FEDERAL COMMUNICATIONS COMMISSION

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ADVISORY COMMITTEE ON

DIVERSITY FOR COMMUNICATION

IN A DIGITAL AGE

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Monday,

December 10, 2007

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This meeting was convened, pursuant

to notice at 10:00 a.m., in the FCC Meeting Room, at the Federal
Communications Commission, 445 12th Street, SW, Washington, D.C., Henry
Rivera, Chairman, presiding.

[MEMBERS PRESENT]{.underline}:

Chairman Henry Rivera

Barbara Kreisman

Andrew Schwartzman

Rodney Hood

Charlton Hoskins

James Winston

Susan Fox

Anne Lucey

Jonathan Adelstein

Sheba Chacko (via telephone)

Rebecca Klein (via telephone)

Marie Long (via telephone)

Vonya McCann

Maria Brennan (via telephone)

Robert Mendez (via telephone)

Ray Gutierrez (via telephone)

David Honig

Tara Sweeney (via telephone)

Connie Simon (via telephone)

Max Navarro (via telephone)

Margarita Wilder (via telephone)

TABLE OF CONTENTS

Opening 4

Introduction and Agenda Review 5

Working Group Interim Reports

Member Hood 6

Member Honig 12

Member Navarro 24

Member Klein 69

Access to Capital

Member Hood 6

New Technologies

Member Navarro 27

Outreach

Member Klein 76

Adjournment

P-R-O-C-E-E-D-I-N-G-S

10:04 a.m.

MEMBER KREISMAN: Is there anybody out there?

MEMBER NAVARRO: This is Max Navarro on the line.

CHAIRMAN RIVERA: Hi, Max. Welcome.

MEMBER NAVARRO: Anybody out there?

MEMBER KLEIN: Hey, Max, it\'s Becky Klein.

MEMBER NAVARRO: Hi, Becky. How are you?

MEMBER KLEIN: Doing good. Thanks.

MEMBER NAVARRO: Are you in San Antonio?

MEMBER KLEIN: As a matter of fact, I am.

MEMBER NAVARRO: Yes. Yes. It\'s a cool day here.

MEMBER KLEIN: Yes.

MEMBER KREISMAN: Max, Becky, can you hear us?

MEMBER NAVARRO: Yes.

MEMBER KREISMAN: Good. Anybody else there?

MEMBER MENDEZ: Bob Mendez.

MEMBER SIMON: Connie Simon.

MEMBER CHACKO: Sheba Chacko, BT.

MEMBER SWEENEY: Tara Sweeney.

MEMBER BRENNAN: Maria Brennan with AWRT.

MEMBER LONG: Marie Long with AT&T.

MEMBER KREISMAN: Great. Anybody else on the phone?

Maybe we should go around and introduce who\'s here around the table,
maybe starting with Rodney.

MEMBER HOOD: Yes. Good morning. Rodney Hood is here from the National
Credit Union Administration.

CHAIRMAN RIVERA: Andy.

MEMBER SCHWARTZMAN: Andy Schwartzman, Media Access Project.

MEMBER HONIG: David Honig, MMTC.

MEMBER McCANN: Vonya McCann, Sprint Nextel Corporation.

MEMBER FOX: Susan Fox, Disney.

MEMBER LUCEY: Anne Lucey, CBS, Showtime.

CHAIRMAN RIVERA: Henry Rivera.

MEMBER KREISMAN: And I heard somebody else just get on the phone.

MEMBER GUTIERREZ: Yes, this is Ray Gutierrez, Showtime Network.

MEMBER KREISMAN: Great. Thanks.

Welcome, everybody. Welcome members. Welcome to the Fourth meeting of
the Advisory Committee on Diversity for Communications in a Digital Age.

Under our Charter Number Two, we have some significant and rather
exciting projects underway. And I look at this meeting as the
opportunity for the entire membership to become familiar with what\'s
going on with those projects, and also to be able to make any
suggestions or share any ideas.

This, I look as more of a working meeting than the one of presentation
of final reports. I also understand that Chairman Rivera has some
additional issues to raise, and with that I turn to Chairman Rivera.

CHAIRMAN RIVERA: Okay.

Thank you, Barbara. And thank you for your continuing support of the
committee. We\'re all deeply indebted to you for all your work.

I think that we\'ve got reports from all three of our subcommittees, and
then I\'ll raise something when we finish at the end of those reports,
but I think we might as well go ahead and get started, jump right in
with those reports, and I\'ll turn to Rodney Hood who chairs our access
to capital committee to see \-- and get a report from him.

MEMBER HOOD: Great. Thank you, Mr. Chairman. And can you all hear me who
are joining us on the telephone?

MEMBER SCHWARTZMAN: Yes.

MEMBER HOOD: Splendid. Splendid.

Well, I\'m very happy to report that we are making great progress in
bringing our whole idea of a Wall Street conference, and bringing that
conference to fruition.

We do have a rough draft of an outline, and I dare say that it\'s
exactly very, very rough, but the important aspect is that we at least
have a template for what we can do going forward in terms of putting the
providers of capital in direct contact with those individuals hoping to
receive funding so they can have minority ownership opportunities.

A great opportunity has come up through Ms. Kreisman\'s attention, and
that is doing it at Barnard College, so we\'re looking forward to
getting more information from the college, but that\'s a prominent
women\'s college up in New York, so we\'ll be able to really draw both
the Wall Street community, but also work with some of the university
officials there at Barnard.

Do all of you on the phone have a copy of the tentative draft that we
are planning as a conference? If you don\'t, I\'ll just quickly walk
through it, in the fact that we are envisioning, beginning with an
evening reception leading up to the half-day of activities.

So, the evening reception would be a public meeting of the Advisory
Committee on Diversity for Communications in a Digital Age, and then we
would follow our advisory meeting with a networking reception.

The second day we will convene at 8:30 in the morning and we \-- and
again, these are all proposed, but we would look at doing a media and
telecommunications market trend and new business opportunities.

That would be a panel where we would have folks who would possibly be
invited, including Mr. Kennard, Michael Powell, or Eli Noam. They are
from the Columbia Business School.

Another opportunity would be a panel where we would look at where to
find capital for the media and telecom transactions, and that focus
would be specifically on sources of capital.

We would then also look at, perhaps, doing a session on focus on
strategies for securing capital. We would also like to extend an
invitation for the Members of the Commission to attend this event and
especially giving Chairman Martin an opportunity to address the group.

Following an address of some sort by Chairman Martin, we would also like
to give the other commissioners a chance to talk about some of the
things that they have as current issues, and also, perhaps, words of
advice that they could leave with those individuals hoping to secure
capital.

Then later, we would have a closing address, hoping to invite Cathy
Hughes from Radio One where we think it would be a great idea for those
individuals seeking capital to hear directly from someone who\'s been
through the process, to hear from, if you will, a very successful person
who can say, \"This is what I did in Point A and this is how I was able
to take that idea to fruition, and really have an enterprise such as
Radio One.\"

And after that we\'re looking at doing what we would call a beauty
pageant of sorts where those individuals could meet with the funders,
with their business plans. Of course, we don\'t expect transactions to
be negotiated at this event, but at least they\'re making contacts and
they\'re giving those providers of equity and capital at least some
contact points.

So, that\'s the conference in a nutshell. Of course, it\'s very, very
rough, I mind you, but importantly enough, at least we\'ve put pen to
paper to come up with some ideas.

I think the next thing that we all need to do from our committee is,
once we\'ve gotten your imprimatur in the format, would be to then
secure funding sources for the conference itself.

And fortunately, through Becky Klein\'s help, I have been able to make
contact with a gentleman by the name of Robert Stuart who works with the
Private Equity Council. That is a consortium of private equity firms
where they have now a point person who can help them with day-to-day
logistics, helping them look at opportunities similar to this.

So, rather than having to all individually go to Black Rock or Carlyle,
he is the one, he is the one who would help us not only partner with
those groups in terms of getting them invited to the conference, but
also the Private Equity Council has expressed an interest in helping
fund this particular conference.

