Remarks of
FCC Commissioner Susan Ness
before the
Texas Association of Broadcasters

San Antonio, Texas

Saturday, September 30, 1995

I am delighted to have the opportunity to visit with you in San Antonio -- a gem of a city, and the home of the Alamo. Speaking of the Alamo, as a Commissioner at an especially tumultuous time at the FCC, I do feel a bit under siege!

I have met a number of you over the years, during my 16 months on the Commission and during my prior life as a media lender. I always enjoy visiting with broadcasters on your own turf. To attend gatherings such as this one enables me to better understand the aspirations and concerns of the smaller-sized companies -- you who have devoted your lives to broadcasting, but whose tight budgets do not leave room for lobbying trips to Washington, D.C.

Radio and television broadcasters serve a vital role in our society. Broadcasting is the one medium of communications which is available to one and all, rich and poor, urban and rural, free of charge. It provides local news and political coverage, weather, traffic, school closings, and other vital information. Broadcasters also serve local communities by promoting civic organizations, recruiting volunteers, raising money, rallying support for local high school and college sports teams, and identifying education and career opportunities, such as broadcast journalism courses at local high schools.

You don't do these things because of a legal requirement. You do it because you're good citizens -- and because it makes good business sense.

Maintaining a healthy environment for broadcasting is essential to preserve the many benefits you provide to your communities.

Maintaining a healthy environment for broadcasting is also a formidable challenge during a time of extraordinary change -- in technologies, in services, and in laws and regulations.

It's the job of the Commission to work with you and with the public, to fashion fair and reasonable rules that accommodate changing realities.

The Commission is considering a host of changes that affect you directly. I encourage you to participate as actively as you can in our proceedings.

I see that Texas congressman Jack Fields will be speaking with you this afternoon. His skilled leadership was instrumental in winning House approval of an omnibus communications bill that will soon be headed for conference with a companion Senate measure. This will be the most important communications legislation since the Communications Act of 1934.

Mr. Fields has brought energy, insight, and experience to his new role as Chairman of the Communications Subcommittee. The FCC is subject to his vigilant oversight. I have enjoyed working with Chairman Fields and his subcommittee, and will use my best efforts to implement, consistent with congressional will, whatever legislation is enacted into law.

Even without legislation, the FCC has before it a number of issues that directly affect broadcasters and your audiences: Digital television. Digital radio. Television ownership rules. Network/affiliate relationships. Children's television. EEO. These issues are all tremendously important, but let me focus my remarks on two main topics -- EEO and ownership -- and then answer your questions.

Equal Employment Opportunity

I know from personal conversations that the FCC's Equal Employment Opportunity rules are of special concern to you. I share many of your concerns. I'd like to spend part of our time together discussing the intent of the rules and how I believe they should be revised. I'm confident we can find ways to reward performance, give greater certainty, and reduce the paperwork burden, especially for smaller stations, without impairing the program's effectiveness.

The goal of the Commission's EEO rules is for a station's employees to reflect the diversity of the community's workforce. We need to keep our goal in sight.

The Commission's EEO rules are intended to realize this goal by encouraging participation by minorities and women in the broadcast industry. They were designed to further the important public policy of promoting diversity of views and information. Employment in top management positions also is a critical stepping-stone to station ownership.

I know that both Congress and broadcasters alike support these goals. So do I.

By hiring minorities and women in key positions, broadcasters stay more in tune with community needs and increase outreach to advertisers and listeners. So diversity also makes good business sense.

I also believe that the basic FCC rules remain valid and constitutional, even after the Supreme Court's decision in Adarand. The rules require licensees to actively seek a diverse recruitment pool. From this pool, a licensee is to select the best qualified, regardless of race or gender. I want to emphasize that there is no requirement that anyone be hired because he or she is a minority or a woman.

The rules were designed to measure efforts, not hiring outcomes, to avoid any suggestion of quotas. The forfeiture guidelines, which were adopted before I arrived at the Commission, were intended to give broadcasters greater certainty and more consistent results.

Notwithstanding the best of intentions, the rules have had a few unintended consequences. They are complex in some places, they do not give clear guidance, and sometimes they produce overly-harsh outcomes, particularly for smaller stations. They also can be counter- productive, at least to the extent that they burden broadcasters with paperwork requirements that may not always further the laudable, underlying goal of equal opportunity.

So it is time to revise and streamline our rules. We are now working on a Notice of Proposed Rulemaking to seek public comment on a number of suggestions. Here are a few of my thoughts.

First, you should not have to maintain detailed paperwork or worry about FCC fines or sanctions if you employ a workforce that reflects the diversity of your communities. That is the intended goal of EEO, pure and simple. If you are consistently meeting that goal, you are in compliance. You should not be penalized for failing to document your outreach efforts.

Or, if you are not consistently meeting that goal, you should be prepared to demonstrate that you have undertaken meaningful, good-faith efforts to achieve the goal.

Some who disagree argue that to consider actual employment in this fashion would constitute a quota system. I see this as a safe harbor. I do not see this as a quota. A quota would be a requirement that a broadcaster employ a specific percentage of minorities and women.

What I am suggesting, is that we shift the focus of our rules toward their true purpose: to identify instances where a broadcaster's employment profile constantly fails to reflect the diversity of its community's workforce and the broadcaster has failed to take meaningful steps to remedy the problem.

