will be irrelevant.                               We will have a

 5   market           convergence          where    there     is       no    distinction.

 6   Communications is communications, whether it be over

 7   wireless access or satellite or cable.                                  The fact is

 8   is that you‘ll be focusing on the applications that

 9   will be provided, and not the mode of transmission by

10   which        you       receive         that    service.                So,    the      New

11   Technologies sub-committee effort is an important one

12   because           of     that     convergence           and,       therefore,            we

13   believe that the establishment of our recommendation

14   for the Supplier Diversity Program will help in terms

15   of advancing that convergence, objective.

16                          We basically wanted to create, at the end

17   of      the        day,     an        opportunity,            a    real        tangible

18   opportunity,              where       at    least       ten       companies         could

19   benefit           from     the    linkage         between         the        access      to

20   capital, as well as the access to the deal-making

21   flow in brining their new technology recommendations

22   to     real       people,        to    real     opportunities            that       could

23   create, again, something tangible within five years

24   for at least ten companies.                             With that said, the

25   program           basically       has      three       elements.             The    first

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 1   element of the program is a mentoring program.                                  We

 2   often get to participate in industry forums where

 3   people can bring forth their technology and present,

 4   and it‘s more of a trade show atmosphere.                         We believe

 5   that trade shows are very important.                       And, in fact,

 6   as a part of this program, we would like have a trade

 7   show, perhaps even in September, centered around one

 8   of our off-site road show type activities. However,

 9   we believe that much more important to this type of

10   initiative          is,    a    real     linkage     in     a       long-term

11   relationship.         So that‘s why we proposed as the first

12   cornerstone program of the pushing of the program,

13   the mentoring aspect of the program, where we would

14   have       larger    companies        actually     mentor,        or     really

15   enter        into   long       term    business    associations              with

16   smaller new emerging companies who are bringing forth

17   technology recommendations.

18                       The second aspect of the program is a

19   Supply Diversity Resource Center.                        We believe that

20   there are already functions and disciplines within

21   the FCC that could really be of assistance, and have

22   been of assistance to smaller companies.                           We‘d like

23   to leverage them further in that role to make sure

24   that we can have a guide that gets you through some

25   of the regulatory trappings, so that some of the

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 1   smaller           emerging        technology           companies       can      have

 2   access, perhaps to even engineers, to bounce ideas

 3   off of.               We saw that that was a critical aspect as

 4   well       to         helping     some       of     the   smaller      companies

 5   navigate their way through the regulatory process.

 6                          Lastly, and most importantly, we have as

 7   the flagship item for this recommendation, and that

 8   is     the       Minority        Communications           Supplier     Diversity

 9   Development Program.                   As noted earlier, none of these

10   things           work      unless          you     have    access      to       real

11   opportunities.                  And    real       opportunities      begin      with

12   access to capital to actually make some of these

13   ideas come to life.                        So, I think that we‘ve had a

14   great melding of many aspects because we did have

15   Anthony, who‘s on the Access to Capital Committee,

16   and we struggled for a long time because we needed to

17   find         some        way,         we     weren‘t      recommending           new

18   technology, we were trying to engender an environment

19   whereby new technology could be easily deployed.                                 And

20   without access to capital and that linkage to that

21   access           to    capital    effort,          none   of   these    programs

22   would really reach their full effectiveness.

23                          As a next step, really what we‘d like to

24            do, is to begin to identify charter members.                              We

25            would like to focus, just as Chairman Powell

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 1            suggested,         outside        of      your       traditional

 2            telecommunications people.                We‘d like EDS, for

 3            example, Microsoft, one of the people you heard

 4            earlier, Riley thanked on behalf of our sub-

 5            committee was Deepak Masong, who actually is a

 6            software vendor, and he is doing an applications

 7            based software program that is communications

 8            based.     So, we are looking to try to look for

 9            internet       enabling         opportunities           to      merge

10            software        opportunities           and       communications

11            opportunities.         So, we‘d like to move forward,

12            and as a critical next step, identify some of

13            the players that could be charter members, as

14            well as charter mentors, so large companies and

15            small companies, so that we can really begin to

16            move     forward       with      some      of      the       program

17            recommendations         that    we     would     have     and    next

18            steps in order to advance this recommendation.

19            Are there are any questions?

20                     Mr. Temple:           Well,    first     let     me    thank

21   you and move the adoption of the recommendation to

22   establish        the   Supplier      Diversity.           Essentially         it

23   will work in the lap of the new –

24                     Committee Member:             Second.

25                     Ms. Johnson: There‘s             a      Motion        and       a

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 1   Second? Any discussions or questions of Ms. Johnson?

 2    For the Chairman?

 3                     Commissioner Copps:               Can     I     ask            a

 4   question?

 5                     Ms. Johnson:      Yes.

 6                     Commissioner Copps:          This is an industry-

 7   wide program?          These other ones that are mentioned

 8   here, I guess, are very company specific but what

 9   we‘re talking about here is a -—

10                     Mr. Temple:       What would happen is that

11   the, our sub-committee would work with the FCC in

12   developing and targeting companies to participate and

13   working with them to develop the mentor program.                            We

14   would target the companies, and the FCC would make

15   the invitation.

16                     Commissioner Copps:                And,       can       you

17   explain to me a little bit more again about this

18   distinction the Chairman was talking about between

19   the      emerging    industries      and      the    current     industry

20   leaders?         I get the feeling the emphasis here is very

21   much on reaching out for the new emerging industries

22   more than trying to work with industries currently

23   controlling most of the charts.

24                     Mr. Temple:       It would not work to the

25   exclusion of the already developed industries.

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 1                           Commissioner Copps:                  But it would work

 2   to their inclusion also, proactively.

 3                           Mr. Temple:         Absolutely.        Specifically.

 4                           Ms.        Brown         Johnson:                 Actually,

 5   Commissioner Copps if I may.                           Actually, it‘s a great

 6   opportunity to bring the two together, because one of

 7   the things that we saw as an opportunity within this

 8   program recommendation is for the smaller emerging

 9   technology companies to have a direct link into the

10   larger companies.                   So, for example, if Cox has a

11   bottleneck issue that it needs working on, they can

12   speak            with     these        smaller           emerging      technology

13   companies,          and       create       an    opportunity        for   thought,

14   create an opportunity to perhaps it will be something

15   never        thought          of    that        will    be   leveraged        in     an

16   existing industry that takes us to the next step as

17   an industry as a whole.

18                           Ms. Johnson: Okay, there‘s a motion and a

19   second? Any other discussion? Seeing none. By voice

20   vote, all those in favor?                              Any opposed.        Show it

21   approved.           Congratulations.

22                           Mr. Temple:        Thank you.         Our next set of

23   recommendations were developed with the assistance

24   and      brainpower           of    one     Ari        Fitzgerald,     who      is        a

25   partner at the Law Firm of Hogan and Hartson.                                      For

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 1   your             convenience,         we          have         divided            these

 2   recommendations,               sub-divided         these       recommendations

 3   and the first is: Be it resolved that the Advisory

 4   Committee           of    Diversity        of     Communications             in     the

 5   Digital           Age     recommends         that        the     FCC       consider

 6   recommendations for increasing access to capital.

 7                        1. Reinstate and explain the minority tax

 8   certificate,              create         a        small         and        minority

 9   communications loan guarantee program administered by

10   the SBA, create an entity that would purchase loans

11   made to minority and small business communications

12   companies           in   the    secondary          market,      allow        private

13   lenders to take a security interest in FCC licenses

14   and expand the type and amount of funds available to

15   small            communications            businesses            through            the

16   Telecommunications               Development             Fund.              We      all

17   recognize            these       recommendations               would         require

18   congressional legislation or FCC rule changes.                                   Ari.

