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BR-910130VI Radio, Inc. ) BRH-910130VE ) For renewal of license for ) Stations WGHQ(AM)/WBPM(FM) ) Kingston, New York ) MEMORANDUM OPINION AND ORDER AND FORFEITURE ORDER Adopted: May 29, 1996 Released: June 12, 1996 By the Commission: 1. The Commission has under consideration: (1) its Memorandum Opinion and Order and Notice of Apparent Liability in Beacon Broadcasting Corp., 9 FCC Rcd 2132 (1994) ("Beacon"); (2) a petition for reconsideration of Beacon filed by the New York State Conference of Branches of the NAACP ("NAACP"); (3) an opposition to the NAACP's petition for reconsideration filed by Historic Hudson Valley Radio, Inc. ("Historic Hudson" or "licensee"), licensee of Stations WGHQ(AM) and WBPM(FM); (4) a petition for reconsideration and response to Notice of Apparent Liability ("NAL") filed by Historic Hudson; and (5) a supplement to petition for reconsideration and response to notice of apparent liability filed by Historic Hudson. For the reasons that follow, we deny the NAACP's petition for reconsideration. However, we grant the licensee's petition to the extent indicated herein. We recalculate the forfeiture and reduce it to $8,000. The NAACP's Petition for Reconsideration 2. In Beacon, we found no evidence that Historic Hudson engaged in discrimination. We observed that it recruited, interviewed and hired some minorities during the license term. However, we also found that Historic Hudson's recruitment and self-assessment efforts were "egregiously deficient." Accordingly, we granted the renewal applications only for a short-term, subject to reporting conditions, and issued a $25,000 NAL for apparent violations of the Commission's EEO rule, Section 73.2080 of the Commission's Rules, 47 C.F.R.  73.2080. Beacon, 9 FCC Rcd at 2137-39. 3. In seeking reconsideration, the NAACP does not dispute any specific factual finding concerning Stations WGHQ(AM)/WBPM(FM). Rather, the NAACP contends that we did not properly investigate whether the licensee's minority hiring record resulted from inadvertence or discrimination. The NAACP submits that because, in its view, Historic Hudson had an "extreme underrepresentation" of minority applicants, Historic Hudson must have deliberately chosen not to use minority recruitment sources to fill upper-level jobs. The NAACP argues that the Commission was compelled to investigate whether Historic Hudson intended to hire minorities only as clerical workers. 4. Historic Hudson challenges the NAACP's premise that there was an extreme underrepresentation of minority applicants. Historic Hudson points out that it could not identify the race of the vast majority of its applicants because it had mistakenly not solicited information about the applicant's race or sex. To the extent it obtained such information about an applicant, it could do so only on the basis of visual inspection of those applicants who appeared for interviews. In any event, the licensee denies that it intended to hire minorities only as clerical workers. In this regard, the licensee observes that more than 50% of its hires were for part-time jobs, that nearly 70% (39 of 56) of its hires for on-air positions were to fill part-time jobs, and that five minorities were among those hired for part-time on-air positions. 5. Reconsideration is appropriate only where the petitioner shows either a material error or omission in the original order or raises additional facts not known or not existing until after the petitioner's last opportunity to present such matters. See WWIZ, Inc., 37 FCC 685, 686 (1964), aff'd sub nom. Lorain Journal Co. v. FCC, 351 F.2d 824 (D.C. Cir. 1965), cert. denied, 383 U.S. 967 (1966); 47 C.F.R.  1.106(c). Applying this standard, we conclude that reconsideration of our decision to renew the licenses of the stations without further investigation is not warranted. 6. Viewing the entire record, we reaffirm our conclusions that a hearing is not warranted and that there were no substantial questions left unanswered. Because of the small percentages of minorities in the local labor force, we disagree with the NAACP that there was an "extreme underrepresentation" of minority applicants, and we find speculative the NAACP's assertion that the licensee deliberately chose not to use minority recruitment sources for upper-level job vacancies. Moreover, we specifically sought and reviewed information about the stations' recruitment efforts. That information disclosed that the licensee recruited for most of its full-time job vacancies. Further, contrary to the NAACP's claim, the stations did hire minorities for on-air positions, albeit on a part-time basis. Although we normally focus on a licensee's efforts to fill full-time vacancies in assessing EEO compliance, we consider all relevant evidence in determining whether a substantial and material question of fact exists. In the EEO context, such evidence includes, among other things, the composition of the local labor force, the number of hiring opportunities the stations had during a representative