8/8/2019 CD de Preference 100410

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Comm Daily 10/4/10

Questions Remain

 New DE Category Expected to Be Unveiled at October Diversity

Committee Meeting

The FCC's Diversity Federal Advisory Committee is expected to take up a new "overcoming

disadvantages" category for designated entities at an Oct. 14 meeting. The proposal comes as

the agency takes a wider look at its DE rules after an August decision by the 3rd U.S. Court

of Appeals in Philadelphia, which sent part of the rules back to the commission for further 

consideration. David Honig, executive director of the Minority Media and

Telecommunications Council, said in an interview that members of the advisory committee

have spent many hours looking at ways to make the DE rules work better.

"I think we’ve come up with a plan that will be easy to administer, helpful to the commission,

helpful to new entrants who’ve not always had a fair opportunity to take full advantage of 

their inherent entrepreneurial, managerial and creative abilities, helpful to the public by providing service from highly qualified, diverse entrepreneurs," Honig said. The FCC has

seen many wireless and broadcast DEs fail over the years, he said.

"Although this comes out of the process of looking at diversity and exclusion of minorities, it

actually addresses a much broader question," he said. "How can we make sure that applicants

that we choose, whether it's through a noncompetitive process such as a waiver or a

comparative process such as an auction, are going to be likely to promote efficiency and to

 promote innovation and prevent the commission from having to take back an authorization?"

Overcoming a barrier to entry or other disadvantage "is a good predictor of business success,"

Honig said. "It does not have to be the overcoming of race discrimination, although that's

certainly a good example." The rule is likely to be "very wide ranging" and take in veteran

status, growing up in a rural community and growing up in poverty, he said.

DE rules are an important issue and one the FCC should address, Public Knowledge Legal

Director Harold Feld said. "Research over the years has demonstrated that companies located

in traditionally disenfranchised communities invest more in their communities and respond

 better to the needs of those communities," he said. "The recent remand of the Designated

Entity credit rules provides a good vehicle for the Commission to explore these issues. I think 

there is considerable scope to think creatively about encouraging minority ownership, while

remaining on firm Constitutional ground."

A wireless attorney said the proposal could be at odds with Section 309(j) of the

Communications Act. It provides only that the FCC should ensure that "small businesses,

rural telephone companies, and businesses owned by members of minority groups and

women" are able to participate successfully in spectrum auctions. "The touchstone for the

FCC has to be their Congressional authority," the lawyer said. Another problem is that

category could prove amorphous: "Just about anybody could argue that they have suffered

some kind of disadvantage." Former FCC Commissioner Henry Rivera, chairman of the

diversity committee, said he couldn’t comment pending the presentation of the proposal

 before the panel. —  Howard Buskirk