Report No. MM 98-18         MASS MEDIA ACTION                 November 19, 1998
                                                         
    FCC LAUNCHES PROCEEDING REGARDING ALLOWING NONCOMMERCIAL
EDUCATIONAL TV STATIONS TO USE EXCESS DTV CAPACITY FOR ANCILLARY
    AND SUPPLEMENTARY SERVICES; ASKS FOR COMMENTS ON LIMITS
                       (MM Docket 98-203)
                                
     The FCC today initiated a proceeding to explore issues associated with allowing
noncommercial educational TV stations to use their new Digital Television (DTV) channels to
offer ancillary or supplementary services, including subscription TV, on a remunerative basis.

     The Commission issued a Notice of Proposed Rulemaking (NPRM) in response to
requests by the Association of America's Public Television Stations and the Public
Broadcasting Service for clarification from the FCC on the ability of noncommercial
educational television stations to use excess capacity on DTV channels for revenue-generating
purposes, and for an exemption on paying fees to the government based on these revenues. 

     In  the NPRM, the Commission asked for comment on whether limits should be
imposed on remunerative activities undertaken by noncommercial educational television
licensees on their DTV capacity. It also asked for comment on whether noncommercial
licensees should be exempt from paying fees to the government when they offer such ancillary
or supplementary services as a source of funding for their noncommercial mission-related
activities.  In a related proceeding, the Commission issued an order today implementing a
Congressional mandate in the Telecommunications Act of 1996 that the FCC establish a
program to assess and collect fees from commercial broadcast licensees for "ancillary or
supplementary" uses of the DTV spectrum. 

      The Commission said it was sympathetic to the arguments from the noncommercial
educational television community that such revenue-generating ancillary and supplementary
services could provide important public interest benefits, could help pay for the costs of
converting to digital service, and could help their noncommercial service flourish in a digital
age. However, it also asked for comments on how to provide such flexibility without
undermining their fundamental mission of providing a noncommercial educational broadcast
service. 

     The Commission also asked for comments on its tentative conclusion that the
Communications Act's ban on advertising on noncommercial stations should not apply to
subscription services they provide on their DTV channels, since these are "non-broadcast"
services not covered by the ban.  

     The FCC noted that under its DTV rules, remunerative ancillary and supplementary
services could include subscription services, computer software distribution, data
transmissions, teletext, interactive services and audio signals. 

     The Commission recognized the importance of these issues to the future of public
television as it enters the digital age.  It said Congress and the Commission have continually
balanced the desire to maintain the integrity of the noncommercial educational status of the
public broadcasting system with the fact that public television must have access to adequate
funding in  order to survive. 

     Action by the Commission November 19, 1998, by Notice of Proposed Rulemaking
(FCC 98-304).   Chairman Kennard, Commissioners Ness, Furchtgott-Roth, Powell and
Tristani.
  
                            - FCC - 
                                
News Media Contact: David Fiske (202) 418-0513
Mass Media Bureau Contact: Jane Gross 418-2130