period, the licensee's recruitment efforts, and the types of jobs filled. Here, after taking into account that the minority presence in the labor force is relatively small, that the majority of the licensee's on-air positions were part- time and that five minorities were among the 39 persons hired for those positions, we conclude that the licensee's minority hiring record does not raise a substantial question of discrimination. Nothing in the NAACP's submissions leads us to believe that such a question exists. We therefore deny reconsideration. Historic Hudson's Petition for Reconsideration / Response to Notice of Apparent Liability 7. In Beacon, we concluded, inter alia, that Historic Hudson had violated the Commission's EEO rule (47 C.F.R. 73.2080). We found that Historic Hudson's recruitment efforts were deficient because minorities were apparently absent from most of the stations' applicant and interview pools. Moreover, it appeared that Historic Hudson had not conducted meaningful self- assessment of its EEO program. Referring to the guidelines set forth in Standards for Assessing Forfeitures for Violations of EEO Rules, 9 FCC Rcd 929 (1994) ("EEO Policy Statement"), we concluded that the licensee's apparent EEO rule violations were egregious and warranted imposition of significant sanctions. We therefore renewed the WGHQ(AM)/WBPM(FM) licenses only for short-terms, subject to reporting conditions, and issued a $25,000 NAL. 8. In seeking reconsideration and a reduction or rescission of the forfeiture, Historic Hudson submits that the NAL is patently deficient because it fails to identify the rule, or any specific provision thereof, that Historic Hudson violated. In any event, Historic Hudson disputes that it violated our EEO rule, arguing that it hired minorities in excess of their presence in the local labor force. The licensee also argues that the penalties imposed pursuant to the EEO Policy Statement are invalid because that statement should have been put out for comment and because the penalties referenced therein were applied retroactively. Historic Hudson further submits that Beacon ignored important facts regarding the stations' recruitment efforts and part-time hires. Finally, Historic Hudson argues that its record of compliance with the Act and our rules and its poor financial state warrant a reduction in the forfeiture. For the reasons that follow, we conclude that the forfeiture should be reduced to $8,000. 9. At the outset, we reject Historic Hudson's contention that the NAL was patently deficient. The petition alleged that each licensee violated the Commission's EEO rule and policies. In paragraph five of Beacon, we explained the requirements of our broadcast EEO rule, Section 73.2080 of the Commission's Rules. In discussing the performance of Historic Hudson in paragraph 41, we concluded that the licensee had apparently not consistently engaged in efforts to attract minorities and had failed to recruit for six full-time vacancies. We further concluded that the licensee had apparently failed to conduct meaningful self-assessment of its program. Finally, in paragraph 43 of Beacon, we stated that the licenses of WGHQ(AM)/WBPM(FM) would be renewed only for a short term, subject to reporting conditions, and that a $25,000 NAL would be issued because of Historic Hudson's deficient recruitment efforts. In sum, Beacon clearly gave notice to Historic Hudson that the Commission found apparent violations of the Commission's EEO rule and that those violations pertained to Historic Hudson's apparent failure to recruit minorities whenever job vacancies became available [Section 73.2080(c)(2)] and its apparent failure to analyze the results of its recruitment efforts [Section 73.2080(c)(5)]. 10. In light of Historic Hudson's apparent failures as described above, we reject its argument that it did not violate our rules. Moreover, we disagree with Historic Hudson's premise that its overall record of hiring and employing minorities compels a conclusion that it fully complied with our rules. As we have repeatedly informed licensees, hiring or employing minorities within certain parameters does not insulate licensees from scrutiny because our focus is on the licensee's efforts, particularly its recruitment efforts and its efforts to self-assess the results of its program. See, e.g., Carolina Christian Broadcasting, Inc., 3 FCC Rcd 1907, 1910 (1988). As set forth in Beacon and as described herein, those efforts were deficient. 11. In adopting the EEO Policy Statement, we proposed the use of non-binding guidelines for assessing forfeitures for violations of our broadcast EEO rule. We had issued general forfeiture guidelines to identify those situations that could lead to a forfeiture and to identify criteria that might be used to increase or decrease the base amount of the forfeiture and that might result in grant of renewal for less than a full-term. Policy Statement, Standards for Assessing Forfeitures, 6 FCC Rcd 4695 (1991), recon. denied, 7 FCC Rcd 5339, revised, 8 FCC Rcd 6215 (1993) ("Policy Statement"). The EEO Policy Statement was issued because, in 1993, we had deleted the broadcast EEO violation category from our general forfeiture guidelines and announced that we would issue a further policy statement on broadcast EEO matters in the future. See Policy Statement, 8 FCC Rcd at 6215 n. 1. The EEO Policy Statement did not modify any part of the EEO rule. See Streamlining Broadcast EEO Rule and Policies, 11 FCC Rcd 5154 (1996). 12. In United States Telephone Ass'n v. FCC, 28 F.3d 1232 (D.C. Cir. 1994) ("USTA"), the court set aside our general forfeiture guidelines. The USTA decision concluded that the forfeiture schedule should have been put out for comment under the Administrative Procedure Act. Following the USTA decision, we have received requests to withdraw the EEO Policy Statement until it is likewise made available to the public for comment. See, e.g., Petition for Declaratory Ruling by Eagle Radio, Inc. (filed August 11, 1994); Letter from Henry L. Baumann to William E. Kennard, July 13, 1994. In Streamlining Broadcast EEO Rule and Policies, we vacated the EEO Policy Statement and advised licensees that we would follow our recent practice of making forfeiture decisions by relying on case precedent to resolve the decisional case. Consistent with that approach, we now recalculate the proposed forfeiture assessed against Historic Hudson. 13. In determining a forfeiture, we take into consideration the relevant statutory factors in Section 503(b)(2) of the Communications Act, including the nature, circumstances, extent and gravity of the violation, and Historic Hudson's record of compliance with our rules. In our evaluation, we consider the number of hiring opportunities, the composition of the local labor force, the station's size, the licensee's recruitment efforts, the station's applicant and interview pools, and the licensee's self-assessment and record-keeping. E.g., Stauffer Communications, Inc., 10 FCC Rcd at 5061 (1995). After considering all of the foregoing, including Historic Hudson's overall history of compliance with our rules as well as its financial situation, we conclude that a forfeiture of $8,000 is appropriate. 14. In reaching the specified amount, we have determined that Historic Hudson's record is equivalent to that of Stations KDYL(AM)/KSFI-FM, Salt Lake City, Utah. See Holiday Broadcasting Company, 10 FCC Rcd 4500 (1995), recon. denied, 11 FCC Rcd 1125 (1996). ("Holiday"). There, the stations were located in an area that had 7.5% minorities in the labor force. During the three year review period, Stations KDYL(AM)/KSFI-FM had between 21 and 24 full-time employees. The stations had 16 full-time hiring opportunities. The licensee maintained that it contacted recruitment sources for 14 vacancies. However, the licensee's contacts were marred by "incomplete mailings." Only one of 91 applicants was a minority. We concluded that the licensee's recruitment efforts were inconsistent and that its self assessment was inadequate. Finding no discrimination, we granted full-term renewal of license to the stations, subject to reporting conditions, and issued an $8,000 NAL. 15. Stations WGHQ(AM)/WBPM(FM) are located in an area that had 6.1% minorities in the labor force. During their 1984-1991 license terms, they had between 15 and 24 full-time employees. During the period under review, the stations had 36 full-time hiring opportunities. The licensee recruited from among several general recruitment sources and as many as four minority-specific recruitment sources for 30 of the vacancies. For the remaining openings, the licensee relied primarily on employee referrals, which, as discussed below, will not be credited. Historic Hudson's records reflected that few minority applicants resulted. Four (11%) of the overall applicant/interview pools for full-time positions, but only one full-time upper-level (3%) applicant/interview pool, contained minorities. There was no indication that Historic Hudson took note of the general absence of minorities from its upper-level applicant/interview pools or made any attempt to increase the number of minority applicants and interviewees for full-time upper-level positions. 16. The stations [KDYL(AM)/KSFI-FM and WGHQ(AM)/WBPM(FM)] are located in areas where minorities constitute roughly 7% of the local labor force. They are also comparable in size. Both licensees recruited for a similar percentage of job openings, (the licensee of Stations KDYL(AM)/KSFI-FM recruited for 88% of its job vacancies while the licensee of Stations WGHQ(AM)/WBPM(FM) recruited for 83% of its vacancies). Although Stations WGHQ(AM)/WBPM(FM) had more hiring opportunities, they also had more applicant pools with minorities. Nonetheless, neither licensee adequately assessed its recruitment efforts. In Holiday, the Salt Lake City licensee did not alter its recruitment practices despite the virtual absence of applications from minorities, while the instant licensee took no significant action to increase the number of minority applicants for full-time upper-level positions. Further, because Historic Hudson did not collect data as to the race and national origin of most of its applicants, it was in no position to know which, if any, of its recruitment efforts were effective in attracting minority applicants. Considering the facts of this case, we believe the appropriate forfeiture is $8,000, the same as that imposed in Holiday. 