**Opening Remarks of Commissioner Deborah Taylor Tate**

**FCC *En Banc* Hearing and Conference on Barriers to Communications
Financing**

**Hearing on Access to Capital**

**Tuesday, July 29, 2008**

Good afternoon. I would like to join my colleagues in welcoming our
distinguished witnesses and thanking them for their participation in
today's hearing--- an idea I've been championing for more than a year. I
appreciate the hospitality of the Schomburg Center in hosting this
historic event. There are many women and minorities in the media
industry -- many of you here today -- who are demolishing gender and
racial barriers and achieving new levels of corporate influence. Thank
you all for joining us to share your own template for success in this
dynamic and ever-changing sector, as well as perhaps some of your
failures. We can learn from both. Whether behind the microphone, in
front of the camera, in the boardroom, control room, or green room, we
need to see more women and minorities in all spheres of influence---
from production to management to ownership. Our distinguished moderator,
Erin Burnett, is a great example of this.

[Lack of Access]{.underline}

In our hearings across the country, it has become clear that one of the
primary hurdles women and minorities face in the broadcast industry is
the lack of access to financing. In fact, the National Association of
Broadcasters identified access to capital as "the largest roadblock to a
more diverse broadcast industry." While I have appreciated the accolades
by many for championing this forum, I want to set the record straight
and actually note that Former Chairman Wiley, along with Dr. Ben Hooks,
initiated a 1975 forum nearly identical to this one. They invited
representatives from the financial industry, broadcasters, brokers, and
advertisers. One of the real-world outcomes of their work was the Tax
Certificate program, which I continue to express interest in today. Just
last week, Senator Menendez announced that he will soon introduce a bill
to reinstate this tax certificate policy, and extend it to include
telecommunications (unlike the 1978-1995 version which only covered
broadcasting and cable.)

The FCC's Diversity Committee, MMTC, and many others have also
recommended these forums; and companies like Clear Channel have hosted
"fly in" meetings, where female and minority entrepreneurs can learn
more about the stations that Clear Channel is selling, and receive
training on due diligence, business planning, capital formation, and
broadcast regulatory issues. I want to applaud Clear Channel, not only
for providing this opportunity to potential buyers, but also for making
it a priority.

I am extremely pleased that today the FCC has re-initiated this
convocation and conversation, and I hope this will launch perhaps an
annual event, not only here in New York, but in other financial and
media centers like Los Angeles, San Francisco, Chicago, Dallas, and
Atlanta. Here, we bring to life tangible opportunities -- not merely
recommendations that sit on a shelf -- for real-world prospective female
and minority media entrants to meet with sophisticated and well-informed
Wall Street investors to discuss financing opportunities. This
conference is a very real first step-- and one that I hope we can build
upon -- toward the realization of our goal of promoting women and
minority broadcast ownership.

Why is this so important?

Because we value and want to encourage the diversity of voices and
opinions. We live in a country where women comprise more than half of
the population, and yet the rate of women in ownership and leadership
positions is strikingly low -- just 3.4% of radio stations and 5% of
full-power television stations. Only 7% of the directors of the 14
largest radio companies are women -- despite the fact that over 50% of
all radio station formats skew to female listeners. In television, less
than 5% of stations are owned by women.

The story is strikingly similar, yet even more dramatic, for minorities.
Minorities own 3% of all broadcast television stations and 7.8% of
commercial radio stations. Hispanics comprise 14% of the entire U.S.
population, but own barely over 1% of all stations nationwide. African
Americans comprise 13% of the entire U.S. population, but only own 1.3%
of all stations. Finally, Asians comprise 4% of the entire U.S.
population, but only own 0.44% of total stations.

These numbers are disturbing to me as a woman, as mother of a daughter,
as a policymaker, and as a consumer. They should be especially
disturbing for a city like New York, which has the largest
African-American media market and the second-largest Asian and Hispanic
media markets. The challenge before us is to find practical solutions to
meet the marketplace demand by advancing diversity among broadcast
owners *in concrete ways*.

The disturbingly low numbers of women and minorities is not just a
problem in the media and broadcasting industries. Overall, only 10
Fortune 500 companies are owned by women. In other positions, the trend
is more encouraging. There are 38 African-American general counsels
among the Fortune 500 companies, and 12 Asian Americans.

[Market Fears]{.underline}

Many of you may be wondering whether capital is still available for new
media entrants in the midst of a struggling economy. Rest assured --
opportunities do still exist for broadcast entrepreneurs, especially in
the mid to small markets, to acquire stations and outperform industry
growth. Although large radio markets are struggling across the country,
the small and medium markets are showing gains in revenue. This is also
true in television where station revenues in 2008 are predicted to rise
11% \-- a ten-year high -- due to the political advertising surrounding
the upcoming elections. Despite the inevitable risks for any
entrepreneurial venture, the broadcast market still promises investors
potential for great reward. I am very encouraged by the opportunities
still available for investment in broadcasting.

