FEDERAL COMMUNICATIONS COMMISSION

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ADVISORY COMMITTEE ON ║

DIVERSITY FOR COMMUNICATION ║

IN A DIGITAL AGE ║

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Tuesday,

June 10, 2008

The meeting was convened, pursuant to notice, at 10:00 a.m., in the FCC
Meeting Room, at the Federal Communications Commission, 445 12th Street,
S.W., Washington, D.C., Henry Rivera, Chairman, presiding.

[MEMBERS PRESENT]{.underline}:

HENRY RIVERA, Chairman

JONATHAN ADELSTEIN

DAVID HONIG

BARBARA KREISMAN

ANNE LUCEY

ANDREW SCHWARTZMAN

DIANE SUTTER

JAMES WINSTON

RUSSELL FRISBY (via telephone)

ABEL GUERRA (via telephone)

RAYMOND GUTIERREZ (via telephone)

MARGARET LANCASTER (via telephone)

MARIE LONG (via telephone)

BOB MENDEZ (via telephone)

SCOTT NAVARRO (via telephone)

TARA SWEENEY (via telephone)

MARGARITA WILDER (via telephone)

[TABLE OF CONTENTS]{.underline}

[PAGE]{.underline}

I. Opening (Kreisman) 5

II\. Introduction and Agenda Review 6

(Rivera)

III\. Working Group Interim Reports 8

and Recommendations

IV\. Access to Capital (Honig) 8

V. New Technologies (Frisby) 20

VI\. Task Force on Eligible 32

Entities (Honig)

VII\. Outreach (Honig) 35

VIII\. New Business (Rivera) 40

IX\. Adjournment (Rivera) 75

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

(10:02 a.m.)

MEMBER KREISMAN: Everybody on the phone, I\'m sorry to do this to you.
We have some audio problems that we have just gotten resolved. We have
to start all over, because the Reporter just didn\'t get anything, and
we could barely hear you.

So could you start identifying yourself on the phone, and then the
Reporter can get your name. If you could spell out your name, and
indicate your organization.

MEMBER GUTIERREZ: Sure.

MEMBER KREISMAN: Go ahead, Ray. Go ahead.

MEMBER GUTIERREZ: My name is Ray, R-A-Y-M-O-N-D, Raymond, last name is
Gutierrez, and that\'s G-U-T-I-E-R-R-E-Z. And I\'m representing Showtime
Networks on behalf of Matt Blank.

MEMBER KREISMAN: Thanks. We got that really well. Next?

MR. NAVARRO: This is Scott Navarro, S-C-O-T-T, N-A-V-A-R-R-O,
representing Max Navarro with Operational Technologies.

MEMBER KREISMAN: Next? From EntraVision?

MEMBER FRISBY: Russell Frisby, R-U-S-S-E-L-L, F-R-I-S-B-Y, with
Fleischmand and Harding, F-L-E-I-S-C-H-M-A-N-D, and Harding,
H-A-R-D-I-N-G.

MEMBER KREISMAN: Anyone else? I think we still have EntraVision out
there.

MEMBER LONG: Yes. This is Marie Long with AT&T, M-A-R-I-E, L-O-N-G.

MEMBER LANCASTER: This is Margaret Lancaster with Skadden Arps,
S-K-A-D-D-E-N.

MEMBER SWEENEY: This is Tara Sweeney with Arctic Slope Regional
Corporation.

MEMBER WILDER: This is Margarita Wilder with EntraVision,
M-A-R-G-A-R-I-T-A, W-I-L-D-E-R, with EntraVision.

MEMBER GUERRA: And Abel Guerra, Abel, A-B-E-L, G-U-E-R-R-A, with the
Latino Coalition.

MEMBER KREISMAN: Is that everybody?

(No response.)

Okay. I\'m going to ‑‑ good morning, everybody. This is the sixth
meeting of the Advisory Committee on Diversity for Communications in the
Digital Age under our Charter Number 2.

Today we have some recent developments to discuss with respect to the
preparation of informational guides, there are a number of
recommendations from the Technologies ‑‑ New Technologies Group. We also
have a lot to talk about with respect to the upcoming Access to Capital
‑‑ I\'ll call it an event ‑‑ planned for New York City on July 28th and
29th, with the Commission meeting being on July 29th.

And with that, I turn it over to Henry.

CHAIRMAN RIVERA: Thank you, Barbara.

Welcome, everyone.

MEMBER KREISMAN: I forgot to go around the room here.

CHAIRMAN RIVERA: Yes. Why don\'t you do that.

MEMBER KREISMAN: Okay. We didn\'t tell the people on the phone who is
here at the table, so why don\'t we go around the room here, starting
with Andy.

MEMBER SCHWARTZMAN: This is Andy Schwartzman from Media Access Project.

MEMBER HONIG: David Honig from MMTC.

MEMBER SUTTER: Diane Sutter, ShootingStar Broadcasting.

CHAIRMAN RIVERA: And Henry and Barbara. So as others come, we will let
you know.

I\'d like to welcome Diane to the Committee. Welcome, Diane. She was
appointed in April by the Chairman. Diane, as many of you may know,
leads the training effort at the NAB, and does a wonderful job there,
and has a long and broad history in broadcasting. So she is an
operations person, hands-on person in the broadcast industry, very well
regarded in the broadcast industry, so we are very happy to have her.

And also, I\'d like to welcome Russell Frisby, who is on the phone with
us. Russell was a legal assistant with Commissioner Joe Fogerty when I
was at the Commission in the early \'80s. Then, he went on to chair the
Maryland Public Service Commission, and he is now practicing law. And we
are very, very happy to have him, not only on the Committee but chairing
the new Technologies Committee. I am very grateful for that, Russell. So
welcome to you also.

MEMBER FRISBY: Thank you.

CHAIRMAN RIVERA: As Barbara suggested, we\'ve got a ‑‑ we\'ve had a lot
going on at the Committee. I\'m sure some of you ‑‑ I\'m telling you
anything you don\'t know, because you\'ve been involved in the Committee
work. But we really do have a lot of things that have been happening
here, and I think we\'re going to get right to it and start with David
Honig, who is going to give us a report on the Access to Capital
Subcommittee on behalf of Rodney Hood, who is in Portugal, unable to be
with us at the moment, but who has been working very hard on this.

Anne Lucy has just joined us from CBS. Welcome, dear. Nice to see you.

So, David, you\'ve got the floor, sir.

MEMBER HONIG: Thank you. The Access to Capital Subcommittee has met a
couple of times for the purpose of considering the right timing, format,
and content of a hearing that we recommended originally to ‑‑ that the
Commission hold on the subject of access to capital in both the media
and telecom space, and particularly the potential involvement of large
private equity houses in providing equity as well as debt capital for
new entrants and minorities and women.

This proposal of such a conference originated with Commissioner Tate in
January 2007. Her idea was specifically to hold it in New York where the
money center banks and the private equity firms predominate.

And when the Subcommittee took this up, we thought that it was best
done, although it could be done as a conference with mentoring, and so
on, that it might be best done as an en banc hearing, to enable the
Commissioners to get a very granular picture of how capital is raised;
what are the impediments that small firms, designated entities,
minorities, and women, face in securing capital in the current
environment.

And what potentially could evolve from this is a clear sense of what the
Commission could do, either through regulation or through other means,
or what Congress could do to facilitate access to capital in this field.

Last week we heard from Dan Gonzalez on behalf of the Chairman that the
Chairman had agreed to participate in an en banc public hearing, and
that the Diversity Committee would organize in New York with the date to
be July 29th. Anticipating that there might be such an event, Barbara
Kreisman had reserved the facilities of Barnard College for that event.
The evening before the Diversity Committee would meet and hold its next
regular meeting.

Evidently, what the Chairman wants to do is have the July regular
meeting of the Commission occur right there. And, therefore, I have
taken the liberty of preparing just kind of a first draft, just some
informal ideas, of how such a hearing might be structured, if it were
done as a straight-through 9:00 to 5:00 event that after, of course,
having the usual calendar items that the Commission would take up the
Commission would then receive an overview of capital markets, it would
hear from representatives of some of the large equity and debt funds and
their experiences in advancing ownership diversity, then hear from
smaller and specialized funds, including what used to be called MESBKS,
on that same subject. Break for lunch, then consider the experiences of
some of the broadcast, cable, and telecom executives, particularly those
that are minority, women-owned, or work with them, or invest in them, or
mentor them, as well as brokers, on how the equity and debt landscape
that we face right now affects minority, women licensees, and
entrepreneurs.

And conclude with a discussion of access to capital barriers that are
present in the Act, the rules, and in application processing, then open
it up with a full hour of brainstorming, discussion among the
Commissioners, and questions from the public.

It\'s designed this way so that, unlike some en bancs that the
Commission occasionally has, this would really develop a good record
with the Court Reporter, with an exchange from some of the best people
in the field, the most active people in the field, that the Commission
could really use in the future to develop policy and to develop
legislative recommendations.

CHAIRMAN RIVERA: Thank you, David.

I would just like to take the Committee back a little bit. The genesis
of this conference really was with Commissioner Tate. She was very
interested in having this conference. The full Commission voted on it in
its diversity item. When was that item? In June ‑‑ I mean, April?

MEMBER HONIG: December.

CHAIRMAN RIVERA: Oh, December.

MEMBER HONIG: We voted out December 18, \'07, published in the Federal
Register in March, and takes effect July 15th.

CHAIRMAN RIVERA: Okay. Anyway, the full Commission voted to have this
conference, and so we have been working with the Chairman\'s office in
an attempt to put it together. So I ‑‑ the reason I gave you that little
bit of history is because I wanted to make the point that this is not a
Diversity Committee hearing. This is an FCC event. It\'s an FCC hearing.

And what I have asked David and Rodney to do is to think about the
format of this conference, and that is what David has done, and that is
what he was just reading you.

Nevertheless, the Chairman\'s office obviously will have the last word
in terms of what this thing is going to look like. We will get you
copies, if we haven\'t already done that, of what David has put together
here. And we\'re looking to hear from all of you in terms of potential
speakers and the format, indeed the agenda.

So what David has done for us is not the end of the process. Indeed, it
is just the very, very beginnings of that process. And, again, we\'ll
have to work with the Chairman\'s office, and they will have the last
word on this.

The second thing I want to mention to you is that on ‑‑ please save July
28 in the afternoon, late afternoon probably, for our next meeting. That
would be followed, hopefully, by a reception for the participants in the
conference and for the Commissioners who would be coming in for their
meeting in the en banc. And at a place yet to be determined, as soon as
we work those logistics out, we will get that information to you.

Obviously, we don\'t expect that everyone is going to be able to make it
to New York for the meeting or for the conference, although I certainly
would encourage all of you to be there, if you can possibly make it. But
if you can\'t, we will have a call-in number for you.

So I think those are the two points I wanted to make. I wanted to note
Jim Winston has just joined us from NABOB. Jim, welcome. Nice to see
you.

MEMBER WINSTON: Good morning. Sorry I was late.

CHAIRMAN RIVERA: Oh, no problem.

Now, are there any questions about the conference or about the proposed
agenda that David has just put out, or anything else surrounding this
particular initiative?

MEMBER FRISBY: This is Russell. I just want to congratulate you. This is
very important, extremely important.

MEMBER KREISMAN: I would like to piggyback if I could. What\'s really I
think important from the Committee\'s viewpoint is when you look at ‑‑
you all have this document. It was e-mailed to you. Forget the format at
the moment. What I\'d like to really concentrate on is the panel, the
subject of the panels, if you agree or if you have any other
suggestions.

I know last night I happened to sit next to Commissioner Cobbs. I know
he made some comments to you, Jim, about your input. I\'d like you to
look at that. This hasn\'t gone any place. And also, as Henry said, the
speakers.

What I would like to do ‑‑ and we were going to meet informally
afterward ‑‑ is actually I\'d like to give the Commissioner ‑‑
Commissioners two options, and the Chairman two options. One would be an
option for them to have the ‑‑ be able to get in and out. That would
mean the meeting would start later. We cannot provide any food for the
SGC part of this. I have already talked to the head of the Ethics
Office.

I\'m working on the reception, which should be a diversity event. That
looks like it\'s okay, depending on who the sponsor is. But for the part
‑‑ even if I wanted to go out and buy food, I\'m told, so you could come
in and have something to eat, that can\'t happen. So I don\'t know if
that affects ‑‑ you know, it\'s hard to have a break, an established
break, if you don\'t have, you know, coffee/tea.

MEMBER LUCEY: Unless there\'s a cafeteria or something, right?

MEMBER KREISMAN: Well, it is a school, but I don\'t think they are
particularly convenient to that particular room. And I\'m not sure
exactly what\'s open in July when the majority of the students aren\'t
there. It\'s New York City, so, yes, there are things right within close
proximity.

So I just wanted to ‑‑ I thought maybe we should give them two options.
One, if they wanted to come in that day, things would start later, we\'d
have less breaks. But I know Commissioner Cox, for example, seemed very
interested in being at a reception the night before and having an
all-day event. But I just thought ‑‑ when I asked, actually, a
representative of the Chairman\'s office, they said options are always a
good thing.

CHAIRMAN RIVERA: All right.

MEMBER KREISMAN: But what would be really good from this Committee is to
pick everyone\'s brain as to the substance of the panels, because
that\'s really the heart of this.

Andy, weigh in on this. This is ‑‑ David has done a great job for us to
all shoot at, but really look at the substance to make sure that you
agree with it. And that\'s how you get a really good project going is
everybody to weigh in.

MEMBER WINSTON: Well, later on in the new business area I\'m going to
want to talk about PPM Arbitron Rating Service. And I appreciate ‑‑ you
all were on the ball getting that out.

But I was thinking that, in terms of the agenda, something that
addressed some of the current challenges in the industry, maybe not one
directed strictly at PPM, but to get Congressional consideration of
performance royalties being paid by radio stations, which would be an
additional cost to all radio stations in the country on top of the cost
they are currently bearing. And, you know, there are many radio stations
that are suffering ‑‑ having financial challenges right now.

So I think ‑‑ and from some of the conferences we have had at NABOB, we
have heard some of the capital sources saying that these challenges the
industry is facing would influence their willingness to invest in the
industry. So I thought something that talked about the challenges the
industry is facing might be appropriate for the agenda.

CHAIRMAN RIVERA: Okay.

MEMBER KREISMAN: Would you mind floating an e-mail? I think anyone who
has a suggestion like that, which is an excellent one, if you wouldn\'t
mind just replying to the e-mail I sent around with everyone\'s name on
it, and then we could have, you know, everyone voice their opinion and
sort of ‑‑ we can bring it back all together, if you wouldn\'t mind.

CHAIRMAN RIVERA: Thank you. Those are fabulous suggestions, Barbara. I
really appreciate it. I think it\'s important for all of us just to take
a step back and think about, you know, why we\'re here and what we\'re
doing in terms of this conference.

