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\ FEDER L COMMUNIC TIONS COMMISSIONW SHIN TONsy

OFFICE OFTHE CH IRM N

F e b r u a r y 1 4 2 0 1 4

The Honorable Fred UptonChairmanCom mittee on Energy and CommerceU.S. House of Representatives2125 Rayburn House Office BuildingWashington, D.C. 20515Dear Chairman Upton:

Thank you for writing with your views regard ing the field test of the Research D esign forthe Commission's Office of Communications Business Opportunities (OCBO) Multi-MarketStudy of Critical Information Needs (Research Design). I understand this is a matter ofimportance to y ou, as it is to me, and app reciate the opportunity to provide additionalinformation about the development and conduct of the Research Design.The Commission has no intention of regulating political or other speech ofjournalists orbroadcasters by way of this Research Design, any resulting study, or through any other m eans.The developm ent of the Research Design was intended to aid the Com mission in meeting itsobligations under Section 257 of the Communications Act. Section 25 7 directs the Commission

to identify and eliminate mark et entry barriers for entrepreneurs and other small businesses inthe provision and ownership of telecommunications services and information services. Thestatutory provision expressly links our obligation to identify market barriers with theresponsibility to prom ote the policies and purposes of this chapter favoring diversity of mediavoices. Finally, Section 257 requires the Comm ission to review and report to Con gress on anyregulations prescribed to eliminate b alTiers within its jurisdiction ... that can be prescribedconsistent with the pub lic interest, convenience, and necessity.

Under the statutory reporting requirement of Section 257 the Com mission studies marketconditions to understand the scope and extent of market entry barriers. Past studies by theCom m ission pursuant to S ection 257 include History of the Broadcast Licensee A pplicationProcess; Utilization Rates W in Rates and Disparity Ratios for Broadcast Licenses A w arded bythe FCC; L ogistic Regression M odels of the B roadcast L icensee A w ard Process for LicensesA w arded by the FCC; and the FCC Econometric nalysis of Potential Discrimination UtilizationRatios for M inority and W om en-Owned Com panies in FCC W ireless Spectrum A uctions. TheResearch Design is a precursor to any formal study. If used in any way, its goal would be similarto those of past reports - seeking to identify whether potential market barriers exist and, if so,whether those barriers affect diversity of media voices.

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Page 2-The Honorable Fred Upton

After the selection of the contractor for the Research Design, the Com mission put thedesign out for comment, inviting input from all stakeholders. Your letter and the opportunity forpublic review surfaced a numb er of issues and mo dification of the Research De sign may benecessary. My staff has engaged in a careful and thorough review of the Research Design withthe contractor to ensure that the inquiries closely hew to the m andate of Section 257. W hile theResearch D esign is a tool intended to help the Com mission consider effective, pro-competitivepolicies that would encourage new entrants, its direction need not go beyond our responsibilities.W e continue to work with the contractor to adapt the study in response to these concerns andexpect to complete this work in the next few weeks. As the revisions that we may implementlikely will require cost reassessmen ts, we will provide you w ith further details regarding cost andme thodology as soon as they are available.

Again, thank you for providing me with your views on this matter.

Sincerely,

Tom W heeler

cc: The Honorable Mignon Clyburn, CommissionerThe Honorable Jessica Rosenworcel, CommissionerThe Honorable Ajit Pai, CommissionerThe Honorable Michael O'Rielly, Commissioner