What I envision as a next step now is, once again, we\'ve gotten clarity
around the program, going back to the Private Equity Council and asking
them for direct funding.

And what I would like to do with working with our committee, is come up
with a smorgasbord, if you will, rather than saying to someone, \"Would
you underwrite the entire conference,\" let\'s have perhaps a sponsor
underwrite the first evening reception.

The committee had thought about maybe having that done at a Goldman,
Sachs or a Bear, Sturge or something like that, then the next morning we
would have the breakfast, again, trying to pick, if you will, all of the
various events that require funding throughout the day, and maybe have
unique sponsors aligned with them.

So, with that being said, that is my report and I\'m open to any
questions you may have.

CHAIRMAN RIVERA: Thank you very much, Rodney. Yes.

MEMBER SCHWARTZMAN: I just had a technical question relating to problems
we had some years ago in a slightly analogous situation. And this is for
Barbara: Can the Commission accept travel funding for Commission staff
for an event like this, and is private sponsorship of the event itself
problematic in any way?

MEMBER KREISMAN: I have to \-- I haven\'t been to the General Counsel\'s
office there. We have some representatives sitting there, because I
wasn\'t sure at this point exactly what our role is.

Whether \-- one of the things that was not subbed yet, whether this is
going to be something that was being sponsored by the trade associations
and some of the investment houses. or whether the FCC was going to have
a co-sponsorship role, that was one of the issues in play, and I thought
I had to have the answer to that before I went to the general counsel,
quite frankly.

The other issue that\'s in play is the timing. And maybe you want to
speak a little bit to that, David, because you had an idea that you
floated pretty recently in an email with respect to the Kagen Financial
Conference.

MEMBER HONIG: Yes. In March, Kagen Research does an annual conference in
New York on broadcast finance.

MEMBER KREISMAN: You came up with an April date in your letter.

MEMBER HONIG: Was it April? They haven\'t changed the date.

MEMBER KREISMAN: Yes. You said April.

MEMBER HONIG: Yes.

MEMBER KREISMAN: Beginning of April was your last email.

MEMBER HONIG: I think that\'s right. Yes. I think they moved it this
year. They are usually about 150 to 200 people there, and the target
group of private equity houses that we\'re looking to attend are \-- all
of them always attend. And large banks all attend.

CHAIRMAN RIVERA: So we would piggy back \--

MEMBER HONIG: Yes. It could be done \--

CHAIRMAN RIVERA: \-- basically off of their \--

MEMBER HONIG: The day before or the day after.

CHAIRMAN RIVERA: Yes. Right.

MEMBER LUCEY: I just have one other question.

CHAIRMAN RIVERA: Yes.

MEMBER LUCEY: David, I assume that you\'ve been part of this. My
question was: Given the fact that, David, your conference in the summers
become so successful that to make sure that the lessons you\'ve learned
from your summer conference from being shared with Rodney who put
together this conference, and as we can drill down to get as specific as
we can. I just raised that \--

MEMBER HOOD: That\'s a splendid point, Susan, and, yes, David has been a
part of our working group that helped us with the draft. He has been the
great institutional memory, I think, of things of this nature.

So, not only has been involved along with the Chairman, Ms. Kreisman and
also one of the former committee members, Mr. Ari Fitzgerald. So, those
have been the informal folks working on this to date.

MEMBER KREISMAN: Yes. There was an informal get-together where some of
these ideas came together, but this is an opportunity for everyone here
that, if you have any thoughts about it, please speak up or if you have
any thoughts after this meeting, including all of those on the phone
there, all these documents were sent as part of the email, so you should
be able to see, at least a rough draft of what we had in mind.

And the purpose, of course, is to bring people who need the financing to
the place where the investors are and that makes an easy \-- it easy for
them to attend the conference, and so that\'s one of the goals,
educational, as to what\'s available, opportunities that are available,
but also put people in a place where they\'re close to the source of
capital \--

MEMBER LUCEY: Well, the question I have is \--

MEMBER SCHWARTZMAN: Hi. I\'m sorry to interrupt \--

MEMBER KREISMAN: \-- in the more traditional medias.

MEMBER BRENNAN: This is Maria Brennan. I\'m on the phone. I don\'t know
if anyone else on the phone is hearing static and feedback.

MEMBER ON PHONE: Yes.

MEMBER ON PHONE: A little static, yes.

MEMBER BRENNAN: I\'m having trouble hearing the speakers when they are
at the FCC.

CHAIRMAN RIVERA: All right. We\'ll try to speak louder and into the
mics. I\'m sorry about the static. I\'m not sure what we can do about
that.

MEMBER BRENNAN: Thanks, Henry.

MEMBER KREISMAN: Do you know what helps sometimes on the \-- people in
the phone, if you would mute your phone unless you\'re speaking,
sometimes some of that is coming from your phones, themselves.

CHAIRMAN RIVERA: And also, if you\'ve got any blackberries around your
speakers, move your blackberries away from the speakers. That helps
sometimes, too.

So, Anne, do you have a point?

MEMBER LUCEY: Yes. I was just wondering. If you draft off that Kagen
conference, are you sort of limiting it, again, to traditional media,
because those are the people who might be participating there, as
opposed to the sort of new media out there?

That\'s always my concern, is that it always seem to drift back to just
the traditional media when maybe it\'s \-- we want to open it up to \--

CHAIRMAN RIVERA: Yes.

MEMBER KREISMAN: Certainly, our panels were directed to opening it up to
other opportunities, other than your traditional, to look for other ways
to get \-- this is part of our discussion, other ways to get in the
chain\--

MEMBER LUCEY: Yes.

MEMBER KREISMAN: \-- and not traditionally, because many times the
opportunities are not in what people know about today, but it\'s the
future and emerging technologies. That was at least the goals of our
panels.

Now, if the associating it with Kagen takes us away from that goal, then
that\'s a thought.

MEMBER HONIG: In the last two or three years Kagen has actually opened
its own conference up and broadened the definition of its target group
as well.

MEMBER LUCEY: To what?

MEMBER HONIG: To include new media that interact with \-- with
traditional media.

MEMBER LUCEY: Does it include telepony and all that? I mean, it\'s
everything? I mean, are we excluded by just grabbing onto \-- I\'m just
curious. I\'m just \-- because \--

MEMBER HONIG: They now include substantial participation, for example,
from internet companies that are distributors of media.

MEMBER LUCEY: So, it\'s just media?

MEMBER HONIG: That\'s right.

MEMBER LUCEY: Is that \-- we\'re just focusing on media, it\'s not on
all telecom then, is that the goal, is to \--

MEMBER HONIG: No. There isn\'t a conference to be bootstrapped off that
focuses on both, but the one that probably, if we were to bootstrap off
someone, it probably has \-- most of the players there is Kagen\'s.

CHAIRMAN RIVERA: Yes. I don\'t think that the \-- there\'s no intent to
limit this. And, in fact \--

MEMBER LUCEY: I know, I know, but I just wondered if you\'re drafting
off conferences kind of geared toward one sector of service \--

CHAIRMAN RIVERA: It was just a matter of convenience. Some of those
folks will be there who might want to come, and we thought it was a good
idea to piggy back, but there \-- again, as Barbara suggested, the panel
\-- the panel\'s themselves are intended to broaden the reach.

MEMBER KREISMAN: Also, the timing, has that been established? I remember
early criticisms of April because there\'s a lot of conventions right
along that line. That may not be the best timing.

I know that, you know, we certainly would like to have this conference
somewhere in the first half of 2008, but that was one of the issues that
had not been nailed down yet.

CHAIRMAN RIVERA: Jim.

MEMBER WINSTON: And I share your concern, but I don\'t \-- I can\'t
think of a conference that exists now that\'s broad enough to cover all
\-- to cover the entire telecom industry.

But I think you\'re right. It would be unfortunate if we weren\'t able
to broaden the scope of our inquiry.

