FEDERAL COMMUNICATIONS COMMISSION

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ADVISORY COMMITTEE ON DIVERSITY FOR

COMMUNICATIONS IN THE DIGITAL AGE

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COUNCIL MEETING

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MONDAY,

MARCH 10, 2008

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

PRESENT:

HENRY RIVERA, Chairman

BARBARA KREISMAN, FCC Designated Federal Official

SALVADOR GUZMAN, WHEW Radio

DAVID HONIG, Minority Media & Telecommunications Council

RODNEY HOOD, National Credit Union Administration

CARLTON HOSKINS, National Credit Union

Administration

REBECCA KLEIN, Loeffler Tuggey Pauerstein

Rosenthal, LLP

ANNE LUCEY, CBS

ANDREW SCWARTZMAN, Media Access Project

JAMES WINSTON, National Association of Black Owned Broadcasters

TABLE OF CONTENTS

OPENING BY BARBARA KREISMAN 3

INTRODUCTION & AGENDA REVIEW

BY HENRY RIVERA 3

WORKING GROUP INTERIM REPORTS:

ACCESS TO CAPITAL BY RODNEY HOOD 4

TASK FORCE ON ELIGIBLE ENTITIES

BY DAVID HONIG 18

OUTREACH BY BECKY KLEIN 27

ADJOURN

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

10:03 a.m.

MS. KREISMAN: Today is largely an informational meeting regarding the
status of several projects. And with that, I turn the mic over to
Chairman Rivera.

CHAIRMAN RIVERA: Thank you, Barbara. And thanks all for coming. We\'re
very pleased that you\'re with us this morning. We\'ve got several
people here at the commission. With us we\'ve got Jim Winston from
NABOB, Salvador Guzman, Becky Klein, David Honig, Anne Lucey, Andy
Schwartzman, Rodney Hood, and his assistant, Carlton.

So welcome to all of you. And again, thanks for coming.

As Barbara said, we\'re going to do primarily informational stuff this
morning. But we\'ve got some very interesting things going on. And I\'m
sure that you will be interested to know what\'s going on. Those of you
who are participating your own little committee work.

So, with that, I\'m going to start things off by asking Rodney Hood,
who\'s chairing our Access to Capital subcommittee, to give us a report
on the status of our conference.

MR. HOOD: Okay, the status of the conference is the following.

Good morning, we have secured Barnard College for the venue for the
conference. Scheduled now to take place on July the 30th, there in New
York City.

We are also still continuing to work with potential funders. Right now
the main thing that I\'m hoping to work with you all on, is determining
if we are in fact, going to go with a conference versus an *en banc*.

So those are one of the things that I think we hopefully can decide upon
soon. Just so we can merely get our speakers invited and some of the
other logistical things. But the important thing that was an outstanding
issue from our last meeting was getting the date and all that confirmed.

So, the college president has indeed given her imprimatur to the event.
The college is looking forward to making some of the students available.
And, other than that, that\'s it as of right now.

CHAIRMAN RIVERA: All right. Could you give a little details in terms of
what we were thinking about in terms of a reception prior, and all that?

MR. HOOD: Yes \-- yes, also ladies and gentlemen, we are also looking at
the opportunity of doing a reception the evening before the conference.
And that would afford opportunities for the funders and participants to
all have a chance to meet and discuss things informally. It would be a
networking reception, if you will.

We\'re hoping to do that with one of the either venture capitalists or
with one of the investment banks, that would be participating in the
program.

So we\'re looking to do that in New York. And that again, would be on
the evening prior to the conference.

CHAIRMAN RIVERA: And I\'m thinking about \-- assuming we go this route,
of holding a Diversity Committee meeting in New York, that would be just
prior to this reception that Rodney was just talking about.

So we\'d have the Diversity Committee meeting, we\'d go to the
reception, and then the next morning we would have \-- we\'d move into
the conference.

MALE: And that would be July 29th.

MR. HOOD: Yes, that would be the 29th, yes. And the event as we\'re
looking at now, will begin around nine that morning with a continental
breakfast. And then we would begin the sessions. We have given some work
or attention, to speakers. But the main thing is just knowing that we
would hopefully begin at nine and I think we would be breaking up around
three o\'clock.

And then for those who wanted to stick around, they could still maybe
meet in informally.

