******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In re Applications of ) ) Davidson County ) File Nos. BR-950801XA Broadcasting Company, Inc. ) and BRH-950801WP ) For Renewal of Licenses for ) Stations WLXN(AM)/WWGL-FM, ) Lexington, North Carolina ) MEMORANDUM OPINION AND ORDER Adopted: March 4, 1997; Released: March 11, 1997 By the Commission: I. INTRODUCTION 1. The Commission has before it for consideration: (i) the above-captioned license renewal applications for Stations WLXN(AM)/WWGL-FM, Lexington, North Carolina, filed by Davidson County Broadcasting Company, Inc. ("licensee"); (ii) a Petition to Deny filed by the Southern Region of the National Rainbow Coalition ("Rainbow"); (iii) the licensee's opposition; (iv) the petitioner's reply to the opposition; and (v) the licensee's response to a Commission staff letter of inquiry. 2. In its petition, Rainbow alleges that the licensee violated our Equal Employment Opportunity ("EEO") Rule and policies, 47 C.F.R.  73.2080. Accordingly, it requests that we conduct an investigation of the stations' employment practices pursuant to Bilingual Bicultural Coalition on Mass Media v. FCC, 595 F.2d 621 (D.C. Cir. 1978), and designate the licensee's renewal applications for hearing. In response, the licensee denies Rainbow's allegations, argues that its EEO efforts are in full compliance with the Commission's rules, and requests unconditional renewal of its licenses. 3. Rainbow derived its factual allegations from WLXN(AM)/WWGL-FM's EEO program and annual employment reports. As a threshold matter, we found that Rainbow made a prima facie showing that grant of the renewal applications would have been inconsistent with the public interest. Section 309(d)(1) of the Communications Act of 1934, as amended, 47 U.S.C.  309(d)(1); Astroline Communications Co. v. FCC, 857 F.2d 1556 (D.C. Cir. 1988) ("Astroline"). 4. After review of all matters presented, however, we conclude that there are no substantial and material questions of fact, and that grant of the applications would be consistent with Section 309(k) of the Communications Act of 1934, as amended, 47 U.S.C.  309(k). Further, we find no evidence of employment discrimination. Therefore, because the licensee is otherwise qualified, grant of the applications will serve the public interest. 47 U.S.C.  309(d)(2). While we grant renewal of the licenses of Stations WLXN(AM)/WWGL-FM, we do so subject to an admonishment for the reasons set forth below. II. DISCUSSION 5. Section 73.2080 of the Commission's Rules, 47 C.F.R.  73.2080, requires that a broadcast licensee refrain from employment discrimination and establish and maintain an EEO program reflecting positive and continuing efforts to recruit and promote qualified women and minorities. When evaluating EEO performance, the Commission focuses on the licensee's efforts to recruit and promote qualified women and minorities and the licensee's ongoing assessment of its EEO efforts. Such an assessment enables the licensee to take corrective action if qualified women and minorities are not present in the applicant pool. The Commission also focuses on any evidence of discrimination by the licensee. See Sections 73.2080(a), (b), and (c) of the Commission's Rules, 47 C.F.R.  73.2080(a), (b), and (c). Before discussing the EEO performance of Stations WLXN(AM)/WWGL-FM, however, we address first the licensee's argument that Rainbow has no standing, then its constitutional challenge to our EEO Rule in light of the Supreme Court's decision in Adarand Constructors, Inc. v. Pe¤a, 515 U.S. __, 115 S. Ct. 2097 (1995) ("Adarand"), and then its request to use alternative labor force data. A. Standing 6. In challenging an application pursuant to Section 309(d)(1) of the Communications Act, a petitioner must demonstrate party in interest status. In addition, a petitioner must, as a threshold matter, submit "specific allegations of fact sufficient to show . . . that a grant of the application would be prima facie inconsistent with [the public interest, convenience and necessity]." 47 U.S.C.  309(d)(1); Astroline, supra; Texas Coast Broadcasters, Inc., 11 FCC Rcd 1688 (1996); Dubuque T.V. Limited Partnership, 4 FCC Rcd 1999 (1989). The allegations, except for those of which official notice may be taken, must be supported by the affidavit of a person with personal knowledge of the facts alleged. 47 U.S.C.  309(d)(1). 