MEMBER LUCEY: Because I just wonder about the venue, even. New York. I
mean, should \-- what about Silicon Valley? I mean, is that a better \--
I don\'t know. I\'m just throwing it open \--

MEMBER HOOD: We were actually thinking that New York, just because of
the proximity to Wall Street and \--

MEMBER LUCEY: Yes.

MEMBER HOOD: \-- the banking institutions there and the private equity
firms. There\'s no reason why \--

MEMBER LUCEY: There\'s a lot of venture capitalists on the West Coast,
too. I was just curious about it.

MEMBER HOOD: It\'s a good point, but I think initially we thought we\'d
do that \-- who knows. If this is such a success, maybe we can take to
the West Coast.

MEMBER LUCEY: Yes.

CHAIRMAN RIVERA: David, Susan raised a very good point that we discussed
in our working group in terms of the difference between this conference
and the MMTC conference. Can you hold forth on that one?

MEMBER HONIG: The MMTC conference has tended to be for new entrants and
small companies, although it includes media and telecom, mostly media.

And the equity providers and debt houses that come tend to be in the
\$20 million and under range. We\'d like that to change, but that tends
to be MMTC\'s constituency. The idea of doing this in New York is to
really focus on much larger companies and larger transactions, which we
hope could also be inspired to set up or invest in smaller funds as
well.

MEMBER FOX: It=s helpful to know that they\'re complimentary.

MEMBER HONIG: Yes.

MEMBER FOX: There\'s one \--

MEMBER KLEIN: I think Rainbow/PUSH does one, right?. Wall Street one
that=s coming up in \--

MEMBER FOX: In January.

MEMBER: In January, 5th through 8th.

MEMBER KLEIN: \-- so that won\'t \-- okay.

MEMBER HOOD: Becky, do you have anything to add to this conversation?

MEMBER KLEIN: I don\'t. I think the questions I had are being asked and
answered, other that just getting some direction at some point when we
can decide the funding sources and the profile of those sources.

And if we do get it funded, or various aspects of it funded from
underwriters that are Wall Street firms, is there an opportunity to
solicit funders that are other than Wall Street firms that might be
interested stakeholders in this?

MEMBER HOOD: I think that\'s a great point, Becky, and when I come up
with our committee\'s help in terms of what the sponsorship
opportunities should be, I have no problem at all in having anyone who
wants to participate, participate in terms of being a funder, so it
wouldn\'t be limited to them exclusively.

MEMBER KLEIN: Okay.

CHAIRMAN RIVERA: All right. The indications I\'m getting from the
chairman\'s office is that they\'re very interested in our pursuing this
initiative, and the chairman, himself, is very interested in
participating, so that\'s all very good news.

And so, if we\'re interested in moving forward, I think we should do
that. All right. Well, that\'s good. Let\'s do that.

And, Rodney, you\'ve got the ball here, so we\'ll look to you for some
leadership in terms of next steps and \--

MEMBER HOOD: Very well.

CHAIRMAN RIVERA: \-- what kind of help you need from us to move forward
with this.

As Rodney mentioned, the next meeting of this committee would be in
conjunction with that conference, so it would be \-- early next year
would be our next meeting, and it would be there the afternoon before.

So hopefully you all can make your way up there and, of course, we\'ll
give you all the details and so forth of where that\'s going to be,
followed by the reception and so forth. So, it should be a very nice
event, I think, if we can it pulled off.

Yes, somebody on the phone?

MEMBER CHACKO: Yes. It\'s Sheba Chacko. The static is still \--

MEMBER KREISMAN: I\'m not sure what to do about it.

Our telecommunications office, is there anything that we can do about
this static?

MEMBER CHACKO: Can we reopen the bridge again?

MEMBER KREISMAN: Can we reopen the bridge again?

CHAIRMAN RIVERA: Okay. Hang on just a minute. Is it just one person, or
is everybody experiencing this awful static? All right. If you all will
hang up, we=ll hang up here and reopen the bridge, and then, you know,
give us a minute or so and then call.

(Whereupon, the meeting went off the record at 10:23 a.m. and reconvened
at 10:24 a.m.)

CHAIRMAN RIVERA: Hello?

FEMALE SPEAKER: This is better.

CHAIRMAN RIVERA: Great. That seems to be the consensus so far.

MEMBER GUTIERREZ: Hello? This is Ray Gutierrez from Showtime Network.

CHAIRMAN RIVERA; Hey, Ray.

MEMBER GUTIERREZ: Much better. My goodness.

MEMBER HONIG: Mr. Chairman, that concluded my remarks.

CHAIRMAN RIVERA: All right. Well, thanks much. As soon as Max gets on
\-- Hello?

MEMBER SWEENEY: Hello. This is Tara Sweeney.

CHAIRMAN RIVERA: Hi.

MEMBER WILDER: Margarita Wilder.

CHAIRMAN RIVERA: Great.

MEMBER CHACKO: Connie Simon for Paul Jones.

CHAIRMAN RIVERA: Great.

Max or Becky, are you on yet?

MEMBER KLEIN: I\'m on.

CHAIRMAN RIVERA: Okay.

MEMBER NAVARRO: Okay. This is Max.

CHAIRMAN RIVERA: Hey, great, Max.

Okay, Max, since you\'re back, we\'re going to go ahead and let you give
your report.

MEMBER NAVARRO: Okay. David, I\'m sorry, Henry.

CHAIRMAN RIVERA: Okay. Can you hear me?

MEMBER MENDEZ: Yes. This is Bob Mendez. I can hear you clearly.

MEMBER NAVARRO: Okay. Henry, as you know, the subcommittee on emerging
technology submitted a recommendation back on September 27th and that
had to do with DTV subchannels. After that recommendation that we did
have David come back to the subcommittee and ask us to consider three
more recommendations, and so we did.

We did have our conference call November the 9th. I think there were
like four members of the committee on the conference call and two or
three people that subject expects, and I believe two of them were part
of the FCC Media Build Bureau.

Unless the committee members have a copy of the Congressional Federal
Register or a booklet in front of them it\'s going to be a little
difficult to explain what the subcommittee was trying to do.

At the three different recommendations that David proposed, David, to
explain those recommendations and why the purpose of those
recommendations were submitted again to the subcommittee.

Of the three recommendations we only looked at two, and basically they
were endorsements, not necessarily changing any of the legislation that
the FCC had already committed to.

But, David, do you want to just talk a little bit about the two
recommendations and tell the committee why you decided to come back and
recommend particularly the recommendation one and two, David.

MEMBER HONIG: These actually are the only matters that \--

MEMBER KREISMAN: Hold one second. This is like really weird, but whoever
was the last person to call in, you\'re the guy or girl who\'s causing
the static. The problem is, I don\'t know who that is.

CHAIRMAN RIVERA: I don\'t, either.

MEMBER KREISMAN: Wow, I don\'t know what to do. Does anyone think they
might be the last person who called in, because I\'m going to ask you to
hang up and see if you change, you make things better.

MEMBER MENDEZ: It could have been me. Bob Mendez, was I the last one to
sign on?

MEMBER NAVARRO: This is Max \--

MEMBER KREISMAN: Bob, do me a favor. Hang up and then call back again.
We\'ll see if it changes.

MEMBER NAVARRO: Okay. But the static is not that bad on my end, anyway.

MEMBER KREISMAN: It is? Okay. Why don\'t you proceed with the report and
then you can hang up and call back, Bob.

MEMBER MENDEZ: Okay. I\'ll do that.

CHAIRMAN RIVERA: David.

MEMBER HONIG: Do you want me to go ahead?

MEMBER KREISMAN: Sorry.

MEMBER HONIG: These FM recommendations were really the only matter that
the diversity committee was charged with reviewing that had been
considered by the previous diversity committee in 2004.

We drilled down a little deeper and really were trying here to
accomplish three things at once. First, to find some way to encourage
the Commission to address the consequences of years and years of
minorities getting inferior frequencies, inferior, particularly FM
allotments, as well as AM allotments, lower power, farther from the
community of light \-- from the center of the community where their
audiences primarily reside.

And, finding a way, therefore, to help them to the extent possible and
consistent with other policies, relocate closer to their audiences. This
would then have a salutary effect on their creditworthiness and their
ability to compete.

Another policy that we were trying to harmonize this with is the
Commission\'s development of low-power FM, both as training facilities
and as facilities that serve unmet needs in local communities.

And third was the longstanding policy that the Commission has had
derived from the way it interprets Section 307(b) of the Communications
Act, under which it\'s preferred that each local community that gets a
station located \-- a license to it should be presumed to be able to
keep that allotment rather than having it moved somewhere else.

These are difficult goals to harmonize and I think the subcommittee has
done a good job at finding a way to do it. The first recommendation is
fairly straightforward simply to endorse the Commission\'s
recommendation to Congress for legislation that would eliminate third
adjacent FM spacing restrictions found in the rules now for low power
FM.

The second one recommends that essentially, to put this in lay language,
if a licensee wants to move from a community that has only one station
licensed to it, let\'s say it\'s East Manassas, and they want to move to
East Arlington to be closer to downtown, they could do that provided
that they \-- that the licensee underwrites the cost of licensing
construction in a full year of operation of a new LPFM service that
would be in East Manassas and thereby leave that community with a
service, perhaps even more locally focused on the needs of that
community than the original station would have been trying to serve the
whole \-- the whole market.

This would, thus, satisfy the 307(b) goal of local service. It would
satisfy the goal of promoting low LPFM as a local \-- as a local
service, and it would also enable stations to move closer to the markets
they\'re trying to serve.

CHAIRMAN RIVERA: All right. David, the recommendation \--

MEMBER NAVARRO: Okay. Henry, those two recommendations are really \--
doesn\'t conflict with any of the \-- in any of the legislation that
that\'s already been proposed by the FCC, with consultations with the
Media Bureau, folks that were there.

These recommendations are basically a refinement and an enhancement
probably, to legislation already proposed so, many members felt pretty
good about that and therefore we had the majority of the folks on the
subcommittee adopt these two recommendations back to the Diversity
Committee.

CHAIRMAN RIVERA: All right. I want to thank you, Max.

Jim, did you have a question?

MEMBER WINSTON: Yes, I do. Is the recommendation for all move-ins, or
only move-ins where there\'s no remaining local service?

MEMBER HONIG: Well, right now, a move-in where there is remaining local
service wouldn\'t need this, so this would really be aimed at move-ins
where it would leave no remaining local service.

CHAIRMAN RIVERA: Any other questions?

MEMBER FOX: Yes, I have one. And this is an issue that we\'ve actually
talked a lot \-- had a lot of policy discussions just internally. And
disclosure would actually help us. And we just haven\'t weighed in in
favor of these because we\'ve always been cognizant of the policy issues
around it.

Have you given thought to a back story or analysis if there is a large
degree of \-- urban migration has always been the thought that stations
could eventually just slowly move into the city areas and we would end
up losing service in the outlying areas.

Was there thought given in your discussions whether you take a look in
two years or five years at that issue or, where do you go?

MEMBER HONIG: The thought, I think, was that, first, when you have
relocations toward the center of a market you have an opportunity for
backfilling, but the issue of remaining service to the outlying areas is
really addressed by this idea of having a low power FM station \--

MEMBER FOX: It\'s creative. It really is.

MEMBER HONIG: \-- through the air.

And the idea is, it wouldn\'t just be a repeater or translator, it would
be one that actually provides kind of the equivalent of what a \--

MEMBER FOX: A real nickel.

MEMBER HONIG: \-- class a LPTV would do.

MEMBER FOX: Okay.

MEMBER WINSTON: Well, the question of move-ins, in general, I think the
Commission has been relaxing the move-in standards that allow people to
do move-ins.

The concern NABOB has had is that they\'ve been mostly large companies.
I mean, you know, they are companies who have engineers on staff every
day looking for new ways to move in stations, so that I haven\'t seen
minorities taking advantage of the move-ins. It\'s mostly been the big
companies who are taking advantage of the move-ins.

MEMBER FOX: It\'s not cheap to go through the process.

MEMBER HONIG: Yes.

MEMBER FOX: Is it not?

MEMBER HONIG: Yes.

MEMBER FOX: It takes money.

MEMBER HONIG: Yes, it takes money just to have the engineers on staff to
do be doing all the studies to see what can be moved in and how it can
happen, so that I have \-- you know, my experience has been that
move-ins have been good for consolidated, but not good for small
businesses and minorities.

So, I don\'t know that a recommendation that facilitates move-ins is a
positive for our committee unless it\'s thought that the Commission is
already going to allow these move-ins and this is sort of a back-filling
to help the communities that are losing service because the move-ins,
themselves, I think have been very questionable.

MEMBER HONIG: Well, we\'ve had experiences with minority-owned companies
that are going to be doing more move-ins in the future and would like
to. The cost of doing so has always been an impediment and one of the
difficulties imposed by the current regulatory regime that discourages
certain types of move-ins, is that no wants to invest the cost for \--
unless there\'s going to be a result.

Where a station can be moved in, of course, there\'s an enormous
benefit. As crafted, of course, it implies across the board, and I\'d
agree with Jim that much more needs to be done to both relax the rules
and also encourage more minorities to take advantage of them, and to
reduce the cost of doing so, which may be the subject of another
recommendation that we ought to focus on.

MEMBER NAVARRO: David, we did agree, I think, that perhaps over the next
couple of weeks, months, the subcommittee would meet again and, based on
some of your comments, we would agree to look at other types of
recommendations, right? Hello.

MEMBER HONIG: I\'m sorry. I couldn\'t understand the question.

MEMBER NAVARRO: David, I think the subcommittee did agree that in the
future we would consider some of the other recommendations as well.

MEMBER HONIG: Okay.

CHAIRMAN RIVERA: All right. Shall we vote on this? The Chair will take
these as \-- recommendations, as a motion.

We take your point, Jim, that perhaps this is not as focused on
minorities as it could be, but maybe we\'ll get some in there. I mean,
why not?

But, any other questions or points?

All those in favor of these recommendations, say \"Aye.\"

(Ayes all.)

CHAIRMAN RIVERA: All right. It sounds to me like the motion carried. Not
very enthusiastically, but it did carry. We\'ll forward this \--

MEMBER WINSTON: Can I be recorded as an abstention?

CHAIRMAN RIVERA: Yes, indeed.

We\'ll forward this up to the Commission, then, and see where we move
from there. Those of you who are here with me in Washington know that
we\'ve been honored by the presence of Commissioner Adelstein. And for
those of you on the phone, you\'ve just been notified of that.

And I\'m going to turn the mic over to him. I think he\'s got a few
things to say to the committee.

So, welcome, Commissioner Adelstein.

COMMISSIONER ADELSTEIN: Well, thank you, Henry. I appreciate all the
work you\'re doing and everybody here is doing on this body. We really
value your input. I know it takes a lot of time from all the busy
schedules that you have and I just wanted to thank you for that.

I know we\'ve talked a lot about \-- each of you, about the issues of
diversity and how deeply I feel about it. There\'s no point in repeating
any of that, but I just wanted to say that, and ask you a question
subsequently, but my main point is that you\'re doing great work. It\'s
very helpful to us. This conference looks fantastic on Access to
Capital.

I think that kind of idea is great. I\'ve had the concept of trying to
get an even broader overview of all the different issues that you were
doing and the other Diversity Committee is doing in MMTC and NABOB and
all the recommendations and getting a body together which would involve
all of you to some extent to talk about that, and I just wanted to make
sure that you understood that that does not reflect that I don\'t value
what you\'re doing.

I think what you\'re doing is incredibly important, in that there\'s
room for a lot of discussion about all these issues.

Now, one question, I really need some advice, because you\'re an
advisory committee. I need advice. As you are probably aware, we have
before us pending a lot of different ideas about \-- actually, very good
ideas that could be very helpful in promoting ownership that could come
up as soon as December 18th.

So, I\'ve got to figure some things out very quickly. And one of the
fundamental issues I\'m struggling with which some of you might have
heard came up in the testimony before the House Commerce Committee last
week, was the question of how you define eligible entities, whether it
is a SDB definition, socially \-- socially economically disadvantaged
businesses, or whether it\'s the basic Small Business Administration
definition, which is another proposal that\'s been made.

My preference is to go to SDB\'s, but I wanted to get the opinion of
anybody here that was willing to share with me just how important that
is, because to me that seems to be a fundamental issue, that all of the
good ideas that we\'re talking about doing on December 18th would be
vastly undermined, if not rendered valueless if we don\'t do the right
definition.

I don\'t know whether you agree that that\'s correct or what \-- I
really wanted your input, just if you don\'t mind if I ask if anybody
has any input on that \-- on that question, because I\'ve got to know
and I\'ve got to know fast.

So, you\'re down here, I got the experts, I want to just get a quick
sense from you how important this SDB definition is versus a broader
definition.

MEMBER HONIG: Well, I think from \--

CHAIRMAN RIVERA: If I could just interrupt. I think that, Commissioner,
we \-- I was going to raise this subsequently at the end of the meeting
to see whether the committee was interested in participating in this
definitional debate, but the Chairman has asked us \-- invited us to
participate in the further notice aspect of the things that you will be
raising on the 18th. So \-- but we can \-- anybody is \-- so we would be
speaking as a committee at that point.

Now, if anybody has any points they\'d like to raise with the
Commissioner individually, have at it.

MEMBER WINSTON: On behalf of NABOB \-- not as a member of the committee,
NABOB would think the distinction is critical, that if you\'re only
talking about a small business program, you\'re not going to do anything
significantly to advance minorities or women because the vast majority
of small businesses are not owned by either minorities or women so that
you\'re not going to get to the heart of the problem we\'re trying to
address by an overbroad definition of who\'s supposed to be taking
advantage of the programs.

So, I think an SDB definition is a starting point. It should be the
minimum standard that the Commission should be looking at.

MEMBER BRENNAN: And, Commissioner, this is Maria Brennan with American
Women in Radio and Television. I would concur with NABOB in that
respect, to start.

MEMBER HONIG: I\'d concur with Jim also. We did the math and for
commercial radio, the first 95 percent of stations are owned by \-- by
SBA defines small businesses, so it\'s very dilute to begin with.

But among all commercial radio stations, 7.78 percent are
minority-owned. Among SBA-defined small businesses, just 5.88 percent
are minority-owned, so the \-- if you use the SBA\'s small business
definition, you end up with a beneficiary class which is even more
dilute than the industry as a whole.

It would not only not be helpful, it would actually be harmful. It would
actually be regressive. And the Commission could not possibly, with a
straight face, adopt a definition based on small business, saying that
it\'s going to help minorities when, in fact, it\'s going to exclude
minorities more so than if it was just open to the general \-- to
everybody.

Now, the ideal way to do this would be to use an SDB definition. The
Commission has sought to develop one since 1996. Unfortunately, the
research that it did in \-- which got us, I think, from a Constitutional
analysis standpoint, three-quarters of the way there.

And published in 2000 has been left stale for years. The underlying
databases were about ten years old, and now the clock has been running,
and it\'s, unfortunately, probably necessary to start over.

So the question now, unfortunately, is what can be done in the interim
while the Commission concludes, possibly with a restart, the job of
coming up with a constitutionally-sustainable SDB definition.

The diversity and competition supporters in the rulemaking proposed an
interim temporary procedure called Full File Review which would consider
for each applicant for one of these programs whether the applicant has
overcome disadvantages, the overcoming of which is both predictive, both
of their likelihood of success in a competitive environment, and their
contribution to diversity, what experiences has the person or company
derived which it could share with the public.

There is a good model \-- there are two good models for this. One is the
admissions policies used by state universities in Texas, California and
Michigan after resolutions were passed that required race-neutral
procedures in admissions.

And the other being the NAB\'s and the Emma Bowen Foundation\'s choice
of candidates for their programs. The NAB\'s program, in particular,
which does not just consider grades and test scores, but also considers
experiences.

It\'s actually about half minorities, half women, and it also includes a
good many rural broadcasters, small market broadcasters and veterans.

Those are substantial disadvantages that people overcome. So, I think
there\'s a way to do this that would be race-neutral. It would not be
the ideal. The Commission should not lose sight of and should continue
assertively to move toward an SDB model.

But, in the meantime, there\'s something that would be much more focused
than the regressive SDB definition that has been kicked around.

And your point, Commissioner, that the Commission seems poised to adopt
maybe 10 or 12 initiatives, eight or nine of those are contingent upon
this definition, so that if the definition isn\'t solved before the
Commission adopts these or at least before the effective date of when
these programs go into effect, the Commission will have snatched defeat
from the jaws of victory.

CHAIRMAN RIVERA: Andy, do you have something to add?

MEMBER SCHWARTZMAN: I think, in the interest of time, what I would say
would just be to add detail to what\'s already been said. I just \-- for
what it\'s worth, the clients that I\'ve been representing in this
proceeding strongly concur with the thrust of what you\'ve already
heard, and I could go into detail for you, but I think the point\'s been
made.

CHAIRMAN RIVERA: Is that what you need?

COMMISSIONER ADELSTEIN: Yes, that was any contrary view or \--

MS. CAREY: Actually, yes. On behalf of the Chairman, I think that it\'s
important to the committee that \-- sorry.

CHAIRMAN RIVERA: This is \-- Michelle Carey from the Chairman\'s office,
has joined us.

MS. CAREY: On behalf of the Chairman, I think it\'s important for the
committee to hear some of the legal concerns that we have with an SDB
definition and as keying off of David\'s point, I think what we\'re
looking at is a race-neutral definition.

And we\'ve asked Matthew Berry, who is the deputy general counsel, to
talk to you just briefly about some of the legal issues about adopting
an SDB definition.

CHAIRMAN RIVERA: Yes. Why don\'t you sit here, Matthew.

MR. BERRY: Thanks for the opportunity to speak this morning. As Michelle
indicated the Chairman\'s Office has asked the Office of General Counsel
at these definitional issues and we have done so in what I believe is a
thorough and careful manner, and I think that these definitional issues
that you have been discussing raise, you know, very, very serious legal
issues that, you know, the committee and the Commission as a whole needs
to take account of.

And we think that the threshold question here is whether or not you
adopt a race-neutral definition or one that includes a race-based
classification. And to the extent that you adopt a race-neutral
definition, you then are in the world of what\'s known to lawyers as
\"rational basis or view,\" very, very lenient review in terms of the
courts.

To the extent that you use a racially-based definition and I think it\'s
indisputably clear that the socially and economically disadvantaged
business definition, for instance, that\'s used in SBA programs, is
clearly a race-based definition because there\'s a presumption that if
you are \-- if a company is controlled by African Americans, Hispanic
Americans, Asian, Pacific, Americans subcontinent, Pacific Americans,
and Native Americans, there\'s a presumption that you quality as an SDB,
then you are in the world of strict scrutiny.

And under strict scrutiny, the courts look to see whether or not a
program is narrowly tailored for their compelling government interest.

And, as the lawyers among you know, strict scrutiny is the highest level
of scrutiny that a court will give a program.

And the Commission and \-- this standard was established by the Supreme
Court case of Adarand in 1995. Previously the courts had said for
federal race-based classifications, you only use intermediate scrutiny.
In 1995, the court shifted and said there\'s going to be strict
scrutiny.

And the Commission has had experience with review of race-based
classifications under strict scrutiny. Twice, in particular in front of
the DC Circuit in 1998 and in 2001, the DC Circuit both times struck
down race-based classifications that were used by the Commission and
said it was unconstitutional under Adarand.

And in these two cases it was a 6/0 rejection for the Commission, both
times unanimously the Commission \-- the court said that the
Commission\'s race-based classifications were unconstitutional.

In looking at the analysis, a couple things that are particularly
noteworthy, first with respect to the compelling interest prong, in the
Lutheran Church opinion in 1998, the DC Circuit specifically held that
the FCC\'s asserted interest in broadcast diversity was not a compelling
interest.

So, that kind of that kind of holding from the DC Circuit is very, very
troubling precedent in any bid to try to establish a race-based
classification passes strict scrutiny and that\'s something the
Commission would be up against if a race-based classification were
adopted.

Secondly, with respect to narrowing tailoring, the courts precedent on
narrow tailoring demands a very, very, very close fit between the
classification that you\'re using and the interest you\'re seeking to
vindicate.

And it\'s been very, very difficult with respect to narrow tailoring to
have a program, a race-based classification that passes that. You did
have one in a 5/4 opinion in the Grutter case in front of the Supreme
Court, however, with this current Supreme Court and the latest round of
opinions in the Louisville Schools case and then the Seattle Schools
case, the Supreme Court said that narrowing tailoring was not
vindicated.

So, I mean, as the Office of General Counsel sees it, we\'ve also looked
into the idea of, well, if diversity isn\'t going to work because of the
Lutheran Church opinion what about the idea that we\'re going to be
remedying past discrimination and that\'s going to be the interest.

And we\'ve looked very, very carefully at the evidence that\'s been
submitted in the record and the like, and the courts have been very
clear in terms of a distinction between remedying overall societal
discrimination versus specific public discrimination that the Commission
may have engaged in.

And, while there\'s some evidence in the record, when you look at it in
light of the type of evidence that the courts have demanded, in
particular, let\'s say, in the transportation context or the like, we
are of the opinion that it would be very difficult to convince a court
that this was justified in terms of remedying past discrimination.

So, I think what we are left with is a very, very serious concern, by no
means are we saying that it would be certain to lose, but a very, very
serious concern if you move forward with an SDB definition, for
instance, a race-based definition, that what you will end up with is a
very, very difficult time defending this in court because, again,
you\'ll be up against strict scrutiny.

Whereas, if you move forward with a race-neutral definition that is
much, much easier to defend. And so I think in terms of trying to move
forward with something that will actually work in the real world in
terms of standing up, the conclusion that we have come to certainly is
that moving forward with a race-based classification is much, much
riskier than moving forward with a race-neutral classification.

And we certainly think that\'s something, you know, it\'s up to the
policymakers to decide what to do with that information, but it\'s
certainly something that we think needs to be taken into account because
if you just do something that\'s declared to be unconstitutional, that
really just doesn\'t do any good at all and arguably, is
counterproductive.

So, that\'s just the perspective that we wanted to share.

CHAIRMAN RIVERA: Questions. Why don\'t we take some questions, Matt.

MR. BERRY Sure.

CHAIRMAN RIVERA: Would that be all right?

David.

MEMBER HONIG: Thank you. I\'d like to suggest that the idea of adopting
an interim race-neutral classification, such as full file review, is not
mutually-exclusive from continuing to pursue the question of how to
justify a race-conscious definition.

I agree with you that it would be difficult, but I don\'t agree on the
reason for its difficulty. In the Parents United case, we basically saw
reasoning used to hold for the second time in three years diversity in
the education context as a compelling governmental interest in language
that I think probably overrules or substantially undercuts the Lutheran
Church decision if it were applied here.

The difficult \-- the reason it\'s difficult is that the Commission,
since 2000, hasn\'t done any work. It hasn\'t commissioned any
meaningful studies. It\'s left the studies that it has had sit in the
shelf. Well, that\'s over, we can\'t change it.

But the best course the Commission could probably take would be to adopt
the least dilute, most effective, most fair race-neutral interim
definition that it can and simultaneously recognize that while it may be
difficult, it doesn\'t hurt to try to see whether a race-conscious
definition could be evolved.

Such a definition need not be based on diversity here. You\'re right. It
could be based on a remedial theory and I would show \-- indicate, too,
that the record in the docket on media ownership has shown years of FCC
ratification and involvement in discrimination.

And also to promote competition, the Commission\'s primary goal was just
simply finding a way to unlock the management and entrepreneurial and
creative of skills of vast numbers of people who haven\'t had those
opportunities. It\'s not efficient. And a way to do that, if found to be
compelling, and it should \-- would be worthy of being pursued.

So, if \-- I wonder whether you would agree that it might be useful for
the Commission to pursue both tracks simultaneously, that is, adopt the
best race-neutral definition as an interim matter while also renewing
its efforts to see whether a race-conscious definition could be
sustained.

MR. BERRY: I think that\'s an excellent question. With respect to the
second part of the question, the \-- as I think the Chairman of this
Committee indicated, the further notice seeks comment with respect to
the possibility of developing a race-conscious definition that would be
constitutionally sustainable and, to the extent that the Commission or
others wish to explore that and, you know, do the work that\'s
necessary, you know, that\'s not something that is for me to comment on
or oppose.

I think that to the extent you want to do more research to have the
Commission to do the work that you feel is necessary to have a
sustainable race-conscious definition, I don\'t think it would be
appropriate for me to prejudge the outcome of that proceeding.

Certain, anything you come up with will be subject to strict scrutiny,
but to the extent the Commission wishes to do that, that is tee\'d up in
the further notice and I\'m not saying I\'m here opposing that at all,
because I don\'t.

With respect \-- and I also agree with you that moving forward on a
race-neutral definition at this time is the appropriate course of
action. And the question then becomes what is the best race-neutral way
of doing it. And that\'s more of a policy issue that I\'m not going to
comment on.

I guess I would have two points with respect to full file review,
though, that give me some concern, but \-- and the first is that I think
with respect to how you would define that, one must be very, very
careful, because, as I\'m sure you\'re aware, in both the Lutheran
Church case and the Maryland/DC/Delaware Broadcaster\'s Association
case, the Commission went into court and maintained that what was being
done really was not the use of a racial classification.

And there was no specific, you know, quota, no specific \-- it was not
designed to pressure in some sense and \-- in terms of having a
race-based preference. And in both times that the D.C. Circuit, I think,
took a really skeptical view of what the Commission was doing and
disagreed.

So, I think that any kind of full file review, one would have to be
very, very careful to make sure that, indeed, it was race-neutral.

The second point with respect to the difficulty of full file review is
that in the educational context, when you are doing a \-- let\'s say for
admissions purposes, if you\'re carrying certain applicants to other
applicants and making a determination of who\'s going to get the slot.

In the Commission\'s context when you have mutual exclusivity, you go to
auction. So, you would be measuring an applicant against some kind of
standard. And the question is: How do you define the standard and how do
you do it in a race-neutral way and how do you do it in a way that\'s
administratively viable.

And with respect to the latter question, I would defer to the Media
Bureau and the likes in terms of how it\'s administratively viable.

But again, you\'d have to define the standard and the process of review
in such a way that is genuinely race-neutral. You\'d also have to make
sure that you don\'t take into account impermissible First Amendment
considerations in terms of, let\'s say, looking for what kind of program
and commitments they\'re going to make, et cetera.

So, I\'m not saying that it\'s impossible to do, I\'m just saying that
the kind of full file review that you\'re talking about raises a lot
more complexities and legal uncertainties than does what\'s in the item
right now, and I think that\'s something everyone should take into
consideration.

But again, it all is \-- I think the courts have said in this area the
devil is in the details, so it\'s a question of what are those details.

CHAIRMAN RIVERA: Go ahead.

MEMBER WINSTON: I wanted to chime in because I\'m not convinced that
this is the course of conduct that I would recommend for the Commission.

It seems to me that what we\'re being told is we\'re just going to have
you lose now as opposed to losing later. And it seems to me that, given
those two choices, I\'d rather take my chances and lose later if I have
to.

But the notion that, you know, you look at this industry. You look at
the racial makeup of the licensees in this industry, you look at the
racial makeup of our country and you say, \"We\'re not going to do
anything about it because we may have trouble down the road with the
courts.\"

That isn\'t an acceptable answer to me. And I recognize that strict
scrutiny is a tough hurdle, but all these cases are fact-based, and
we\'re not looking at any \-- you know, we\'ve not had any discussion
about any specific program or any specific way of dealing with a
race-conscious look at that program.

So, until you put all those pieces together in a way of going forward
\-- you know, David pointed out we\'ve got an awful lot of information
that\'s been developed in the record over the course of the last decade.

Some of that record may be stale. Some of it may not be. So, I don\'t
think \-- because there is some good information, good studies in the
record that were developed several years back, and I think if you take
all the pieces together and say, \"You know, we\'re looking to have a
winning strategy that\'s going to make a difference,\" I think you come
out differently than if you say, \"We\'re going to cave now to do
something that we doubt is going to have any real impact.\"

And I don\'t think that that\'s \-- that\'s not a strategy that I would
support.

CHAIRMAN RIVERA: Andy.

MEMBER SCHWARTZMAN: If I can take time to respond to that.

CHAIRMAN RIVERA: Go ahead.

MEMBER SCHWARTZMAN: I think, really, you\'re raising policy issues, so
I\'ll step in.

I think the Chairman agrees, actually, with what David outlined, which
is that it\'s important to adopt the best race-neutral definition right
now while we continue to work on other definitions, and I think he
believes that the item that we have put forward to the Commissioners
contains lot of proposals and some significant reforms to our rules that
are going to be beneficial to many.

However, he still is open and, as Henry mentioned, we are having a
further notice to look at whether we can expand the definition in a
constitutional manner, but he believes that there are some significant
proposals and rule reforms that are going to be beneficial to many.

CHAIRMAN RIVERA: Andy.

MEMBER SCHWARTZMAN: I\'d like to concur, in general, with Jim\'s
remarks, and I do agree that there\'s no reason not to go forward with a
\-- in the short term, with the best race-neutral approach possible, but
I do want to stress that the pessimism that you are expressing, Matt, as
Jim says, may be excessive.

The Commission has, on many prior occasions, been willing to vote items
where it knew that its chances in court were less than perfect, and I,
you know, would encourage \-- and I hope this committee will encourage
the Commission not to be gun-shy.

Two other observations about your comments. First, you made reference to
the First Amendment difficulties of requiring news and public affairs
programming or programming commitments of some kind or another \-- I
can\'t remember exactly what you said.

I don\'t regard that as an impediment. I regard that as an ideological
position, rather than something based on case law.

And the second observation that I would make is that it\'s not necessary
to take new comments or build a new record to find that there was 30
years of history of systematic discrimination on the part of the Federal
Communications Commission in the wording of broadcast licenses, awarding
licenses to segregationist institutions, refusing licenses to
minorities.

That\'s been established. There\'s a literature on it and there\'s
already a solid basis for the Commission to find evidence of past
intentional discrimination in what amounts to the vast majority of the
incumbent licenses presently there.

So, again, I think that there\'s a strong factual platform from which to
start, and I would encourage you not to be as pessimistic or \-- and to
view this as a much more promising opportunity than I think I\'m
hearing, Matt.

MEMBER HONIG: Briefly, too, I agree with the comments that have been
made. I think full file review would be \-\-- could best be
characterized as having a moderate level of difficulty.

In the space of a couple of months, bright people can figure it out.
Certainly, it\'s not sufficient to rest on a small business definition.
That wouldn\'t \-- that wouldn\'t pass rational basis review because, in
fact, it\'s regressive.

But, we\'d want to emphasize that sometimes when the Commission has
dealt with issues related to minority ownership, it adopts the report
and order and then, in effect, goes away for years. We\'ve done that
now, we\'ll just let it rest.

And that seems to have been what happened with the effort to get an SDB
definition, unfortunately. It\'s important that it not happen again and
that if the Commission is going to adopt an interim standard while it
pursues the work needed to tie down an SDB definition, I\'d agree it may
not be as difficult as we feared it could be, or take as long as we
feared it could be, that the Commission would be well-advised to
establish a time period no more than six months, eight months to finish
the work, budget it properly, collect what\'s already been done, add to
it anything that\'s necessary, and then ramp it up and in the best
possible way, and defend it aggressively in court.

MEMBER WINSTON: Am I correct, we \-- this Committee was organized in
2003? We\'ve been at it four years. What have we got to show for it?

The notion that we\'re going to suddenly, you know, the Commission is
going to get into high gear on these subject strikes me as fanciful, and
that\'s why I\'m concerned about what course of action we take now,
because I think we get into it once again, justice delayed, justice
denied situation of never getting back to this.

So, if we\'ve got \-- if we\'d got something tee\'d up now to actually
happen, I\'d like to see it have some teeth in it, because I don\'t know
when we\'ll get a chance again.

MEMBER WINSTON: No, I mean, I certainly thing that these are difficult
issues, and I guess I will just respond in a couple \-- I wanted to
respond on one point that Andy had made.

And that is, with respect to the evidence of public discrimination by
the FCC, again, this is something that lawyers in the Office of General
Counsel have looked at very carefully in terms of the evidence that\'s
just been submitted into the record, and the \-- I\'m not making any
definitive statement because one never knows how courts are going to
come out, and there\'s a good-faith argument to be made on both sides.

But, when you look at the type of evidence that\'s in the record here,
versus the type of evidence that\'s been used in the transportation
context, the evidence of direct public discrimination by the FCC in the
past is significantly less than there was in the transportation context,
which was a public discrimination.

And also, this has never been an interest that\'s been asserted in the
past in terms of FCC race-based classification, so I\'m not nearly as
optimistic as you are in terms of going forward with that as a
rationale.

I\'m not saying you can\'t. I\'m not saying you can\'t make a good-faith
argument on it, but I think looking at it in a neutral manner, it\'s
difficult to say that the case here is nearly as compelling as it has
been in the transportation context. That\'s the only thing I would say.

CHAIRMAN RIVERA: Well, thanks for coming, Matt.

Commissioner, you got what you needed?

COMMISSIONER ADELSTEIN: That was great. I think it was an excellent
discussion back and forth and that\'s exactly why we pay you so well.

Just so I understand it, my sense is that your concern is that we not
move forward now with something that would undercut the longer-term
goals, better to try to get it right, either do it now right or delay
until such time as we can get the SDB definition or at least some
interim measure.

If we can\'t get the interim measure by the date that we have a vote
scheduled for, then we ought to put that out to comment and make sure we
get it right instead of moving ahead with something in the interim basis
now that might actually undercut us in the hopes that someday we=ll fix
it. Is that accurate?

MEMBER HONIG: That would be my position.

MEMBER SCHWARTZMAN: I agree with that, too.

COMMISSIONER ADELSTEIN: Well, very much, everybody, for \-- that was
fantastic. That was a great discussion.

CHAIRMAN RIVERA: Thank you, Commissioner. Thank you for coming.

That was completely unexpected, so I hope everybody benefitted from that
conversation.

As I noted, we might as well stay with this. I was going to bring this
up at the end of the meeting, but I\'ll bring it up now.

And I know \-- Becky, are you still with us?

MEMBER KLEIN: Yes, I\'m still here\--

CHAIRMAN RIVERA: Okay. Good, because I\'m \--

MEMBER KLEIN: \-- for about another ten minutes.

CHAIRMAN RIVERA: Okay. Well, I don\'t think this will take very long. As
I mentioned earlier, the Chairman has indicated that there will be a
further notice, that we would \-- we are invited to participate in that.

If you all are interested in doing that \-- and I take it from the
comments here that we seem \-- there seems to be a great deal of
interest.

Without objection, I\'ll go ahead and form the subcommittee to deal with
that, and we will participate in that part of the rulemaking.

Any objections to that?

MEMBER KLEIN: Henry, this is Becky. I have a question on that.

CHAIRMAN RIVERA: Sure.

MEMBER KLEIN: So, in order to participate, you\'re talking about the
Committee as a whole that would come to some kind of consensus and how
we would voice ourselves within the context of the NPRM, correct?

CHAIRMAN RIVERA: Correct.

