UNITED STATES OF AMERICA

FEDERAL COMMUNICATIONS COMMISSION

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THE ADVISORY COMMITTEE ON DIVERSITY FOR COMMUNICATIONS IN THE DIGITAL
AGE

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MONDAY, SEPTEMBER 29TH, 2003

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The Advisory Committee met at the Commission meeting room at FCC
headquarters, 445 12th Street, N.W. at 2:00 p.m., Julia Johnson, Chair,
presiding.

[FAC MEMBERS PRESENT]{.underline}:

JENNY ALONZO

DECKER ANSTROM

ANDREW BARRETT

MATTHEW BLANK

MARIA BRENNAN

BENITA FITZGERALD-MOSLEY

A. ANTHONY GEE

STEVE HILLARD

DAVID HONIG

JAMIE HOWARD

JULIA JOHNSON

GINGER LEW

VONY MCCANN

FRANCISCO R. MONTERO

HENRY RIVERA

RILEY TEMPLE

LAUREN TYLER

TEDEMA USSERY

ALEX WALLAU

KELVIN WESTBROOK

ROSCOE YOUNG II

A-G-E-N-D-A

WELCOME

Chair Johnson 3

Chairman Powell 4

Commissioner Abernathy 9

Commissioner Copps 12

Commissioner Adelstein 18

MISSION DESCRIPTION AND GOALS

Jane Mago 30

DIVERSITY INITIATIVES AT FOX

Mitsy Wilson 50

SUPREME COURT CASES

Professor Abernathy 79

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

2:00 p.m.

CHAIR JOHNSON: Good afternoon, everyone. We want to go ahead and call
the meeting to order. We have a couple of preliminary housekeeping
matters. We have sign language interpreters available, if you need them,
at the press table. Please just let us know.

Also audio and videotapes can be purchased, and we will give you more
information at the end of the meeting, in that regard.

My name is Julia Johnson, I have had the privilege and honor of being
appointed Chair of the Federal Advisory Committee on Diversity in the
Digital Age, by Chairman Powell.

And I say honor, really, based upon the opportunity to work with him, in
this FCC that has shown a tremendous commitment to diversity. As I
reflect on the Chairman and his history as Chair, and some of the things
that he has done, he not only talks to the talk, he walks the walk.

From starting the FCC University, which promotes advancement and
training from within this Commission, to his personal mentoring, and his
support of the tax incentive programs, he has shown a purpose and,
indeed, a commitment.

So with that I wanted to turn it over to the Chairman for his comments,
as well as hearing from some of the other Commissioners, and welcome you
all here today.

CHAIRMAN POWELL: Thank you, Julia. It is my great pleasure to welcome
all of you here to the Federal Communications Commission today, it was
my sincere plan and hope that I would sit here for all two hours with
you but, regrettably, I have been asked by the President to come to the
White House to work on the Do-Not-Call Data Base.

Which if you have not read the newspapers, it has had a little bit of a
rocky week, and today we are going to sign legislation that will restore
some jurisdiction, and consider our next litigation steps in protecting
that important consumer event.

I will try to shake him off as quickly as possible and get back here to
work with you. I also want to thank all of you for being willing to
commit some time to public service.

And I say commit because it is our hope, and indeed our desire and
mandate, that this is not a ceremonial post, this is a working post,
toward a worthy and worthwhile goal. And so we thank you for your
willingness to serve.

And I also want to thank those who have been willing to lead,
particularly our most notable and honorable Chairwoman, Julia Johnson,
and the designated federal official, Jane Mago, and Maureen McLaughlin,
who will be working with Jane on this.

I particularly am glad to have Jane because in my six years here at the
Commission, Jane worked with me hard to try and find sustainable EEO
rules, and was instrumental in helping us develop positions on the tax
certificate proposals that we still hope, and urge, will find their way
through Congress.

I think this is a historical opportunity. Historical in this sense. It
is an opportunity to define and advance diversity at the ground floor.
And what do I mean by that?

I have often said, in speeches, that I think this country has passed
through two great economic revolutions, and is at the precipice of the
newest. The agricultural revolution, the industrial revolution, now the
information age.

And I think that for lots of reasons very few of us, or our ancestors,
had any opportunity for meaningful participation in either that
proceeded us. As I\'m fond of saying, you know, I don\'t know about you,
but my ancestors were picking cotton in the agricultural revolution. And
in the industrial revolution they couldn\'t even use the same restroom.

This is the first powerful economic opportunity for this country to give
true meaning to its creed in the context of economic empowerment, and
that opportunity is in the information age.

And so I\'m extremely excited about that. And if we are worthy to our
task I think we can make, when our children look back on this era, it
will be a much more proud one, than shameful one.

I also think it is important that we work for results. I have been part
of diversity initiatives time, and time, again. I\'m looking around at
the table at people I have seen participate time, and time again.

Results are much harder to produce than words of encouragement. They are
easy to come by. Results require top minds engaged in a sustained effort
who are willing to think creatively and constructively towards
solutions.

This group was built for success. It was built with that in mind. And I
think what we have done is assembled an extraordinarily strong group of
leaders who not only have enjoyed great personal professional success,
and have much to teach in that regard, but have a proven record on
bringing diversity to organizations which they have been involved in.

And it is our hope to have those experiences exported to this process
and give us a tangible basis to understand what works, and what
doesn\'t. I also think we have committed to a sustained effort. It is
easy to hold a hearing, everyone could come for a couple of hours, and
we celebrate the goals and objectives, close the hearing down and go
back to work, and very little changes.

We made a committed decision to create a team that would be able to work
on this in a long, sustained, and committed way. To work through those
thorny problems, instead of just identify them. So we have committed our
resources, our staff, and our time, to that lengthy and important
effort.

And creativity, lastly, I think is the most important thing that we can
achieve. We want advancement, and ownership employment and advancement
within employment organizations.

And I think one of the things that we have to do is look for new, and
tried, and true solutions for that. You know, I continue to believe that
while I hope and pray that everyone has a good heart, I don\'t want to
count on it.

I want to be able to convince American corporate culture that diversity
is a business imperative. You can\'t afford, in the modern era, not to
be a diverse organization. You will be the loser in the marketplace if
you are not a diverse organization.

You are a bankrupt government agency if you are not willing to promote
the important objectives of an ever diverse national society. And I
think that what we are going to try to do is take the experiences from a
cross section of the industry, and we invited membership from other
industries, to help us figure out how to make that case, engineer that
case, and advance that case as greatly as possible.

As well as to emphasize that diversity at the personal level is a matter
of attitude, a matter of leadership, a matter of management commitment,
and that it is never successful if the people involved are not willing
to personally make an effort, in a day in, day out way, to advance
diversity within their own spheres.

So with that I\'m not going to take much time, you all have a lot of
work to do, and I\'m proud to be associated with this, and I\'m proud to
have it assembled here. And when I get done with the big guy I will get
back as soon as possible.

Thank you, Julia, I appreciate it.

CHAIR JOHNSON: Thank you, Mr. Chairman. Next we will have opening
remarks from Commissioner Abernathy.

COMMISSIONER ABERNATHY: Thank you. Well, now that the Chairman is
leaving I guess I don\'t have to say anything nice about him. But I
will, anyway.

This has long been a vision of the Chairman. And he has some very real
ideas about how he wanted to see it implemented, which I thought was
great. And then to have such an outpour of positive response from the
industry, at the highest level.

I was talking to some of the folks. I know you guys have nothing else,
guys is generic, just so you know, have nothing else to do. And actually
the commitment that you are willing to put aside other projects and come
to help with this is critical.

Because, frankly, we need the best minds, as the Chairman said, working
on this. So I\'m very, very thrilled to see all of you here today, and
to appreciate at what high level you decided that this is important and
something that you want to focus on.

Typically our focus on equal opportunities has been limited to
employment opportunities within the media sector. And I think it is time
to reach beyond these traditional limits and cross new boundaries, into
new areas.

So this industry serves a diverse community, and it will clearly benefit
by having diversity represented in ownership. And maybe even more
importantly, there can\'t be that many owners, there can be a lot of
managers out there, all across the country. And we need to find ways to
move people up from all aspects of society, up through the ranks.

How do you cultivate the talent that is out there, and provide the
opportunities? I had the wonderful opportunity of being at the Walter
Case dinner in New York a couple of weeks ago, where Decker was honored
for his commitment to diversity.

And I think Decker, you and everyone on this Committee, and Julia, have
worked to create, already, opportunities in their own businesses and
their industries for people.

But as Decker pointed out, it took someone who is willing to take a
chance on him, when he was untried and untested; same for me, I needed
people who were willing to take an interest in me, and bring me along.
And I bet it is probably true of everyone in this room, that there are
certain key individuals in our careers who, but for them being there and
helping us, and guiding us, we wouldn\'t be where we are today.

So it is time for us now to figure out how we can continue this process,
and take a chance on other new talented people who are, perhaps,
untested, but we need to bring them along.

So through the leadership of Julia Johnson, and I have no doubt that
this Committee will put together best practices that will promote broad
and diverse opportunities for all levels of the communications sector,
when you combine Julia\'s energy and drive, and commitment, and passion,
with the similar drive, commitment and passion of everyone in this room,
then the results that the Chairman was talking about, which is different
than sitting around and just talking, it is actually delivering; I have
no doubt that you will be able to deliver.

So I want to thank you for coming today, I will tell you that I will be
dropping in and out, because there are some people who come in for
meetings from out of town, and I\'m trying to meet with them at the same
time that I\'m spending time here today.

And I, again, can\'t thank you enough for taking the time to come here
today and share with us your ideas and your thoughts. And, again, making
the long-term commitment to these efforts. Thank you.

CHAIR JOHNSON: Thank you, Commissioner, thank you for your commitment
and your service. Next we will have opening remarks from Commissioner
Copps.

COMMISSIONER COPPS: Thank you very much, Julia, and thanks to all of you
who are dedicating your time and your energy to this.

I really am honored to be a part of this today. I see some old friends
around the table, and some folks I don\'t know so well, but I\'m looking
forward to getting to know better, as we work our way through this.

This issue of diversity is so important for our country. You know,
we\'ve come a long way in the last 40 years, there is no gainsaying
that. But it is kind of awe inspiring to think about how far we still
have to go.

And one thing that can help us get to the promised land of equal
opportunity for all is making certain that the dynamic and liberating
new technologies of the digital age are, indeed, available for every
American citizen, no matter who they are, where they live, or what their
economic circumstances might be.

And I really think it would be the tragedy of our era if we allow these
liberating new technologies of the digital age to become the province,
or the property of the few. I don\'t think history would ever forgive
us, nor do I think history should forgive us if we let that happen.

Right this minute, looking at it realistically, I think the cards are
stacked against really significant growth in minority communications
ownership. I saw that when I went around the country with Commissioner
Adelstein, holding hearings on localism, and diversity, and competition,
in the context of media ownership.

And I will spare you my speech on that today. But the conclusion I took
away from it all was that there really cannot be a wide-ranging
diversity of viewpoint, or diversity of programming, or diversity of
employment, unless we have more, much more in the way of diversity of
ownership and diversity of control.

How you get there against the reality of concentration, I don\'t know.
But I do look forward to seeing your recommendations on how we are going
to accomplish that.

This year marks the 25th anniversary of the FCC\'s statement of policy
on minority ownership of broadcast facilities, that was 1978. And in
that statement the Commission said it is apparent that there is a dearth
of minority ownership in the broadcast industry.

Well, a quarter of a century later there still is, and dealing with it
isn\'t going to be a whole lot easier. But today we initiate a group
that can help us develop new tools, maybe whole new approaches to
promoting diversity.

And I commend Chairman Powell for forming this group, and all of my
colleagues for being here today to encourage it. I\'m pleased with the
comments the Chairman made today, and the other day at NABOB about the
resources, and the priority that will be accorded to this Committee.

From my days at the Commerce Department, where I had responsibility for
administering some 20 advisory committees with the private sector, I
know first-hand that we can benefit tremendously from the work and the
innovation that you bring.

I can also give you, from my experience at Commerce, one or two of the
ingredients and the recipe for Advisory Committee success. A successful
committee develops its own list of priorities. I urge you to do that.

It formulates a plan for action and deliverables. It takes some early
votes, not just to keep itself viable, but to impart a sense of purpose,
and a sense of direction.

It thinks creatively and acts aggressively to push the Commission to
take steps to advance diversity among our communications sectors. The
committees which achieve success demand attention. They work toward
early action, and sometimes they are even a thorn in the side.

They think both broadly and with focus, understanding that the broad
policy background is fair hunting ground, just as taking smaller steps
is important, too. And with a problem this rampant we need action, both
at the 40,000 foot policy level, and down on the ground.

Not every group is represented here today. Each of us might have chosen
members somewhat differently. But I am sensitive to the fact that you
cannot have everyone sit as members of the table of the committee, or it
might become unwieldy.

That being said, there is a broad range of talent, and voices, that you
can draw on, and which I think you have a responsibility to draw on. And
I would urge you to reach out to those at public interest groups, and
civil rights organizations, and unions, and a whole diverse range of
other interests.

And I\'m optimistic on this score because who better than you folks
around this table, who have been laboring in the vineyards for so long,
know how to do that; nobody knows how to do that any better.

So I hope you are excited about your role helping us to achieve our
goals. I want to tell you how much we appreciate your commitment of time
and resources to give us a real sense of direction.

I want to work closely with you, and listen to your input, and listen to
your advice, so I thank you, again, for your contribution of the public
interest, and I hope that together we can address the challenges ahead
in a manner that best serves the American public.

My door is always open, and I\'m always available. We just have to get
this right. I have said before that America will succeed in the 21st
Century not in spite of our diversity, but because of our diversity.
Diversity is this country\'s greatest strength. It is not a problem to
be overcome, it is an opportunity to be taken advantage of.

And our communications industries, and out other telecommunications
industries need to reflect this diversity and to nurture it. I look
forward to working with you to make that happen.

CHAIR JOHNSON: Thank you, Commissioner. Commissioner Adelstein?

COMMISSIONER ADELSTEIN: Thank you, Julia. And thank you all for your
commitment in being here. I know we have a busy and impressive group of
people here, and it means a lot to us that you are taking time out of
those schedules to try to help us address this incredibly difficult and
daunting issue that we have in front of us.

We need to have a very serious examination of this issue, and I don\'t
think we could come up with a group that could better do that. We\'ve
got to advance minority ownership, and participation at the highest
levels of management in broadcasting, in all the fields of
communications that we have jurisdiction over.

And we can learn from other areas of the economy about how that can best
be accomplished. So I want you to know that I certainly pledge my
support to making sure that you have all the resources of the Commission
that you need, all the attention that you need to get your important
work done.

And I join my colleagues in expressing that. And I know that the
Chairman feels that way, as well. I\'m very pleased that the Chairman
decided to pull this together. This was a reflection of his
long-standing commitment to these issues, and it is interesting the
timing of it.

I mean, I can\'t help but notice that this appointment comes on the
heels of this summer\'s media ownership order, and we are talking about
this against the backdrop of what is certain to be further media
consolidation in an area where I think the media is already highly
concentrated in many of its sectors.

But I try to remain an optimist, you know? I don\'t want to just dwell
on the negative. I mean, you need to help us find creative ways to break
out of this, to get beyond that.

Even in the context of that, or if you want to recommend changes in
that, it is always a beautiful thing that God created, called
reconsideration. Or somebody. There are many Gods. I don\'t know who
created that one.

But I figure you will help us to explore barriers, and to find out what
it is that is in the way of dealing with this problem. Because
minorities and women have been underrepresented in the use of our
nation\'s airwaves for far too long, probably from the very beginning,
since we\'ve taken statistics.

Certainly radio deregulation in the 1990s only made things worse, was
another setback for minorities in broadcasting. It allowed them, in the
radio field, to face even higher costs, more concentration, fewer
opportunities to have their own voices heard.

So you look at the numbers, minorities represent more than 29 percent of
the United States\' population, but they own a mere four percent of the
nation\'s commercial radio stations, and 1.9 percent of the nation\'s
commercial TV stations.

That is the lowest level of ownership, ever, since we\'ve been taking
statistics. So, clearly, we have a problem, that is why you are here,
that is why we need your input so desperately, and I\'m so glad we are
going to.

You know, the issues of raising capital, where it all goes back, I think
back to 1982 when Henry Rivera had a committee that identified access to
capital. And financing is the biggest single obstacle to advancing
minority ownership of the media. And, guess what? Nothing is changed.

Same problem today, still there. The more things change the more they
remain the same. But we also need to have more reliable data about what
the problems are, and a deeper understanding of the causes and effects
of consolidation on minority ownership, minority employment, and how
minorities are portrayed in the media.

And I think maybe the FCC needs to do more of its own data gathering. We
have, the NCIA gathering the data for us on broadcast outlets, on
licensees, how many of them are owned by minorities. We are the agency
that gives out these licenses, we are the agency that maybe should be
doing more to try to keep track of how much progress, or lack thereof,
we are making on this issue.

But to go back to the positive side, I think that we all have to work
together, so closely, on this. And I really want to work, every step of
the way, with all of you on this.

And as Albert Einstein once observed, in the middle of difficulty lies
opportunity. Think about the opportunity side. The Supreme Court
recently affirmed that promoting diversity is an important governmental
function.

And that opens a whole range of opportunities for us to relook at how
we\'ve considered these issues, and we need your input on that. Because
that is a whole new field that we can look at.

So I\'m really looking forward to your recommendations. I\'m impressed
with the caliber of this committee\'s membership, and a number of great
minds, I think, were appointed here. And Julia, of course, a terrific
leader, very experienced, and she brings a wealth of information and
background to this new role.

And we had a chance to speak, a little bit earlier, about how I think it
is so important that you get outside of the Beltway, and outside of this
room, and out into the countryside, as many of you can, as Commissioner
Copps and I did on the media ownership proceeding.

We learned so much about what was happening out there by really
traveling to the country, and taking it on the road, and hearing as big
of a group as you can get out, or small of a group, spreading out.

We sometimes would split it up and one of us would head to San
Francisco, one of us would head to LA, but we would cover as much of the
country as we could, in the short period of time we had.

And each and every stop that we made we learned something new. And that
factored into our consideration of that important issue. And I think it
really was a great benefit.

So I hope that you will do that. I know that Julia is committed to doing
that, and is looking forward to trying to get out there, and really get
that kind of input.

You know, there is other groups that need to be consulted very closely,
that you can do, whether they are on the committee or not. There is
labor, civil rights, and other public interest groups, that you really
need to reach out to, and to get their input from, and to ensure that
they are an integral part of this process, on the subcommittee level,
and the full committee level, out on the field, not just their leaders
here in Washington, but their members out across the country.

And there is all kinds of interests that we have to consider, Hispanics,
African-Americans, Native Americans, all of them need to have their
ability to really get their input before you, and through you to us.

So there is a broad pool of talent here led by an able Chairman, in
Julia Johnson. And she has assured me that the committee will call upon
a broad range of people, and a broad range of groups, and really do the
outreach that is necessary to bring us the kind of information that we
need to turn this situation around, in the face of the kind of daunting
obstacles that Commissioner Copps I think so articulately identified for
us.

So, like my colleagues have before me, I implore you all to really come
up with concrete steps, real things that we can do in the face of this,
creative ideas that are outside the box, things we might not have
thought of.

Sometimes the obvious, things that we should be doing, like gathering
better data ourselves. It was a long time coming getting you here, and I
want to take full advantage of the opportunity that we have before us in
your presence here today.

So my door is always open, I really want to hear from you, I want to
work with you, and I\'m really looking forward to a successful outcome.

CHAIR JOHNSON: Thank you, Commissioner. I would like to thank all of the
Commissioners for their opening remarks, and I know Commissioner
Adelstein and I had the opportunity to briefly have some discussions.

We would like to make sure that we are communicating with all of the
offices, and taking those ideas, and incorporating them into our work,
as we move forward. Your being here today shows a commitment, and a
focus, and we are very appreciative of that, and you may be hearing
quite a bit from us.

So we appreciate your time, and your interest, very much. I think I will
start where Commissioner Adelstein, one of the comments that he made
with respect to reminding us that racial and ethnic minorities comprise
about 30 percent of the U.S. population.

And when you look at the current labor market data it indicates that 80
percent of new jobs will be filled by women, and minorities by the year
2010. And that by the year 2020 women will make up more than half of all
workers, accounting for 60 percent of the total.

So when we look at our work, and what must be done, we understand that
it is not philanthropic, it is not socialistic, it is about having a
competitive edge, it is about economic development, it is about
opportunities, but not just opportunities for women and minorities, but
opportunities for this nation to be a greater nation.

And I say those, and we reflect upon that, as we think about the impact
of providing those opportunities in the context of the communications
sector. The information economy is making the global economy even more
relevant to us every day.

Different views, different perspectives are more powerful than they have
ever been in the past. This is our real opportunity to make a
difference, to ensure that the nation continues to be the leader that we
are, and to continue to promote ourselves, our being, our economy, and
keeping that on the right track.

And with that I thank you all for your service, and one of the things
that we wanted to do, because a lot of people, as we were entering into
the room, while we have a lot of old school players around the table,
that we will all look to everyone in the new room new ante. That is
clear.

And it is because of his wisdom, and it is because of all of the work
that he has done, over the years. But everyone did not know everyone
else. So one of the things that we wanted to do with this particular
time, is to just go around the room, introduce ourselves, and that will
be important for the camera, and those people that are watching from the
digital community, as to who we are, and simply stating your name, and
your title, would be quite helpful.

Towards the end of those introductions I will announce the subcommittee
chairs, as it relates to the subcommittee work, Jane will go through the
substance of each of those committees, and we have a full agenda that we
will walk you through.

Towards the end we will have time for questions and answers from the
Board, and we will move forward from there. So if we could start with
Jenny?

MS. ALONZO: Good afternoon. I\'m Jenny Alonzo, president of NAMIC, the
National Association for Multiethnicity in Communications.

MR. ANSTROM: Good afternoon, I\'m Decker Anstrom, the president of
Landmark Communications.

MR. BARRETT: And I guess I\'m that old, dilapidated, former
self-important person, Andrew Barrett.

MR. BLANK: I\'m Matthew Blank, Chairman and Chief Executive Officer of
Showtime Networks.

MS. BRENNAN: I\'m Maria Brennan, Executive Director of American Women in
Radio and Television.