[Advertising Industry]{.underline}

I've been interested to see that advertisers have recognized the need
for increased minority involvement in their industry. According to a
recent *New York Times* article, 15 advertising agencies set forward a
plan with distinct goals, including being monitored for 3 years on
minority practices. Thus far they have met 24 of the 30 goals they set
for themselves in 2007. The 15 agencies originally aimed to have 18% of
total managerial and professional positions held by minorities. In
reality, that number reached 25%! I would love to see a number of media
companies step forward and commit to create such a voluntary program.
Perhaps that can be the next step, having the ad firms provide a
template and assist their media partners in adopting a similar program.

[Adoption of Diversity Order]{.underline}

In December of last year, the FCC unanimously adopted an Order Promoting
Diversification of Ownership in the Broadcasting Services. The
Commission adopted several specific initiatives to advance women and
minority ownership. All in all, thirteen items were adopted, but those
that are most significant in this setting include: (1) extension of the
timeline for construction permits, (2) revamping our own longitudinal
research studies so that we actually have data within the FCC, (3)
requiring non-discrimination provisions in all advertising contracts,
(4) development and creation of a guidebook on diversity, and -- another
initiative I strongly supported -- (5) modification of our Equity-Debt
Plus attribution rule, which too often caused potential investors to
cautiously avoid investments that might be combined to approach the
ownership limit. While December's Diversity Order does not repeal the
rule entirely, it relaxes the rule, allowing an interest holder to
exceed the 33% ownership limit without triggering attribution. These can
have both an immediate and lasting impact on improving opportunities for
minorities and women.

[Roadmap-MMTC]{.underline}

Last week MMTC unveiled its much-anticipated "Roadmap for
Telecommunications Policy." I applaud the continued excellent work of
this organization. The suggestions contained in this document --
legislative priorities and proposed FCC rules -- create a blueprint for
breaking down the remaining barriers to entry for minorities and women.
A few of the FCC policy suggestions include: share-time proposals,
extending EEO rules to all MVPDs and telecom carriers, rejecting *a la
carte* mandates, and a top to bottom reform of the Designated Entity
Program. (Just last week I insisted on applying the broadcast EEO rules
to SDARS licensees, a policy I believe will provide consistency among
radio broadcasters.)

Other public policy suggestions I continue to press personally are:

> 1\. Track investments and the performance of investments by gender,
> race, and ethnicity, as well as geographic location in all venture
> funded companies.
>
> 2\. Encourage investors to make diversity a priority in their overall
> portfolios. Encourage investors to have a positive impact on public
> policy, and make good investments by seeking out and considering
> investment in women and minority-led ventures.
>
> 3\. For those investors whose portfolios include family businesses, we
> can encourage them to establish a set-aside to assist women and
> minorities. Those who are females and minorities at the top of their
> firms should make this a priority-- from the top down\-- to value and
> invest in diversity.
>
> 4\. Create programs to educate and prepare women to lead fast-growth
> businesses -- whether high tech or not. This could even help add more
> women and minorities to the financial and investment sectors as well.
>
> 5\. Encourage and educate women and minorities to participate in the
>
> investment process through sponsor forums like Springboard 2000,
> sponsored by the National Women's Business Council and the Forum for
> Women Entrepreneurs. Springboard 2000 was the first ever venture
> capital forum to showcase women entrepreneurs. It was a national
> initiative designed to increase investment channels and facilitate
> deals for women-led companies. At the forum, the entrepreneurs were
> able to present their business plans to angel, venture, and corporate
> investors, and event sponsors. These women were introduced to funding
> opportunities that they may not have previously considered.
>
> 6\. Encourage and sponsor additional research to examine the process
> by which men, women, and minority-led ventures are screened by angel
> and venture capital firms, to determine if there are any differences.
>
> 7\. Enlist marketing experts, corporate coaches, as well as PR and
> image consultants to assist in helping borrowers/buyers present their
> "best case scenario."
>
> 8\. Encourage and sponsor research to examine the extent to which
> venture capitalists, angels, and limited partners (pension funds,
> endowments, and insurance companies) perceive investments in women and
> minority-led ventures as more risky investments- and then develop
> educational programs like the one we are holding today, for
> decision-makers to learn about success stories and mitigating
> risk-adverse decision-making.
>
> 9\. Encourage all states and large corporations to follow the lead of
> states like California, which sets aside funds for women and minority
> investments. California does this by utilizing funds from a pension
> fund to invest in capital venture funds that focus on minority media
> ownership. So far, eight Hispanic broadcast companies have benefited.
> Examples like this further emphasize the growing number of innovative
> programs states and companies can use to support women and minority
> broadcast companies.
>
> 10\. Establish internships to help women and minorities get into the
> pipeline so they can eventually be considered for leadership and
> ownership positions.
>
> [Conclusion]{.underline}

While I have laid out a series of suggestions, we are really here to
listen. I continue to believe that there are many other concrete ways to
advance women and minority roles in the media marketplace, and I look
forward to hearing from some of the "success stories" here today as well
as from those of you in the investment sector. Together, we can help
promote diversity at all levels of media, from management to ownership
to other spheres of influence; creating a media industry that reflects
the diversity of America.