7. Submitted with the petition to deny is a statement under penalty of perjury from a member of Rainbow's organization. The declarant states that she has resided in the Greensboro/Winston-Salem, North Carolina area for 30 years, that she is a regular listener of Stations WLXN(AM) and WWGL-FM, and that she would be seriously aggrieved if the petition is not granted. The licensee argues that Rainbow failed to establish standing because it does not allege that any of its members have been discriminated against with respect to employment, that any of its members are interested in employment, or that any of its members have been denied employment at the stations. Because there is no dispute that the declarant resides in the stations' service area or is a listener of the stations, we find that the declarant's statement meets the well-established requirements for standing. See NAB Petition for Rulemaking, 82 FCC 2d 89, 93-101 (1980); see also Stephens County Broadcasting Co., 11 FCC Rcd 3628 (1996). Accordingly, we hold that Rainbow has petitioner status against Stations WLXN(AM)/WWGL-FM. B. Constitutionality of the Commission's EEO Rule 8. The licensee contends that our EEO Rule is inconsistent with the holding in Adarand Constructors, Inc. v. Pe¤a, supra. We disagree. 9. Adarand addresses the constitutionality of a race-based preference program arising under federal law. The Supreme Court held that where questions arise as to a violation of the personal right to equal protection of the laws as a result of such programs, courts should evaluate such challenges by invoking the strict scrutiny standard of judicial review. Under strict scrutiny, racial classifications are constitutional only if they are narrowly tailored measures that further a compelling governmental interest. 10. The requirements imposed by our EEO Rule, 47 C.F.R.  73.2080, are fundamentally different from a race-based preference program such as that at issue in Adarand. The Rule does not require that any person be hired or accorded a hiring preference based on racial or ethnic status. Rather, it requires that licensees make efforts to recruit minority and women applicants so that they will be ensured access to the hiring process. The ultimate decision as to whether to hire a particular applicant may be premised upon any non-discriminatory considerations, without regard to the applicant's race, ethnicity, or gender status. Further, our Rule does not require licensees to hire any prescribed "quota" of minorities or women. Thus, our EEO rule imposes no requirement that would operate to deprive any person of a benefit he or she might receive but for his or her race, ethnicity, or gender. 11. We employ a two-step process in evaluating licensees' EEO efforts. In the first step, we seek to identify those licensees whose EEO efforts may be unsatisfactory so as to warrant further inquiry. Whether a licensee's employment profile as reflected in its Annual Employment Reports filed during the license term meets the processing guidelines is one factor considered in making this preliminary assessment, along with information contained in the renewal application, allegations raised by any petitions to deny or informal objections, and any other information available concerning the licensee's EEO record. We emphasize that these guidelines are used as an initial screening tool for determining the stations whose EEO programs might require further investigation. If the first step of review indicates that the station's EEO efforts are satisfactory, the station is found to be in compliance with our EEO Rule. In no situation are a station's efforts found to be unsatisfactory or is it found to have violated our EEO Rule solely because it does not meet the processing guidelines. Where we find that a station's efforts may be unsatisfactory, we will generally request additional information which is analyzed along with relevant pleadings to determine if, among other things, the station notifies sources of minority referrals when vacancies occur and engages in continuous self-assessment of its EEO program; if, in light of the evidence, the station violated our EEO Rule; and, if it did, what sanctions or remedies may be appropriate. Compliance with the processing guidelines is not a factor in this second step analysis. Broadcast licensees whose employment profiles are below our processing guidelines have been renewed without sanction. 12. Accordingly, we find no basis for concluding that our process denies any person equal protection of the laws. Indeed, the licensee has not identified any person who arguably suffered such injury as a result of the provisions of our Rule. As the Court emphasized in City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493 (1989) ("Croson"), the right to equal protection is a personal right. In the absence of any provisions in our EEO Rule that abridge the personal rights of any person, we conclude that Adarand does not implicate our EEO program. 13. Our reading of the scope of the Adarand decision is consistent with the interpretation of the case by the Department of Justice ("DOJ"). An analysis of the Adarand decision by DOJ states: Mere outreach and recruitment efforts . . . typically would not be subject to Adarand standards. Indeed, post-Croson cases indicate that such efforts are considered race neutral means of increasing minority opportunity. In some sense, of course, the targeting of minorities through outreach and recruitment campaigns involves race- conscious action. But the objective there is to expand the pool of applicants or bidders to include minorities, not to use race or ethnicity in the actual decision. If the government does not use racial or ethnic classifications in selecting persons from the expanded pool, Adarand ordinarily would be inapplicable. C. Appropriate Labor Force Data 14. The licensee contends that its EEO performance should be evaluated using labor force statistics for Davidson County, North Carolina. The stations' community of license, Lexington, is located in Davidson County, which is included in the Greensboro--Winston-Salem--High Point Metropolitan Statistical Area ("Greensboro MSA"). According to the 1990 Census data, Davidson County shows a 46% female and 9.9% minority (8.9% Black, 0.4% Hispanic, 0.3% Asian/Pacific Islander, and 0.3% American Indian) labor force; in comparison, the Greensboro MSA shows a 47.8% female and 19.7% minority (18.1% Black, 0.6% Hispanic, 0.6% Asian/Pacific Islander, and 0.4% American Indian) labor force. The licensee contends that the stations' "effective labor force" is Davidson County rather than the Greensboro MSA. It asserts that the stations' formats are local in appeal and do not attempt to compete for advertisers or listeners with the radio stations serving the Greensboro, Winston-Salem, and High Point metro area. It states that the stations aim to serve Davidson County and the surrounding rural area, which is why the main studio for both stations is located in Lexington. It further states that the licensee does not maintain any offices or facilities outside Davidson County. 15. The licensee points out that, in determining the appropriate labor market, the Commission looks at practical difficulties in attracting minority applicants. The licensee contends that it satisfies the Commission's requirements for use of alternative labor force data because Lexington is approximately 32 miles from Greensboro and 21 miles from Winston-Salem, the nearest areas where minorities are centrally located. Second, it asserts that commuting between these cities and Lexington can be done only with a private automobile as there is no regular means of mass transportation. Third, it asserts that it has had considerable difficulty in persuading potential minority employees to relocate from the larger Greensboro, Winston-Salem, and High Point metro markets to Lexington. It states that minority recruits have expressed numerous reasons for such reluctance, including reservations about the stations' format (the FM station airs Southern gospel programming and the AM station airs primarily news and talk show programming), concern over the disruptions inherent in commuting and relocation, and reluctance to move to a lower paying job market. The licensee argues that because the stations are true "community" stations in the sense that programming efforts are concentrated locally, and because the licensee's effective labor pool is Davidson County, the appropriate benchmark for evaluating the licensee's EEO program is Davidson County labor force data rather than the Greensboro MSA labor force data. 16. In its reply, Rainbow contends that the licensee has not justified use of alternative labor force data. Rainbow points out that the licensee does not suggest that most of its staff, or most of its job applicants, are drawn strictly from Davidson County. Rainbow argues that the licensee's suggestion that its failure to hire minorities can be attributed to the stations' formats, relocation or commuting costs, and supposedly low pay are factors that affect all races and are not unique to minority applicants. 17. As our initial frame of reference in analyzing EEO efforts of broadcast stations, the Commission uses the labor force data of the MSA in which the station is located or, when the station is outside the MSA, the county in which the station is located. Michigan/Ohio, 3 FCC Rcd 6944, 6945 (1988). In certain circumstances, we will evaluate a station's EEO efforts by reference to alternative labor force data if the licensee shows that the MSA labor force is not applicable to its circumstances. The Commission evaluates such requests by considering: (1) whether the distance of the station from the areas with significant minority population in the MSA is great; (2) whether commuting from those areas to the station is difficult (such difficulties may be based on distance but may also be based on other factors such as lack of public transportation); and (3) whether recruitment efforts directed at the MSA minority labor force have been fruitless. Buckley Broadcasting Corp., 9 FCC Rcd 2099, 2101 (1994) (noting the standard for evaluating a request to use an alternative labor force is "a three-part test"); Broadcast EEO, 2 FCC Rcd 3967, 3973 (1987). 18. The burden is on the licensee to justify the use of alternative labor force data. Broadcast EEO, 2 FCC Rcd at 3973. We find that the licensee did not substantiate the factors required to meet the standard for use of alternative labor force data. While the licensee did address potential commuting difficulties such as the lack of a regular means of mass transportation between the stations' location and Greensboro and Winston-Salem (a distance of approximately 32 miles and 21 miles, respectively), it failed to demonstrate that recruitment efforts directed at the MSA were fruitless. See Lanser Broadcasting Corporation, et al., 7 FCC Rcd 4254, 4256 (1992); Group Six Communications, Inc., 7 FCC Rcd 1815, 1817 n.2 (1992). Significantly, in this regard, the licensee did not explain its efforts to attract qualified minority applicants from Greensboro and Winston- Salem, and the results of those efforts. See id. Therefore, there is no indication whether its lack of success in attracting minority applicants is in any way reflective of transportation problems between the stations' location and Greensboro and Winston-Salem or of the licensee's possible "failure to engage in best efforts to recruit from [Greensboro and Winston-Salem]." Id. 19. To satisfy the alternative labor force criterion concerning recruitment efforts, we have stated that a licensee must show that "despite extensive recruitment involving use of minority referral sources, it was unable to obtain qualified applicants from areas of minority concentration in the MSA . . . ." Application of National Capital Christian Broadcasting, Inc., for Renewal of License of Station WTKK(TV), Manassas, Virginia, 3 FCC Rcd 1919, 1920 (1988) ("Manassas"); accordBuckley Broadcasting Corp., 9 FCC Rcd 2099, 2101 (1994); Gulf Atlantic Media Corp., 8 FCC Rcd 603, 604 (1993); Lanser Broadcasting Corporation, et al., 7 FCC Rcd at 4256; Group Six Communications, 7 FCC Rcd at 1817. The record, as will be more fully discussed below, shows that the licensee did not recruit for two of eight vacancies. Further, it used only one specific minority recruitment source, the NAACP, and it relied on anywhere from two to five educational institutions for the remaining six vacancies as potential sources of minority applicants. Further, the record indicates that hires for five vacancies were referred by "personal recruit," "word of mouth," "unknown source," or "station posting." We do not believe that this record demonstrates "extensive recruitment" sufficient to warrant use of alternative labor force figures. Moreover, the licensee's argument that prospective minority employees are unwilling to work in the stations' formats or accept lower wages is unrelated to the choice of relevant labor force; these factors affect minorities and non-minorities similarly. See Lotus Communications, Inc., 9 FCC Rcd 2117, 2120 & n.13 (1994) (holding that station format does not relieve licensees of their EEO obligations and that competitive factors, such as salary limitations, "affect minorities and non-minorities equally"). Thus, because the licensee has not provided an adequate basis for use of alternative labor force data, we will evaluate WLXN(AM)/WWGL-FM's EEO performance in light of the Greensboro MSA labor force. D. The Stations' EEO Performance 20. Review of the licensee's renewal applications, opposition, and inquiry response reveals that from December 1, 1992, to December 1, 1995, the stations filled eight full-time vacancies, including seven upper-level positions. The licensee recruited for only six of the eight vacancies. The licensee states that it did not recruit for the two vacancies in its sales manager position in 1995 because of "exceptional circumstances." The licensee explains that, in 1993, the current General Manger, Mr. Greeley Hilton, who had previously been employed in the capacity of sales manager, assumed the General Manager's position in addition to his responsibilities as sales manager because of the death of the former General Manager. Later, in 1995, the licensee states that it was approached by an individual who was familiar with the licensee's employment needs and thus convinced the licensee to hire him for the sales manager role that Mr. Hilton was occupying. A few months thereafter, however, the licensee decided to replace the new employee because "it was not working out." The licensee looked for a replacement using "personal sources" and did not recruit for the position. The licensee explains that, "under the circumstances of the Station's relationship with the existing Sales Manager, it was inappropriate to put out a public notice for that position." For the six vacancies for which recruitment efforts were made, the licensee asserts that it used 12 to 16 recruitment sources, including both general sources and organizations deemed likely to refer minority applicants. Neither the NAACP nor the educational institutions used referred any applicants. Our review further reveals that the hirees for five of six vacancies were referred by "personal recruit," "word of mouth," "unknown source," or "station posting." 21. The stations had five applicant and interview pools (four upper-level); multiple hires were made from one of these pools. The licensee's inquiry response reveals that the stations had a total of 90 applicants (52 in upper-level) and 39 interviewees (26 in upper-level). The licensee notes that some of the applicants had not revealed their race or ethnic origin during the application and interview process. Thus, the stations were able to document the race or ethnic origin of only 70 applicants and 36 interviewees. Of these, 21 applicants (ten in upper-level) and 16 interviewees (eight in upper-level) were minorities. Minorities were present in four of the five applicant and interview pools. No minority was hired from these pools. 22. Rainbow contends that Stations WLXN(AM)/WWGL-FM are operating in violation of the Commission's EEO Rule, 47 C.F.R.  73.2080. Rainbow points out that, during the past renewal term, these stations did not report even one full-time minority employee on any of their seven annual employment reports. Rainbow also points out that the licensee's 1995 EEO Program reported that, in the preceding year, the stations received only six minority referrals, and that they hired four persons, none of whom was a minority. 23. The licensee contends that it is in compliance with the Commission's EEO requirements. The licensee argues that it "maintains a vigorous EEO program" focusing on job hires, policy dissemination, recruitment, and self-assessment. It states that even though it has not had any full-time minority employees over the license term, it has undertaken "substantial" efforts to recruit minorities. The licensee points out that not only were minorities present in the applicant and interview pools, but that minority applicants (all Black) were offered jobs in connection with three vacancies, but all declined to accept the job offers. The licensee asserts that one offer was made for a part-time news position, which was intended to lead to a full-time news director position, but that this offer was rejected because the candidate desired a full-time position. The licensee further asserts that two offers were made for sales and secretarial positions, but that both of these offers were declined by candidates, who indicated that they had accepted higher paying jobs in a larger city. 24. We find that there are no substantial and material questions of fact warranting designation for hearing. See Astroline. Moreover, there is no evidence that the licensee engaged in employment discrimination. The licensee recruited, hired and employed females, and recruited and extended offers of employment to minorities. Although no minority was employed for a full- time position during the license term, we note that compliance with our rules is not based on meeting or exceeding a numerical goal, but on the total efforts to recruit minorities and females and the ongoing assessment of those efforts. See Implementation of Commission's Equal Employment Opportunity Rule, 9 FCC Rcd 6276, 6291 (1994); Amendment of Part 73 of the Commission's Rules Concerning Equal Employment Opportunity in the Broadcast Radio and Television Services, 2 FCC Rcd 3967, 3974 (1987). Minorities were present in most of the applicant and interview pools. We also find that the licensee contacted recruitment sources for most of its vacancies. Therefore, renewal of the stations' licenses is in the public interest. 25. While we grant renewal of the licenses, we are nevertheless concerned about the licensee's self-assessment of the effectiveness of its recruitment sources in eliciting minority applicants. For example, we note that neither the NAACP nor the five educational institutions contacted by the licensee referred any applicants, yet the licensee continued to rely on these unproductive sources. In addition, hires for a majority of vacancies were referred by informal means such as "word of mouth." We believe that a continuing and more extensive review by WLXN(AM)/WWGL-FM of its EEO program was warranted. Accordingly, we admonish the licensee for failing to self-assess its EEO program adequately. III. CONCLUSION 26. After reviewing the record before us, we find that a hearing is not warranted and that grant of the renewal applications is in the public interest. Accordingly, finding the licensee to be otherwise qualified, we will grant the renewal applications subject to an admonishment. IV. ORDERING CLAUSES 27. Accordingly, IT IS ORDERED that the Petition to Deny filed by Rainbow regarding the renewal applications for Stations WLXN(AM) and WWGL-FM IS DENIED. 28. IT IS FURTHER ORDERED that the license renewal applications for Stations WLXN(AM) and WWGL-FM ARE GRANTED subject to an admonishment. 29. IT IS FURTHER ORDERED that the Mass Media Bureau send by Certified Mail -- Return Receipts Requested -- copies of this Memorandum Opinion and Order to the licensee and to Rainbow. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary