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TAB Urges FCC to Reconsider Fee Hikes

- Pai Pushes Back on Reinstating EEO Data Collection

TAB is pressing the FCC for significant reductions in its proposed regulatory fees for Radio and Television stations in 2019, arguing that the commission relied in part on defective data and that the process used to allocate fees among the various industries regulated by the FCC unfairly shifted FCC “overhead” costs to Radio and TV stations in the form of higher regulatory fees. 

In comments prepared by TAB’s DC legal counsel Scott Flick with Pillsbury Winthrop Shaw Pittman, we also argue that the FCC has failed to release adequate information to determine how it had allocated various costs among regulated industries, and that more transparency in the process is required to meet the FCC’s statutory obligations, as well as to permit outside parties to analyze the process and bring errors to the FCC’s attention.

The filing, made jointly with state broadcast associations representing 49 other states and Puerto Rico, also notes that Congress last year passed the RAY BAUM’s Act of 2018, which altered the FCC’s congressional instructions for setting and collecting regulatory fees, and that the FCC’s proposal for 2019 regulatory fees fail to comply with those new requirements to the detriment of broadcasters.

Pai Pushes Back on Form 395-B

Broadcasters that have been in the industry long enough will recall that for many years stations had to file FCC Form 395-B (Annual Employment Report), reporting each year on the racial, ethnic and gender breakdown of the station’s staff by job category.  The FCC would then use that information to assess whether the station had complied with the FCC’s EEO Rule, basing its review in part on the assumption that a station with nondiscriminatory hiring practices would naturally have a staff whose demographics matched that of its market’s labor force. 

While the FCC Form 395-B filing requirement began in 1970, its use was suspended in 2001 following a successful court challenge of the FCC’s EEO Rule by TAB and other state broadcasters’ associations.  The court found that the FCC’s results-oriented EEO review in which the Form 395-B played a key role was improper, as a station might be sanctioned not for discriminatory conduct or practices, but for merely having a staff that didn’t mirror the local labor force.  The court found the FCC’s approach to be an unconstitutional application of racial quotas.

When the court overturned the EEO Rule, the FCC announced a temporary suspension of the FCC Form 395-B requirement while the FCC assessed whether and how to revise its EEO Rule to pass Constitutional review.  While the FCC did adopt a new EEO Rule, the new rule (still in place today) focuses on a stations’ EEO outreach efforts rather than on the race, ethnicity and gender of its staff, eliminating much of the point of Form 395-B.     

Recently, however, some in Washington have been calling for the FCC to reinstate Form 395-B specifically as a tool for increasing minority employment in broadcasting.  In that regard, FCC Chairman Ajit Pai recently received a congressional letter from Senator Chris Van Hollen and Representative Yvette Clarke demanding the reinstatement of Form 395-B, insisting that “[t]he collection of such data and the use of Form 395-B are not optional; they are statutory requirements under Section 334(a) of the Communications Act.” 

Pai’s response to the Van Hollen/Clarke letter notes that “[w]ith respect to the approach to Form 395-B you suggest, I have serious constitutional and statutory concerns.  These concerns have been shared by Commission leadership under both Democratic and Republican Administrations, which is why the Commission has not adopted these reforms over the past decade and a half.” 

As broadcasters begin what will be their third license renewal cycle without the overhanging shadow of the Form 395-B and the associated threats to license renewal it brought, the Chairman’s response reflects that TAB and its counterparts have collectively been successful in not only eliminating an unconstitutional rule, but in informing and reminding subsequent regulators of the harms involved in results-oriented EEO hiring requirements, lest they be tempted to return to that unconstitutional path.   

Broadcasters and their state broadcasters’ associations have been strong supporters of equal employment opportunity in all industries, including broadcasting, and it’s important to remember that all stations are required by the FCC to be equal opportunity employers.  However, thanks to the collective efforts of the state broadcasters’ associations, stations are now judged on the quality of their EEO efforts rather than on the demographics of their station staff.

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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