January 26, 2004

1. FCC ADVISORY COMMITTEE ON DIVERSITY FOR COMMUNICATIONS IN THE DIGITAL AGENEW TECHNOLOGIES SUB-COMMITTEE January 26, 2004

2. TECHNOLOGY SUBCOMMITTEE OBJECTIVES Assess what ownership and career advancement opportunities available in new and emerging technologies (e.g. broadband, digital television, cable, satellite, low power, FM) and the convergence of these technologies; and Develop recommendations for facilitating opportunities for minorities and women in new industries as they form. CRITICAL SUCCESS FACTORS Linkage between “technology opportunities” and financing opportunities Identifying opportunities that drive technology AND investment interest Managing the “quick success” expectations Focusing on opportunities for sustainable success--- not get rich quick type fixes DDAC SUBCOMMITTEE -TECHNOLOGY

3. PHASE 1: WHAT OPPORTUNITIES EXIST RIGHT NOW? LOW HANGING FRUIT PHASE 2: FOCUS ON TECHNOLOGY DRIVEN DEVELOPMENT OPPORTUNITIES Focus in on incentive based and regulatory policy (versus regulation) based opportunities Target Recommendations mid to late 2004 PHASE 3: WHAT DOES THE LONG-TERM FUTURE HOLD? Commercial “Petri-Dish” Research and Development opportunities for minorities Work with incumbents like Microsoft, Hewlett Packard, General Electric to identify “opportunities” to outsource development and delivery of technological solutions for their business needs Education Driving the advancement of scholarships and research opportunities at the graduate level Examples: Emory’s “New Ventures” program at the Goizuetta Business School Regulation Focusing in establishing long-term regulatory programs and policies to drive and foster nascent technology Target Recommendations early 2005 PHASED APPROACH

4. LEVERAGED “POST-MORTEM FOCUS GROUP” ANALYSIS TO FORMULATE INITIAL FINDINGS Interviewed minority companies in effort to get “real life” feedback on hurdles, best practices, and opportunities Suppliers Ascension Integration GlobeNet The Wilkins Group Retail Service Providers North Point UrbanComm Savoy IDENTIFIED LOW HANGING FRUIT RECOMMENDATIONS AND REFINED OPPORTUNITES FOR LONG TERM FOCUS Identified initial recommendations in general and in the broadcast communications sector GENERAL PROGRESS REPORT

5. MEDIA COMMUNICATIONS Radio Limited minority ownership (4.2% as of 2001) Limited to “Second class” facilities Most minority owned radio stations were AM stations (51.6% as of 2001) Minority owned AM stations are 36% more likely to operate at the less desirable frequencies Limited access to licensing in non-dominant communities Minorities are 37% less likely to be licensed in non-dominant communities Television Limited minority ownership (1.5% as of 2002 – Highpower; 10% as of 2002 – Low Power) Minority ownership growth stunted by relaxation of broadcast ownership caps INITIAL ASSESSMENT

6. TELECOMMUNICATIONS Reporting and Analysis Roadblocks Difficult to assess actual minority participation due to limited reports Statistical data focused primarily on “communications” ownership in general, specifically media communications and wireless communications Limited to using reports on initial market entry barriers research focused on broadcasting and wireless as a paradigm for common carrier and cable providers Initial Assessment Aside from the retail wireless and PCS sector, the primary minority participation in the supplier chain, rather than in the retail segment INITIAL ASSESSMENT

7. BROADCAST COMMUNICATIONS VS TELECOMMUNICATIONS Though minorities are historically under-represented in both areas, the minority representation in the broadcast communications field appears to be more common due to the following factors: Ability to leverage minority centered content: Broadcast communications allows minorities the ability to leverage minority based content to capture market share Telecommunications is typically content neutral Capital Intensiveness: Broadcast communications entry requirements tend to be less capital intensive than telecommunications OTHER OBSERVATIONS

8. WHAT WORKED? Enterprise Focused Incentive To Deal Programs Minority Tax Certificate Program Reports indicate that minority broadcast and cable ownership grew from 40 minorities owned licenses in 1978 to 356 in 1995 under the Tax Certificate Program Targeting Underserved Retail Opportunities Content based services formatted to serve public interest needs Minority owned communications businesses that focused on providing diversity in programming Lifting the Freeze on the Filing of Applications for Major Modifications of AM Stations and New Construction of AM Stations POST MORTEMS • WHAT DIDN’T? • Bidding Credits • Though designed to increase participation in wireless auctions by small, minority, and women owned businesses were ineffective • Auction block allocation and scheduling process, coupled with “generous” financing structure for all participants made bidding credits a “moot” issue • “Over” Regulation • Forcing “auction” processes on uncontested spectrum • Incumbents typically already had spectrum from “pre-auction” days as such, these processes increased minority and small business barriers to entry and had little to no effect on incumbent

9. BROADCAST FINANCING: Limited access to capital. DISCRIMINATION: Specifically, advertising and capital markets have excluded minority formatted and owned media stations. REGULATORY: Entry barriers raised by cost prohibitive regulatory processes such as auctions. LACK OF INDUSTRY EXPERIENCE:Industry experience and successful track records key to success in acquisition of capital and general market entry PERCEIVED HURDLES • TELECOMMUNICATIONS • COMPETITION: Entrenched and powerful incumbents • Overcoming the service inferiority perception • CAPITAL: High capital and investment requirements • Financial Distress. Investors are shying away from telecom in general • SCALABILITY: Success requires ability to leverage economies of scale and geographic scope--- traits that small businesses usually don’t have • MARKET DOWNTURN • Reduced Demand/Supply Chain Glut. Over capacity and overbuilding coupled with economic downturn

10. BROADCAST Engineering Deregulation Talent Development Leverage Technology PERCEIVED NEEDS • TELECOMMUNICATIONS • Access to Strategic Partnerships • Regulatory Protection for Competition and Nascent Technology • Opportunities to attain scalability

11. BROADCAST MOVE UP THE FREQUENCY STREAM:Establish medium powered FM stations and AM stations with expanded band LEVERAGE CONTENT DIVERSITY:Continue to address the needs of underserved/underrepresented subscribers LEVERAGE TECHNOLOGY: Leverage the internet to drive market reach and subscriber base for print publications PERCEIVED BUSINESS OPPORTUNITIES • TELECOMMUNICATIONS • TRIPLE PLAY TRANSFORMATION DRIVERS: Convergence is unstoppable. Wireless, Data and Broadband triple play opportunities still promising. • SUPPLY CHAIN FOCUS: As large players reach aggressively for the triple play, minority suppliers can focus on • Engineering, installation, network upgrades • IP applications • Removing “last mile” bottlenecks • GAP FILLER: Focus on supplier opportunities to resolve capability gaps for large enterprises • Examples: Transport to IP based service providers; network build-out partnerships with Wireless carriers; cable company “last mile” upgrades

12. General Technology Deployment – No Rule Changes or Legislation Required Expand the working relationship between the FCC and SBA, as well as the FCC and other government agencies (e.g., NTIA, Department of Commerce) Increase awareness of emerging technology opportunities for minority and small businesses Sponsorship of an annual FCC/SBA conference on minority/small businesses and emerging technologies such as wireless, VoIP, broadband, etc. Potential Conference in the Fall of 2004 LOW HANGING FRUIT RECOMMENDATIONS

13. Spectrum Allocation No rule changes or legislation required Establish an FCC database and/or work with outside groups to establish an information clearinghouse of updated license sales, spectrum leasing, and other communications-related opportunities for minority and small businesses Engineering Restrictions Creation of medium powered AM and FM radio stations Relax the community of license and transmitter site rules to allow suburban facilities to move closer to their audiences Allow interference agreements between licenses or for a licensee with itself LOW HANGING FRUIT RECOMMENDATIONS

14. Finalize and Submit White Papers on Low Hanging Fruit Recommendations Work with Access subcommittee to establish a Minority Supplier Program Identify opportunities to leverage resources of the Asaba Group Enlist support of Top Tier Players (Cablevision, Charter, Comcast, Cox, Time Warner, Level 3, ILECs, IXCs Refine regulatory and legislative based recommendations Leverage resources of the NNPA, NAHP, NABJ, NAHJ, AAJA and similar organizations to: Research minority publishers needs to develop and maintain successful internet operations Focus in on private sector initiatives: Preserving and expanding NTIA’s TOP program Facilitating joint ventures with companies that dominate the internet Raising funds for training, including complex Internet site development and management intitiatives in the journalism schools of HBCUs and HSIs Explore Opportunities to Resuscitate the Telecommunications Ownership Diversity Act NEXT STEPS