MS. FITZGERALD-MOSLEY: Good afternoon, I\'m Benita Fitzgerald Mosley,
I\'m the President of Women in Cable and Telecommunications.

MR. GEE: Anthony Gee, partner, Carthage Venture Partners.

MR. HILLARD: Hello, Steve Hillard, with Council Tree Communications.

MR. HONIG: David Honig, Executive Director of Minority Media and
Telecommunications Council.

MR. HOWARD: Jamie Howard, Chief Operating Officer for BigBand Networks.

MS. LEW: Ginger Lew, CEO, Telecommunications Development Fund.

MS. WILSON: Mitsy Wilson, Senior Vice President, Fox Entertainment
Group.

MR. YOUNG: Roscoe Young, Chief Executive Officer, and Chief Operating
Officer for KMC Telecom.

MR. WESTBROOK: Kelvin Westbrook, President, CEO, Millennium Digital
Media.

MR. WALLAU: Alex Wallau, President, ABC Television Network.

MR. USSERY: Terdema Ussery, Chief Executive Officer of HDNet.

MS. TYLER: Lauren Tyler, Partner of Quetzal/JP Morgan Partners.

MR. TEMPLE: Riley Temple, a partner in the firm of Halprin and Temple.

MR. RIVERA: Henry Rivera, I\'m a partner in the firm of Vinson & Elkins.

MR. MONTERO: Francisco Montero, from the law firm of Fletcher, Heald &
Hildreth, and executive director of the Independent Spanish Broadcasters
Association.

MS. MCCANN: Vonya McCann, Senior Vice President of Sprint Corporation.

MS. MCLAUGHLIN: Maureen McLaughlin, chief of staff, OSP.

MS. MAGO: I\'m Jane Mago, I\'m the Chief of the Office of Strategic
Planning and Policy Analysis at the Commission, and also the designated
federal officer for this committee.

CHAIR JOHNSON: Thank you. And let me, quickly, before Jane goes into her
presentation, announce the subcommittee chairs. We will have four
subcommittees. We will anticipate membership between eight and twelve of
each of those committees, made up of a broad range of backgrounds, and
expertise.

The first subcommittee, New Technologies, will be chaired by Mr. Roscoe
Young. Roscoe, thank you. The second subcommittee, Financial Issues,
will be chaired by the esteemed Andrew Barrett.

The third subcommittee, Transactional Transparency, will be chaired by
Steve Hillard. And fourth, the Career Advancement, will be chaired by
Jenny Alonzo. And you will be hearing more about the work of each
subcommittee, so that you can kind of decide which would be most
appropriate for you to serve during the course of Jane\'s presentation.

And I\'ve already had one question, Jane, from someone as to whether
they could serve on more than one committee, and have access to the work
of more than one committee. So with that, Jane?

MS. MAGO: Thank you very much. I have a PowerPoint presentation that
I\'m trying to get through here. I\'m not the most technologically savvy
person, so if it doesn\'t work just smile, anyway.

From the folks on this side of the table, the monitors will have it, for
the others it will be up on the screen.

Let\'s try and see if this works. I\'m going to just be talking about a
broad overview of how we anticipate that the Advisory Committee is going
to work.

As you all know, you are the members of the Executive Committee, the
main body. This is the body that when you get together and meet, you
will be meeting in public meetings, primarily in this room.

Our meetings are on the record, they are open to the public, and there
will be a record that will be kept of those meetings. We anticipate that
they are going to be screened on the website for the Commission.

There is a website for the Committee, the citation for which is right
here on this page, where we will be having the repository of the various
documents that are associated with the Committee. That should be up and
running at this time, I hope. It was supposed to have been.

Beneath the Executive Committee, we will be functioning with,
anticipating four subcommittees. These committees are focused on the
areas that we think are most important for us to try to develop answers,
and solutions, and recommendations, and best practices.

And those subcommittee meetings will be in addition to members from the
executive committee, we will anticipate having others who have come
forward, and asked. And as we form, over the next few months, next
month, two weeks, whatever, the subcommittees that we will be adding
members who are not members of this executive committee, that will help
us to enhance our expertise, and bring additional knowledge and
perspectives to the organization.

We anticipate that the subcommittees will be members of about 12 in
size. They need to continue to be workable, but they can also accept
information and inputs from additional people, from the public, and we
would be working together.

I will be working with you to get those going. The four that we have are
the Financial Issues, as Julia said, Transactions, Career Advancement,
and New Technologies.

I will be talking, a little bit more in a few minutes, about exactly
what that means. I thought I would pause, for just a moment, and talk
about the duties that we have for our committee members.

As we have said the Committee Chair is Ms. Julia Johnson, who I\'m
honored to be able to work with. Her duties include working with me, and
with Maureen, who is the alternate designated federal officer for this
committee, to establish the priorities, and identify the issues to be
addressed by the Committee; to make sure that we are continuing to work
forward; to serve as the focal point for the Committee membership.

As questions arise, questions can come both to Julia, they can come to
me, and we will make sure that the questions are answered. It is also
her responsibility to establish the subcommittees,a nd name the chairs,
as you understand that she has just done.

And it is her responsibility to conduct the committee meetings, and she
is doing an able job there. The role of the designated federal officer,
as I said, I\'m the designated federal officer. My chief of staff,
Maureen McLaughlin is the alternate.

Our duties include getting, calling the meetings and approving the
agendas. This is by statute under the Federal Advisory Committee Act. It
is the obligation of the designated federal officer to approve all of
the agendas.

We will be here for all of the meetings, and working with you, and
looking forward to doing that. We may have to chair, or close the
meetings, as necessary, although I\'m anticipating that Julia is going
to be handling most of that.

We are responsible for maintaining the records, and the documents, all
of those documents, including those that might be generated in the
subcommittee. We will be keeping those on file here at the Commission,
and making them available on the website, so that this is an open and
transparent process.

I want to take just a minute, if I can, right now to thank the members
of my staff, and the Office of Strategic Planning, who have been working
their tails off, quite frankly, to pull this meeting together.

Erin Boone and Sherille Ismail have helped enormously in pulling this
together. I also want to thank Chuck Needy, and Jerry Cornfeld. I don\'t
think they are here at the moment, who have done an enormous amount of
work helping to organize the many, many people who came forward, who
wanted to participate in this committee, helping us to organize, keep
track of everyone, and having a process so that we could make some
reasonable choices. And they have been absolutely invaluable.

I thought I would take a minute, before we get into the specific work of
this committee, and take a look back for just a second. This is my prop.
This is the report of the Advisory Committee on Alternative Financing
for Minority Opportunities in Telecommunications, that was give to the
Federal Communications Commission in 1982.

I will pause for just a second and thank Henry Rivera, who was the Chair
of this Advisory Committee, and helped pull this document together. It
is a very well done document. This will also be available on the
website, so that if anyone wants to go back and look at this, I would
advise that you do that.

It has some very good background and materials for how we can go about
doing this. As the title indicates, the focus of this committee was on
the financial issues. And looking, specifically, at those issues.

This committee will be focused a little more broadly. We are going to be
looking at financial issues, but we are also going to be looking beyond
that. We want to focus on career advancement and opportunities to
participate in new technologies, as they go forward.

So our focus is a little bit broader than it was in 1982. It is also
important to recognize that the legal landscape has changed
significantly since 1982. And so that is one of the reasons today we
have Professor Charles Abernathy, from Georgetown Law School, is going
to be talking to us, and he is going to give us an overview of where we
are.

He just came in. We have a place saved for you, or you can wait back
there. And he is going to be talking to us, and giving us an overview of
where is the legal landscape applicable to our task. I think that is the
tone and the information for what we have to do going forward.

One thing, as Commissioner Adelstein recognized, in his presentation,
that hasn\'t really changed, there is still a need for information, a
very dramatic need for information, and to have a process that
facilitates that flow of information to everyone, so that all can
participate in this process.

And that is something that we have to keep working with as we go
forward. So what do we have going forward? We are looking forward to
what is the mission of this committee.

The mission of this committee is to make recommendations to the
Commission regarding policies and practices that will enhance the
ability of minorities and women to participate in the telecom
industries, and our related industries.

Specifically we want to try to develop strategies that enhance
participation and the transactions, that include timely knowledge of the
potential transactions, and necessary access to capital.

We also want to find ways that we can encourage increased educational
training and information, that gives opportunities for minorities and
women to be able to move into the upper level management and ownership
of companies.

And we want to enhance participation and ownership by these groups, and
new technologies, as the new technologies develop, and where they are
coming. Those are going to be the focuses of the group.

What is the product of the group? In its simplest form the product is a
final written report that gives a description of the best practices that
we will find for promoting diversity in the communication sector, that
has specific recommendations on guidelines, incentives, regulations, or
other policy approaches, that will promote diversity of participation.

Also providing and informing the Commission with supporting data, and
information. That sounds awfully cold, but in some ways this is one of
the key pieces of what the work of this committee can do.

The Commission will take the recommendations of this committee, not just
the final report, but interim reports as we go along, and interim
recommendations, and take and evaluate those.

But the job of the FCC is going to be to put that into the Agency\'s
processes, and we are guided by the Administrative Procedure Act. We
have to follow all of the procedures in looking to adopt rules, and to
move forward.

And so the work of this committee, the more thorough the work of the
committee, the better it is for when the Commission takes that and
considers the next steps, as we go along.

I will also be noting that the recommendations don\'t have to be limited
to initiatives that the Commission can make, and I will go through that
as I talk about each of the committees.

There may be things that companies can adopt through best practices on
their own, there may be legislative initiatives. The Chairman mentioned,
earlier, that we\'ve had a commitment to trying to move forward on
revised tax initiative program to try to move that forward, and perhaps
we can come up with other legislative approaches that may be helpful
towards the goal.

So how do we get there? We are going to be getting there through
forming, and working in the subcommittees. Those meetings, we anticipate
that those meetings will start right away. Moving forward, I\'m going to
be talking with each of the subcommittee chairs, and populating the
subcommittees, and moving forward with schedules that we are going to be
yet moving along.

I would like each of the members of the Executive Committee, if you
listen to this, if you want to indicate that you have a particular
interest in one of the subcommittees, if you would indicate that to me,
that would be the most helpful way to do that.

Also if you are interested in more than one, let me know. We will use
you as much as you are willing to let yourselves be used. So we will
employ your talents as best we can.

We are anticipating that the next full committee meeting will be on
January 26th. I have blocked the Commission meeting room, and blocked
the Chairman\'s schedule, and I will tackle him if anything else happens
with it.

And I hope that all of you will put that as a target date on your
calendar, so we can give you a little more warning of when to be here.
At that time I anticipate that we will have subcommittee progress
reports, initial assessment of the lay of the land, if you will.

Looking at some of the best practices, looking at the problem areas, any
initial recommendations that you may have. We are looking for, roughly,
May 2004 for an interim report that will move us along, and go from
there.

That is the broadest view. Let me take just a minute to go through each
of the subcommittees. Identifying the objectives for the subcommittee on
Financial Issues, we want the committee to asses current practices
regarding access to capital, to identify the obstacles that are
addressed by minorities and women in the telecom industry, to develop
recommendations, and identify best practices to address those obstacles.

And I want to emphasize this last point, and this is going to be on
every slide, which is that we should focus on industry specific level,
looking at different pieces, the media side, the telecom side, but also
those that extend across all of the industries.

I think sometimes we tend to be focused on media issues, or focused on
the telecom world. And the purpose of this committee is to look broadly
at all of the issues. We are not just going to be focused on the media
side of things, and not just focused on the telecom side, but rather
looking to cross all of them.

And so for each of the subcommittees I want to emphasize that it is
important that we keep that perspective, and not get bogged down in one
side of the industry.

Again, emphasizing that the recommendations that come out here can be
recommendations that include regulatory initiatives, private
initiatives, legislative initiatives, other types of things.

The Chairman has charged the committee to be as creative as possible.
Let\'s not just go with the tried, and what has been done in the past,
let\'s try to be creative for the future.

The Subcommittee \-- we have been calling it the Transaction
Subcommittee because I couldn\'t fit all of these words in my little
boxes before. But it is really Transactional Transparency and Related
Outreach.

That is the name of the subcommittee, and it will be assessing practices
of how potential investment opportunities are identified, and how that
information is disseminated.

We want to identify what enhancements, or additions, are needed, and
develop best practices there, again, as to what might be done in order
to increase the participation of minorities and women.

Focus, again, beyond any one particular sector of the industry, but
focus on making sure that we know that there is that type of
transparency that is available to all.

This is one area where we do have a specific direction from the
Commission, in the media ownership order, paragraph 52, the Commission
directed the committee to determine how best to ensure that interested
buyers are aware of broadcast properties for sale.

And it specifically asks the committee to make this one of the
priorities for the committee to go forward. So this, for this
subcommittee, we want you to take that charge very specifically, and to
be able to move forward on it.

Subcommittee on Career Advancement. Again, assessing what executive
training programs are available, and other career development,
identifying best practices, focusing across the industry.

Here I want to be very clear about this, that this is not to be looking
at the Commission\'s EEO rules specifically. We have a proceeding that
is outstanding, that is on reconsideration. It is not the function of
this committee to take specific stances with regard to pending dockets
before the Commission.

But rather to try to go on a going forward basis, looking at where we
should be going. And the focus here is on advancement at the executive
levels, where we think that that is where there can be the most done, in
terms of opportunity, and advancing towards ownership, and towards
greater diversity in the sector.

New Technologies \--

\[END OF TAPE ONE, SIDE ONE, BEGIN TAPE ONE, SIDE TWO.\]

MS. MAGO: \-- opportunities as new and emerging technologies develop.

Consider, for example, what broadband digital television, cable
television, low power TV, as each of these, as the convergence goes
forward, is there any new areas where we can try to promote
opportunities for minorities and women. And we want to develop those
recommendations and have them be available.

All right, this is my conclusion. When you are limited, a little bit, in
your graphics that you can come up with, you have to have ones that you
don\'t get sued for taking something.

Anyway, thank you very much for agreeing to serve on this committee. I
think that we will, if there are any specific questions we can take
them, for a couple of minutes, but then we need to be able to move
forward, and our speakers have limited time.

(Question off mike.)

MS. MAGO: The question was related to other people in the Commission,
would we be able to get access to some of those, and we will facilitate
that, and make sure it happens, yes.

PARTICIPANT: (Off mike) and I think it is important, with those people,
to be able to, as long as we go through you, we ought to be able to at
least have them, maybe at a subcommittee meeting, or something.

MS. MAGO: Absolutely.

PARTICIPANT: Thank you.

MS. MAGO: Ms. Mosley?

MS. MOSLEY: I was wondering if there was a time frame for the committee
to finish its work? I see that there is an interim report in May, but
any time after that?

MS. MAGO: The committee has a two year life span, according, and that is
set by statute, that is the Federal Advisory Committee Act. And so we
established the interim report as May, and thought that we would be able
to look forward from there, and see.

We don\'t have to take the full two years, and hopefully we will be able
to move forward before then.

PARTICIPANT: (Off mike) \-- to comment on the overall breakdown in the
subcommittees, how much priority setting will the Executive Committee
do, versus this charter, and within the subcommittees themselves, are
they free to prioritize what they are going to do?

MS. MAGO: Absolutely. Within, we had made recommendations on the
subcommittees, in order to have a manageable workload, that will be able
to go forward, and to work with this, and we identified the areas.

But the subcommittees themselves, the members, I\'m hoping will be able
to come up with ideas if they think that there are things that we have
not thought of, it is certainly something that we ought to be able to
discuss and address, and do.

PARTICIPANT: I would just underline the importance of that, because you
folks have a lot more experience in this than we do, and it could be our
little boxes are wrong, or there is an outstanding one that is not
included, I\'m a little surprised to hear that EEO will not be a
consideration of this, because there is pending docket, because we have
a lot of pending dockets.

But I think we ought to have some sort of input and discussion of where
that may fit in, and I would hope that that would be in one of the
subcommittees, or better yet, at this full executive committee.

But as I tried to say in my remarks, I hope you will kind of take the
bit in your mouth and run with this, and prioritize it. (unintelligible)
and let\'s make sure your priorities are the priorities we are talking
about here.

CHAIR JOHNSON: Riley?

PARTICIPANT: Jane, I have a question about resources. I note that soon
we will hear from Professor Abernathy on the legal landscape. I do feel
that in some ways we are treading in a legal minefield.

And my question is whether or not we will have access to expertise like
Professor Abernathy\'s, as we proceed?

MS. MAGO: We will endeavor to have as much expertise as needed. And,
again, some of this comes from within the committee itself, too. And we
have a good deal of expertise among the folks on this committee, which
is why many of you were selected, to be able to help provide us with
that kind of background. But, yes.

PARTICIPANT: If I understood you (off mike) individuals who are not
members of the Executive Committee, but may participate in the
subcommittees?

MS. MAGO: Yes.

PARTICIPANT: And will that be decided at the subcommittee level, when
the subcommittees first convene, will there be deliberation over whether
additional individuals should be invited to participate in that
subcommittee?

MS. MAGO: What we anticipated, in order to have a process that will move
us forward, is that we will work with the subcommittee chairs to try to
populate those subcommittees. And, again, some of this depends on
getting the interest of the members of the Executive Committee in
knowing where you want to be.

I have an enormous number of people that have come forward trying to
volunteer, and to be helpful, and we are anticipating trying to get as
much of that in there as we can.

PARTICIPANT: Jane, as I read through the information you sent, over the
weekend, it said that the budget is 10,000 dollars for the committee,
and I wanted to know if there was any flexibility in that?

MS. MAGO: By and large this is the government, we are here to help. By
and large the money that was there for the budget is to cover things
like our copying costs, and all of the pieces here. We don\'t have a lot
to spend on other things.

CHAIR JOHNSON: Any final questions?

(No response.)

CHAIR JOHNSON: In going back to the one question regarding the input of
others in the form of experts, I would envision that as perhaps being
the kind of subject matter experts that we would list, and delineate, so
that people would know who would be providing input to the group.

They wouldn\'t be voting members of that committee, but we could,
indeed, have a lot of input through our subject matter experts, or
committee advisory group, that kind of thing.

And with that I think we are going to move forward. One of the things
that the Chairman, in our discussions, stated that he really wanted to
focus on, and that would be best practices. Are there things out there
that are good, and that are working well?

And how can we ensure that we start by profiling those things, and
celebrating the successes that may be out throughout the country, and
the different industry sectors, and emulate that which works.

And with that in mind we thought that we would begin even this
presentation, with one of those examples. And we have with us, today,
Ms. Wilson. She is Senior Vice President of Fox Entertainment Group News
Corporation.

With that, I would like to turn it over to you, and thank you for your
participation. We look forward to hearing more about the activities of
your company, and any wisdom and insight you might provide to this
committee.

MS. WILSON: Thank you, Chairwoman Johnson. Fellow Commissioners and
distinguished guests, it is an honor for you to invite us to participate
in this event, particularly to share the story that we have at Fox News
Corporation.

I am the Senior Vice President of diversity development for the Fox
Entertainment Group. I was hired three years ago to create and manage
the office of diversity development. That position was created because
of a coalition of community organizations, the National Association for
the Advancement of Colored People, the National Hispanic Media
Coalition, the National Asian Pacific Islander Coalition, and the Native
American Coalition, to increase diversity within the entertainment
industry, specifically focusing on the broadcast sector.

My background, just to give you some information on why I was selected
for this position, I have completed strategy work, within the airline
industry, spent eight years with Continental, spent seven years in
customer service and training, with the cable industry, Times Mirror
cable.

And then, prior to this position, I was a corporate officer at Times
Mirror, where I worked for the chairman in establishing and directing
their training, organizational development, and diversity initiatives.

When I was asked to accept this position, at Fox, by Peter Churnen (PH),
the Chairman, we talked quite a bit about what this would mean. And one
of the things I had mentioned to him was that if we are going to
effectuate change within this industry, you\'ve got to allow at least
five to seven years for that change to be integrated within this
organization.

Mr. Churnen decided that I was right, and I accepted the position to
spearhead this initiative within the organization. I have a staff of
eight individuals, and those individuals I call my agents of change.

They primarily work with all of our Fox business units, and their
primary responsibility deals with recruitment, outreach, outreach within
the community for community based organizations, academic organizations,
and associations, professional groups, as well as organizations within
the entertainment industry.

I also, we are also responsible for procurement, which is identifying
women and minority vendors for the Fox and News organization, and the
identification and placement of talent, both in front of, and behind the
cameras.

One of the key initiatives that I\'m primarily also responsible and work
on is the identification and creation of various content, which really
focuses and identifies, and deals with diverse audiences.

So I work hand in hand with our strategic partners in the news corp
organization in doing so. My scope of responsibility is the entire news,
domestic news corp organization. So we are responsible for diversity
within our cable group, our network group, within our studios, our film
division, within our sports group, and our publishing arm.

We felt that in order to have systemic change this organization,
particularly this division, had to reach out to all aspects within the
news corp organization.

The first thing we decided to do was to define diversity. And diversity,
for us, is a little different than most organizations would come up with
that specific definition.

When you look at diversity for Fox, we look at your traditional groups,
your African American, your Asian American, Native American, and Latino
American.

But we also go outside of the box. We look at the disabled. We also
include, within our diversity, women. We include those individuals who
are foreign born, who may not have the opportunities that we may have in
this country.

And the last piece, which is a little different for us, is we include
the economically disadvantaged. Coming from the East Coast, I can give
you an example. If you have an individual who was born in Appalachia, he
or she may not have the same opportunities to be included within the
entertainment industry, as someone who is within an urban setting.

So part of our diversity initiative reaches out to those who are
economically disadvantaged. And that spans all ethnicities, and is
inclusive of everyone.

I report directly to the chairman, Peter Churnen. I attend his weekly
executive meetings, at which point my primary responsibility is to
provide him with an update on our diversity initiatives across the
entire business unit.

I cannot pass, at any time. We do sit back and talk about those issues
that are pertinent, those obstacles that may be in the way, and look
towards the executive team that attends those meetings for resolutions.

I just want to spend a few minutes and talk about our reason for
success. And keep in mind I have been in existence now, and the
department has been in existence for three years. So when we talk about
success, we are looking at significant incremental success.

And we hope that within the next three to five years, to sustain that
success, where diversity then becomes a way of life within the Fox
Entertainment Group and News Corp.

I would probably say one of the primary reasons for our success is that
I don\'t take no for an answer. We find ways to do things. And in doing
so we find ways to really work strategically with our clients to meet
their needs.

And if it is not now, then we look at what time, what opportunity do we
have in the future to work with you. We\'ve also developed strategic
alliances and partnerships. So we have alliances and partnerships, both
with companies within the organization, but most importantly, with
companies outside of the organization.

For example, the Grammy Foundation would be one example of a
partnership. We have several partnerships with our universities, and
other community based organizations, the National Native American
Organization, that we utilize from time, to really enhance our diversity
initiative.

We began our process two years ago, by forming a diversity advisory
board, very similar to what we are experiencing here today. Our do you
see advisory board consists of executives, the senior most executive
from each one of our business units, the person is selected by the CEO
of that business unit, and the primary responsibility for that person
being on the advisory board is to speak on behalf of the organization,
that business unit within the Fox Entertainment and News Corp group.

The business units spent the first six weeks, to eight weeks,
identifying and formulating a strategic plan. We came up with mission,
we came up with a purpose, and a 24 month strategic plan, which was then
presented and approved by Peter Churnen.

Our diversity advisory board, for the first year, we met once a month to
review the plan, to look at the implementation of that plan within the
business units, and to determine what we would need to do to modify and
refine that plan.

Within this last year we have been fortunate enough to just meet once a
quarter, to continue to update each of the businesses, and to get
additional information from those businesses.

In addition to that, once a year, we provide, twice a year excuse me, I
provide the Chairman, and all of his direct reports with a Fox diversity
update. We spend time going over the eight strategic objectives that we
have put into place, and to take a look at where are we within those
time lines.

I\'m pleased to say that out of the eight, six of those objectives we
have met within the 24 months, I should say less than the 24 months, and
we are working on the last two, which are probably going to be the most
difficult for us to achieve within 24 months, we will stretch that out
to within three years.

We have also established a diversity purchasing council. And that, too,
consists of representatives from each one of our business units.
Purchasing council meets once a month, and we identify those commodities
that are in need, within the organization, and we look towards our
minority and women vendors, to actually fulfill our request for proposal
for those supplies.

Over the past two years we had an 18 month plan for our purchasing
group, and we are pleased to say that we met that plan within the first
nine months.

Year to date with 35 percent ahead of our goals from last year, and we
have increased our dollar percentage, within the minority and women
community by 116 percent.

Some of the successes that we have been able to have, within our
purchasing group, is that we have a Native American security firm for
the Fox lot. We use Latino marketing firms for our film division, and
African American IT firm to work with our national group that is out of
New York and news corp.

We also use our second tier vendors to our advantage. If we have a
commodity that we are looking to purchase from a major supplier we ask
that major supplier to identify minority vendors. And any time a Fox
individual purchases a supply, or a commodity from one of our major
vendors, it automatically goes into the data base, so that we are
purchasing that supply from the second tier women or minority vendor.

So, again, looking at both our initial vendors, and our second tier
vendors, we really try to take advantage of opportunities to increase
diversity within our purchasing arm.

Last, but probably not least, in terms of some of the successes, before
we talk about our execution, is that we have a diverse slate of
programming. Most of you are familiar with Fox, we are the newer
channel, 15 years in existence.

We are a little edgy, we are a little risk taking, as some people will
say. And if you look at that slate, that slate includes shows like the
new Luis Guzman, the Ortegas, Wanda at Large, of course Bernie Mack that
won a Peabody award last year.

But in addition to that we look at all of our programs. And what we
attempt to do within our programming slate, is increase diversity or
include diversity within all of our programming slate.

So if you look at a show like 24, which has gained quite a bit of
accolades, we\'ve got an African American president, we\'ve got a Latino
CIA agent, and we\'ve got two Asian Americans that are on the show.

So within our programming you will see that diversity runs its theme
throughout the entire programming group.

Some of the successes that we have encountered, particularly within the
execution phase of our diversity initiatives, really has to do with our
champions of diversity, our CEOs.

What we ask them to do, every single year, is to send out a letter to
companies that we do business with, to reaffirm that diversity is a core
part of our business, and that we ask that any company that does
business with Fox acknowledges this, and works with us, within the
diversity initiatives.

I, then, follow-up with these businesses to make sure that they are
aware of our goals, our objectives, and how we can then work with on
each of the business units to accomplish those goals and objectives.

I need to let you know that one of the things that we agreed to, right
up front within the News Corp organization, is that my group, and Mitsy
Wilson in particular would not be viewed as the diversity police. I\'m
not there to police anyone.

And we are not a nice to-do. So whenever we look at going into a
business unit, and work within that business unit, in terms of enhancing
their strategic objectives, we are making sure that we are using the
strategy to enhance that objective, and using diversity as an integral
part of that strategy.

I will give you a prime example. Within our publishing arm, Harper
Collins, we have two imprints. We have Amistad Press, which is our
African American imprint, and Ryo, which is our Latino imprint.

Last year we introduced a Latino author, most of you may have heard of
Victor Villaseñor. He has written the book Six Senses. Very well known
author within the latin community, very powerful book.

We printed the book in both spanish and english. Well, when our
marketing arm decided to go out and do product placement, they were
doing product placement in your traditional areas, Barnes and Nobles.

One of the things, when they brought the diversity group into the
marketing meetings is that they then realized that a lot of your Latino
families spent time, on Fridays and on the weekends, in what we call the
markets, the mercados.

So in order for us to enhance the distribution and sale of our product,
we made an agreement with the Latino Merchants Association, and placed
the books within the mercados. Thus you can see an increase in sales.

So when we talk about diversity, we are looking at diversity within the
traditional means of recruitment, and placement. But we are also looking
at diversity, and how can it then enhance our businesses.

We have several examples of that, within quite a few of our business
units. As we look at diversity within our network group, and the
execution of that diversity within the network group, one of the key
initiatives that caused us to be very successful, within that group, is
that my staff participates in all aspects of the creative process.

We attend the chairman\'s meeting, we sit in on development meetings, we
sit in on creative meetings, we sit in on current meetings. And we
provide feedback and input.

So as product is being rolled out, either at the studio, or within the
network, diversity is an active and integral part of that division and
organization. Then the product becomes organic and diversity becomes
organic within that division.

And for each of the products that we are rolling out. We are not an
afterthought, we are not a side piece, we are a part of the process.

Prime example of the successes that we\'ve had within the network side,
and this success has been charted and documented by the UCLA study, Chon
Noriega, Rivera Institute, we have a writer\'s initiative that we\'ve
had in existence, now, for the past three years.

We identify diverse writers to staff in our shows, 19 of our 21 shows
last year were staffed with diverse writers. And within the director
category, 18 of our 21 shows were staffed with diverse and female
directors.

What does that mean in terms of the industry? Fifty-seven percent of all
directors of color were hired by Fox. Two-thirds of all writers of color
were hired by Fox. This is not a number that Fox came up with, this is a
number that was presented to us by the UCLA study. We are very pleased
with that number.

What does that allow us to do? It allows us to take, say for example, a
director who we\'ve identified for a Fox show, and work that director
within the Fox organization. A prime individual, we have a female
director who started off with one Fox show, then went on to direct three
episodes of another Fox Show, Bernie Mack, moved into the film division,
where she did her film directorial debut for Chasing Poppy.

This young lady has now come back to the Fox fold, where she is
directing four episodes of Luis Guzman, and most of the episodes of the
Ortegas.

So our goal is not to just identify a person, and have a one-time hit
within the creative aspect. What we are looking to do is to make sure
that individuals have employability, and that employability extends
beyond just directing one episode, but several episodes within the Fox
family.

We have also had successes below the line, and below the line looking at
the production side of the house. Here is where the strategic alliances
come in. We have partnered with various organizations and, again, we are
seeing some successes on that side.

To just sum up some of the successes we\'ve had on the business side of
our initiative, our recruitment and internship, sixty percent of all of
our recruitment are conducted at non-traditional colleges, what we
consider non-traditional colleges.

Your historical black colleges, your hispanic serving institutes, and we
spend quite a bit of time with your Native American tribal colleges.

Once a year we bring in 15 Native Americans from around the country, we
have a Native American residential institute, and we introduce them to
the world of entertainment.

We have conducted this, now, for over two years, in conjunction with
UCLA. And we have seen some success from that. The first year we
conducted this institute, two individuals were hired in the production
arm, this year we have three individuals, we are thankful to say, that
have been hired within the entertainment division.

Within our internships, Fox really promotes from within. So in order for
you to become a director, or an executive within the organization, most
of the individuals start off within an assisting category, or a manager
category.

So what we have opted to do is take that internship position, and really
turn that internship position into a key position for development within
the organization, and recruitment within the organization.

We have internships within every Fox organization, and we look to hire
and place interns once they graduate either from high school, or
college, within the Fox organization.

Our success story this year has been Fox news. We\'ve started an
internship program with Howard University, that is right down the
corner. And we had one young lady who was a senior, came on as an
intern, and is now in the Fox management development program, which is
an accelerated program that will allow her to be an executive, within
this organization, upon successful completion of the program, within 24
months.

I can continue with the successes that we\'ve had. I\'d like to leave
you with one key area that I think as organizations, and I know Mr.
Wallau is here, and he too could speak to the ABC experience, and the
successes that ABC has had, as well as name-making women in cable.

But one of the areas that we struggle with, and most organizations I
find struggle with, is within the executive ranks. How do I attract
women, and people of color. And, most importantly, how do we place women
and people of color, in those executive ranks, so that they have an
impact on content, and distribution, and the delivery of product.

Well, what Fox has decided to do, in News Corp, is following suit within
our New York segment, is that we have opted to put in place a 24 month
executive development initiative.

This program is spearheaded by the CEO of the business unit. He or she
must come up with the 24 month plan. He or she presents that plan to the
Chairman, Peter Churnen. That plan is then approved, and my
responsibility is to provide the first year of funding, so that those
individuals that are coming into our executive development program are
not hindered because we don\'t have the head count, or the budget.

Within the second year that person is then moved into the executive
ranks, the management ranks within the respective business unit, and we
provide coaching, mentoring, and direction and guidance for those
individuals to become executives within the Fox Entertainment and News
Corp group.

I could look at, probably, two successes that we\'ve had. We\'ve had one
young lady who started out about six years ago. She was in the program
prior to my coming on board, she is now a senior vice president in our
film division, African American female.

We have an Asian American male who is a vice president within the film
division. We use that process as a template for the program that we use
throughout the organization.

Today we\'ve got six individuals, within our news division, that are
going through this executive development program, and we have
individuals within six of our business units that have just been hired,
and will be going through this program.

This is probably the area where it is the most difficult to sit back,
and quantify, and determine success. But one of the things we say to our
executives, treat an individual as an employee, don\'t look at them as a
person of color, don\'t give them any advantages because they are a
person of color, don\'t cut them any slack.

The individual is coming in with all the skills and qualifications, and
all we are asking is that you put a plan together to allow that
individual to be successful.

What we\'ve decided to do with this process is to make sure that 60
percent of all the individuals within our executive development program
come from within the company, so there is internal development, and 40
percent of those individuals come from outside the company.

So there are opportunities for people to come from outside of the
entertainment field, because that is where we pull from.

With that I can talk a little bit about, you know, going forward. But as
you can see we have made incremental strides within the first three
years. We\'ve got a long way to go.

But with the commitment and I think the dedication of what I consider
our champions of diversity, which is our chairman and CEO, we are on our
way to success.

CHAIR JOHNSON: Thank you very much. Any questions for Ms. Wilson?

(No response.)

CHAIR JOHNSON: Seeing none. Yes, Mr. Barrett.

MR. BARRETT: Is Ms. Wilson coming back to visit with us again? Because I
don\'t want to take up the time today, but I would like, from having a
great deal of experience at Fox, when my gentleman to the left behind me
was employed there, I would like to ask some questions.

But I would rather not take up the time today. Will she be coming back
again at some point, where she can \--

CHAIR JOHNSON: We can certainly invite her back.

MR. BARRETT: And the questions I\'m going to ask you deals with your
legal \-- are you in New York or Los Angeles?

MS. WILSON: I\'m housed in Los Angeles, I spend quite a bit of time on
the east coast, New York as well as Washington.

MR. BARRETT: So you would be able to give me some information who our
first (unintelligible) in the legal department, you would be able to
give me information on whatever Chase Kerry had in his old department,
and Peter Churnen would have in those departments?

MS. WILSON: I\'m sorry, I didn\'t quite catch \--

MR. BARRETT: You could give me some data on where you have come, and
what has flown from your executive programs, and all of that, and where
\--

MS. WILSON: Yes, I can provide you with data on that.

MR. BARRETT: I don\'t want to take up the time today, but I might even
have you send it to me. Thank you very much.

CHAIR JOHNSON: So Commissioner Barrett, you are kind of trying to put
some perspective to the numbers that she was putting out there, give it
perspective?

Another question?

(Off mike question.)

CHAIR JOHNSON: Could you get a little closer to the mike?

PARTICIPANT: I\'m sorry. The question, I think, is related in that I\'m
curious as to \-- we do a lot of work with Fox. I\'m curious as to the
impetus for the program. Was there \-- because I know Peter, and David,
and all those guys.

Was there something that happened that resulted in the program being
started, or was it altruism, or what?

MS. WILSON: Three years ago my former employer was the Los Angeles
Times, Times Mirror. And about four and a half years ago they conducted
a study, and completed a report that talked about the whitewashing of
TV.

And in doing so what they found is that 23 of the new series that were
on TV did not have women and people of color. (unintelligible) NACP took
up that charge, formed a media coalition with the Asian, American
Latino, and Native American groups, and then presented a memorandum of
understanding to each of the respective broadcast companies, requesting
that we increase diversity within, in front of the camera, behind the
scenes, and below the lines.

Based on that they also requested that an office of diversity
development be created. And that office was created. Every single
network has that, ABC, NBC, CBS and Fox.

We as a group work together, all four networks, to really move that
initiative forward, because it is an entertainment initiative, it is not
just a company wide initiative. My responsibility, in addition to just
the network expands the entire News Corp organization. So that was the
impetus.

CHAIR JOHNSON: Thank you. A couple more questions?

PARTICIPANT: I would like to ask the question as it relates to the
procurement council, in terms of how you identify the types of services,
or commodities that you may be purchasing from vendors, companies that
are led by people of color.

And the basis of my question has to do with the fact that many new
technologies, and many new startup companies are, in fact, being led by
people of color. And yet one of the biggest challenges, one of the
largest hurdles that we found, when we worked with many of these
companies, is getting access to the large companies, in terms of being
able to at least have the opportunity to demonstrate the technology, and
demonstrate their capability, whether it is in compression technology,
streaming technologies, whatever it may be.

Perhaps this is not the right time, but I would certainly like to have
the opportunity to talk further with you about that.

MS. WILSON: Sure. Our procurement council consists of two different
components. We\'ve got the national group that is responsible for News
Corp, and they do all of your major contracts, and we can talk about
that, and how they have looked at the second tier vendors to actually
implement a minority supplier process within their second tier vendor
group.

And then, of course, each of the respective business units, they have
their own individual person who is responsible for procurement, and we
work with them to identify commodities, and then make sure we have a
preferred vendor supplier list, that is inclusive of women and people of
color.

So I can talk to you about that. We also have a diversity website, and
that information is on our website, and will also give you information
on how you can become a preferred provider. So you may want to take a
look at our diversity website.

CHAIR JOHNSON: We are going to take one final question from Jenny.

MS. ALONZO: My question is, would we have access to the resources and
experts that you use to develop the diversity initiative within Fox? You
mentioned UCLA. I\'m sure there were other experts that you brought into
the fray, to make this happen.

MS. WILSON: Professional experience in this area, so a lot of what we
have developed within, for Fox, we did internally, using the expertise I
have.

I was a member of NAMIC, I started the NAMIC group, years ago, when I
was in cable. So I do know individuals that can come in and work with
the group, in terms of developing a solid diversity plan.

Reesa Booker being one of them, and you may be familiar with her. So I
can give you the names, I have all the names of individuals that we use,
in terms of studies that are conducted throughout the country.

So, yes, I have that opportunity to give that to you.

CHAIR JOHNSON: Thank you very much, and we will be following up with
you, in kind of one of the related questions as to what caused the
initiative to occur, I\'m wondering, is there a monitoring, or an
information collection aspect to that, that we might also, particularly
if it covers all the different networks, if we might be able to access
also?

MS. WILSON: And Mr. Wallau may want to speak to that, also, because
where he is a part of this, the whole coalition. We meet twice a year
with the media coalition. We provide them with reports and updates on
what we are doing, in front of the camera, behind the scenes, below the
line.

We provide them with information on our procurement initiative, our
recruitment initiatives. And they monitor us, quite frequently. I have
conversations with him, probably, once a week, once a month, to identify
and determine the types of programs and initiatives we have going on
within the organization.

We also partner with them on various initiatives, as well.

CHAIR JOHNSON: Is there something you might want to add to that?

PARTICIPANT: I can just say that if there is an effort to be made, to
speak to the question about what brought it about, was it altruism, was
it confrontational, was it collaborative.

This speaks to something that I think the Commission said in his opening
remarks. At the end of the day diversity has to be smart business for us
at the networks, because we are broadcaSt networks, FOX, ABC, CBS, NBC,
and our audiences are diverse.

And in the attempt to maximize Audience, which is what our business is,
we need to have the ability to attract people of color to our network.
So I\'m not quite sure that there is any single answer to what brought
about the attention.

I think the catalyst was, in fact, the NAACP, National Hispanic
Coalition, and the Asian American, Pacific Islander group, and the
Native American group, they got together three years ago to kind of jump
start it.

But since then I think it has had a life of its own. And it is the
process that came out of that. While I would not, on behalf of ABC at
least, I have the sense that we have a lot more challenges ahead of us,
that we have, and maybe this is the Commissioner\'s point about the
overall point that we\'ve reached in terms of with the successes that
Mitsy has pointed out at Fox, I believe we have some very, very strong
success stories.

At the same time I don\'t believe that we have gotten where we need to
get in terms of reflecting America on our screens, whether it is in our
entertainment shows, whether it is our news programs.

In the one area that we have diversified is ABC Saturday Morning,
because animation is very easy to diversity very quickly. So we have
very diverse images on our cartoons.

But it is the creative process is challenging, in a way, I think on
television unlike anyplace else. I don\'t think there is anything in the
creative enterprise, and I don\'t want to make this too narrative,
because I know the Commission scope is wide.

But I don\'t think there is anything in the creative process as
challenging as scripted series television. To be able to run through 22
successful episodes of a show that can actually be a broad range, where
you can fail, have millions and millions of viewers and be a failure.

It means that the bar is very, very high. The failure rate, failure
being that you don\'t come back for a second season is about 85 percent.
And so putting into that process the concept of diversity is a real
challenge.

It is a very hard process to begin with, and then you say, and we need
diversity, we need to reach out, we need to have these shows populated
by people of color, is a process that we are just beginning to really
make some inroads on.

And I respect everything that Mitsy has done, and she has a fantastic
reputation within the industry. And we feel that we made, we have some
great industry success stories, some programs in places that we believe
would bear fruit.

But, overall, we feel that we have a lot of work to do to get where we
need to get.

CHAIR JOHNSON: Thank you very much. And with that I think we will go
directly to Professor Abernathy.

PROFESSOR ABERNATHY: Thank you, Ms. Johnson, it is a pleasure to see you
again.

Well, I have been asked to speak about the post-Greuder and post-Grets
world. These two Supreme Court cases came down from the Supreme Court
last summer, basically setting out the parameters for affirmative action
in the future.

And I hate to be the bearer of limited tidings, but I think that is my
role here today. If you want to understand these two cases we have now,
I think you have to think back to two older cases.

The first one is the Bocci case, from the late 1970s, and the second one
is the City of Richmond case from the late 1980s. And you will see, in a
moment, why I want to do a little bit of history, much easier to
understand where we are likely to go, if you understand where we\'ve
been.

If you look back at the Bocci case from the 1978 period, that was an
affirmative action program involving a medical school, and the medical
school set aside a certain number of seats for minority applicants.

And all of the rest of the seats were in the ordinary admissions
process. That was challenged by a white student who was excluded from
competing for the limited number of seats.

And in that case the Supreme Court divided 4-1-4, on consideration of
Affirmative Action Program. Four members of the Court say you can\'t do
it, period, it is on statutory interpretation grounds, but they say no,
period.

Four members of the Court say you can do it on relatively relaxed
grounds that would make it fairly easy for schools to pursue affirmative
action. And one member of the Court sits in the middle, slicing the
baby.

This is courtly old Justice Powell, who decided that some affirmative
action is okay, but too much affirmative action is a bad thing.
Specifically what Justice Powell says is that he takes the approach that
is usually applied to racial discrimination cases that harm African
Americans.

He takes that approach, so that he is going to do what lawyers call
strict scrutiny. That is hold almost all of them to be illegal. In fact,
up until that time all had been held to be illegal, all race-based
programs that harmed African Americans.

Justice Powell, however, says that in the special area of education
there is an overriding, equally important interest of educators in
achieving diversity in their classroom. And he is going to recognize
this as a countervailing interest, justifying at least some racial
classification because of the importance of the First Amendment interest
in the United States history.

Now, if you do this so-called strict scrutiny, there is not only this
ends test, what is important enough to satisfy the Court, but also a
means test. That is the means used, the statutory method, or
programmatic method used to pursue an affirmative action goal, or any
other governmental goal, must be narrowly tailored so it accomplishes
just the corrective ends, or just the diversity ends, and doesn\'t
accomplish other collateral ends.

And in this regard Justice Powell says that the school can adopt a point
system, where you can give extra points to minorities who apply, but you
can\'t outright reserve places for minorities.

In other words, you cannot guarantee acceptance to a certain number of
minorities, you cannot segregate the seats so that minorities compete
for some, and non-minorities, or majorities, compete for others.

So he suggests what all schools should do is what he calls the Harvard
College plan. That is you can give extra points to trombone players, to
students applying from Michigan, to students who are basketball players,
or football players, and those extra points go toward the bottom line of
getting accepted, or not.

But what you can\'t do is reserve extra seats. Now, the hidden problem
always in the Bacci case, was that any admissions officer who was really
up on his numbers, could sort of predict how many extra points you had
to give to minorities, in order to get the number of minorities you
wanted, into school.

And you assigned that many extra points, and then you get that many
extra minorities. It might fluctuate from year to year because you
weren\'t so good at predicting, but everyone knew this was one of the
problems or fallacies in the Bacci case.

But this is something that was tolerated during the Bacci years. The
second case you should think about is the City of Richmond v Krosenkis
from the late 1980s. This case involved contracting set aside by the
City of Richmond, where it reserved a certain number of contracts,
certain percentage of contracts as a goal for being given to minorities,
certain minorities listed on the report.

This is the first Supreme Court case, modern Supreme Court case striking
down an affirmative action program. What is interesting about this case
is that it is no longer the 4-1-4 split with the solomonic vote down the
middle.

Instead it is a very clear 6 to 3 majority, opposed to affirmative
action, or at least saying that affirmative action is always subject to
this stricter scrutiny, this close scrutiny by the Court.

Only three members of the Court, at the time, said that they would
permit this lower level relaxed kind of scrutiny that would permit
almost all affirmative action programs to pass through.

Now, what is interesting in this situation, I think from your point of
view, is that the Court, in 1989 says the \--

\[END OF TAPE ONE SIDE TWO, BEGIN TAPE TWO SIDE ONE.\]

PROFESSOR ABERNATHY: \-- program is secure, former discrimination, past
discrimination.

And what we mean here is not someone else\'s discrimination at some
other point in time, or societal discrimination, but to cure your own
prior discrimination, or some prior discrimination that you have the
power to cure because you are in charge of the government.

So what it wants is some identifiable prior presentation, not simply
generalized ideas that Blacks have a history of being discriminated
against in the United States, or that women don\'t get as many contracts
for employment as men do, or one of these generalized approaches.

Now, if you think about these two prior cases, 4-1-4 vote upholding some
affirmative action, but not all, in education; and the 6 to 3 vote
against affirmative action, insofar as it is pursued as a general
societal remedy for prior discrimination, McGruder and Grath cases make
perfect sense, they are easy to understand.

In terms of structure, a six vote majority in the Grath case, basically
says we are going to follow the Crozen opinion. In other words, this
idea of strict scrutiny, where you look closely at the justifications
for the program, programs must be narrowly tailored, the majority by six
votes takes that view.

Only three members of the current Court take the relaxed approach to
reviewing affirmative action, that is Justices Ginsburg, Bryer and
Suter. So there are just three members there for that position.

Now, if we look at the actual voting pattern among the six it splits up
into two different groups. Or to be more precise, two members of the six
vote majority peel off from the four others and say, well their version
of strict scrutiny isn\'t quite as strict as everybody else\'s version
of strict scrutiny, or the other four\'s version.

And in this context they follow Justice Powell in the Bacci case. They
say education is a special area, there are these special First Amendment
educational issues, professors and universities can control their
classrooms, and some deference should be given to professors, and
educators, on what is necessary to make the educational system work.

So if you look at the particular decision in the Grath\'s case,
involving undergraduate admissions at the University of Michigan, what
the undergraduate university did is give 20 points on their admission
scale to every Black applicant in the state.

And given the number of points that were in the admissions process, 20
points guaranteed you admission. So every Black person got it. And to
Justice O\'Connor, and Justice Stevens, the two in the middle who split
off, this looks too much like what is condemned by Powell in Bacci.

That is to say, certain people are guaranteed admission automatically.
On the other hand, on the Gruder case, that is the Michigan Law School
case, the Michigan Law School still has a competitive point system.

You get some points, but not too many points, exactly how many points
you get is never quite made clear in the case, but you don\'t get
automatic admission just by virtue of being a minority member.

So Justice O\'Connor says that this is still a competition. It may be
that minority applicants are getting some points, but football players
are also getting some points, and tuba players are still getting some
points.

Last year, at Georgetown, we admitted some people who were athletes, you
still get points for being athletes in law school, because they
diversify the class, as well. Not everyone likes to sit in the library,
we need some athletes at law school, as well.

So this competitive applications process can include extra points for
minorities, as much as it includes extra points for football players and
basketball players.

Now, there is one extra little detail that I should add here, or two
extra details, that may make a difference. First of all I mentioned,
slightly earlier, and I will mention again, just to give it some
emphasis.

Justice O\'Connor says, what is critical in this situation is that we
need to give deference to university administrators. We are not going to
review their decisions the same way we would review local government
decision makers.

There is this aura that persons associated with universities are persons
of good will, where this idea comes from is difficult for me to
understand. But that is the idea at the Supreme Court.

And, specifically, that is the idea that is promoted by the amicus brief
from universities. In other words, the Supreme Court seems to be
recognizing that universities are unique places that need to allow a
little extra space.

As Chairman Powell has said here, before, education has always been a
special place in affirmative action, and the Supreme Court seems to be
recognizing that.

Secondly the Supreme Court says, a university, in implementing its point
system, may shoot for what the university calls, what the law school
called a \"critical mass\".

Now, the reason this is very important is because a critical mass is, to
some people, a quota. It is a goal, or a point, or a number which you
want to reach.

And if you take a look at Justice Renquist\'s dissenting opinion in the
Gruder case, and some of the other dissenting opinions, it seems fairly
obvious that Michigan had in mind a certain percentage number that it
wanted to admit each year, because it is remarkable how close the
percentage of minority admitees came to that number year, after year,
after year.

And when they decided they needed a few more minorities, then in the
succeeding years after that, they just happened to reach that number
almost exactly, over again, year after year.

So the Gruder case is important because it tacitly admits this leeway
which is necessary in educational institutions, or the difficult job of
balancing out the class in many different directions.

So it provides a certain measure of sloppiness to university
administrators that might not be applicable in other areas of the world.
Now, I raise these issues to make a couple of points over the long run,
I guess three points over the long run.

Number one, there does seem to be a definite trend line here if you look
at these things. And a risk adverse public official would be unwise, in
my opinion, to say things are going to go back to the 1970s overnight,
and that affirmative action will be upheld, very easily, by the Court,
and there is no need to worry about this problem.

It seems to me that that is simply not going to happen. Or if it
happens, it is something that is not easily foreseeable at this stage.
Certainly not easily foreseeable over the next couple of years that you
will be operating.

Secondly, one of the major issues that comes forward out of this pair of
cases is that, or the four cases that are compared over time, is that
education is something different. And the idea that the Supreme Court is
going to allow affirmative action in other areas, outside education, as
easily as it does in education, seems to me extremely unlikely.

If you look here, just do some head counting, for example, Justice
O\'Connor, who goes to make up the dispositive vote here, really the
fifth vote, regardless of what happens with Justice Stevens, her vote is
really the dispositive vote in this situation.

She dissented in the Metro Broadcasting piece. And she is the author of
the idea, although not the opinion, in the Crozen case. The Crozen case
is, basically, adopted from one of her concurring opinions in an
employment piece in the earlier 1980.

So it seems to me, unlikely, that the Court is going to go through and
say, oh the FCC area is an unusual area as well. After Adorand (PH)
overturned the Metro Broadcasting piece, it seems to me highly unlikely
the FCC is going to get some kind of special buy, like education.

Now, having said that, there may be areas within the purview of the FCC
study here, which do fall within education. For example, the Center for
Communications at Michigan might have certain, at Michigan State, might
have certain functions that it wants to undertake.

Or the Communications Law Program at Catholic University of America
might have some affirmative programs that it wants to take, and the FCC
might want to encourage, in the area of education.

There might even be educational areas within corporate America, training
programs, or something of that nature, that create a larger set of
people to compete for jobs. I think the basic message in this
educational area is, then, basically unlike what most parents of what 18
year olds think, education is not success, getting into Harvard is not
success, it only puts you into a pool where you can then compete to be
successful.

And the Supreme Court\'s theory appears to be you can enlarge the pool,
but you can\'t directly bestow the benefit. Education, as a part of
enlarging the pool, it is not a part of directly bestowing the benefit.

Now, I must admit, as I sat here listening to Ms. Wilson, since I follow
the D.C. Circuit, I\'m thinking that many of the things she says, I\'m
thinking, there is a potential violation, oh there is another potential
violation.

Because the D.C. Circuit takes a somewhat narrower, or stricter approach
to the idea of broadening the pool in the affirmative action context.
The usual answer in several circuits is what we will do is recruiting.
We will make sure that we get better numbers on the out-in, that
minorities get more chances, and get included more, by targeting our
recruiting at traditional black colleges, or at Native American schools,
or what have you, that will produce a better turnout, and therefore skew
the pool, and produce better numbers. The D.C. Circuit, and I emphasize
the word here, appears, appears to have rejected that approach in the
Maryland, D.C., Delaware Broadcasters Association versus the FCC, that
is one of the proceedings that is on remand now.

Where it says that a targeted outreach program apparently violates the
Equal Protection Clause of the Constitution, because you are reaching
out only to one group, and not to all groups.

So in the D.C. Circuit the preferred approach appears to be that pool
enhancing procedures must be pool enhancing procedures for everyone.
They cannot be targeted pool enhancing procedures, or else that, itself,
is a violation of the Equal Protection Clause.

Let me leave you with one last footnote. I haven\'t said a word about
employment. And if you remember the kind of didactic, the polar world I
have set up between the easy approach of the Bacci case, or the kind of
middling approach of the Bacci case adopted in Gruder, and the stricter
approach of the Crozen case adopted in Graths, there are two cases out
there in the employment area.

One of which is stricter, and one of which is also looser. And most of
the Circuits are actually split on whether the looser approach should
apply to affirmative action in recruitment and employment, or whether
the stricter approach should apply.

If I were advising the risk adverse public servant, I would note that
the closest case on point, in the Supreme Court, is one with a
concurring opinion by Justice O\'Connor, where she takes the stricter
approach.

So if I were a betting person, trying to predict what would happen at
the Supreme Court, I would guess that Justice O\'Connor would put
employment in the area with set-asides and contracting.

In other words, the general run of government services. I don\'t think
she would see it as a special case. And the final footnote I would leave
you with is that even Crozen allows affirmative action, where you can
prove specific, identifiable prior discrimination that you were trying
to prove.

So the more you can gather data to show that certain specific employment
practices exclude African Americans, or Native Americans, or women, or
that certain processes specifically exclude persons of color, or
minorities, then there is an opportunity to have a targeted affirmative
action program in those areas.

If you will look at the slides that Ms. Mago has given you, it is no
accident that many of the things suggested on the slide are initiatives
that broaden the pool for everyone, not target specific groups for
inclusion within the pool.

It is a fact of life in American society, I think all of us should be
aware, it is a fact of life that the more we broaden the pool,
generally, the more we also include minorities and women.

So that broadening the pool, generically, will also partly accomplish
the program of including more women, minorities, but at the loss of
diluting the effort of excluding women and minorities.

So it is one of the ironies of constitutional law that the most
difficult problems in American history, race, sex, discrimination
problems, are also the most difficult to solve. Thank you.

CHAIR JOHNSON: Thank you very much. Any questions? Yes, sir.

PARTICIPANT: You know, one of the biggest challenges, and I\'m really
pleased that the Committee is going to be focused on programs or best
practices that create more access to capital, awareness of deal flow,
etcetera.