MEMBER KLEIN: Will we be given a chance, the Committee as a whole,
ultimately to vote or to talk about the positions, because \--

CHAIRMAN RIVERA: Absolutely. Absolutely. The process would be exactly as
we do everything else.

MEMBER KLEIN: Okay. All right. That would be fine. I just \-- my sense
is that this is really a little bit out of the scope of the Committee
itself.

CHAIRMAN RIVERA: Yes.

MEMBER KLEIN: Because, you know, necessarily the issues are relevant to
each of us, but also there\'s probably going to be different effects on
different members of this Committee and different perspectives from this
Committee.

So, you know, I can imagine that it would be difficult for \-- it may be
difficult to come to a consensus, and then what happens for those people
who may not take the perspective of the majority of this Committee.

CHAIRMAN RIVERA: Well, that\'s always a problem and a challenge and I\'m
not sure it\'s beyond the scope of the Committee when the Chairman has
asked us to participate, or invited our participation.

MEMBER KLEIN: Okay. I didn\'t realize that he was tasking us to do that.

CHAIRMAN RIVERA: Yes. Well, we hadn\'t been tasked to do anything. He
said \"If you\'d like to, I\'d be happy to take your points of view in
the further notice.\"

MEMBER KLEIN: Okay.

CHAIRMAN RIVERA: So \--

MEMBER KLEIN: Well, that\'s good to know.

CHAIRMAN RIVERA: Here\'s Michelle Carey from the Chairman\'s Office.

MS. CAREY: In fact, your comments actually reminded me of one thing. I
know Commissioner Adelstein just asked a few members of the Committee
what their views were on our pending proceeding, and I wanted to point
out that, at least, from where I\'m sitting, I haven\'t heard from the
rest of the members, and from the Chairman\'s perspective he, you know,
to the extent this is an issue that you want to be involved in, that\'s
your choice.

He would want to hear what all the members think and not, you know,
certainly he takes all of your views into consideration, but would want
to know what, collectively, the Committee thinks and hear from all of
you and not just a few of you.

So, that\'s important to him, as well.

MEMBER KLEIN: Okay. Thanks, Michelle.

MEMBER FOX: I can talk for a minute, too, because obviously I\'m \-- I
work for a large company and we\'re part of the Committee, and there\'s
been times when we\'ve decided not to take a role on an issue or I\'ve
had personal views and sort of conveyed those and then stepped out of
the debate as something that involves the company itself.

I think we can all deal with those issues on an individual basis. And
I\'m sure other members have had similar experiences.

CHAIRMAN RIVERA: Sure. I think that\'s right. All right. Well then,
without objection, we\'ll proceed in that fashion and follow the normal
procedure with the Committee, and maybe Becky\'s right, we won\'t be
able to come up with a Committee consensus position, but maybe we will.

All right. Becky with that, I will turn the mike over to you to report
on your committee\'s activities.

MEMBER KLEIN: Okay. Thank you. And this will be relatively quick and
straightforward.

So, as of early October we have been focusing on the concept of
developing a brochure and the brochure would highlight and itemize and
list different resources, types of resources that a small minority in
women-owned business can prevail upon for financial matters, for legal
matters, for engineering consulting, other types of consulting, trade
associations that are pertinent to them, acquisition opportunities
within the government, any pertinent websites and URL\'s that might be
helpful that would give rules and regulations.

And, of course, you know, other particular types of resources that I
haven\'t mentioned here, I invite discussion or input on. So, ideally,
the brochure would be a wonderful tool to be able to promote and
distribute at events such as the conference that Rodney is working on,
and other such conferences.

Also, Barbara, I think we indicated or talked before about the potential
of having this, if it\'s approved, uploaded on the FCC website, is that
correct?

MEMBER KREISMAN: Certainly.

CHAIRMAN RIVERA: She said \"Certainly.\"

MEMBER KLEIN: Okay. And so that is what we\'re proposing, and the scope
of the brochure that\'s being visualized. I think there\'s some
outstanding issues that the Committee would \-- subcommittee would need
to discuss and input from the Committee as a whole would be very
beneficial, and that is, as we gain these resources and we put them on
the brochure, what kind of references or vetting process do we
undertake, if any, do we just put a general disclaimer at the bottom and
that would suffice?

If something \-- we want this brochure, obviously, to be credible to
anybody that wants to rely on it. So, you know, I think we need some
discussion on, you know, what we think would be, A, a reasonable
standard in that regard.

And then the subcommittee will need to decide to \-- how often do we
update this since, of course, there will be ongoing resources out there
that we either discover, or new ones that come about.

CHAIRMAN RIVERA: Do you want to speak to this a little?

MEMBER KREISMAN: I think it\'s great. I think what we need is, probably,
for all the subcommittees, maybe some dates for subcommittee meetings,
starting the beginning of next year where we can sit down and really
hammer out what should be involved, for example, in the brochure.

CHAIRMAN RIVERA: Any questions for Becky?

I think it\'s a fine initiative, Becky. Thanks so much. What are the
next steps for your subcommittee, then?

MEMBER KLEIN: Well, I think that the subcommittee needs to have a
conference call and maybe discuss a couple of those issues, and then
talk about maybe where to go to find some of these resources, and
outreaching to these resources so that we can start compiling the meat
and potatoes of a brochure and putting it together, because what we\'d
like to have at the next full Committee meeting is an actual mock-up of
a draft brochure.

CHAIRMAN RIVERA: All right.

MEMBER KREISMAN: It might be great if we could get ahold of whatever
resources you have, Jim, and you have, David, you have, Andy, that, you
know, we can put in one place. It just basically references, you know,
hello, you can go to talk, you know, consult this to get information
about companies that are lending money, you can go here to get this \--
and I know some of this is already in existence, but it\'s sort of
scattered.

What we\'d like to do is not put something \-- not a multipage thing,
but something that\'s very simple, that you look at, open up, and at
least sends you to the right spot. And we\'re not taking anyone\'s
glory, we\'re going to send them right back to you, but something that
can be a focal point. So, it might be great if we can get something \--
you can send us an email or something with respect to some of the things
already in existence that we can just cross-reference and send it back
to you.

CHAIRMAN RIVERA: Yes, that would be very helpful.

So, I don\'t think you need a vote form us at this point. Do you, Becky?

MEMBER KLEIN: I don\'t think so. I think once we have the mock-up\'s,
that would be the time to do that.

CHAIRMAN RIVERA: All right. Great. Thanks very much. Great report.

Does anybody have any new business to bring before the Committee?

Yes?

MEMBER HONIG: I have one quick question. Do we need to appoint a
subcommittee to work on this, the full file review and other issues?

CHAIRMAN RIVERA: Right. I\'ll do that. And if anybody\'s interested in
participating in that, please let me know. Send me an email. We\'ll send
an email out to the entire committee asking for folks who are
interested, and if I don\'t get enough volunteers, I\'ll make some.

Any other new business?

MEMBER HONIG: I also just wanted to note that the minutes should reflect
the fact that the conference idea originated with Commissioner Tate
who\'s really pushed for this\--

CHAIRMAN RIVERA: Yes.

MEMBER HONIG: \-- since last January and coming to fruition. Her
initiative ought to be recognized.

CHAIRMAN RIVERA: We\'ll make sure that\'s in the minutes. Yes. That\'s a
good point. Yes, it\'s her baby.

Anything else?

Listen, I want to thank \--

Oh, I\'m sorry. Go ahead.

MEMBER KREISMAN: This is being transcribed and we will put the
transcript on the website.

CHAIRMAN RIVERA: Okay. Great. I\'m going to thank you all for coming and
for those of you on the phone for participating. I want to wish you all
a happy holidays, and thanks for you all your work.

I think we are going to have a great year in 2008. We\'ve got a lot of
great things in the pipeline. And next year at this time we don\'t want
to have Jim Winston ask us that question that he asked. \"What have we
got to show for it?\" And I\'m sure that we won\'t be in that position.

So, again, thank you and season\'s greetings to all of you. We
adjourned.

(Whereupon, at 11:18 a.m., the meeting was adjourned.)