This is an excellent opportunity for us to educate the Commissioners
about this problem, and this is a significant problem in terms of
increasing minority ownership. And it has been since the early \'80s
when I was a supervising Commissioner on a Committee that dealt exactly
with this issue. Jim knows and David knows, so ‑‑ and Andy knows. We
worked very hard on this particular issue. It\'s still around, it\'s
still with us, and I think we need to take this opportunity to educate
the sitting Commissioners about this.

So please take to heart Barbara\'s requests for input on this. It\'s
terribly important, and we\'ll look for your e-mails. Any other
questions or comments on this?

(No response.)

All right. We\'re going to go ahead and move on. Russ, would you talk to
us about your Subcommittee\'s recommendation? I think everybody has been
e-mailed a copy of it.

MEMBER FRISBY: Yes. What I thought I\'d do is, given that I\'m on the
phone, give an overview, and then David could walk through the two
reports.

CHAIRMAN RIVERA: All right.

MEMBER FRISBY: Yesterday we looked at two issues. The first issue being
whether Class A low-power ‑‑ and I apologize, I hear the feedback ‑‑
stations should be afforded must carry status. And the second issue we
looked at was a more general issue with regard to the question of
procurement in the communications area, and what companies are doing in
light of the billions of dollars which are being currently invested in
various infrastructure builds and potential of procurement really being
a pathway to industry ownership and employment.

Now, with regard to the first question, whether or not Class A LPTV
stations should be afforded must carry status, we spent a lot of time
discussing this issue, and came up ‑‑ we didn\'t reach any conclusions.
We ‑‑ I think we all recognize this was a very important issue, but it
was a very complex issue. It was an issue about which we needed more
information, and David will walk through that.

With regard to the procurement ‑‑

CHAIRMAN RIVERA: Hey, Russ?

MEMBER FRISBY: ‑‑ issue, we thought ‑‑

CHAIRMAN RIVERA: Russ?

MEMBER FRISBY: ‑‑ that ‑‑

CHAIRMAN RIVERA: Russell?

MEMBER FRISBY: Yes.

CHAIRMAN RIVERA: It\'s Henry. Can I interrupt you? I\'m terribly sorry
to do this to you, but Commissioner Adelstein has just walked in the
room, and he has got to go give a speech very shortly. And he wants to
talk to the Committee. I hope you don\'t mind.

MEMBER FRISBY: I\'m always deferential to Commissioners.

CHAIRMAN RIVERA: Atta boy. Hey, thanks very much.

Commissioner Adelstein?

MEMBER ADELSTEIN: Sorry about that, Russ.

MEMBER FRISBY: No problem.

MEMBER ADELSTEIN: It\'s just a crazy day here today, and I want to ‑‑
you all know how I feel about this and how important your work is. So I
don\'t want to go on at length about any of that, and I only have a
minute. There\'s one topic I wanted to talk about real quick, and I know
it\'s on your agenda today, which is the personal people meters.

I see you have a ‑‑ you have a resolution here that you\'re considering,
and I wanted to underscore my view that it\'s very important that we
look into this. I am very concerned about the impact of these on
broadcasters today. I\'m afraid it\'s a clear and present danger.

We talk about these long-term solutions, but if we lose what little
toe-hold minorities and women have on ownership, then it\'s going to be
that much harder to recover and to improve the situation which is
already I think abysmal. So I\'m deeply concerned about what I\'m
hearing about this.

I\'m going out to visit Arbitron this week. I think I\'ll ask them the
hard questions. I\'ll ask you the hard questions. I think the Commission
needs to do that as well, and we certainly need the input from this
Diversity Committee as well on this issue.

I\'m not going to tell you how to vote or what to do about this
resolution. I\'m just going to tell you I think it\'s an important
resolution. I think it\'s an important issue, and I want to thank you,
Jim, for putting this on our radar screen here, and David and everybody
else who has done that. I\'m very concerned about it.

So thank you for at least thinking about that, thinking about what we
can do, and just as importantly thinking about what you can do to help
us understand what\'s really going on in the marketplace with regard to
these PPMs, and whether they\'re really working, whether they\'re
accurate. All we want is accuracy. And if they\'re not being accurate,
we\'re getting undercounted and losing revenue. This is a potential real
crisis.

CHAIRMAN RIVERA: Thank you very much.

MEMBER ADELSTEIN: That\'s all I wanted to say. Thank you all for
considering that today.

CHAIRMAN RIVERA: Thanks for coming, Commissioner. We appreciate it, and
we appreciate your words of wisdom. And we\'re certainly going to take
that up later.

Russell? Okay. Russell, would you mind starting over?

MEMBER FRISBY: Well, I think at this point, why don\'t I turn it over to
David, who can walk through the different reports, one being ‑‑ and go
through our proposals.

CHAIRMAN RIVERA: All right. That\'s a good plan. Go ahead, David.

MEMBER HONIG: Thanks, Russell.

Let\'s start, I guess, with the one on procurement. This one actually
takes the form of a recommendation that the Subcommittee wants the full
Committee to vote on. There is statutory authority from the \'92 Cable
Act for cable systems to ‑‑ and the language says ‑‑ encourage minority
and female entrepreneurs to conduct business with all parts of its
operation.

The cable system should do this, and cable systems should analyze the
results of its efforts to recruit, hire, promote, and use the services
of minorities and women, and explain any difficulties encountered in
implementing its equal employment opportunity program.

So this provision, although it is basically phrased as ancillary to
equal employment, really relates to procurement. The relationship is
more than just a pigeon hole in the statute, because of course when a
company is able to get a foothold in the industry as a supplier, that
enhances its ability to, first, raise capital and develop expertise to
ultimately become an FCC regulatee or licensee, to incubate others who
will become entrepreneurs and follow that path, and to train executives
and professionals who will ultimately work in these regulated
industries.

This provision is implemented on the cable side by a regulation, Section
76.75(e), which unfortunately appears to be essentially dormant. The
Committee, in the Subcommittee meeting yesterday, felt that because this
provision ‑‑ the authority is so clear with respect to cable, and there
are other provisions of the ‑‑ in the statute ‑‑ 151, 257, 309(j) ‑‑ in
which Congress has spoken about the importance of preventing
discrimination, lifting market entry barriers, and promoting minority
ownership, that the Commission most likely already has statutory
authority, if it chose to do so, to expand this initiative into other
industries, including wire line, wireless, broadcast, and satellite.

In order to do that, of course, as well as develop a more thorough means
of implementing and promoting compliance with the provision it already
has, the Commission would need to undertake a rulemaking proceeding.

And, therefore, the Subcommittee recommends that the full Committee
recommend to the Commission that it issue an NPRM that would examine the
question of statutory authority, the extent and nature of potential
contracting opportunities, barriers to entry and inclusion faced by
minority and women contractors, how the agency can encourage and ensure
compliance with its procurement rules, and implementation of the clause
that says \"analyze the results of its efforts.\" Basically, the
information provision and disclosure provision relating to knowing
whether procurement opportunities have been provided.

Those are all questions, among others, that the Commission could choose
to ask in an NPRM. And if the Chair would entertain one, I would like to
move that this recommendation be adopted.

CHAIRMAN RIVERA: All right. Is there a second?

MEMBER SCHWARTZMAN: Second.

CHAIRMAN RIVERA: All right. Andy, I see you\'re on the Subcommittee. Do
you have anything to add to David\'s and Russell\'s explanations?

MEMBER SCHWARTZMAN: No. I think it has been fully covered.

CHAIRMAN RIVERA: All right. Marie Long, I know you\'re on the phone, and
you\'re on this Subcommittee. Do you have any comments to share?

MEMBER LONG: No, I don\'t.

CHAIRMAN RIVERA: Okay. Are there any questions of David or Russell on
this recommendation?

MEMBER FRISBY: This is Russell. I will say that to some extent the FCC
would be following the lead of the states. California, as well as NARAC,
has been particularly active on these issues. And I know that ‑‑ I
think, Marie, as I recall, AT&T participates in the NARAC effort.

MEMBER LONG: Yes, we do.

CHAIRMAN RIVERA: All right. Thank you.

Anything else?

(No response.)

Are you ready for the question? All in favor of this recommendation
please say aye.

(Chorus of ayes.)

Any opposed?

(No response.)

Motion carries. Thank you.

David, the next recommendation, please?

MEMBER HONIG: We had a very lively discussion about the report, and this
addresses the question of Class A LPTV must carry. We had a very lively
discussion yesterday at the Subcommittee with subject matter experts
from the LPTV community and from the cable community, and realized that,
as a Subcommittee, we don\'t yet have sufficient information on a number
of critical points to be able to make a recommendation to the full
Committee.

What we, therefore, determined to do was to follow up with the subject
matter experts, as well as other parties, with a series of questions
that we would ask them to respond to to the Subcommittee. Those
questions are set out in this report. They basically relate to the
questions of statutory authority, the number and type and service
provided by these Class A stations, how it comes to pass that there are
barriers to participation in these stations and on cable, and whether
there are other factors which may be inhibiting the availability of
channels for them, whether and in what form FCC intervention may be
necessary, and the impact of the DTV transition, of course, this
elephant in the room on all of this.

We are expecting to sharpen, of course, this list of questions and get
it out to the affected parties and the experts soon, so that by the next
meeting we may be in the position to have either a further report or a
recommendation.

CHAIRMAN RIVERA: Thank you, David. Any comments from anyone on this ‑‑
on the status of this recommendation?

(No response.)

Okay. All right. Let\'s move on, then, to the Task Force on Eligible
Entities, David, which you chair.

MEMBER HONIG: Do you want to take up the PPM resolution, which I guess
really flows from the ‑‑ from new technologies at this time, or take it
up later?

CHAIRMAN RIVERA: I was actually going to put it in the New Business. But
if you think it\'s more appropriate to deal with it here, we can do
that. What do you want to do, Jim?

MEMBER WINSTON: I don\'t want to cut the line. I\'m quite happy to
address it now or later. You set an agenda. I\'m happy to live with your
agenda.

CHAIRMAN RIVERA: All right. Why don\'t we take it up in New Business,
then.

MEMBER WINSTON: Okay.

CHAIRMAN RIVERA: All right?

MEMBER WINSTON: Okay.

CHAIRMAN RIVERA: Okay. Eligible entities?

MEMBER HONIG: The Eligible Entities Subcommittee is really looking at
two different paradigms that we feel could prove ‑‑ could be promising
as a less dilute means of advancing minority and women ownership that
would still be constitutionally satisfactory. The means used now is that
an eligible entity is defined by the Commission as a small business, but
that is very dilute, as it turns out, especially in commercial radio.

So we prepared this agenda of questions, version four of which is the
one we are working from now ‑‑ that\'s attached to the materials ‑‑ and
thus far have had interviews at some length with four subject matter
experts ‑‑ Matthew Berry, who is of course the Commission\'s General
Counsel; Tom Henderson, who is one of the leading civil rights lawyers,
formerly Director of Litigation for the Lawyers Committee; Kent Lawless
from the LSAC; and Camille Dejana of the ABA; the latter two of whom are
experts on the subject of how law schools in particular have considered
factors that ‑‑ under a paradigm that we\'re calling \"full final
review\" under which the Commission could conceivably take into account
the extent to which an applicant for Commission authorization has
overcome barriers and overcome disadvantages.

At our last gathering that we held last week, June 4th, we decided that
we would have one final round of subject matter expert interviews. That
would be June 25th. We have invited Henry Geller, Ken Robinson, and Jane
Mago to meet with us. Ken is already confirmed.

And our hope is that by, realistically, September, the Subcommittee will
be in a position to present a report and recommendations to the full
Committee.

CHAIRMAN RIVERA: Thank you, David. I know the Committee has been working
very hard, and meeting often, and I want to particularly thank Anne
Lucey for hosting these meetings. It\'s very kind of you and your
company to do that. We appreciate it.

So thank you. Keep up the good work. And we\'re looking for good things
from you. I know this is a thicket, and a difficult issue to deal with.
But it seems to me that you\'re getting the best and the brightest in
front of that Subcommittee, and we\'re looking for a terrific report
from you when you get it done.

Okay. Outreach.

MEMBER HONIG: Okay. The Outreach Subcommittee has meet on a couple of
occasions and considered the question of whether information should be
provided broadly to the general public, and to particular subsets of the
public, on how diversity in our industries is advanced and can be more
readily advanced at the voluntary initiative of interested parties.

There are really two key audiences that we\'ve identified. One is
corporations and trade associations in the field who might benefit from
having before them a set of well thought out best practices along the
lines of what was done in the ‑‑ in a more elaborate way in the equal
employment field in 2004 when our best practices guide was developed.
That was also aimed primarily at companies.

The other document, which would need to be much more granular because
it\'s really aimed at entrepreneurs who need a vast amount of
information about these sometimes esoteric industries and the Commission
and how one successfully negotiates the transactional and
capital-raising process, this would be a guide that would have the depth
and granularity actually of the best practices guide for employment that
was developed in 2004, because of the depth that it would have and what
it would cover, which is how to raise capital, negotiate joint ventures,
negotiate acquisitions, develop a new media strategy, FCC policies and
procurement opportunities. That\'s a lot.

We felt that it would be necessary to have that contracted outside, much
as the workplace diversity guide was in 2004. That guide was done by the
Commission at a cost of \$25,000. That I think is probably about what it
would cost to develop this kind of guide.

This, again, is a subject which, while not committing the funds, the
Commission did vote to undertake in one of the ‑‑ in granting one of the
proposals in the diversity order it voted out in December.

So the recommendation that the Subcommittee on Outreach wanted to
present to the full Committee for its consideration and vote today is to
recommend to the Commission that it first have OCBO develop this company
guide, and that it undertake to find the funds ‑‑ obviously, we can\'t
commit the Commission to spend money, but the Commission can consider
whether it might somewhere find the money to underwrite the cost of
producing this entrepreneur\'s guide in approximately this form.

And if the Chair would entertain one, I\'d like to make that as a
motion.

CHAIRMAN RIVERA: All right. Is there a second?

MEMBER FRISBY: Second.

CHAIRMAN RIVERA: Thank you. Any conversation about the company guide
that would be prepared by the OCBO?

(No response.)

David, that ‑‑ what is the status of that guide at this time? I
understand that it is in some ‑‑

MEMBER HONIG: It\'s just a concept. There was some early material
developed by OCBO really aimed more at entrepreneurs, and the material
that OCBO developed is Commission rule and procedure specific, and would
be probably best suited as exhibits to the other one, to the
entrepreneur\'s guide.

CHAIRMAN RIVERA: Has OCBO committed to going forward with the company
guide?

MEMBER HONIG: No, they would have to take direction from the Commission.
But I think they\'ve got the capacity to do it if the Commission chose
to assign it to them.

CHAIRMAN RIVERA: Has the Subcommittee talked to them about it?

MEMBER HONIG: Yes. They were on the call that we had, and they are
willing and able, but of course they have to ‑‑ just subject to being
authorized.

CHAIRMAN RIVERA: Okay.

MEMBER HONIG: And they have ‑‑ by the way, they don\'t have any
discretionary funds of their own to hire an outside contractor. That
would have to be a Commission decision.

CHAIRMAN RIVERA: Right. All right. Is there any further conversation
anyone wants to have about this guide, or this recommendation?

(No response.)

All right. Hearing none, all in favor say aye.

(Chorus of ayes.)

Any opposed?

(No response.)

Motion carries.

You have another? Okay.

MEMBER HONIG: No, that\'s it.

CHAIRMAN RIVERA: All right. I just wanted to mention that Becky Klein
chairs this Subcommittee, but she is unable to be with us either on the
phone or in person today, so that is why David is making this report.

Okay. Now we\'re moving into New Business, and the first item of New
Business that I know of is the People Meter issue that we asked Jim
Winston to ‑‑ at our last meeting to draft a resolution about, and he
has done that. So the floor is yours, Jim.

MEMBER WINSTON: Okay. Thank you, Henry. Just to refresh, and perhaps for
some people who may not have been on the call or at the last meeting,
Arbitron is a ratings service that rates the audience of radio stations
around the country. And they are the only company that does that.

For about 40 years, they have done that through a technique called a
\"diary,\" where they send out a written diary to a set group of
households in each market, and got written reports back from them, which
they used to measure the amount of audience of each radio station in
that market.

In the last couple of years, they have decided to upgrade that service
to an electronic service ‑‑ a move that everyone in the industry
supports. We all recognize that in 2008 electronic measurement is the
way to go for the radio industry, as other industries have done.

However, in implementing the PPM methodology, a number of questions have
been raised about the results that the methodology is producing. In
Houston, when it first came out, the stations targeting
African-Americans in ‑‑ African-Americans and Hispanics in Houston fell
dramatically in their ratings.

In Philadelphia, the same thing happened. In Houston, the ‑‑ and the
culprit appeared to be that Arbitron was not reaching the number of
Hispanics and African-Americans that Arbitron\'s methodology said they
should reach. It wasn\'t outside persons trying to change the number of
persons they should reach. It was their methodology that said, \"We need
X number of African-Americans and Hispanics in the sample,\" which is
called \"in tab,\" meaning in the tabulation.

And their early results were showing results with various segments of
the minority community, because once they do their tabulation they break
it down by age and ethnicity. And for young African-Americans, young
Hispanics, they were getting 30 percent of the number of people that
they targeted ‑‑ that they said they needed to have, and that seemed to
be the problem with the methodology that was producing these very
negative ‑‑ these very unsatisfactory results.

NABOB began meeting with Arbitron over a year ago to address this issue,
and in spite of many meetings and many assurances that in the next month
or two the numbers will be where we want them to be, Arbitron has still
been unable to achieve the results that they said they need to have.

Simultaneously, Arbitron went to the Media Ratings Council, which is a
voluntary trade organization that the advertising industry, not just
radio, television, anybody who does media measurement goes there for
accreditation of their measurement services. And Arbitron had gone to
the Media Ratings Council for accreditation.

They were granted accreditation in Houston, but the methodology that
Arbitron uses in Philadelphia, and is proposing to use in subsequent
markets, is different from the methodology they used in Houston. In
Houston, Arbitron joined with Nielsen, the two of them joining together
to do an electronic measurement service.

After the Houston experiment, Nielsen and Arbitron went their separate
ways, and Arbitron continues to use in Houston the methodology they
created with Nielsen there, which, as I said, has been accredited by the
Media Ratings Council.

When they did their new methodology, and particularly with Philadelphia
and New York, the Media Ratings Council denied accreditation in both
instances, because the results that were being produced by their new
methodology were not meeting the standards that the Media Ratings
Council said they needed to be meeting to measure the audience they were
purporting to measure.

In spite of being denied accreditation in Philadelphia and New York,
Arbitron continues in Philadelphia to use the PPM methodology as the
actual method for buying and selling radio advertising time in that
market ‑‑ a status that\'s called \"going to currency,\" meaning that
it\'s used to ‑‑ for the exchange of money.

In New York, they delayed the rollout of PPM in New York because of
concern about the methodology, and they said they would delay New York
and several other markets until September of 2008. This was in late
November 2007 they made this statement.

And apparently they knew at the time that they were about to be denied
accreditation in New York and Philadelphia, although they did not make
that public until they filed an SEC report sometime later.

So where we are now is that Arbitron is continuing to move forward with
this September 2008 date for rolling out PPM in New York, Los Angeles,
San Francisco, and some adjacent markets to those markets, with the rest
of the top 50 markets being scheduled for rollout in roughly monthly
increments from now until 2010.

However, the results for the PPM methodology have gotten no better in
Philadelphia and New York, where they are doing ‑‑ they are still doing
test data, and they are about to release test data, we understand, in
Los Angeles and San Francisco. And our concern, of course, is that the
test data there will be very similar to the test data they are
experiencing in New York, and the actual data they are still
experiencing in Philadelphia.

The financial implications for minority broadcasters could be
devastating if the PPM data comes out in the manner that we expect. In
Philadelphia, the station targeting the ‑‑ the number one station
targeting African-Americans, which was number two in the market, when
PPM data came out it went from two to number 14. The Hispanic station
went from four to 17.

So we\'re looking at impacts that can be very devastating for these
stations. Just to put it in simple financial terms, in many markets,
advertisers will only advertise on the top five stations. So that if you
fall from two to 14, it\'s not ‑‑ it\'s not a fractional difference,
it\'s actually going from revenue to zero with respect to some
advertisers.

So, you know, and that of course is one scenario. The other scenario is
that advertisers will say, \"Yes, we\'ll advertise with you now that
you\'re number 14, but we want a 75 percent discount in the rate you\'re
charging us.\"

And, obviously, your overhead costs don\'t change because your Arbitron
numbers change. Your debt service doesn\'t change because your Arbitron
numbers change. So we have a clear and present danger, as Commissioner
Adelstein described it, with respect to minority broadcasters that could
have severe consequences as early as September of this year.

And so it\'s the ‑‑ basically, the only thing that stations in those
markets are talking about, and it\'s a matter that we believe could
undermine everything that the Diversity Committee is trying to do,
because it would take us backwards and erode any opportunity for going
forward.

I hope I didn\'t speak too long.

CHAIRMAN RIVERA: Oh, no, not at all. Now can you walk us through the
recommendation? What is it that you want the Committee to do?

MEMBER WINSTON: Sure. The recommendation is to request that the
Commission investigate this situation. We think that whether the
Commission has statutory authority to actually take action with respect
to this is a matter that needs to be investigated.

And if the Commission determines that it doesn\'t have statutory
authority to actually take action with respect to Arbitron, then we
would encourage the Commission to take the results of any investigation
it does do and share those with Congress, which may need to take action
to step in to do something about this monopoly situation.

CHAIRMAN RIVERA: All right. Thank you.

David, did you want to speak to this?

MEMBER HONIG: Sure. This is profoundly important, and I think that the
facts that are set out in the whereas clause are entirely accurate. We
had ‑‑ MMTC had one of its fellows ‑‑ Joe Miller ‑‑ look at this
question of the Commission\'s jurisdiction in the area, and he has
provided a draft report that I wanted to just summarize very briefly.

First, the Commission has subject matter jurisdiction to conduct ‑‑ to
find facts and to do the kind of investigation that is contemplated here
under at least four provisions ‑‑ 151, 257, 303(g), and 309(j) ‑‑ which
advance non-discrimination, the lifting of market entry barriers, new
uses for radio, and minority and women ownership.

The statutory provision that affords the Commission procedural authority
to do these investigations is 403 of the Act, implemented by Section 1
of the Commission\'s rules. I brought those, if anyone wants to go
through them. But basically what this ‑‑ what is important about 403 is
that these investigations are done typically by an ALJ. They are
fact-finding.

The full range of tools available in any other Commission fact-finding
proceeding, such as those under 309(e), are available to the Judge and
to the staff, including the ability to conduct discovery, take
depositions, call witnesses, and question them.

These are ‑‑ however, unlike a 309(e) or a 312 hearing, these are
non-adversarial proceedings. They are fact-finding proceedings, and the
advantage of this kind of investigation is that, subject to reasonable
protective orders, facts which are not able to be elicited and examined
in any other way, including sensitive information that may be
privileged, can be examined in camera by the Judge and the parties.

The witnesses can testify, and a Judge would normally look at their
demeanor, and thus be able to come up with a report which would have far
more credibility and moral authority than anything that interested
parties could possibly derive.

Now, the final question that we looked at was whether the Commission ‑‑
the extent of the Commission\'s discretion in looking at an issue
involving a non-regulated entity. And the answer is that when the
Commission finds, or it appears, that a non-regulated entity\'s behavior
frustrates the Commission\'s ability to do what Congress has required it
to do in other areas, in this case 151, 257, and so forth, then the
Commission has very broad discretion, and it can even be argued it has
very limited discretion not, to undertake an investigation.

The leading case of course is that involving Payola, in 1978, 42 R.2d
847. In this instance, just to give a sense of the magnitude of this
problem and its time urgency, the Commission recently adopted some 13
steps intended to advance minority and women ownership.

The most significant of those in terms of its economic impact, if it
were fully implemented tomorrow, is the ban on advertising
discrimination, which would, if fully implemented with full compliance
tomorrow, add about \$200 million in revenue to minority broadcasters.

This one issue of PPM has the potential, just conservatively, back of
the envelope, appears to have the potential to cost minority
broadcasters more than twice that a year, about half a billion dollars a
year, and would wipe out immediately all of the gains that the
Commission will have caused to come into being through its diversity
policies, and would potentially be the single greatest cause ‑‑ the
single greatest loss in asset value of minority broadcasters in history.

That\'s so serious and so immediate that, really, only through
Commission investigation can the problem be addressed.

CHAIRMAN RIVERA: Thank you, David. Anyone have any comments or questions
about this?

MEMBER KREISMAN: Can I ask a question?

CHAIRMAN RIVERA: Yes.

MEMBER KREISMAN: I understand how serious this issue is and the impact.
But what I\'m sort of curious as to ‑‑ I don\'t have any background in
it ‑‑ is basically you\'re saying that the present methodology, the
diary, is the preferred that has been accurate. Why doesn\'t this work?
I mean, what was the basis for the Media Ratings Council\'s failure to
accredit?

MEMBER WINSTON: The Media Ratings Council is ‑‑ all of its activities
are confidential. They do not make public statements about the reasons
for denial of accreditation. And, in fact, what they do is go to their
‑‑ if they deny accreditation, they encourage the company to reapply.
And we are advised that Arbitron has reapplied, but they keep all that
confidential.

And what I know from investigating this matter is that there was a
similar problem when Nielsen went to the local People Meter in
2003/2004, and there was a public outcry that it was not adequately
measuring minority television audiences.

Congress held a hearing and investigated this matter, and brought the
Media Ratings Council in to present to Congress its confidential
information. Media Ratings Council made all of its information available
to Congress at the time.

They have advised me that that is their policy and, if called in to
respond to a Congressional inquiry, they would do the same again this
time, which is, of course, one of the reasons why we are also talking to
Congress about initiating an investigation. But we think that it needs
to be looked at from every conceivable angle as soon as possible because
of the time sensitivity of the problem.

MEMBER KREISMAN: Have the minority broadcasters ‑‑ do they have any
speculation as to why the reason for the disparity? I mean, I\'m ‑‑ just
a matter of curiosity as to ‑‑

MEMBER SUTTER: It\'s a difference in methodology in terms of how the
work is actually done. So that change in methodology has resulted in a
very different result in terms of what they\'re measuring now. They\'re
actually measuring different things now, trying to get to the same
result.

MEMBER KREISMAN: I see.

CHAIRMAN RIVERA: Andy?

MEMBER SCHWARTZMAN: I\'m very comfortable with the recommendation and
the proposed resolution at the bottom of the page. I do have some
problems with the drafting of the resolution. It is not as neutral as I
think it could be, and I don\'t think it is necessary or appropriate to
be conclusory in the resolution. I think it impairs the independence of
the investigation if it appears to be conclusory.

I also have a long-standing concern with excessive reliance on the part
of the Commission and policy-making for private, unaccountable bodies.
And I do think that it is, therefore, surplusage to include explicit
reference for policymaking purposes as opposed to investigatory purposes
to include a paragraph about the denial of accreditation.

I certainly understand the mandate in the final paragraph to include
what Jim was talking about in terms of investigating, you know, the
facts, to the extent they are ascertainable, or getting Congress to
investigate the facts about the accreditation. I just don\'t think it
should be a whereas clause.

So in light of that, I make the following recommendations. First, is
that the whereas clause about the Ratings Council be deleted or,
alternatively, if it\'s not deleted, for clarification I would change
the word \"in\" on the first line to \"for.\"

CHAIRMAN RIVERA: All right. Just procedurally, the Chair is recognizing
Jim\'s request here as a motion, so can we get it on the floor as a
second? Can we get just a second, just to get it on the floor?

MEMBER HONIG: Second.

CHAIRMAN RIVERA: Okay. So we ‑‑

MEMBER LUCEY: I guess I don\'t ‑‑ this seems like a new issue. I know
Jim had raised it last time, but are we being asked to vote on something
today?

MEMBER WINSTON: It\'s just a motion at this point. You can vote against
the motion.

MEMBER LUCEY: Motion to do what?

MEMBER WINSTON: Motion to adopt this.

MEMBER LUCEY: Adopt this entire ‑‑

CHAIRMAN RIVERA: Point well taken. I was trying to get the thing on the
floor, and we\'ve got it on the floor now. And Andy is suggesting an
amendment, and I\'m going to ask Jim if he would accept that as a
friendly amendment.

MEMBER WINSTON: Okay. And, I\'m sorry, give me again your proposed
amendment?

MEMBER SCHWARTZMAN: My first amendment would be to delete the whereas
clause referring to the Media Ratings Council in its entirety. My second
degree, I guess it would be, would be, if that were not adopted, that ‑‑
to change the word \"in\" to \"for,\" just for clarity.

CHAIRMAN RIVERA: Okay.

MEMBER WINSTON: My view ‑‑ if the resolution seems adversarial, it was
not my intention for it to do so, but I probably am not capable of
writing totally objectively about this subject. So if deleting that
whereas clause would make it seem less adversarial, I\'m quite happy to
make that amendment.

CHAIRMAN RIVERA: Okay. We\'ll take that as a friendly amendment. Now ‑‑

MEMBER SCHWARTZMAN: I have two other minor amendments to propose. In the
whereas clause, which begins, \"PPM results have been objected to as
accurate and reliable,\" again, to avoid being excessively conclusory, I
would change the word \"numerous\" at the end of the first page, top
line I mean, to \"some.\"

CHAIRMAN RIVERA: Okay.

MEMBER SCHWARTZMAN: And I would delete the word \"numerous,\" a
surplusage on the second line.

CHAIRMAN RIVERA: Okay. So those are all friendly amendments from your
perspective?

MEMBER WINSTON: I can accept both of those.

CHAIRMAN RIVERA: Okay. Anything else?

MEMBER SCHWARTZMAN: Yes. In the next paragraph, I would ‑‑ just to avoid
being conclusory, I would change on the second line the word \"does\" to
\"may.\"

CHAIRMAN RIVERA: Okay.

MEMBER SCHWARTZMAN: And then, I have one other observation.

CHAIRMAN RIVERA: Please, go ahead.

MEMBER SCHWARTZMAN: This reads as if the Commission\'s job is to protect
and promote minority broadcasters or companies which promote
broadcasting to minorities. That is part of the Commission\'s job.

However, it seems to me that the problem that is being identified here,
if it is borne out through investigation, is something that adversely
affects advertisers, adversely affects all broadcasters, because
inaccurate information is bad for all broadcasters, and it adversely
affects the public.

And I would recommend that a paragraph be added that relates to the
potential adverse effects to those parties as well as to broadcasters or
companies relating to minority broadcasters. I think our mission is for
all of the American people.

CHAIRMAN RIVERA: I think that\'s an excellent point. Again, would you
accept that as a friendly amendment? At least conceptually.

MEMBER WINSTON: Conceptually, I guess the question is: can we vote
without it being drafted?

CHAIRMAN RIVERA: No. And that\'s to Anne\'s point, and I think that,
since everybody just got this, and we\'re sort of editing this on the
fly, I thought what we would do is to take it back. Perhaps you would be
good enough ‑‑ you working with David ‑‑ to incorporate Andy\'s edits,
and then we can bring it back to the Committee and hopefully vote in our
‑‑ either by circulation, an e-mail vote, or we can do it ‑‑ we can take
it up again in July at our meeting in New York.

MEMBER SCHWARTZMAN: I would ‑‑ I think this can be done quickly, and I
would urge that it be done by circulation, so that things can move on.

CHAIRMAN RIVERA: All right.

MEMBER MENDEZ: Bob Mendez on the line, by the way.

CHAIRMAN RIVERA: Hey, Bob. Great.

MEMBER KREISMAN: When you all agree on the language, I\'ll just send you
an e-mail and you can respond back. That seems like the best way to ‑‑
the Committee can actually do it that way. We\'ll do it on the spot.

CHAIRMAN RIVERA: Is that okay with you?

MEMBER WINSTON: Yes.

CHAIRMAN RIVERA: All right. What we\'re going to do, for those of you
who did not hear Barbara, we\'re going to rewrite this pursuant to
Andy\'s suggestions, and we\'re going to circulate it, and we\'re going
to vote by e-mail on this.

Anne, do you have something else to add?

MEMBER LUCEY: No.

CHAIRMAN RIVERA: No. Okay.

All right. Anybody else have anything to add?

(No response.)

All right. I think that was a great discussion. Appreciate everybody
pitching in on it. And just for ‑‑

MEMBER LUCEY: I just have a question about some of the process. An issue
like this, I just ‑‑ or any issue, I mean, all of the issues, we seem to
have task forces or some committee/subcommittee discussion ‑‑

CHAIRMAN RIVERA: Right.

MEMBER LUCEY: ‑‑ and this one just, I don\'t know. You had mentioned it
last time, and now I see a resolution, boom, we\'re asked to do
something.

CHAIRMAN RIVERA: Right.

MEMBER LUCEY: When, you know, I\'m not sure we have the ‑‑

CHAIRMAN RIVERA: Would you feel more comfortable if it went through a
subcommittee?

MEMBER LUCEY: Well, I don\'t know. I\'m just asking about the process
and procedure.

CHAIRMAN RIVERA: Oh, no. It\'s a point well taken, and you\'re
absolutely ‑‑ your observation is accurate.

MEMBER LUCEY: Because all of a sudden, this one comes up, and we\'ve got
these others that have been studied. And I\'m just ‑‑ I\'m not sure of
how we pushed ‑‑

CHAIRMAN RIVERA: Your observation is accurate. I mean, I had the same
thought.

MEMBER LUCEY: Okay.

CHAIRMAN RIVERA: David, just the ‑‑ Russell\'s Subcommittee didn\'t take
this up?

MEMBER HONIG: No. It came directly out of the charge from the last
meeting. Although there is no rule of the ‑‑ procedural rule of the
Diversity Committee that says things you have to go through at
Subcommittee, usually they do. There has been one resolution that was
passed because of time urgency on \'05 that came directly.

CHAIRMAN RIVERA: Right.

MEMBER HONIG: So we have the authority to do it this way, present it
directly.

CHAIRMAN RIVERA: But I ‑‑ I mean, I think Anne raises a good point, and
I don\'t know why the Subcommittee couldn\'t take this up on circulation
and then make a recommendation.

Russ, would you be able to ‑‑ would your Subcommittee be able to do
that, once we got you a revised copy? Are you still there, Russ?

(No response.)

We\'ll correspond with Russ on that, and then ‑‑ and we should be able
to get this ‑‑ move this pretty rapidly and get a Subcommittee ‑‑

MEMBER LUCEY: I\'m not trying to slow anything down. I\'m just kind of
‑‑ because it\'s like Class A low power must carry, for example. I mean,
that\'s an issue, I mean, I\'ve heard churn for years, you know, on
various, you know ‑‑ but this one, I don\'t know if the Subcommittee
could ‑‑ does it make sense for them to talk to Arbitron? Is that at all
within the charge?

I don\'t know, I\'m just asking if there\'s a procedure that might ‑‑ I
don\'t know ‑‑ bring more discussion or pressure, I don\'t know, or
whatever it is you\'re looking for. I\'m not sure.

MEMBER WINSTON: Well, you know, I would like something to happen sooner
rather than later. But I certainly don\'t want to engage in any
procedural shortcuts. So whatever the Committee feels is ‑‑ makes it
comfortable in terms of referring it to the Subcommittee is fine. I
think a meeting with Arbitron might be a time constraint problem, but
certainly, you know, I think if the Committee wants to talk with
Arbitron, they certainly should.

MEMBER KREISMAN: You could also give them a little bit more background.
I mean, you started to go there as to ‑‑ because I still ‑‑ you\'ve made
it very clear the impact. That is really clear, and I understand the
urgency and the ‑‑ but I still don\'t understand why ‑‑ it\'s
unfortunate we can\'t get our hands on the basis for the failure of the
Council to accredit it, because that probably would answer all of the
questions.

And probably you guys know the answers, but, I mean, why doesn\'t it
work? And you started to explain that it measures different things.
That\'s the kind of thing that would be helpful, if it could be included
in a report, because at least you know what you\'re focusing on. I mean
‑‑

MEMBER LANCASTER: Is that ‑‑ I\'m sorry. This is Margaret Lancaster.

MEMBER KREISMAN: Yes.

MEMBER LANCASTER: The main issue here is that Arbitron\'s, you know,
methodology with respect to its sampling panel is proprietary, and MRC
won\'t release the information. That\'s why we\'re pursuing the
Congressional angle, because the MRC has a precedent established where
the MRC will talk to Congress. So we are pursuing that angle.

The other ‑‑ and the other angle and the other prong we\'re coming at
is, again, to have the FCC investigate Arbitron as this potential, you
know, new advertising, you know, method has the potential to seriously
impact minority broadcasters.

And, again, the urgency is coming from the fact that they are planning
to roll this out in the fall. And if nothing is done, or if no one
stands up to ask, you know, the appropriate questions of Arbitron, and
to get more information out of them, because they are being very
tight-lipped ‑‑

CHAIRMAN RIVERA: I think what we\'re trying to do here is, is we\'re
asking the Commission to take a look.

MEMBER LANCASTER: Right. To ask the questions.

CHAIRMAN RIVERA: To ask the questions. So, I mean, maybe as Ms.
Lancaster just pointed out, we couldn\'t ‑‑ we can\'t get at some of the
stuff that you\'re talking about. Maybe Congress can or the Commission
can.

MEMBER SCHWARTZMAN: I think it\'s ‑‑ to the Committee what this
resolution does, which is to identify a perceived problem and ask the
Commission to investigate it. I don\'t think this Subcommittee has the
capability, or probably even the authority, to really delve deeply into
that.

It\'s enough to recognize that there\'s a potential problem, and I hope
my changes reflect what is a potential problem rather than making the
conclusion that there is a problem, which is I think something for the
Commission to do.

MEMBER SUTTER: If this is something that is referred to a subcommittee,
the opportunity is that there are several major groups who have very
vocally looked into this themselves. I\'m speaking broadcast groups now
‑‑ those who are impacted by it.

And have stations that have been impacted by it, and there is a great
deal of discussion going on within the broadcasters themselves. And
certainly it might be advantageous to have one or two of those
particular broadcast companies to share their findings as they have been
delving into this in great detail, and have been working with Arbitron
on it.

There are several companies that come to mind that have been very vocal.
Certainly, Cox has been with Bob Neil. You have Inner City Broadcasting.
You have several companies that are actively working on this who might
be able to supply the Subcommittee with sufficient information that it
might make everyone more comfortable about a discussion about this
issue.

We also are going to be in New York in a month, and both Arbitron and
several of these companies have headquarters in New York. And if it was
something the Committee wanted to do, you would have the opportunity
perhaps to have a conversation. That might be more illustrative.

MEMBER KREISMAN: That\'s why that\'s written as to the panels. This
certainly ‑‑ it seems to me it will affect, as you pointed out, access
to capital. I\'m just ‑‑

MEMBER HONIG: The problem is that there is ‑‑ we don\'t have a month.
This ‑‑ the company plans to roll this out in the largest markets in
September. So that if the Commission were ‑‑ even if it were to decide
next week to initiate a 403 investigation, a judge would really have to
work hard to get a report done in August. It could be done.

Certainly, at least a paragraph could be added to identify, in a crisp
way, trying to keep this just to a page, some of the procedural issues,
or some of the substantive issues relating the methodology that have
been raised and vetted already. There are seven or eight ‑‑ there are at
least three that probably the Commission could ‑‑ if it saw that, could
just say, okay, this is what this is about.

MEMBER SCHWARTZMAN: Yes. I strongly urge that we vote to send this
matter to the Commission, so that the Commission can act expeditiously
on it. This Subcommittee doesn\'t have the staff, the capability, the
power. Statements to it are not subject to 18 USC 1001. It doesn\'t have
process. We are not an investigatory body.

But we certainly are capable of identifying a potential problem that
adversely affects large numbers of people, which I think this resolution
does.

CHAIRMAN RIVERA: I think that\'s very well stated. And the Chair is
inclined to agree with you. I think what we will do is clean this up,
then, and I certainly understand your point and I share it. I was ‑‑

MEMBER LUCEY: It\'s an attempt at delay. I\'m not ‑‑

CHAIRMAN RIVERA: No.

MEMBER LUCEY: To me, it was jus ta new issue, and I\'m just wondering ‑‑

CHAIRMAN RIVERA: Right.

MEMBER LUCEY: ‑‑ what the process and procedure is for any issue.

CHAIRMAN RIVERA: I was troubled by it as well. But given the ‑‑ well,
two things ‑‑ first, the urgency. We just don\'t have the time. And the
second thing is that all we\'re asking the Commission to do is to look
into it.

So, and as Andy correctly points out, we are not an investigative body,
but we are capable of identifying a problem that\'s going to affect a
lot of people, we think. So take a look at it, Commission, and I think
we\'re capable of doing that. So we\'ll circulate this clean copy, and
we\'ll vote on circulation.

MEMBER LUCEY: Can I add something to that?

CHAIRMAN RIVERA: Sure.

MEMBER LUCEY: You had mentioned something ‑‑ that the SEC has
jurisdiction. I mean, does that need to be listed here somewhere also?

MEMBER WINSTON: It could be, and that\'s a good idea. I think we should
add a paragraph specifying that. Sure.

CHAIRMAN RIVERA: And that will be ‑‑ if the Commission decides to take
this up, we will have the ‑‑ the Commission would have the opportunity,
for example, to attempt to have a conversation in New York in the ‑‑ at
the en banc with these folks. We would have an opportunity to submit
other data that has been gathered. So there will be other opportunities.

Again, all we\'re doing is saying, \"Hey, we think there\'s a problem
here. You really ought to look into it.\"

Okay. So all in favor of proceeding that way say aye.

(Chorus of ayes.)

And then, we will vote on circulation on the substance.

Is there any other new business to come before the Committee?

MEMBER SUTTER: Has the Committee previously, or is it on an agenda to
consider a discussion having to do with tax certificates, and whether or
not that is something that is being looked at, or is that something we
have had discussion about previously?

CHAIRMAN RIVERA: David, do you want to address where we are with tax
certificates?

MEMBER HONIG: Margaret, are you on the line?

MEMBER LANCASTER: I am.

MEMBER HONIG: Margaret has been staffing the Committee for ‑‑ on tax
certificate restoration, which consists of about 20 companies and a
number of public interest and trade organizations focused on this, and I
think has the most immediate information on where it stands in the House
and Senate.

MEMBER LANCASTER: I, unfortunately, don\'t have positive news to report.
We have not heard back from Chairman Rangel\'s office. But on the Senate
side, Senator Menendez is ready to drop his ‑‑ is quite excited about
it. He is actually planning a publicity push ‑‑ is trying to put
together for it now.

And we will do everything we can to help, you know, shed some light on
these important initiatives. So I think we\'re in good stead. We\'re
definitely getting more people ‑‑ more and more people on board as we go
forward. And while we are, you know, realistic that we may not be able
to accomplish very much this session, I think we\'re in good stead to
hit the ground running here.

CHAIRMAN RIVERA: I hope that\'s responsive.

Okay. Any other new business to come before the Committee?

(No response.)

All right. I want to thank you all for coming and for participating, and
would ask you, again, to hold July 28th in the evening for our next
meeting in New York. And we\'ll get those details out to you as soon as
we have them.

So thanks, everybody. We\'re adjourned.

MEMBER KREISMAN: Thanks, a lot, David, for your extraordinarily hard
work. Just want to say thanks. And also, he is not here, but Rodney Hood
has really done a great job on access to capital. He is really the one
who made all of the arrangements at Barnard. And he is in Portugal now,
but thanks.

(Whereupon, at 11:15 a.m., the proceedings in the foregoing matter were
adjourned.)