17. In assessing its recruitment efforts, the licensee contends that the Commission should credit its use of employee referrals, noting that employee referrals may be one way to satisfy the EEO rule. While employee referrals may indeed be a way of satisfying a licensee's recruitment obligations, we have also observed that the use of "word of mouth" recruitment may not be proper if it tends to exclude minorities and females and simply perpetuates a white male dominated staff. See Rust Communications Group, 73 FCC 2d 39, 48 (1979) (subsequent history omitted). In this case, the stations had few minority employees during the license terms, and there is no evidence to demonstrate that employee referrals resulted in minority applicants during the period under review. Accordingly, we will not credit the licensee's use of employee referrals. 18. The licensee also contends that the Commission ignored its part-time hires. This contention is incorrect. In our original decision, we cited the licensee's hiring of a Black applicant for a part-time upper-level announcer position before concluding that no substantial and material questions of fact existed. See Beacon, 9 FCC Rcd at 2138. In affirming our conclusion that there was no discrimination at the stations and in affirming our decision to renew Historic Hudson's licenses, we are also taking notice of the licensee's part-time hires. See para. 6, above. However, inasmuch as our primary focus is on the licensee's efforts to fill full-time vacancies, the hiring and employment of minorities on a part-time basis does not mitigate the licensee's noted deficiencies in recruitment for full-time vacancies and its failure to adequately self-assess the results of those efforts. See Radio Chattanooga, Inc., 10 FCC Rcd 9773 (1995). Thus, even though we will renew the licenses, we continue to find a forfeiture appropriate. 19. Finally, as noted, the licensee has asked us to consider its ability to pay in setting the forfeiture. Our review of the licensee's financial documents leads us to conclude that the stations have not been profitable. The stations' expenses, without regard for depreciation, have exceeded their income, and the stations have been forced to offset decreasing income by reducing operating expenses. On the other hand, expenses for the stations have included an annual salary to a licensee principal, rental payments for the studio to three licensee stockholders, and rental payments for the tower site to a licensee principal. Moreover, the licensee itself showed a profit for the twelve months ending May 31, 1993. 20. In Benito Rish, 10 FCC Rcd 2861 (1995), the Commission reduced a $10,000 forfeiture to $2,500, inter alia, because the licensee's station [Station WREM(AM), Monticello, Maine] was a 5 kW day-time only station licensed to a community of 425. The Commission concluded that, in light of those circumstances and the station's apparently unprofitable history, a forfeiture of $2,500 would adequately deter future misconduct. Here, the two stations are licensed to a community of 23,500, and, as noted, the licensee has shown a profit during the last period for which information was submitted. Inasmuch as we have already reduced the forfeiture substantially, we are not persuaded that the information relating to Historic Hudson's financial condition warrants a further reduction. While a $25,000 forfeiture might have impaired the licensee's ability to serve its listeners, we do not believe that a forfeiture of $8,000 is beyond its ability to pay or will in any way affect the licensee's ability to serve the public interest. 21. Accordingly, IT IS ORDERED, that the petition for reconsideration filed by the NAACP IS DENIED. 22. IT IS FURTHER ORDERED, that Historic Hudson's request for confidentiality IS GRANTED and that the financial information submitted with its response to the NAL SHALL BE KEPT CONFIDENTIAL pursuant to Sections 0.457 and 0.459 of the Commission's Rules. 23. IT IS FURTHER ORDERED, pursuant to Section 503(b) of the Communications Act of 1934, as amended, 47 U.S.C. Section 503(b), that Historic Hudson FORFEIT to the United States the sum of eight thousand dollars ($8,000) for the willful and repeated violations of Section 73.2080 of the Commission's Rules, 47 C.F.R. Section 73.2080. Payment of the forfeiture may be made by mailing to the Commission a check or similar instrument payable to the Federal Communications Commission. 24. IT IS FURTHER ORDERED, that the Mass Media Bureau send by Certified Mail--Return Receipt Requested, copies of this Memorandum Opinion and Order and Forfeiture Order to the NAACP and to Historic Hudson. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary