In a three-to-one vote in mid-October, the FCC made what could end up being a landmark decision. The FCC said that anything less than the substantial majority of the public broadcasters' new digital capacity may contain advertising, just like their commercial counterparts. There's one stipulation — the government gets a five percent cut of the gross commercial revenues.
In the public statement accompanying the ruling, the commission cited computer software distribution, data transmissions, Teletext, interactive materials, aural messages, paging services, audio signals and subscription video as examples of the services that may be offered as supplements to the digital TV signal. There's nothing keeping public broadcasters from running sitcoms, game shows or even soap operas, with commercials, on one or more of their sub-channels.
In the Report and Order, the FCC ruled that the statutory prohibition against broadcasting of advertising on non-commercial educational (NCE) television stations applies only to broadcast programming channels. It does not apply to any ancillary or supplementary services carried on their excess DTV channels.
Commissioner Michael Copps disagreed with the decision to allow public television to put commercials on their digital spectrum, saying that public and commercial television services should not converge until they become indistinguishable.
John Lawson, president of America's Public Television Stations (APTS), claimed the revenue would be used to provide a new generation of digital educational services.
Rep. Billy Tauzin (R-LA), who chairs the House Energy and Commerce Committee, expressed concern about what he called “creeping commercialization.” Tauzin's spokesperson Ken Johnson said the Congressman will likely ask the agency to tighten its definition of substantial majority.
Tauzin, Rep. Edward Markey (D-MA) and Rep. Richard Burr (R-NC) sent a letter to FCC Chairman Michael Powell asking the commission to reconsider its move.
The FCC concluded that NCE licensees are not exempt from the statutory requirement to pay fees on revenues generated by remunerative use of their excess digital capacity, even when those revenues are used to support their mission-related activities. Beginning in 2002, NCE licensees will be required to report to the FCC on Dec. 1 of each year on their use of their digital channels during the 12-month period ending the previous Sept. 30. Stations must then remit fees of five percent of gross revenues received during the reporting period for feeable ancillary or supplementary services provided on their digital bitstreams.
For more information, see the FCC's Web site at: http://www.fcc.gov/Bureaus/Mass_Media/News_Releases/2001/nrmm0111.html.
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