Second, recordkeeping also must be simplified. Broadcasters should not have to hire a squadron of Washington lawyers to figure out what is necessary to comply with our rules.

Third, the Commission should recognize alternative ways of recruitment. For example, job banks and job fairs that are designed to attract significant numbers of minority and female applicants can be successful recruitment vehicles. These services are especially helpful to smaller stations, which may not have the resources to conduct and document extensive recruitment campaigns.

The Commission's rules should provide more incentives for broadcasters to participate in these cooperative recruitment efforts.

I have been told that the Texas Broadcasters Association operates an electronic job bank, with access on the Internet. It also organizes an annual job fair that has attracted minority and female candidates. I applaud the Texas Broadcasters for these important efforts.

Finally, we should consider increasing the size of the stations that qualify for the paperwork exemption. Today, this exemption applies only to stations with five or fewer employees. I think we should increase this threshold. The documents required under our efforts-based test place a greater strain on the resources of smaller stations.

It is not a simple task to draft rules that reward results and pass constitutional muster. But we must try. We have heard your concerns. Let's work together to resolve them in a way that honors our mutual commitment to an equal opportunity society.

Broadcast Ownership

Broadcast ownership issues are currently pending both before the Commission and the Congress. As a representative of an agency which is charged with faithfully implementing legislation enacted by Congress, I would not presume to tell Congress how to resolve these policy issues. Just the same, I'd like to share some of my thinking with you.

Why do we have national and local owner limits for radio and TV broadcasting? To foster competition and to insure a diversity of voices in the marketplace of ideas. These are principles I care about.

Having diverse sources of news and informational programs within a community is important to an informed citizenry. One of the underpinnings of our democracy is that ownership of our media outlets is widely held, and one or a handful of individuals cannot control information flow. Call it a "freedom insurance policy."

Some argue that the proliferation of multichannel providers of video programming -- via cable, MDS, and DBS -- have eliminated the concern over diversity of voices. For now, I disagree.

Radio and television are still the only free, universally available anytime-anywhere means of communication. The special status of broadcasting is reflected in our cable "must-carry" requirements and in the FCC's recent decision to lend incumbent broadcasters -- temporarily -- an additional six megahertz for digital TV conversion.

The FCC does not have a rulemaking pending on radio ownership. But on the national level, I favor increasing the current 20AM/20FM limits. It seems to silly suggest that ten stations in markets the size of Malakoff or Carthage are the same as ten the size of Houston. Permitting greater national ownership would not appear to result in undue concentration or impair the public's access to a diversity of voices in individual markets.

On the local level, I am much more cautious. Duopoly appears to have served the public well. It has bolstered weak stations and enabled duopoly owners to experiment with more narrowly focused formats. In larger markets, it may be possible to permit additional common station ownership without undermining competition or impairing access to a diversity of viewpoints.

But, somewhere between the extremes of single station ownership and unfettered local station ownership, I feel that there is a point at which the benefit to the public shifts from positive to negative.

The same principles apply to TV station ownership. On a national level, the Commission has proposed in a pending rulemaking to raise the cap on ownership reach to 35%. That's fine. But on the local level, I am again more cautious.

In determining signal overlap, we have proposed to shrink the size of the service area from a 55 mile radius to a 35 mile radius. That's fine, too.

And we have asked for comment on whether we should permit blanket ownership of two UHF stations or a UHF and a VHF station or two V's. Based on what I know today, I have difficulty understanding how the public interest would be served by universally permitting these combinations.

Most markets only have between four and ten television stations. Once the first two combine, to be competitive, the others will have to do the same. How would you feel if the top two stations in your market combined and you are Number Three?

Finally, if we are going to increase ownership caps, "ownership" must be defined in a clear and realistic manner. We need to revisit our attribution rules for both radio and television.

Right now, if there is no single majority shareholder (that is, more than 50% ownership), and you own five or more percent of the voting stock of a company, that company's stations are attributable to you. However, if there is a single majority shareholder of voting stock they are not attributable.

If all stock is voting and you own 49.9 percent of that stock, am I really to believe that you can't influence that station's operation?

Let's consider a combination of factors. A web of entanglement. Imagine your competitor owns one station outright. She also contributed 60% of the equity in another station in your market, but received only non-voting stock. The two stations are co-located. And the general manager used to be the station manager of the first station. Under current FCC rules, there is no attribution. I think that outcome is nonsense.

And what about non-ownership influence? In radio, if one has a local management agreement with another station for more than 15 percent of airtime that second station is attributable for ownership purposes. Not so for television, however -- where there are many fewer stations. Does that make sense?

Let me ask two more questions:

Don't we all lose something when a dedicated broadcaster is forced to sell his station in a market that he loves because he doesn't have the capital buy out a competitor?

Won't this great nation be diminished if most of our media outlets -- TV, radio, newspaper, cable, DBS, and yes, telephone -- are owned by the same ten media conglomerates? Think about it!


I've raised many issues today. Please work with us to craft solutions. Your participation can ensure that our decisions are based on the best possible understanding of marketplace realities.

Bring to our proceedings the same public spiritedness that you apply to your broadcasting operations! Let's make public policy decisions as you do programming decisions -- with the interests of the audience -- the public -- always front and center.

I'm happy to take your questions.