CHAIRMAN RIVERA: Well, what we\'ve got going on here, as Rodney
mentioned, is once we had settled on a conference, then someone raised
the notion of having a commission *en banc* in New York.

Basically to hear from the investment community about how capital ought
to be raised. What the problems are with the capital markets, now in
particular. The problems that minorities and females have raising
capital. And the issue now, is whether we\'re going to go with an *en
banc*, which we thought was a really good idea. Or, whether we\'re going
to go with a conference.

And, we have been trying to get some guidance from the Chairman\'s
Office, in terms of to see what they prefer.

And, we are still seeking that guidance. So, at some point, we\'re going
to have to make a go/no-go decision because we\'re running out of time.
If we\'re going to organize the *en banc*.

MR. WINSTON: Chairman, can I ask, if it\'s not *en banc*, does that mean
that we won\'t have a good number of the commissioners there?

CHAIRMAN RIVERA: No, the commissioners seem to be very excited about
this. The notion of the conference was actually Commissioner Tate\'s
idea. We\'re pretty sure we can count on her at least. But we\'ve talked
to the others, and they are interested in coming.

In fact, our tentative agenda for the conference had a commissioners
panel. So we\'re \-- we\'re certainly anticipating that they will come
in either event.

MR. WINSTON: Okay, and the difference would be, that if it\'s an *en
banc*, they will \-- they\'ll listen to all day long\'s as opposed to
just being one panel?

CHAIRMAN RIVERA: Yes, and we\'ll have testimony scheduled, and it would
be \-- it will be a full-blown *en banc*.

MR. WINSTON: Okay.

MS. LUCEY: Either way is it an FCC or a Diversity Committee?

MS. KREISMAN: It is an FCC event. MS. LUCEY: It is.

CHAIRMAN RIVERA: Either way.

MS. KREISMAN: Either way it would be an FCC event. Understanding that a
lot of the planning, is by Mr. Hood, actually.

MR. HOOD: With your help, yes.

MS. KREISMAN: And in fact \--

(Off record comments.)

MS. KREISMAN: \-- the Chairman is in fact giving this consider now, I\'m
told. And hopefully, if you have a conversation with him, Rodney, you
could maybe bring a deal to closure.

MR. HOOD: Oh, yes.

MR. WINSTON: So is it fair to say that the distinction between the a
conference and an *en banc* would be the length of time the
commissioners are in attendance?

MS. KREISMAN: No, I think if you look at all our other *en banc\'s*, I
mean, basically if it\'s an FCC *en banc*, I think the presentations are
directed to influencing what the commissions policy should be. I think
it\'s a little different.

I think maybe there\'s some elements that could be combined. But, the
*en banc*, basically the commissioners are up here, as are traditional
ones. And people are making presentations to them, we can direct what we
want them to be.

I mean, the financial community maybe could bring in to their attention,
what really are the issues that this commission has to address, in order
to get appropriate investment into more diverse entities.

I think \-- I think our conference was more of an educational, how to do
it approach, versus I look at the *en banc*, maybe incorrectly, as more
of a policy. You all can speak to that if I have it wrong.

CHAIRMAN RIVERA: Yes, and there will the materials differences in terms
of actual event. But you\'re right, if it\'s an *en banc*, obviously the
commissioners will be there a longer period of time. We don\'t know how
long if it\'s an *en banc.* The Chairman will want to take testimony.
That\'s another we don\'t know.

But if it\'s a conference, they will be primarily affiliated with the
\-- with this commissioners panel.

Hopefully, they\'ll be there longer, but they certainly wouldn\'t be
there as long as \-- we couldn\'t count on them being there as long, as
we could if there was an *en banc.*

MR. WINSTON: So, our request then is for an *en banc*, is what we\'re
asking for?

CHAIRMAN RIVERA: No, what we\'re asking for is what \-- what would the
Chairman like to do. He\'s \-- the commission has incorporated this
notion of a conference in the latest diversity order. It\'s there and it
says we\'re going to put it on.

So, they\'ve \-- we\'re under a mandate to do that.

MS. KREISMAN: It\'s really at our request. At this Diversity Committees
request of \-- Henry circulated a suggestion by, I guess it was a
columnist, that the commission hold an *en banc* hearing on this issue.

And basically, it\'s at our request, that the commission consider having
a full *en banc* versus a conference.

So, it\'s really us.

CHAIRMAN RIVERA: Yes. So we\'re asking \-- so we\'re asking him what he
wants to do. What the commissioners want to do at this point.

MR. HONIG: There\'s a practical and a policy reason why it might be more
desirable to have an *en banc* now. The policy reasons, we haven\'t had
an *en banc* on this subject since December 2000. And before that, the
previous one was July 1984.

It\'s just a subject that the commissioners haven\'t had an opportunity
to hear testimony on in a long time. And to have their understanding of
it refreshed.

The practical question derives from the fact that, on July 21st and
22nd, dates that have been locked in for months, MMTC has its annual
conference on almost exactly the same subject as the contemplated
conference here.

The only difference being that the pool of capital funds would be
somewhat different, in that the larger New York funds would be taking
the lead. But, will we address that question? Before, I think we were
contemplating that there wouldn\'t be a conflict if it were being held
in say April or May, or September or October as a conference.

An *en banc* though, would present no conflict. And I think it\'s a
higher priority.

CHAIRMAN RIVERA: Yes, we\'ll work through that. And a smaller task force
is working on this. But we\'re very aware of the conflict.

Becky?

MS. KLEIN: Just wondered if it was your perception that the Commissioner
and the Chairmans Office was looking at this an indoor option, or might
it be possible to do both of them over a course of time?

MS. KREISMAN: We presented it as an and/or. Basically, you know, we \--
the commission basically indicated in the item, and an order, that it
wanted to do a conference. Basically taking a suggestion from us. And
basically when Henry circulated the idea to the committee here, it was
basically an and/or.

I think it\'s a practical matter. I don\'t see how we can pull them both
off at the same time. Just a matter of location in New York. It\'s not
so easy to get a place in New York, as Rodney can tell you.

So, I think as a practical matter, right now, I think it\'s one or the
other. There are other years and other days and other time. But now
it\'s presented as an and/or.

MS. KLEIN: Yes, I can\'t imagine doing both at the same time either.

MS. KREISMAN: No.

MS. KLEIN: I just wondered if it was feasible to do one at the end of
July, and then save whichever other for another date?

MS. KREISMAN: I think that\'s a very good suggestion.

CHAIRMAN RIVERA: That\'s a possibility.

MS. KREISMAN: Yes.

CHAIRMAN RIVERA: We\'ll have to see how the \-- and the Chairman may
decide that\'s what he wants to do.

MR. HOOD: And also, Mr. Chairman, I would just like for the committee to
note that, when we decide whether to go *en banc* versus conference, as
soon as we make that determination, that\'s going to then change the
level and scope of the funding sources that I\'ll be searching for from
the venture capital community.

CHAIRMAN RIVERA: Right.

MR. HOOD: So, that\'s one of the things that\'s really pressing, is
determine what would be our needs then. Will we still wish to go with
the reception the night before, and things of that nature.

CHAIRMAN RIVERA: Right. Well, and that brings me back to what I briefly
mentioned earlier. We\'re going to have to make a go/no-go here pretty
quick. And I think we\'re \-- as Barbara mentioned, you know, if you
have your conversation with the Chairman, maybe you can close the deal
one way or the other for us.

Meanwhile, we\'ll continue to press with the staff to ask them for
guidance, to get us a decision. But we\'re going to have to make a
decision pretty soon here.

Any other questions on this? I \--

MS. LUCEY: And the topic will be access to capital?

CHAIRMAN RIVERA: Yes, indeed.

MS. LUCEY: Okay.

CHAIRMAN RIVERA: We \-- I just have to thank Rodney for all the work
that he\'s put in on this thing. He\'s really owned this conference.
He\'s worked very hard to get us a place. He\'s set to go with the \--
trying to help find the funding. All of us will have to be engaged in
that process as well.

And David has been working hard on a draft to format for the conference,
if we go that route. So, we\'ve had a lot of people working on this.

Becky, as well, has been helping us to try and \-- with this conference.

So, I thank all of you for your very hard on work on this. I think it\'s
going to pay big dividends when we get this thing off the ground.

MR. HOOD: I agree.

MS. KREISMAN: Thank you.

CHAIRMAN RIVERA: Okay, David \-- I\'ve asked David to report on what\'s
going on with this task force on eligible entities. Again, this is an
item that has been thrown to us by the commission in the recent
diversity order. And they\'re expecting a recommendation from us on this
very difficult question.

And I\'ve asked David to chair this task force that\'s addressing this
\-- this very difficult issue and challenging issue.

So David, would you please tell us what\'s going on with that?

MR. HONIG: We were created as a subcommittee of the Diversity Committee
a couple months ago, to examine what might be some alternative paradigms
for eligible entities, under various FCC rules and policies, including
some of those just announced.

It might be less dilute, but nonetheless, constitutionally sustainable
than the small business paradigm that figures in the order.

To give you a sense for the urgency of the task, in the order that came
up this past Tuesday, the commission presented statistics which we
understand actually were developed the night before they voted. Showing
that for instance, for radio, minorities comprise 7.78% of all radio
stations. However, only 8.5% of radio stations owned by small
businesses.

That means as a practical matter, that in the very unlikely event that
all radio stations owned by non-small businesses were sold to small
businesses, minority ownership would increase all the way up to 8.5%.

And in fact, the direction of transactions is occurring the other
direction, as the industry consolidates. So, actually, it could be said
that this would have a very dilute, or possibly no effect on diversity.

Certainly therefore, we have to think to think of what are some other
paradigms. In the outline there, circulated around today, and for those
on the call, I guess I can e-mail it around.

This is version four of the work plan, of the subcommittee. And we also
mention the subcommittee members are Andy Schwartzman, Jim Winston, Anne
Lucey, Tara Sweeney, Vonya McCann, Susan Fox, Sylvia Strobel, and
myself.

We have met once, to just develop a work plan. And are now in the phase
of our work, which involves interviewing subject matter experts.

The first subject matter expert that we\'ll be interviewing on the
constitutional questions, 1st, 14th, and 5th Amendment issues, is
Matthew Berry, who is general counsel of the commission. That interview
is here at the Agency March 19th.

The second interview, we\'re trying to find a date for, about two or
three weeks after that, is with Tom Henderson. Who is a partner at
Springer and Lane, and was most recently the Director of Litigation for
the Lawyers Committee for Civil Rights.

We\'ll then be interviewing representatives of the state higher
education departments in Michigan, California, Washington state, and/or
Texas. All of which have had some experience with full file review.

And then we\'ll be interviewing experts on the administration of
policies before the commission \-- former commission officials and maybe
some current ones, on some of the issues related to implementation.

In the commission\'s order this past Tuesday, that order, Paragraph 85,
sets out 11 specific questions, that the commission wants the public to
comment on. The majority of those questions weren\'t included in our
regional outline. That\'s why you have this draft that now incorporates
them.

In a nutshell, what we\'re going to try to do, is to present a report.
Which ideally, would be done in June. I think that may slip a bit going
to the greater complexity of the task. That would discuss each of the
five potential paradigms.

One being small businesses. One being designated entities as we
understand that term to be used in the wireless context. One being new
entrants, which happens to be the criteria used for broadcast auctions.
One being socially and economically disadvantaged businesess, SDBs. And
the other being full file review, which is known in the educational
context sometimes under the name of comprehensive review.

This full file review is the paradigm that we\'ll be most focused on.
Not because it\'s the ideal, but because there is a much more glandular
and detailed process that would be needed to develop an SDB model, which
is beyond the ability of our community, given the need to refresh the
record, that was developed in 2000.

Full file review, in a nutshell, is a procedure developed in higher
education under which individuals present their credentials based on
grades and test scores \-- I\'m sorry, and also show that they have
personally overcome disadvantages, which may of may not be disadvantage
related to race or gender discrimination. It could be disadvantage of
other types.

Where the overcoming of those disadvantages is predictive of their
success in a challenging environment.

That seemed, in at least some respects, to be a good model to try and
import if it can be imported into our space.

The report would focus then on how this works constitutionally. How it
can be administered in a way which, both in theory and in practice would
be race neutral. How we would avoid any potential for First Amendment
issues to arise.

And then, the questions of administration with any new program. Some of
which Commissioner McDowell raised with us when we met with him.

When there is a new program that unavoidable involves some subjectivity,
who makes the decisions as to who\'s qualified. How do you make sure
that the decisions are made consistently among applications?

