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.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
"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.