19                        Mr. Fitzgerald:               Thank       you     Riley.              I

20   think as Marva has already sort of intimated, one of

21   the       themes         running     through         our       sub-committee‘s

22   deliberations was this idea that there was a whole

23   lot      going      on    out    there       in    sectors       that       are     not

24   traditionally regulated by the FCC.                            But at the same

25   time, as has already been mentioned today, the FCC,

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 1   the leverage points, the points of possible leverage

 2   were most available, vis a vis those entities that

 3   were       being        regulated        by     the     FCC.    So,        what      our

 4   committee tried to do, and you heard Marva sort of

 5   describe the supplier diversity initiative, was to

 6   try to figure out a way to use the leverage that the

 7   FCC has to really create opportunity for emerging

 8   businesses.             So, some of the recommendations that we

 9   focus on are specific to access to capital that would

10   apply       to        any   technology        and     other     recommendations

11   focus            on     those        areas,     those         entities,           those

12   industries that are still regulated by the FCC in

13   some      form        or    fashion      with    the     goal     of     trying        to

14   create           incentives       for    those        regulated    entities            to

15   work with new emerging technology companies that are

16   owned by minorities.

17                          Some of the recommendations that we came

18   up with relating to access to capital have already

19   been        discussed           by      other       sub-committees.                  Our

20   committee is also very interested in reinstating the

21   tax certificate. There are additional recommendations

22   relating to access to capital though.                             I‘m not going

23   to spend too much time talking about them today.                                       We

24   do think that in addition to reinstating the tax

25   certificate, there are other ways to get funds to

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 1   emerging technology businesses owned by minorities,

 2   including           creating        a     loan     guarantee       program       that

 3   would            reduce      the     risk        associated        with      making

 4   investments             to   emerging           minority    owned     companies,

 5   many of which would have sort of a non-traditional

 6   credit profile and might not be able to secure the

 7   loans without some type of guarantee.                          Fannie Mae has

 8   worked           very     well     in     encouraging       homeownership           by

 9   people who would otherwise, if it weren‘t for Fannie

10   Mae, would not have access to a home.                              We think the

11   same type of institution could be created for small

12   businesses. Again, the idea being that there would be

13   a     source         of      capital          available,      an    institution

14   available to actually buy loans that were made by

15   financial institutions.                       Thereby, keeping the flow of

16   capital            flowing         to         those     institutions,            also

17   minimizing the risk associated with making loans.

18                           There has been a lot of discussion about

19   the problem of taking a security interest in FCC

20   licenses.           That issue has been around for a very long

21   time.             Broadcasters            and    wireless     companies          have

22   gotten           around      that,       to     some    degree,    by     allowing

23   lenders to take an interest in the proceeds from the

24   sale of licenses.                  But it does often take some time

25   to explain the process to potential creditors.                                    And

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 1   so eliminating the need to explain, you know, why you

 2   can‘t        formally          take     a    security        interest       in     the

 3   license could potentially be quite helpful.

 4                          And we made a very general recommendation

 5   about            increasing           the      scope         of      the         TDF‘s

 6   responsibilities.                   Again, we see TDF has done a great

 7   job,        but        if      we     expanded         the     scope       of      its

 8   responsibility, we believe that it could be even more

 9   helpful           in    promoting           opportunities           in     emerging

10   technologies.

11                          Mr. Temple:           All right, I just need you

12   to     clarify         one        thing,    which      is    with    respect         to

13   interest          in        FCC     licenses,         the    priority       of     the

14   security holder, the security interest holder, vis a

15   vis the FCC.

16                          Mr. Fitzgerald:                Right,      right.         These

17   would all, I believe all of these recommendations

18   would require legislation. Yes, but who --

19                          Participant: Not to allow -- I‘m sorry --

20   not to allow security interest in FCC license?

21                          Mr. Temple:          Yes, yes.

22                          Participant: I think the prohibition is

23   by FCC policy.

24                          Mr. Temple:           Yes,      by    FCC     policy,         so

25   legislation or rule change.                           But the question was,

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 1   who would prevail, the security holder -—

 2                          Participant: It             wouldn‘t                 require

 3   legislation or rule change, it‘s a policy, so it

 4   could just be it would just be, require a change of

 5   policy.

 6                          Mr. Temple:        There     is        some     debate        on

 7   that issue, but the goal here would be to allow the

 8   security holder to have priority.

 9                          Ms. Johnson: Let‘s,          we        have      a     couple

10   questions or clarifications here.                        Jane, did you want

11   to speak -—

12                          Ms. Mago: Yeah.       I don‘t think it‘s just

13   a policy Frank, I think this, you know, it‘s part --

14   there‘s a legal requirement regarding ownership of

15   the licenses.

16                          Participants:              Is there a rule? There

17   is no rule -—

18                          Ms. Mago: The security, I think it would

19   require          some    modification       of     the    statute,           but     we

20   would have to look into this.                     This is something.

21                          Ms. Johnson: David.

22                          Mr. Honig:         Actually,           the     Access         to

23   Capital          sub-committee        has     looked          into      the       same

24   matter,          and    there   is    a   way     to     do    it     that      we‘re

25   exploring and hope to report on next meeting that

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 1   would achieve this with just a rule change, and in a

 2   nutshell it is just to have if you file a 314 to file

 3   when would take the station in the other direction,

 4   just switch positions of the assignor and assignee,

 5   and the only thing that you would have to change is

 6   the rule how long you need before you close on the

 7   transaction.             You could make that two years on the

 8   transaction back, if there‘s no, if the conditions

 9   are      to      the    in   the    asset     purchase      agreement       are

10   satisfied, you would just never file it, and dismiss

11   it.       So there‘s a way to do it exactly the way that

12   Ari has specified, that wouldn‘t require legislation.

13    But it would require a rule change.

14                          Mr. Temple:       It    would    require      a     rule

15   change.

16                          Ms. Johnson: Mr. Winston. I‘m sorry, Mr.

17   Chairman.

18                          Mr. Temple:       I want to move the adoption

19   of the recommendation.

20                          Ms. Johnson: Did we agree with that?

21                          Mr. Temple:       We forgot that.

22                          Ms. Johnson: Okay, we‘ll go back to your

23   discussion, but there is a motion to put it on the

24   floor for discussion.                Is there a second?         Motion and

25   a     second.             With     that,      we   will     continue        the

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 1   discussion.            Mr. Winston.

 2                         Mr. Winston: Yeah, Ari, I was wondering

 3   how much discussion you had with current licensees

 4   about this proposal to allow security interests.

 5                         Mr. Fitzgerald:           We had some discussion.

 6    Again, focus across various industry groups.                                But,

 7   we     didn‘t         get   a    whole    lot      of    feedback     on     this

 8   particular proposal.                 We‘ve had a lot more specific

 9   discussion about some of the other proposals that I‘m

10   going to be discussing.

11                         Mr. Winston: I recall last time this was

12   discussed extensively at the commission, there was a

13   great        deal      of    resistance       from       broadcast     station

14   licensees, many of whom feel that they already are

15   shackled         by    aggressive        lending        practices    in    their

16   industry,           and     thought      that      allowing     a    security

17   interest in the license would give them even less

18   negotiating position than they have already.                                So I

19   think there would be some need for further discussion

20   before we go very far with this proposal.

21                         Mr. Fitzgerald:              Again, the fact that a

22   lender can‘t take a security interest in a license

23   today has created, is viewed as sort of an obstacle

24   by some to being able to secure the capital necessary

25   to build out their businesses.                      If it were available,

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 1   yeah I‘m certain that certain lenders would demand it

 2   from licensees.          But it is perceived as a barrier

 3   today, because you do have to go through and explain

 4   how you get around the prohibition.

 5                     Mr. Temple:       The       purpose    here,       if    we

 6   pass this recommendation is to not say that this

 7   committee        recommends    that     the     FCC     absolutely        and

 8   henceforth or ever more adopts a recommendation to

 9   take security interest in an FCC licenses, but to

10   place it firmly in the hands of the commission to

11   explore in the form of a rule making, and to have

12   further discussion on it.

13                     Mr. Winston: And        I     would    support          your

14   language much more than what was written in front of

15   me here.         I think it‘s much more, the committee‘s

16   proposing to allow a security interest and that would

17   trouble me.

18                     Mr. Temple:       Okay.

19                     Ms. Johnson: I‘m            sorry,     is        that         a

20   friendly amendment?

21                     Mr. Winston: I        would      take       it     as         a

22   friendly amendment.

23                     Ms. Johnson: And --

24                     Mr. Winston: Which is to place this in

25   the hands of the FCC for consideration.

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 1                     Ms. Mago: So      if    you      were       to    say,     for

 2   example, the Federal Communications Commission might

 3   consider actions that it might take to allow or it

 4   would be really to further most of the other goals

 5   and to potentially allow that one if you‘re ready to

 6   do that.

 7                     Mr. Winston: Consider if such an interest

 8   would be advisable, is I think the language I‘d be

 9   looking for.

10                     Mr. Montero: Personally, I agree with the

11   idea of having the commission look into this further,

12   and in fact, Ari, your law firm had a longstanding

13   petition before the FCC, dating back to probably the

14   early ‗90‘s, trying to urge the FCC to do away the

15   prohibition on securities and FCC licenses.                           When we

16   handled the Senior Lenders Panel, we did hear from

17   several senior lenders that this prohibition did act

18   as     a     disincentive,     particularly            by    smaller        less

19   sophisticated             lenders             on            lending            to

20   telecommunications           companies.            I    guess        my     only

21   cautionary note is that I think Jim‘s amendment is

22   very very well taken, because there are a lot of

23   wrinkles         associated     with     doing         away        with     this

24   prohibition regarding do you allow foreign banks to

25   take a security interest in that license, if you do,

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 1   are you going to allow strict foreclosure?                              That is

 2   to say, are you going to allow the lender to seize

 3   the license without the FCC being able to vet that

 4   bank?            You know, people immediately start thinking

 5   about BCCI, or whomever else. So, it‘s just that

 6   there are a lot of wrinkles associated with this. But

 7   I will say that a lot of lenders stated that this

 8   policy or this rule was a major disincentive for

 9   smaller lenders.

10                       Mr. Temple:          Jim, I don‘t object to your

11   friendly           amendment,      but        I    want    you      for       your

12   consideration, I want you to look at the overriding

13   language of the recommendation to see if that will do

14   it     for       you.    But,    otherwise,         I   will     accept       your

15   change.

16                       Ms. Mago:      I need to be clear about what

17   the amendment is.

18                       Mr. Winston:         My       colleague      here         just

19   drafted something for which I find very appealing.

20   That       phrase,      ―allow      private         lenders‖,       would        be

21   preceded by, ―consider whether it would be advisable

22   to allow private lenders, etc., etc.‖

23                       Ms. Mago:      Just to be very, very clear.

24   What        you‘re      talking       about        voting      on      is      the

25   resolution, at the top, the be it resolved language

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 1   that       is       here     ―asking     the     commission            to    consider

 2   proposals listed below‖, and the now next to last

 3   proposal would be to say that ―it would consider

 4   whether            it     would    be    advisable          to     allow         private

 5   lenders to take a security interest‖, is that the

 6   language?

 7                           Ms. Johnson:       So        that     is       a     friendly

 8   amendment? Accepted?

 9                           Mr. Temple:       Are         there            any         other

10   questions about any of the other access to capital

11   recommendations.

12                           Ms. McCann:        Yes I have one more.                    First

13   of all, I would like to just establish that I am in

14   agreement with Jim on his amendment.                              We have backed

15   about          a     handful,       a    half        dozen       various          ethnic

16   individuals and women in acquiring broadcast assets

17   over       about          seventy-five      stations,            and    this       issue

18   would       be      a     very    big    issue       for    us,    and       I    am   in

19   complete support of Jim‘s recommendation.

20                           The other issue that I have with regard

21   to these recommendations is the last one.                                    And as I

22   talk to Riley, I understand the concept here was to

23   find       a       fund    that    was    already          established           to    put

24   capital in, to have that be the vehicle in the access

25   to capital group he talked about trying to establish

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 1   a fund to fund, and I‘m in agreement with the concept

 2   here, but I think that it should be amended to say

 3   ―TDF or other established funds as a vehicle,‖ rather

 4   than just TDF as a concept.

 5                       Ms. Johnson: Is               that      an       acceptable

 6   friendly amendment.                So we would add, ―Through the

 7   TDF      or      other    established       funds‖.           So     that       then

 8   accepted without objection? Any other final comments.

 9                       Mr. Montero: I have one question.                           When

10   you say, it‘s not specific, but when you say expand

11   the      type     and    amount     of    funds      available,          are     you

12   referring          to    federal      funds,        as   in      interest          on

13   auctions?          Or, are you talking about any funds?

14                       Mr. Temple:          I think any funds.

15                       Ms. Johnson:           So, the clarification is

16   that       it‘s     broader      than    more       narrow.          Any      other

17   questions?

18                       Mr. Temple:          Okay, then I‘d like to move

19   on to the second set of -—

20                       Ms. Johnson:           No, we‘re going to vote

21   them out, you‘re on a roll, we better get these while

22   we can.          By voice vote, all those in favor with the

23   two appropriate amendments, signify by saying Aye.

24   Opposed?          Show it approved unanimously.

25                       Mr. Fitzgerald:               Now I‘m going to move

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 1   on to the second set of recommendations, and again,

 2   as I mentioned earlier, and as Marva has already sort

 3   of suggested, our committee was interest in making

 4   sure that there was a place, opportunity created by

 5   this             sub-committee,       by        the       sub-committee‘s

 6   recommendations          for    Emerging        Technology     Companies,

 7   but we were also very much aware that the FCC has

 8   leverage, more leverage over certain companies than

 9   others.           And what we tried to do with the next set of

10   recommendations was to create incentives for those

11   companies that the FCC has leverage over to serve,

12   underserved minority communities, and also partner

13   with emerging technology companies.

14                        The first couple of recommendations that

15   I want to talk about are two proposed new bidding

16   credits.           These credits would be transferable credits

17   or vouchers that would be made available.                       The first

18   credit would be made available to any liener in an

19   FCC auction, regardless of size, that certifies that

20   it will use its spectrum license to provide service

21   to an underserved market.                  Now, this bidding credit

22   seeks to achiever goals of this sub-committee and

23   goals that the FCC has.              The FCC obviously has a goal

24   to make sure that services are available to as widely

25   a group of Americans, as widely a group of people

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 1   within this country as possible, and this committee

 2   is      not       only     interested         in   promoting       ownership

 3   opportunities,               but      also         making      sure         that

 4   traditionally underserved communities are served.                              So

 5   this credit would be made available to companies that

 6   make a commitment to use their spectrum licenses to

 7   provide service in underserved areas.                       Now the FCC, a

 8   couple of years ago, developed a credit which sought

 9   to promote service on tribal lands.                          A credit that

10   would       be    used,     a   credit       toward   bids    made     in    FCC

11   auctions by carriers that commit to provide service,

12   to      deploy       facilities         on     tribal       lands.          This

13   particular           credit        would       work     a     little         bit

14   differently.             The idea would be that if you bid in an

15   FCC auction, your license area, whether it be a BTA

16   license or an MSA license, or whatever.                           If within

17   that license area, there were areas designated as

18   underserved areas, either because they fall within a

19   HUD     designated         empowerment        zone,    or    enterprise        on

20   them, we haven‘t really figured out the geographic,

21   how     we       would    determine      which     geographic      locations

22   would be, would qualify.                      But, if you have those

23   areas within your license area, and you‘re committed

24   to providing service to individuals residing in those

25   areas, you would qualify for the credit. Unlike the

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 1   tribal lands, where service is not being provided

 2   because facilities are not available on these lands,

 3   in this particular case, there may be coverage, it

 4   just may be that people living in certain zip codes,

 5   or within certain areas, within the license area, may

 6   not have the resources, or may not have, or may not

 7   otherwise be, they may not be receiving service at

 8   the same rate as others within the license area.                                  So,

 9   the goal of this credit was to create an incentive

10   for licensees to figure out ways to basically close

11   the      gap     between       the    amount       of    service         they     are

12   providing         to    certain       people       within       their      license

13   areas, and the amount of service they are providing

14   to     others     that     may       be    living       in    impoverished          or

15   underserved areas.

16                      The second credit seeks to promote, it

17   sort        of   dovetails           with    our        Supplier         Diversity

18   Initiative.            It would create a transferable credit or

19   voucher,         and    would    make       it    available         to    any     FCC

20   spectrum licensee, auction winner, again, regardless

21   of size, that makes a satisfactory showing that it

22   has      entered        into     an       agreement          with   a    socially

23   disadvantaged business, as defined by the commission,

24   for      the     provision       of       services       relating        to      that

25   spectrum         licensee‘s          offering       of       services      to     the

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 1   public.            Now here the idea would be to give some

 2   currency            to        potential      new      business           emerging

 3   technologies. The licensee would enter into a deal

 4   either, we‘d want to make sure that this credit is

 5   structured flexibly so that a number of arrangements

 6   could be           covered.        The licensee is interested in

 7   using,           believes       that   it    wants      to     market          in        a

 8   particular ethnic community, and feels that in order

 9   to be effective, either it needs to enter into a

10   distribution arrangement with an entity that has some

11   expertise marketing to that community – that type of

12   arrangement would be covered by the credit, market

13   consulting,          engineering          consulting,         sales,       leasing

14   agreements,              resale    agreements,        network         deployment

15   agreements, content development.                        Let‘s say you‘re

16   interested               in     targeting          content      to         certain

17   historically disadvantaged communities.                             You may not

18   feel that you have the expertise in house to do that

19   as a carrier, but you know of some content provider

20   that you think may.                 That contract with the content

21   provider           would      be   covered     under         this     particular

22   credit.           So, the idea is to use the areas of leverage

23   that the FCC has with its regulated entities to see

24   if we can create an opportunity for businesses that,

25   small            minority       businesses,         giving,         create          an

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 1   opportunity for them to work with these regulatees.

 2                      Ms. Johnson: Does that conclude?                    I think

 3   you – does that conclude the presentation?

 4                      Mr. Fitzgerald:                That      concludes           my

 5   description of those two credits.

 6                      Ms. Mago: We        are       going     to   put    on     the

 7   floor and then take questions.                      That does conclude

 8   your – no, there‘s more on here. Are you going to go

 9   down the list or are you going to -—

10                      Ms. Johnson: Go down the list, and --

11                      Mr. Temple:         Did you want to talk about

12   those others Ari, or do you want to, should we go

13   back.

14                      Mr. Fitzgerald:               I can definitely talk

15   about the others, but I thought that Vonya might have

16   a question. Did --

17                      Mr. Temple:         Well,       why     don‘t      we     talk

18   about the others first.

19                      Ms. Mago: Why don‘t we do a complete run-

20   through of all of the items, and then come to the

21   discussion.

22                      Mr. Fitzgerald:               Okay. Again, the theme

23   being        to   try    to   create      leverage,        incentives         for

24   regulatees         to    promote,       consider         ways   to     promote

25   ownership opportunities. We also recommend that the

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 1   FCC      consider       providing          expedited         FCC     review        of

 2   license assignment transfer of control and de facto

 3   leasing applications approvals where the applications

 4   contain a certification that a notice of intent to

 5   sell or lease a spectrum was disseminated in a manner

 6   that allowed notice to be provided to minorities.

 7   Again, if you‘re interested in quick approval of your

 8   application, the way that you get the FCC to quickly

 9   approve it, is to make your goals of selling your

10   license, or whatever transaction you want to engage

11   in, known to minorities.

12                      We     also     have      a     recommendation             about

13   forbearing from pre-approval of FCC applications that

14   require          pre-approval       where        the    transaction           would

15   result in minority ownership of 25% or greater.                                  The

16   FCC has forbearance authority in certain cases, and

17   again, we believe that there would be people who

18   would be interested in securing quick speedy approval

19   of     their      transactions,        and       such    a   rule      would       be

20   attractive.

21                      We also have recommendations relating to

22   unlicensed         Part     15.       As     the       Chairman      mentioned,

23   unlicensed just developed as a garden of innovation.

24    And,        although      the     FCC      does       not    have      as      much

25   regulatory authority in the unlicensed space, it does

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 1   have some.             One of our recommendations request that

 2   the FCC consider increasing the amount of spectrum

 3   that‘s available for unlicensed use.

 4                          Ms. Mago:      Ari, you‘re into the next set.

 5    Wait a minute.

 6                          Mr. Fitzgerald:              Yeah,       we        should         go

 7   ahead and vote on --

 8                          Ms. Mago: Ari, do you have the breakdown?

 9                          Ms. Fitzgerald:              I     have       a        different

10   breakdown but, yeah, I apologize.                            The last bullet

11   has to do with the Diversity Impact Statement.                                         And

12   the      idea      with       the   Diversity           Impact    Statement              is

13   again, to require that all applications for transfer

14   of control contain a Diversity Impact Statement.                                              A

15   statement              that     explains            how     the            particular

16   transaction would enhance diversity of ownership or

17   viewpoint.               Again,     the       idea      being     seeking             out,

18   identifying            those    points      of      leverage         and      creating

19   incentives for the individual companies with business

20   before           the    commission       to      take     steps          to     promote

21   diversity of ownership opportunity.

22                          Ms. Johnson: Thank you.

23                          Mr. Temple:        Madam         Chair,       I        recommend

24   that the committee adopt the recommendation that the

25   FCC consider the proposals as listed below.

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 1                      Ms. Johnson: Is there a second?

 2                      Participant:               I had a question.

 3                      Ms. Johnson:               No,       now       we    do      the

 4   discussion.

 5                      Participant: On the second bullet, Ari,

 6   is there anything, you had a lot more detail about

 7   that than is reflected in the document I have.                                    Is

 8   there anything in there that would require that the

 9   transaction be of some significant value?                              I mean, I

10   could see an opportunity for licensees to engage in

11   such de minimus transactions or minimal transactions

12   to get a credit and you know it would be meaningless.

13                      Mr. Fitzgerald:                One way to make sure

14   that       that    doesn‘t       happen      is    to    do   what      the     FCC

15   essentially         did      with     tribal       lands,     which        is     to

16   basically give you a credit for the amount of the

17   value of the transaction.                  Now, if you did that, you

18   have      to     weigh    that    against,        if    the   value       of    the

19   contract         isn‘t     significant,        and      the   carrier        can‘t

20   think       of    any    way     to   come    up       with   a    significant

21   contract, that might not create the type of incentive

22   you want for the particular licensee to engage in the

23   transaction.             But the answer is, yes, we have to be

24   very careful not to create a situation where this

25   particular credit could be gained, obviously seeing

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 1   what      the     credit             has    to     go     to     cover    a     bona       fide

 2   contractual arrangements.                          But there are various ways

 3   for the FCC to police that activity to make sure that

 4   the      arrangements                that      are      covered         are     bona       fide

 5   arrangements.

 6                          Mr. Temple:               But the recommendation, as

 7   currently drafted, does not have a significant tag to

 8   it,       but         we     would          be     open         to      that       kind       of

 9   recommendation.

10                          Ms. Mago: Let                me         also     note         to     the

11   committee that the report of the New Technologies

12   Committee that‘s in the front part of your binder,

13   has the expanded written explanation of this, so that

14   you have that there.

15                          Ms. Johnson: Do                    you     have         any        final

16   questions? Decker and then Dave.

17                          Mr. Anstrom: Just                   a    quick     comment          then

18   question.             First of all, I‘d like to commend this

19   sub-committee has done very innovative work, I was

20   interested             in        the       first        impact         statement          which

21   strikes          me    as        a     very      creative         idea,        and     I    was

22   wondering,            when        you      think        about     diversity          impact,

23   specifically what are you looking at?                                         I mean, are

24   you      looking            at       broadly         in        terms     of     employment

25   policies as well as ownership and is there a breadth

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 1   that you‘re thinking of, are you specifically looking

 2   at ownership?              And I guess my suggestion maybe for

 3   future           work   maybe    by   the     sub-committee,            without

 4   changing this one, is to pick up a little bit of the

 5   conversation is if we think this is a good idea, if

 6   you all go forward with this, whether this idea of a

 7   diversity impact statement might be something that‘s

 8   linked not solely to license assignments and transfer

 9   of control applications but perhaps more broadly in

10   terms of other things that the commission might be

11   doing.           You know, arranging for NPRMs to whatever.

12                        Participant:      -- jurisdictional things.

13                        Mr. Anstrom:      Yes, exactly right.

14                        Ms. Johnson:      David or Jim?

15                        Mr.   Anstrom:         On    the      second       bullet,

16   ―provide a transferable credit or voucher‖ and so

17   forth, should end with ―a socially and economically

18   disadvantaged business‖.

19                        Ms. Johnson: Thank          you.        So,    I     think

20   that‘s –was that accepted?

21                        Participant: It‘s consistent.

22                        Ms. Johnson:            Yes.     Jim?

23                        Mr. Winston: Question. And I realize it

24   goes to all the recommendations that we‘ve adopted

25   today.           I assume that as we continue our work, if

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 1   thoughts         come      up    that      suggest         some      of      these

 2   recommendations need to be redefined and changed, at

 3   the next stage of our proceedings, we can come back

 4   and revise some of these recommendations.

 5                     Ms. Mago: Absolutely.

 6                     Ms. Johnson: Yes.

 7                     Mr. Winston: Okay, and the -- with regard

 8   to Mr. Anstrom‘s comment about the diversity impact

 9   statement. It‘s an idea that has been floated for a

10   few years, and I think it has a lot though it‘s

11   intended to be broad.                So I think using it in other

12   areas        certainly      would     be   something         the      committee

13   should look at.

14                     Ms. Johnson: Thank you.                   By voice vote,

15   all those seeing no other discussion, by voice vote,

16   all those in favor signify by saying Aye.                              Opposed?

17   So approved unanimously. Thank you.

18                     Mr.      Fitzgerald:            The      second         set     of

19   recommendations focus on unlicensed, again as -—

20                     Mr. Temple:         Ari, can you go to the next

21   page, which would look at the Regulatory, okay you

22   are, okay. Regulatory Barriers for the Deployment of

23   Unlicensed Services Technology.

24                     Mr. Fitzgerald:                Yes.      As the chairman

25   mentioned,        the      unlicensed        space      is    a      space        of

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 1   amazing, there‘s a lot of innovations going on in

 2   that       particular          space    today.        The     companies          and

 3   businesses that are involved in unlicensed, are not

 4   regulated to the same extent that FCC licensees are.

 5   Nevertheless, there are points of leverage available,

 6   and we try to take advantage of that, and try to

 7   create           some    opportunities       to    that      we    believe       may

 8   have,       if     not     a   direct     impact     on      the   ability         of

 9   minority companies to participate more in emerging

10   technologies, at least an indirect effect.                                So some

11   of the recommendations that we‘re asking that you

12   consider is there is a pending proceeding going on

13   right now with respect to 3650 to 3700 megahertz.

14   The      FCC      has     proposed      setting    aside       some      of     that

15   spectrum for unlicensed use.                       We‘ve asked that the

16   committee           consider      recommending        to     the     commission

17   that it do that.               Again, the benefit, the good thing

18   about unlicensed is that it eliminates that barrier

19   to entry that licensed, you have to pay, most of the

20   wireless           licenses       they‘re      now     assigned           by     the

21   commission or assigned via auction.                          There is a cost

22   associated with it.                    Unlicensed doesn‘t require an

23   auction.

24                           Mr. Temple:      Ari, for the record could

25   you just talk a little bit about what services you‘re

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 1   talking about in unlicensed.

 2                      Mr. Fitzgerald:                 This    particular          band

 3   falls between the 2.4 ghz band and the 5.8 ghz band.

 4    Both        of   those         bands      have     been       allocated        for

 5   unlicensed use, higher powered unlicensed use, such

 6   as       wifi      hotspots          for      example,          short         range

 7   communications.             With the changes that are occurring

 8   in wireless unlicensed technology now, equipment is

 9   being developed that facilitates wider area coverage

10   by this equipment.                  So there are now wimaxes now

11   which are being deployed which will allow facilities

12   to transmit much further than they have under, much

13   further than they have in the past.

14                      So,      a     company     that        is    interested        in

15   providing         wide     area     service,        but    doesn‘t      want      to

16   necessarily have to spend the money to acquire an FCC

17   license, might now today look at unlicensed as a way

18   to do that.         And the more unlicensed spectrum that is

19   available, the better that company‘s opportunities.

20   The 3650 to 3700 MHz band falls between two spectrum

21   bands that have been optimized for unlicensed use.

22                      The          second      bullet         focuses       on       --

23   recommends that the commission create a fast track

24   equipment         certification          process.              Now,   equipment

25   certification process at the FCC is not as cumbersome

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 1   as the license process, but it is a process, it‘s a

 2   regulatory process.             And anything that the commission

 3   can do to shorten that process could be helpful to

 4   small        businesses,        including        businesses      owned        by

 5   minorities and women.

 6                     The     FCC      has     a     program    called          the

 7   Experimental License Program.                    Today the longest term

 8   for any experimental license is five years.                              We‘re

 9   recommending that the committee consider recommending

10   that that term be extended to seven years.                                 When

11   companies that are developing new technology go to

12   the capital markets they‘re often asked, well what‘s

13   the process with the FCC?                  Sometimes if they don‘t,

14   if they‘re in the middle of an allocation process, it

15   can take a very long time to secure the regulatory

16   approval they need to deploy their service, holding

17   some       type   of    license      is    often     helpful      with      the

18   capital markets.

19                     And     the    last     bullet     in    this      section

20   focuses on expanding the terms for Special Temporary

21   Authority, which I believe most people are familiar

22   with.

23                     Mr. Temple:          I move the adoption of the

24   recommendation for commission consideration.

25                     Ms. Johnson: Is           there     a    second?          Any

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 1   discussion?

 2                       Mr. Winston: Could I ask a question, just

 3   because this is an area I‘m not that very familiar

 4   with.            Are there currently many minority companies

 5   that are affected, are there existing in minority

 6   companies that are that might be able to step in and

 7   take advantage of these rule changes now, or is this

 8   sort of hoping for the future?

 9                       Mr. Fitzgerald:                I    don‘t    believe        the

10   FCC keeps any records on the race of their -- of

11   entities           that    hold     equipment          authorizations,          but

12   there are thousands and thousands of companies out

13   there with equipment authorizations, and there are a

14   lot of people in garages around the country that are

15   trying to develop equipment that would need to be

16   certified          by     the    FCC.      Now     these      recommendations

17   would benefit everyone. They‘re race neutral.                                   But

18   because unlicenses become a lot more -- there‘s a lot

19   more activity in the unlicensed base than there was

20   five, even two, five years ago. It‘s definitely an

21   area that many people are focusing on as possibly the

22   next         big        growth     area.               And,     again,       these

23   recommendations are race neutral, but they could have

24   the effect of helping people decide that they could

25   make a business without necessarily going through the

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 1   process of acquiring a license.

 2                      Ms. Johnson: Thank              you.             Any        final

 3   questions? Seeing none.                 By voice vote, all those in

 4   favor, signify by saying Aye.                       Opposed?           Show that

 5   section approved unanimously.

 6                      Mr.      Fitzgerald:            Quickly,        I    will       go

 7   through the last set of recommendations, which relate

 8   to license spectrum -spectrum that is licensed today

 9   by the FCC.            The FCC currently offers bidding credits

10   in     most       of    its    spectrum      auctions         and      they      are

11   generally         made     available      to      small     and     very       small

12   businesses.             The    FCC   decides,       on    a    case       by    case

13   basis, the percentage credits made available in those

14   particular auctions. But recently, the credits have

15   pretty much been 15% for small business, 25% for a

16   very small business, and depending on the auction,

17   the standards could be quite rigorous to meet those

18   thresholds.            This recommendation would ask that the

19   FCC increase the percentage bidding credits for small

20   and        very        small     businesses         to        25       and      50%,

21   respectively.

22                      Again, with the idea of that small and

23   very small businesses are having that the price of a

24   spectrum license is a significant barrier to entry,

25   and anything that the commission could do to reduce

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 1   that barrier, or make it more manageable would be

 2   helpful.

 3                      The second bullet asks the committee to

 4   consider proposing to the commission that it license

 5   spectrum         over     smaller      geographic          areas.             Large

 6   spectrum, large geographic areas generally cost more

 7   money.           And,     if    the    commission,            in     particular

 8   auctions,         for      example,       if      it‘s        interested           in

 9   promoting          opportunity          by       small        and       minority

10   businesses, it might want to consider reducing the

11   geographic license areas. Smaller areas are much more

12   affordable. And again, these recommendations are not

13   race specific, but could potentially help minority

14   businesses interested in getting into spectrum, into

15   the business of providing spectrum based services by

16   lowering the cost of entry.

17                      Participant: They find it a forbearance?

18                      Mr. Fitzgerald:               The    FCC,       last       year,

19   promulgated rules that allow non-licensees to lease

20   spectrum         from    spectrum      licensees         as    part         of   its

21   secondary         market       proceeding.             This    was      a     great

22   decision, because what it does is it allows people,

23   businesses that might not be interested in becoming

24   licensees themselves to nonetheless offer services to

25   the     public     using       someone    else‘s        license        spectrum.

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 1   Now,       the     FCC    does     not    require       pre-approval           for

 2   transfers of leasing arrangements that do not affect

 3   a de facto transfer of control of the license.                                 But

 4   it does require pre-approval for what they call de

 5   facto transfer leasing.                  The FCC has sought comment

 6   on whether it needs to pre-approve these types of

 7   arrangements.            If it didn‘t have to pre-approve these

 8   types of arrangements, the time it would take to

 9   enter into an arrangement, a leasing arrangement, and

10   the time it would take for the lessee to actually be

11   able to deploy services, would be reduced.                              The FCC

12   has sought comment on this issue.                           Again, this is a

13   race neutral proposal, but if adopted, this proposal

14   could have the affect of reducing the time to market

15   for minority businesses that might be interested in

16   getting          into    the     business     of       providing      services

17   without necessarily becoming a licensee.

18                       Participant: I move the adoption of the

19   recommendation for commission consideration.

20                       Ms. Johnson: Is there a second? Showing a

21   second.          Any discussion?         Frank.

22                       Mr. Montero: Ari,             on    the     bullet        one,

23   regarding           FCC        pre-approval            of      the      leasing

24   arrangement.            Given the fact that there is an NPRM on

25   this        issue,       I‘m     just     wondering,          what     is      the

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 1   committee‘s        obligations          insofar       as       putting        out         a

 2   recommendation,           one     way       or   another,          and     how     the

 3   commission should come out -—

 4                     Ms. Mago: In              fact,    I        am    specifically

 5   discouraged         from         taking          positions          on      pending

 6   specifically on pending matters, including NPRMS, and

 7   that is something that I noticed about that, and I

 8   hadn‘t been aware of that before.                                  The committee

 9   getting involved I think in particular proceedings, I

10   think, is not part of the charge of what we are

11   supposed to be doing now.

12                     Mr. Montero: Does the committee have, I

13   think        we   discussed       this       one     before.             Does      the

14   committee,        not     that    they       would       do    it    here,        have

15   authority to file comments in a commission, as a

16   committee?        Or make a recommendation?

17                     Ms. Mago: Directly                file      comments.            The

18   role of the Advisory Committee is to provide advice

19   to the commission in the form of a report, and so

20   forming, deciding to be a commenting body I think

21   would be an extremely unusual step.

22                     Ms. Johnson: David.

23                     Mr. Honig:            I    would       think      the     charter

24   prevents it, if I remember the charter is silent, and

25   some advisory committees actually do file comments

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 1   and rule-makings.                But I don‘t think we need to reach

 2   that question now.                The resolution could just perhaps

 3   be corrected with a friendly amendment saying without

 4   intending to take position on any currently pending

 5   proposal.            As a general matter, we recommend, and

 6   then the rest of the text.

 7                       Ms. Mago: But            you‘re      recommending          that

 8   the      commission         do     something        it‘s    already        doing.

 9   You‘re           recommending         that    the       commission     consider

10   whether it should forebear, which is something it‘s

11   already appending, rule making at the agency, so the

12   agency is already doing what you‘re recommending.

13                       Mr. Fitzgerald:                We     could      make       the

14   recommendation a bit more general and to -—

15                       Ms. Mago: It might also be possible just

16   to delete that bullet.

17                       Mr. Honig:           One        difficulty        that        we

18   could anticipate, and maybe you could explain what

19   would        happen,      is     if    the    commission       undertakes              a

20   general           rule    making        on    minority       ownership          for

21   instance, as it has said it would do in the mass

22   media area, is it the commission‘s intention that

23   while that docket is open, this committee can‘t adopt

24   a proposal or make recommendations that would fall

25   within the subject matter of that proceeding.

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 1                       Mr. Mago: Not at all, David.                In fact, as

 2   we‘ve discussed it‘s really the anticipated work of

 3   this committee to help the commission to help develop

 4   those proposals on a rolling basis, so it would be

 5   something it would be entirely appropriate for them

 6   to continue to comment on.

 7                       Mr. Temple:       So, it‘s not inappropriate

 8   to say this, but it does reflect the committee‘s --

 9   if we had passed it -- it reflects the committee‘s

10   ―weighing in‖ on the matter, essentially.

11                       Ms. Mago: Yes.

12                       Ms. Johnson: Any            further         discussions?

13   There‘s a --

14                       Participant: Are we going to vote with

15   this one removed, with this bullet removed or?

16                       Mr. Temple:       I don‘t see any reason to

17   actually, unless, you don‘t want to weigh in.                                        I

18   think it‘s a question of whether or not the committee

19   feels        that    it   can   weigh      in     on     this     particular

20   proceeding          and   add    further,         I    think       what       the

21   commission‘s going to do already.                     It seems to me the

22   commission might welcome it.

23                       Unidentified:           So,       we‘re     voting       with

24   the bullet in?

25                       Ms. Johnson: I think the motion is with

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 1   the bullet in.

 2                         Mr. Winston:        Before      we     vote,    I    think

 3   whether          we   vote    for     this    particular       item       is    one

 4   issue.           But, what I hear, what I hope I‘m hearing, is

 5   that      there‘s       no    impediment        to    this    committee         for

 6   voting on a pending rule making matter.                          And I, you

 7   know, if people are hesitant to vote because they

 8   don‘t want to be involved in this particular rule

 9   making, that‘s one issue, but I want to make sure

10   that they‘re not saying that this committee is of the

11   view that it should not weigh in to pending rule

12   making matters.              That would be a matter of concern to

13   me.      Right.

14                         Ms. Mago: Just          to     clarify.             It     is

15   appropriate for the committee to take positions that

16   may be something that is the subject of a pending

17   rule       making      proceeding.            But,    weighing       in    on        a

18   particular, for a particular side of that proceeding,

19   you‘d need to decide that as a committee that‘s where

20   you are.              I‘m not being very clear, I understand

21   that. It‘s late in the day, I‘m getting tired.                                 But,

22   you are taking a position in the proceeding if you go

23   forward with this.

24                         Ms. Johnson: Is         there    an     understanding?

25   There‘s a motion on the—I think Mr. Temple has a

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 1   change.

 2                       Mr. Temple:      No change.

 3                       Ms. Johnson: Is        there      a     second?          Any

 4   further discussion?               Seeing none.            Then, by voice

 5   vote, with all bulleted items included, all those in

 6   favor signify by saying Aye.                Opposed?

 7                       Ms. McCann:       Aye.

 8                       Ms. Johnson: The motion carries with one

 9   dissent.

10                       Mr. Temple:       Finally, Ari.

11                       Mr. Fitzgerald:             In    the     interest         of

12   time, these are recommendations that do not require

13   either legislation or FCC rule changes.                       They‘re very

14   -- they‘re fairly general recommendations to the FCC

15   to establish expanded relationships that the FCC has

16   with other government agencies to promote minority

17   ownership.          The other agencies identified include the

18   SBA, NTIA and TDF.

19                       Another recommendation would be for the

20   FCC      to      sponsor   an   FCC/SBA     conference        on    minority

21   small business and emerging technologies, and use the

22   conference           to     highlight           the       potential          for

23   partnerships          between     large      and      small    businesses,

24   identifying certain potential relationships between

25   those businesses.

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 1                       The third bullet would recommend to the

 2   FCC that it establish a database that would list

 3   information about licenses, license sales, spectrum

 4   leasing          opportunities,        and      other     communications

 5   related opportunities.               This database would not be,

 6   participation in the database would not be mandatory,

 7   it     would      be   voluntary,      but      it   would   serve      as        a

 8   resource for people who are potentially interested in

 9   getting into the business and need spectrum in order

10   to provide services.

11                       Mr. Temple:       I move the recommendation.

12                       Ms. Johnson: There‘s a motion, is there a

13   second?          Motion and a second, any discussion?

14                       Mr. Winston: Yes, it seems to me there

15   may be other federal agencies other than the SBA that

16   might be worth including, and I would just like some

17   language that said, ―or other appropriate agencies‖.

18                       Ms. Johnson: The            friendly       amendment.

19   Show       it     accepted    without        objection.        Any      other

20   clarifications or questions?                 Seeing none.        All those

21   in favor signify by saying Aye.                      Opposed?       Show it

22   approved unanimously.               Thank you Mr. Temple and to

23   our subject matter experts.                     Congratulations.           And

24   our final presentation for resolution action item,

25   Jenny.

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 1                     Ms. Alonzo:           We   were     just    saying        back

 2   here, ours is very simple compared to all this.                                Be

 3   it resolved that the Federal Advisory Committee on

 4   Diversity in the Digital Age accepts and commends to

 5   the      commission‘s          attention     the     Career    Advancement

 6   sub-committee‘s           Best       Practices       Report,       Workplace

 7   Diversity,         A     Global        Necessity      and     an      Ongoing

 8   Commitment.            Our recommendation initially mentioned

 9   in the opening report basically, eight -- nine posts,

10   the report on the website, and help promote it.                                At

11   this moment, that‘s all we‘re asking.                         Help promote

12   the       white    paper        to     the    industry        at    industry

13   conferences and so forth.                    So, that‘s it from this

14   end.

15                     I‘m not going to go ahead and read the

16   executive         summary.           Sort    of    what     Francisco        was

17   saying, it‘s out there, it‘s available for anyone who

18   wants to curl up in a couch and read it at your

19   leisure.         But I do want to say that this is a work in

20   progress for this committee.                      We went through a few

21   back       and    forth    very       productive      discussions,           and

22   certainly there is an understanding that there is a

23   lot of work to be done, and I want to bring attention

24   to our steps and phases II and III.                       At this point at

25   the      submission       of    this    report,      we    have    completed

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 1   phase        I.          In     phase     II,     we    will   be     developing

 2   additional recommendations from the sub-committee to

 3   present            to     the      full     committee          regarding          the

 4   dissemination of Best Practices Guidelines.                                We will

 5   be developing recommendation action items or other

 6   voluntary policy initiatives for the communications

 7   industry,           and       we    will    explore        opportunities            to

 8   conduct annual best practices benchmarking studies.

 9   That‘s all expected to take place in phase II.

10                           Phase      III,    we     are     going     to     propose

11   legislative              and       regulatory          recommendations            for

12   Congress, the Federal Communications Commission and

13   other            federal,        state      and        local   administrative

14   agencies for consideration.                          So, at this point, I

15   pass it on, and I would like to add one thing.                                           I

16   understand that for the record I need to say how we

17   conducted our meetings, and I didn‘t do that in my

18   opening report.                 All of our meetings were via e-mail,

19   phone        calls,       and      in-person         meetings,      so    I    thank

20   everyone for being available and for the cooperation.

21    And, the white paper we‘re putting forth is again, a

22   labor of love of this committee and of Fatima Fafanna

23   and her team, and I would like to thank the committee

24   member‘s           companies         that       helped     pay      for       Fatima

25   Fafanna‘s services.                     So, thank you so much and at

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 1   this point I turn it over to you, Madam Chairwoman.

 2                       Ms. Johnson: And that was the motion.                   Is

 3   there a second?           Any discussion?        Mr. Honig.

 4                       Mr. Honig:      There‘s no way to understate

 5   the solemnity and importance of what is being done by

 6   this sub-committee.            If you would look at page three

 7   of the progress report which accompanies it, which

 8   was discussed earlier today, you‘ll see these very

 9   troubling statistics that RPNBA has developed.                            And

10   what‘s troubling about them, is that they show that

11   in just two years of non-enforcement of EEO rules,

12   we‘ve lost about a generation worth of talent.                         These

13   are positions of people at the top of their career.

14   When you have television general managers, minorities

15   down 59%, that means that there are 59% of minorities

16   who had been at that point in their career; in two

17   years they‘re not there anymore.                    They didn‘t decide

18   to go fishing.             Something happened to them.                    And

19   that‘s true across the board in these job categories.

20    There are other studies including one that NMTC did,

21   that related to the posting of vacancies with just

22   EOE notices, and the Blumrosens Ford Foundation study

23   that       seemed    to   suggest     that     as    many   as     1/4      of

24   broadcasters,          even     large     ones,      discriminate           in

25   employment, 1/3 of cable companies, 1/3 of telecom

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 1   companies, so that the fact that the sub-committee is

 2   proposing,       initially,        best     practices    initiatives,

 3   voluntary efforts, shouldn‘t be misread as a signal

 4   that that‘s all that needs to be done; it‘s the first

 5   thing that needs to be done.                  And, I‘m going to vote

 6   yes for this to be taken as a concurrence based on

 7   the fact that in the second and third phases, the

 8   sub-committee       is     going   to     very   seriously     consider

 9   whether, as always has been the case in the history

10   of     civil     rights,    federal       protection     and     federal

11   intervention to protect people‘s careers is necessary

12   in the public interest.

13                    Ms. Johnson: Any other statements?                  Thank

14   you. Any other statements?                Then, consistent with the

15   comments of the Chair, phase II and phase III are yet

16   to come, and there will be proper focus on all issues

17   stated.

18                    Ms. Alonzo:        And I do want to add that

19   the committee members support that.                     We understand

20   that there‘s work to be done, and there‘s a lot more

21   that we should be looking at.                  We just did not have

22   sufficient time to vet it amongst ourselves the way

23   we wanted to to be able to come to you and the rest

24   of the team with comfort level that was appropriate.

25                    Ms. Johnson: One step at a time, we‘re

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 1   getting there.          Understanding the importance.                       All

 2   those in favor?         No further discussion?            Seeing none.

 3    All those in favor, signify by a voice vote.                              Aye?

 4   Opposed?         Resolution adopted.          Thank you very much.

 5   And with that, we‘re going to transition into our

 6   public comment portion of the day and head towards

 7   our wrap-up.         Commissioner Tristani.             Oh, I‘m sorry,

 8   there is public comment.                 I‘m sorry, there‘s one

 9   question of a member, and then we‘ll go to the public

10   comment.         I‘m sorry.

11                      Ms. Fitzgerald Mosley: It            was     just       more

12   general in nature, because so many of the items that

13   were recommended had something to do with activities

14   other than what in question as to what how much the

15   FCC can do on its own behalf.                 And I was wondering,

16   since they really crossed all sub-committees, at any

17   point as a committee we would be addressing ways in

18   which to move all of these things forward in the most

19   advantageous and effective way, as opposed to each

20   sub-committee kind of figuring out piecemeal.                          Again,

21   since so many of them seem to be crossing over.                            When

22   we finally look at all of them collectively, will we

23   have an opportunity to figure out, okay what‘s the

24   best strategy for getting all this done.

25                      Ms. Johnson: It       would    be    my      hope,       and

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 1   based upon the will of the group, that we start the

 2   process with having each of the sub-groups kind of

 3   bubble up the issues of most importance, and that we

 4   then        can         all    sit     back     and        reflect      on       what

 5   implementation might be required for each, and then

 6   put together a consolidated gain plan that would be

 7   consistent, get rid of duplication, and focus on the

 8   core issues, and to the extent that we can find some

 9   real trends, then we totally develop advocacy plans

10   for      those,          and   move     forward       towards        that      final

11   document.

12                           And along the way, to the extent that we

13   as a full body can put ourselves behind these action

14   steps then we do that as a full body, we can do that

15   through formal meetings such as this, or posting from

16   the website or through telecommunications conference

17   calls,            but     we    do      intend        to     look       at       this

18   comprehensively and move forward.

19                           Any other final questions of the group

20   here?            Seeing none, then we will head to our public

21   comments.           Commissioner Tristani, welcome.

22                           Ms. Tristani:         Thank you.        Can you hear

23   me?        Thank you.           First of all let me tell you my

24   formal commissioner hat is here, but I am not here as

25   a formal commissioner, I am here as the Managing

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 1   Director of the Office of Communication of the United

 2   Church of Christ, an organization that has a history

 3   that is well known to you in not just advocating, but

 4   being that voice for civil rights in broadcasting and

 5   other communications, and we hope now in emerging

 6   technologies also.                    First       of   all,   I        want     to

 7   thank the committees and all the sub-committees for

 8   your marvelous work.                It‘s very dedicated work.                      I

 9   know it takes time and effort.                         I know it takes

10   sometimes giving some, and holding back some so you

11   can reach consensus and make some good and valid

12   recommendations.

13                        I was also pleased to hear the question

14   from       Jim      Winston    that     this      committee       is     not       a

15   committee that if it‘s ready to make recommendations

16   is going to stand back, because there happens to be a

17   proceeding that‘s open.                After all, you are supposed

18   to advise the commission on all matters, not just on

19   matters          that   may   come     up,       otherwise,   what‘s           the

20   point.           So, I commend you on that.

21                        But I do have one comment and that is

22   directed at the Best Practices Report on the sub-

23   committee on Career Advancement.                       And I do want to

24   commend you for starting with best practices.                                  And

25   I‘m glad you mentioned phase II and phase III, but I

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 1   really find it hard to understand how you can be

 2   making your first public report, and I think this is

 3   the      first      public      report,     and     not     talk     about       the

 4   commission‘s             regulatory,          statutory            and        moral

 5   obligation to equal employment opportunity.

 6                       In prevention, as David mentioned, I know

 7   with some it‘s not politically correct to talk about,

 8   but it‘s a long tradition at this commission has a

 9   long history, and if you look at those statistics,

10   it‘s not just cutting people at the top, it‘s cutting

11   people at the bottom.                And we can talk about all the

12   career advancement in the world, but if there‘s no

13   one left to advance, where are we going to go?                                   So,

14   I‘m glad to hear that there‘s phase II and phase III,

15   but      I       would   have     liked     hearing        that      there‘s            a

16   commitment to equal employment, that you‘re going to

17   hold the commissioner accountable on that, that you

18   should tell the commission and you should at least

19   consider advising the commission that it‘s got to

20   keep         that    up,     monitoring,          not     just     monitoring,

21   enforcing equal employment opportunities, doing all

22   of that.

23                       I don‘t want to take up much more time,

24   you‘ve got a lot more to do, but I really want to

25   plea,        not    plea,     I   mean     it‘s     your     obligation            to

                                       NEAL R. GROSS
                              COURT REPORTERS AND TRANSCRIBERS
                                  1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433               WASHINGTON, D.C. 20005-3701           www.nealrgross.com
                                                                                          120

 1   address those issues, and not to say it‘s in phase II

 2   and phase III.                For those of us who aren‘t aware, for

 3   the public, that doesn‘t mean a thing.                                 But, thank

 4   you,      thank         you    very    much     for     the    good     work       that

 5   you‘re doing.             I don‘t envy you that.

 6                       Ms. Alonzo:             Certainly,               Commissioner

 7   Tristani, we agree with you, and we‘ve talked about

 8   that at length.                In certain cases we were in violent

 9   agreement of the issues, and we – I have to tell you

10   that       it     came        down    to    the       fact    that      there       are

11   committee members who are not as well versed in the

12   area        of     EEO        policies,       and     therefore,         want       the

13   opportunity to really understand what the impact will

14   be of our full recommendations.                          So, it isn‘t that

15   we‘re ignoring it.                   We really wanted to put it forth

16   in phase I, but feel that it would be irresponsible

17   to     do        that    without        the    entire         committee        really

18   understanding what is being moved along.

19                       Ms. Johnson: Thank you.                     Thank you very

20   much. Any other public comments?                             Seeing none.           Any

21   closing remarks of the committee members?                               With that,

22   I‘d like to thank our subject matter experts, our

23   audience, our staff, our designated federal officer,

24   and most importantly, the committee members for all

25   of the hard work and focus and commitment.                                   I think

                                           NEAL R. GROSS
                               COURT REPORTERS AND TRANSCRIBERS
                                   1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433                WASHINGTON, D.C. 20005-3701             www.nealrgross.com
                                                                                     121

 1   we‘ve made an excellent first step.                      Our next meeting

 2   is     September       17th.      Right     now    it‘s    scheduled            for

 3   South Florida.           But we‘re continuing to evaluate the

 4   place for that meeting, but if you could mark your

 5   calendar for September 17th.                     Any questions?             Thank

 6   you again, and this meeting -—

 7                     Unidentified:              Excuse       me,     can       I    –-

 8   would the        South Florida, because?

 9                     Participant: Why not in December?

10                     Unidentified:            Why    not     South     Beach        in

11   January?

12                     Ms. Johnson: The 17th is a Friday.                            The

13   location was in response to the committee saying we

14   should go to the road.                    And, as a part of that

15   effort, we decided to head south in an area that was

16   full of diversity and interest in the working that

17   we‘re        doing.        But     certainly,        I    think        it       was

18   Commissioner Copps that said, ―Take the show on the

19   road‖, and that would be our intention there.

20                     Unidentified:              Is     the     agenda          open?

21   Because we had talked and thought about a little bit

22   within our committee, tailoring an event like our

23   kick-off,        our    charter       members      for     our      diversity

24   program around that September meeting.                             So is it

25   open?

                                      NEAL R. GROSS
                            COURT REPORTERS AND TRANSCRIBERS
                                1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433             WASHINGTON, D.C. 20005-3701          www.nealrgross.com
                                                                                122

 1                       Ms. Johnson: There‘s                        certainly

 2   opportunity           for    discussion.            And    we‘re       still

 3   developing.           We were trying to first earmark a date

 4   to let everyone know.                 Second, select a location,

 5   which still may be up for discussion.                     And then we‘ll

 6   get into the actual agenda items.                         Is that right

 7   Jane?            Maureen, anything else?           No?     Seeing none.

 8   Thank you again for your time, focus and commitment.

 9    This meeting is adjourned.

10                       (End of recording.)

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                                     NEAL R. GROSS
                            COURT REPORTERS AND TRANSCRIBERS
                                1323 RHODE ISLAND AVE., N.W.
     (202) 234-4433             WASHINGTON, D.C. 20005-3701      www.nealrgross.com

				
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