How do you make sure that in rendering those decisions, they\'re done in
a way that\'s fair, that doesn\'t interject attributes into the decision
making process that are unintended. How do you avoid the possibility of
fraud or abuse, as sometimes happens in the administration or commission
programs that involve conferring of advantage on one group as opposed to
another. However that\'s defined.

And how you deal with the question of just, the mechanics of certifying
a group \-- a company as compliant, and thus giving them in effect a
coin they can use to raise access to capital. Because they\'ll already
have been certified.

So, that\'s kind of a nutshell of what we hope to achieve.

The writing of this report, we\'ve had some discussions with Skadden
Arps about whether they, or a center at the Berkman Center at Harvard
University, that they work with, might be in the position to help us
take the fruits of the expert witness interviews that we\'ll develop,
and cobble them together into a report.

It\'d be great if they could do that and could do it pro bono. If they
can\'t, then it will probably be viable upon us to write the report.
That will take more time. Probably won\'t be done as well. But we could
get it done if we had to. It would just take considerably more time.

CHAIRMAN RIVERA: All right. Thanks David. The object of the \-- or the
goal of the task force will be to produce, as David said, this report.
Which will contain a recommendation.

That recommendation will come to this \-- to the Full Committee for a
vote and discussion. And any modifications we want of that committee \--
of that report, hopefully the report as edited by the Full Committee
would then be put into the record and sent to the commission, pursuant
to the commissions request for information from the committee.

So, are there any questions about the process and/or what the task force
is doing, from anyone?

MALE PARTICIPANT: No.

CHAIRMAN RIVERA: No. Okay, well David, thanks for all your work on this.
And for all the work that is yet to come. We appreciate your leadership
as well in galvanizing the task force and moving \-- moving things
forward.

With that, Becky, do you have any report for us today on the Outreach
Committee?

MS. KLEIN: Not really, only that I have reached out to Clear Channel, to
discuss their conference previously held. And they\'re going to be able
to refer me to a couple of people to help assist in getting names and
collecting entities that we may want to include in our list \-- in our
clearinghouse.

So, I think what is especially relevant is now having a date that we\'re
working towards. Whether conference or *en banc*, to work towards that
as the debut of this clearinghouse brochure.

And so that \-- this is \--

CHAIRMAN RIVERA: All right.

MS. KLEIN: This is our trigger I think, to \-- to be able to move
forward \--

CHAIRMAN RIVERA: That\'s right.

MS. KLEIN: \-- more actively

CHAIRMAN RIVERA: Right, wonderful. The New Technologies task \--
subcommittee is not on our agenda today. And the news from that
subcommittee is that our chairman, Max Navarro, has decided that he \--
his business demands just can\'t, won\'t allow him to continue in that
\-- in the capacity as chairman.

So, he is \-- however, he is going to stay with us on the Diversity
Committee. And I\'m looking for a new subcommittee chair. And again,
I\'m looking to the Chairman\'s Office for some guidance on that. And I
will \-- I should have an answer and a person soon I hope.

So, stay tuned on that.

Does anyone have anything else to bring before the committee?

Yes, Jim?

MR. WINSTON: Yes, I\'d like to \-- this is Jim Winston for those folks
on the phone. I\'d like to bring to the committees attention, a new
matter of concern to minority broadcasters. For both black and Hispanic
broadcasters in particular.

For those of your who are not that familiar with the broadcast industry,
there\'s a company called Arbitron, that measures radio audiences for
the radio industry. They have a monopoly in that business.

And, for years, they have used something called a diary. Where they send
out a report to a select number of people in a market. Those people fill
out each day what they\'ve listened to on the radio that day.

And in recent years, it was thought that electronic \-- some sort of
electronic measurement would be more reliable. And industry has been
asking for that. Advertisers have been asking for that.

And Arbitron has come up with something they call the Personal People
Meter. Which is a device that looks like a pager. And you wear it on
your person all day long. And the radio stations send out a signal with
their broadcast, that identifies that station.

The Personal People Meter picks up that signal and then reports what
you\'re \-- you have exposed to each day. Because it \-- part of the
problem with the Personal People Meter, is it picks up radio stations
whether or not you\'ve turned them on.

So if you\'re at work, and your boss is listening to a particular radio
station, you\'re identified as listening to that station.

If you\'re in a store, and it\'s playing \-- and the station\'s playing
as background music, you\'re identified as a listener to that station.

So conceptually, there\'s a concern about what exactly the Personal
People Meter is measuring. Because it\'s measuring expose, as opposed
engagement, as opposed to what I\'ve actually chosen to listen to.

But, the problem that we found with the Personal People Meter, actually
goes much deeper than that. Because what\'s happening is that in the
initial \-- additional report \-- the initial reports found the Personal
People Meter, the listening ascribed to African American, Hispanic
stations has fallen dramatically.

And the principle reason, although I don\'t think it\'s the exclusive
reason that, that has happened, is that Arbitron has not been measuring
African American, Hispanic audiences at the level that Arbitron says it
should.

So, they have done statistical studies that say, we should have this
number of people in the study for each reporting period. And they\'re
coming in at numbers well below that.

So, that if their target is 100% in each demographic segment, they
started off measuring blacks and Hispanics at the 30% level.

You know recently, they\'ve been getting up to the 50 and 60%. But
there\'s still a lot where they need to be.

And what we \-- the problem appears to be, that Arbitron\'s not been
willing to commit the time and money needed to get a decent sample.

Arbitron and NABOB have been meeting on this issue for about a year. And
it\'s still \-- we\'re still continuing to meet.

Overlaying this process is something called the Media Ratings Council.
The Media Ratings Council was created at the request of Congress, by the
advertising and broadcast industries some time ago. I think a couple
decades ago. Because of concerns about rating inaccuracies at that time.

And Congress said to the industry, we really appreciate you doing a
voluntary watchdog organization, so that we don\'t have to legislate in
this area. And as a result of that, the Media Ratings Council was
combined \-- was created, consisting of members from the advertising
agency community, national advertisers, and the broadcast industry, both
radio and television.

And the MRC accredits research to avoid the kinds of issues we have here
with the Personal People Meter.

The MRCs chiefs always divert deliberations quiet, private. So that you
only know if the MRC publicly announces that it\'s accredited somebody.

And what has happened, is that Arbitron had been pending accreditation
in Philadelphia and New York. It has three markets. It has Houston,
which was accredited with \-- in a joint program with Nielson. There was
a time when Arbitron and Nielson were planning to do this \-- the
Personal People Meter as a joint activity.

That \-- that accreditation wasn\'t received. In Philadelphia and New
York, Nielsen pulled out. They said we\'ll do a separate program.
Arbitron went along.

As I said, Arbitron had been pending accreditation for about a year in
Philadelphia and for about six months in New York. It was just reported
in the trade press last week, that Arbitron submitted a statement in its
most recent Securities and Exchange Commission filing, advising the SEC
that it had been accreditation by the MRC in both Philadelphia and New
York.

That information became public, Arbitron has since confirmed that is the
case.

In spite of that and \-- missing one little piece. Because of industry
concern about the inaccuracy that seem to exist with the Personal People
Meter, Arbitron agreed to delay further deployment of the Personal
People Meter for nine months. They did that back in December, I guess.
So the nine months end like September 1st.

And that was still while PPM was awaiting accreditation results in
Philadelphia and New York.

After it was denied accreditation in Philadelphia and New York, we went
back to Arbitron and said, well obviously you can\'t begin deployment
again until you get accredited.

Arbitron advised us that they had no intention of delaying the rollout
any further. They will again begin deploying the Personal People Meter,
in additional markets, starting in September.

So, where we are with Arbitron is, we think that \-- and, there\'s no
legal impediment of course, because MRC is a voluntary activity. Getting
accreditation is a volunteer activity.

There\'s no legal impediment to Arbitron moving forward with
accreditation. I mean, with deployment, in spite of having no
accreditation \-- having been denied accreditation.

And our view of course is, there\'s a distinction between awaiting
accreditation, while you rolling out, and actually having been denied
accreditation and still moving forward anyway.

And so, we believe this is an issue for consideration. We\'re not
exactly sure what the commissions role might be in this. But, our view
is that, PPM has the potential, if not corrected, to do serious damage
to minority ownership in the broadcast industry for blacks and
Hispanics.

And so, it\'s an issue that we know the commission needs to be made
aware of, as we work through what role the commission might have in
trying to address this issue.

CHAIRMAN RIVERA: Yes, David.

MR. HONIG: In the order that the commission issued last Tuesday on
diversity, right in the second paragraph, they start right out quoting
Associated Press, and talking about the widest dissemination of diverse
and antagonistic sources. And the importance of minority and women-owned
\-- ownership, to \-- to achieve that objective.

More than any other factor that I\'m aware of, this problem that Jim has
identified, poses the greatest risk of frustrating the commission\'s
diversity objectives.

Just to give you a sense of the math. The commission also in this order,
undertook to ban discrimination in advertising \-- in broadcast
advertising. A practice which MMTC estimated cost black and Spanish
radio about \$200 million a year.

If you look at the initial PPM results, and you extrapolate. I was just
curious and did the math. The impact of this technology, if it were
rolled out fully on black and Spanish radio, is about two-and-a-half
times the impact of all of the advertiser discrimination put together.
About half-a-million \-- half-a-billion-dollars a year.

That is an extraordinary burden on the ability to raise capital to
deploy assets, and to serve the public.

And, I therefore think it squarely falls within our jurisdiction. Either
in the access to capital sphere, or the new technology sphere, or both.

CHAIRMAN RIVERA: Thank you. Anybody else?

I appreciate you bringing that to our attention, Jim. And David, I
appreciate your remarks.

I think that maybe we ought to talk offline, maybe the three of us, to
see if there\'s some \-- some hook here for the Diversity Committee, in
some way to move forward specifically and assign this to some \-- one of
our existing subcommittees, or create a task force to try to deal with
it. Because I agree with you. It seems to be a serious problem for the
folks that we\'re supposed to be looking out for.

So, we ought to take this in hand and try to do something about it.

MR. WINSTON: And just to try to put it in perspective, for folks who may
not be that involved in the broadcast industry. The way this will
manifest itself in a day-to-day world, is if a broadcast station has an
advertiser, let\'s say a car company, that advertises on its radio
station.

The effects are going to have one of two results. One possibility is
that they go back into the advertiser, which is a regular advertiser on
a station, and say it\'s time to renew your contract. Let\'s do another
whatever, 26-week, 30, 52-week contract.

And the advertisers going to say, well, I see your ratings have fallen
from number two to 12 in the market. We can certainly talk about
renewing a contract, but not at the rate you were talking about before.
At these numbers, we\'re talking about giving you half the advertising
rate that we gave you before.

So, you know, if you\'re a radio station, and you see your revenues drop
by that kind of margin, you know, nobody\'s offering at those kinds of
margins anymore. So, you\'re immediately in the rid.

The other possibility is the advertiser says, well it\'s nice, but you
dropped from two to 12. You know, we only advertise on the top five
stations in the market, period. You\'re offer\'s bye completely.

So, you know, these \-- these are the kinds of real world impacts that
we\'re talking about for \-- for radio stations.

So it\'s not theoretical, it\'s actually real. And a very serious
threat.

CHAIRMAN RIVERA: Right.

MS. KREISMAN: I\'m just thinking out loud. I wonder if maybe, you could
draft a resolution by \-- for our committee. Basically supporting the
failure to award accreditation. Indicating in a very public way, the
negative impact on minority broadcasters. And at least make sure that
there\'s good publicity.

I know many of us have been working on it. And that we make it \--
information available to the commission. And then I could forward the
e-mail or the resolution, if it\'s adopted to the commissioners offices.
So, we would start getting some good publicity on this issue.

MR. WINSTON: Fine, thank you.

MS. KREISMAN: Something like that \--

(Simultaneous speakers.)

MR. WINSTON: I think \-- at some point in time, we do need to bring it
to the commissioner in a \-- in some sort of action item. But I think
right now, resolutions are a good way to start.

CHAIRMAN RIVERA: Great. Good idea. All right, anybody else have anything
to bring before the committee?

Well, then I think we \-- we can go ahead and adjourn. You see can see
there\'s a lot of work going on. A lot of substantive stuff that\'s
going to be made public here, and we\'re going to be able to take action
on in the very near future.

And I thank everyone for all of their hard work. And we\'ll see you at
the next meeting.

Thank you.

(Whereupon, the above-entitled matter was concluded at 10:40 a.m)