But entrepreneurial training to be prepared for the entrepreneurial
experience in the event that you get the deal flow, and you get the
capital, is still lacking. And one of the things that resonated with
both presenters was that strategic alliances between various sectors,
you focused a lot of the contextual case law around the academic sector.

But when you add to the academic sector the venture capital community,
and then public policy, it seems like there might be an opportunity for
taking advantage of some of the positioning that the case law relative
to the academic field, where it seems that there is more latitude within
that context, and marrying some of the practices like with some of the
entrepreneurial colleges, like Stanford, for example, with some of their
business incubator programs.

And the question is, is there a way that some public policy can be
shaped to help facilitate broadening the pool of entrepreneurial talent
by leveraging some of the latitude that might exist in the world of
academia, and bringing that to some common practices that you might find
in certain venture capital firms, like entrepreneurs, and residents,
etcetera, to facilitate incenting VCs, and or colleges, to promote
targeted programs for people who are underrepresented in that process.

PROFESSOR ABERNATHY: You\'d make a great law professor, Mr. Howard.
Because what you have done is identify that between every line of cases
there is always a marginal area.

And whether these programs would be seen as the FCC requiring colleges
to do something, or as colleges doing something, that is the key. So the
more private universities would be encourage to pursue certain diversity
goals.

I think that the more the universities do it themselves the better it
is. The more the FCC seems to be in a command position, telling them to
do it, then the less likely there will be this deference to educators.

The more the government is the impetus for it, then the greater the
problem is. I should mention, here, that historically the answer here
would have been, government can\'t do these things, or government
covered by constitutional law, private persons or not, there is a
footnote in the Graths case, the end of the Graths case that says, these
ideas that we are adopting today are going to be read into one of the
older Civil Rights statutes, 42USC Section 1981 that forbids racial
discrimination in contracting.

So that in theory, any contract that would be made, that would have a
racial term, would be covered by all of these ideas, as well. Now, if we
get out into the real world it has not been my experience that
entrepreneurs sue each other for whether they got cut in on the deal, or
cut out, unless there happens to be a lot of money involved, or their
family members involved, or something like that.

So if certain entrepreneurs chose to include certain other entrepreneurs
because they wanted to promote a pool talent among African Americans, I
don\'t see any litigation getting started over that, or at least not in
any practical sense.

But the risk adverse answer is, this is out there for everyone now.

CHAIR JOHNSON: Thank you very much. One final question.

PARTICIPANT: Most of us know, over the last several years, MMTC has
proposed a number of very carefully drawn, we think, race neutral
initiatives.

Some of these are distributed to the body in a memo that you have before
you. But, nonetheless, we realize that race neutral initiatives may not
be sufficient to the past, in light of the very extreme under
representation, and under inclusion of minorities and women, and the
enormously high barriers to entry.

Consequently we\'ve put before the Commission the question of whether
first racial diversity, particularly given the educational functions of
media, as those are better understood, really, since the Metro Decision.

Whether the need for remedying the present effects of the Commission\'s
own past actions, licensing segregationist for 50 years, and whether the
need to promote competition, by having more people able to participate,
more brain power able to participate fully in these sectors.

Whether any or all of those three objectives might be compelling
governmental interest. After the Arandan (PH) decision, many of us might
remember, that in 1995 the Solicitor General, I think it was, produced
an opinion, famous opinion as to how agencies were to treat this
opinion, and how to comply, and what it meant, it came out of the
Justice Department.

And I wonder whether, in light of the issues that are teed up already,
and the special objectives that we all have, if it might be possible for
the Committee to engage special counsel, or otherwise perhaps have
someone within the Commission, or outside, provide us with a formal
opinion on whether any of these, or other objectives, are compelling
governmental interest, and how that would be determined in particular
cases.

PROFESSOR ABERNATHY: Why would the FCC, as an agency, raise an issue of
compelling interest, as opposed to the Solicitor General, or the Justice
Department, or someone else? I think the FCC could propose it, and raise
it with the proper legal entity of the country.

But are you suggesting that the FCC ought to raise that in isolation?

PARTICIPANT: Yes, I\'m suggesting, actually, not that the FCC obtain an
opinion, but the Committee, in order to properly guide its work, obtain
its own opinion.

PROFESSOR ABERNATHY: Well, I guess my only concern there would be this
Committee, I assume, is for two years as a function of FCC. And so, in
essence, we would be asking, or you would be asking a Committee mandated
by the FCC, under proper authority, to do the same thing, but you just
previously said you are not asking FCC to do.

And that is to raise the issue. I\'m not suggesting, at all, that the
issue shouldn\'t be raised. I\'m not sure it should be raised by this
Committee, around FCC. Because we are mandated to certain charges by the
FCC.

And it seems to me, then, to go outside of this, as a committee, and ask
without, ask for questions that the FCC itself has chosen not to ask at
this time, I think is a bit much.

PARTICIPANT: I\'m not sure, and maybe the Chair could advise us, because
this kind of goes to what is our role. If our \-- one of the functions,
as I understood it, that we are going to have, is to provide
recommendations.

And those recommendations, under our charter, go to the Chairman. And
those recommendations need to be, I think, informed by, as accurate and
up to date interpretation of the law as we can muster.

And the point I was trying to make is that while that may ultimately be
the Commission\'s obligation, or possibly some higher authority\'s
obligation, it is also an obligation that we have, in order to do our
work.

I\'m not suggesting that the interpretation that we might ask for, and
obtain, ought to be the Commission\'s interpretation. Rather it ought to
be ours.

PROFESSOR ABERNATHY: Well, I\'m sorry. My only concern there is from
whence do you think our authority flows, independent of the Commission?
Because if it is not independent of the Commission, and mandated by the
Commission, then when you raise that question you are in fact raising a
question that really falls back on the Commission.

I\'m not suggesting, at all, that the question ought not to be raised.
I\'m simply saying that that question can be raised and answered by
internal counsel, it seems to me, as opposed to going out and getting an
outside counsel.

CHAIR JOHNSON: Okay. Thank you. We have a couple of other questions, or
comments.

PARTICIPANT: I would suggest that perhaps the question can be best
answered in the context of subcommittee recommendations, so that we can
provide some context for what recommendations might be supported by the
proposition that you set forth, but without the recommendation first
forthcoming, it is a question without a justifiable end, it is just a
question.

So I would think at the subcommittee level, if a recommendation comes
forth, and the premise for that recommendation is to remedy some prior
practice, implemented or followed by the FCC, then the question becomes
germane.

But I would submit that we leave it to the subcommittees to articulate
the recommendations, and then follow-up with legal advice before the
recommendations are offered up by the FCC.

CHAIR JOHNSON: Thank you. Mr. Temple, did you want to ask? Was that the
same comment? Okay.

Any other questions or comments?

PARTICIPANT: I just wanted to say thank you very much, and particularly
say thank you to Professor Abernathy for stepping in at the last minute.
I had a cancellation and had to call in a favor to bring him in and do
that excellent job of covering the law for us, and thank you all very
much, and I will turn the mike back over to Julia, and thank you.

CHAIR JOHNSON: Thank you, again, very much for your presentation, it was
quite insightful. And as you can see generated more questions and
discussion, and debate for us.

We will be calling on you again, Professor. You may be our special
counsel. Just kidding.

And with that we are a little behind schedule, but we did go back and
open all of the conversations that we had, the discussions, the
committee work, including our schedule, for discussion for the full
group.

Are there any questions, or concerns? Mr. Rivera?

MR. RIVERA: Madam Chair, I just wanted to point out that Commissioner
Barrett, when he was, when he graced these halls with his presence,
chaired, or authored a report out of your office, with regard to small
business. It wasn\'t specifically related to minorities.

And I think if that is not on the website it ought to be, because I
think it is pertinent, particularly to the new Technology Subcommittee.

Would you agree, Andrew?

PARTICIPANT: (Off mike) \-- I would take any kudos that you \--

(Laughter.)

CHAIR JOHNSON: Okay. Then we will definitely follow-up and tag that on
the website. And some of Ms. Wilson\'s comments, with respect to them
looking at all of the different aspects of diversity, and including the
small and disadvantaged kind of opportunities would bode well for us to
incorporate, particularly overlaying Abernathy\'s comments with respect
to, that may be the trend as it relates to what the law may be
requiring, or leading us to do.

So thank you very much for that input. Any other questions or comments?
Yes, sir.

PARTICIPANT: Relative to subcommittee processes, and how each respective
subcommittee, and the committee at large, will stay abreast of the other
subcommittee\'s activities.

Is there any, I think you mentioned this earlier, that there was, at
least, an interim report, that is sometime in May, if I remember
correctly. Is there any other intermediate reporting steps along the
way, and will those subsequent reports be available on the website, you
know, so that we can cross pollinate thinking, and that kind of thing?

PARTICIPANT: There are several levels to that. The answer is that we
anticipated that at the January meeting we would have the subcommittee
progress reports at that time; that there will be a sharing, then, of
what is going on in the subcommittees.

And then, in the meantime, as to the extent that there are specific
documents that are generated within the subcommittees, that they want to
put on the website to be able to share with the others, we can do that,
as well.

CHAIR JOHNSON: Another question?

PARTICIPANT: On the work product, I think it was laid out very well by
Jane, and it may be imbedded in your thinking on best practices. But I
was struck by your comments, as well as Chairman Powell\'s and the other
Commissioners, about the fact that this isn\'t about social justice,
this is about good business, and America having the best communications
businesses and infrastructure, and innovation in the world.

And we are all here because we take it for granted that diversity is a
business strategy. But I would like to encourage this committee, and I
think it could be quite impactful if we don\'t turn it into trying to
write a long statement, but something that reflects our view about how
critical this is.

Because I think that a well written business case for diversity, if you
will, from as diverse a group as this one, could be a useful tool in
helping to carry the message forth, if you will, as our final report
comes out.

And I would like to encourage, whatever subcommittee that falls in, that
we give some thought to that as part of our work product.

CHAIR JOHNSON: Excellent suggestion. Any other comments or questions?

(No response.)

CHAIR JOHNSON: Seeing none, if you could then check your calendars with
respect to the first date, at least, the January 26th, we do intend to
move forward on that date. Certainly we would expect the subcommittees
to meet via teleconference calls, or however the groups may decide to
meet, to start their work.

I and Jane will be working, actively, with the Chairs as well as the
committee members, to ensure that they have all of the resources, and
the tools that they need to move forward. But there would be some
expectation of some preliminary reporting back to the full group, with
an understanding that whatever the subcommittee may report out, it will
require a vote of the full body in order to go forward.

So there will be some coordination and even if you aren\'t sitting on a
particular group, you will have the opportunity to guide that process,
and to have input and to, certainly, to vote as to the merits of
whatever proposals may be coming forward.

Any other final comments?

PARTICIPANT: I have one further question.

CHAIR JOHNSON: Yes, please.

PARTICIPANT: What would be the form of (off mike) specifically will we
have access to the presentations made by the panel today?

PARTICIPANT: Yes, we will be doing the minutes of the meeting, and I
will ask for the presentations, and make those available.

CHAIR JOHNSON: Any other comments?

(No response.)

CHAIR JOHNSON: Seeing none, we will show this meeting adjourned. And
thank you very much, again.

(Whereupon, the above-entitled matter was adjourned.)