MMTC urges caution in defining small business


MMTC / Minority Media & Telecom CouncilRecent attempts to improve diversity of ownership in the communications field have relied on a careful definition of small business, which has been necessary to enable any such measure to withstand judicial scrutiny. MMTC is concerned that a definition used in a recent Senate bill may be deleterious.

The issue is important. MMTC said, “Recent action by the Supreme Court in the area of affirmative action only underscores the importance of carefully crafting small business definitions in federal and state law to enhance small business ownership across all segments of American society while remaining true to the Constitution, as the Supreme Court interprets it.”

The bill is The Marketplace Fairness Act, which MMTC said “…includes a safe-harbor provision for small businesses, using out-of-state revenues to establish whether a business would be exempt from the bill’s compliance costs.”

MMTC cites economist Jon Orszag’s questioning of the definition, which he said lacks empirical evidence and may impose expenses on some businesses, many of which may be minority-owned. Orszag, who served in the Clinton administration, suggests that the small business definition used in MFA should be based on existing definitions as used by the Small Business Administration.

In conclusion, MMTC stated, “MMTC does not take a position on the merits of the MFA generally.  MMTC is concerned, however, that a judicially untested and economically unsupported definition of small business risks harming minority-owned small businesses and could undermine efforts to maintain effective federal and state statutes and regulations in the courts. MMTC therefore calls upon Congress to reconsider the definition of small business in the MFA’s safe harbor provision such that any final version of the bill would apply existing federal laws and Small Business Administration regulations to define small businesses.”