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A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#&J\  P6Q[&P#"S^.=K\\===\g.=.3\\\\\\\\\\33gggQzzpf=Gpfzfpp=3=V\=Q\Q\Q=\\33\3\\\\=G3\\\\QX%Xc=.============\3QQQQQzzQpQpQpQpQ=3=3=3=3\\\\\\\\\\Q\\\\\f\QQzQzQzQzQ\pQpQpQpQ\\\\\\\=\=\===\G=\p3p=p=p=p3\\\\\z=z=z=fGfGfGfGp=p=p=\\\\\pQpQN@.S\=Q\\\\\39\7\7!3QQ\==\\ff=Q7tggeeggoo.Ig2[-Kye1pe~e\e~"S^.=f\\===\i.=.3\\\\\\\\\\==iii\zzpG\zpfzz=3=k\=\fQfQ=\f3=f3f\ffQG=f\\\QH(H_=.============f3\\\\\QzQzQzQzQG3G3G3G3f\\\\ffff\\f\\\\pf\\QQQQfzQzQzQzQ\\\\\ffGfGfG=Gf\=fz3z=z=z=z3fff\\QQQfGfGfGfGz=z=z=ffff\zQzQN@.c\=\\\\\\7=\7\733\\\==\\ff=\7tiieeiioo.Ii2[-Kye1pe~efe~"S^.=M\\===\|.=.3\\\\\\\\\\==|||\ppzpp=Qzfzpp\fppffG3GM\=\\Q\Q3\\33Q3\\\\GG3\QzQQGI2Ic=.============\3p\p\p\p\p\zzQpQpQpQpQ=3=3=3=3z\\\\\\\\\fQp\\\\fQ\p\p\p\zQzQzQzQ\pQpQpQpQ\\\\\\\=\=\===\Q=zQf3f=f=f=f3z\z\z\\\zpGpGpG\G\G\G\Gf=f=f=\\\\zfQfGfGN@.`\G\\\\\\39\7\7'3ff\==\\\\=f7t||ee||oo.I|2[-Kye1pe~e\e~2LLLZL"S^%-77\V%%%7>%7777777777>>>1eOIIOC=OO%+OCbOO=OI=COOhOOC%%47%17171%777V7777%+77O77155<%%%n%%%%%%%%%%7O1O1O1O1O1bII1C1C1C1C1%%%%O7O7O7O7O7O7O7O7O7O7O1O7O7O7O7O7=7O1O1I1I1I1I1O7C1C1C1C1O7O7O7O7O7O7O7%7%7%%%7+%O7CC%C%C%CO7O7O7O7O7bOI%I%I%=+=+=+=+C%C%C%O7O7O7O7hOO7C1C1N'27%177777"SS7!TT7S!117n%%77l==n%1ni!t>><<>>mBBs,>[N6-msTN[TTTH_<1CPd<d<$8YYdCCddooCYȾ883+9^:a7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:>y? 6 @Heading 2Underlined Heading Flush Left14 Heading 1Centered Headingcal Style 4G Y * Ã  Bullet ListIndented Bullet List*M0 Y XX` ` (#` MACNormall      X` hp x (#%'0*,.8135@8:<     :}D4P T I. A. 1. a.(1)(a) i) a)T,0*ÍÍ,*Í ., US!!!! !      X` hp x (#%'0*,.8135@8:<     :}D4P ,0*ÍÍ,*Í ., US!!!! ! 2!jL+^-MFootnotel!G!$?w A<x $}6 @  $}6 @  S- X   1ض S- #&J\  P6Q[&P#Federal Communications Commission  )xxXFCC 98304  yx}dddy 1ՊQg Before thepp  )xxX Federal Communications Commission  S-&>Washington, D.C. 20554 ă  S-In the Matter of hhCq) ` `  hhCq)  Sh-Ancillary or Supplementary Use ofhhCq)ppMM Docket No. 98203  S5- %Digital Television Capacity by Noncommercial)pp  )xxX   S-Licensees` `  hhCq)pp  )xxX  ` `  hhCq)  S -   NOTICE OF PROPOSED RULE MAKING \  Sj-X` hp x (#%'0*,.8135@8:subscription channels for popular PBS programming.8  {O-ԍAAPTS/PBS Petition on Reconsideration of the Fifth Report and Order at 2627. It emphasizes the importance of the revenue  d(#potential of these services in order to continue public television's commitment to providing a high quality  S - d(#noncommercial, educational broadcast service.X ~ yO-ԍAAPTS/PBS Reply to MAP Opposition at 7.X AAPTS/PBS has noted that the multiple programming  d(#jstreams offered by the extra capacity of digital transmission will enable public broadcasters to extend the  Sl- d(#.reach of their educational services. New expanded "multicast" programming channels planned by public  d(#ytelevision as a result of multicasting capabilities include: PBS's ReadytoLearn service for children; K12  d(#instructional programming; college credit telecourses; workforce training; and local public affairs  d(#=programming. AAPTS/PBS notes that many public stations are relying on the revenue from ancillary or  d(#supplementary services to help fund the construction of DTV facilities and the operation of both DTV  d(#Nand NTSC facilities. Such flexibility is crucial, it maintains, as federal and corporate funding have  S:-become increasingly difficult to obtain.+X: yO- v >ԍAAPTS/PBS Petition at 27. AAPTS/PBS has also noted that it has requested 45% of the estimated $1.7  d(#ibillion DTV transition cost, or $771 million, in its FY 1999 budget submission to the Office of Management and Budget.+  S- d(#  13. Specifically, AAPTS/PBS requests that the Commission clarify that Section 73.621 of its rules,  d(#which requires public stations to provide a noncommercial service, is not applicable to ancillary or  Sn- d(#[supplementary services provided on DTV capacity.On.  yO<"-ԍAAPTS/PBS Petition at 2627. O It proposes that the Commission make clear that,  d(#as long as a public station provides one noncommercial broadcast service pursuant to Section 73.621, it  d(#can use its additional DTV capacity as a source of revenue, subject only to the requirement of non S-derogation in Section 73.624.  {O3&- v ԍAAPTS/PBS Petition at 27.  See n. 10 for description of nonderogation requirement under Section 73.624 of the Commission's rules. ",l(l(,,"Ԍ S- d(#=ԙ  14. AAPTS/PBS notes that its proposal to use its additional DTV capacity as a source of revenue is  d(# consistent with existing Sections 73.621(f) and (g), and 73.646(b) and (d) of the Commission's rules,  d(#which allow public television stations to use the vertical blanking interval ("VBI"), and auxiliary broadcast  Sg- d(#services for revenue generating activities.Jg yO-ԍAAPTS/PBS Petition at 28.J It argues that use of their DTV capacity as a source of revenue  d(#follows rationally from these provisions. Similarly, public television licensees seek the opportunity to use  d(#[that portion of their DTV spectrum that is not necessary for their primary public television mission as a  S-means of financing their DTV broadcast operations.JX yO-ԍAAPTS/PBS Petition at 27.J  Sh- d(# 15. In opposing AAPTS/PBS's request in part, MAP requests that the Commission make clear that  d(# any leased or jointventure programming undertaken by public television licensees that is advertiser d(#supported would violate the advertising ban of Section 399B of the Act. MAP argues that AAPTS/PBS's  d(#request is unclear as to what specific programming would be offered or whether it would comport with  d(#the requirements of 399B. For example, MAP specifies programming that it believes would violate the  d(#advertising ban as "programming that is predominantly utilized for the transmission of sales presentations  d(#or program length commercials, such as home shopping or infomercials, or that otherwise encourages or  d(#Msolicits the purchase of goods and services from commercial entities." MAP also argues that because  S - d(#=Section 336 of the Act does not explicitly permit noncommercial stations to broadcast advertisements on  d(#any ancillary or supplementary services, AAPTS/PBS's argument that Section 336 extends to both  d(#Lcommercial and noncommercial entities is possible only if the inconsistent requirements of Section 399B  S8- d(#were repealed. MAP notes that, while public television stations should be able to provide some revenue d(#generating ancillary services, these services must be consistent with the nature of noncommercial public  S-television as set forth in that section. {OZ-ԍMAP Opposition to AAPTS/PBS Petition for Reconsideration of the Fifth Report and Order at 89.  S-   Sl- d(# 16. In reply, AAPTS/PBS acknowledges that the advertisement ban of Section 399B will apply to  d(#kthe primary noncommercial broadcast service, but argues that it should not extend to the provision of  d(#ancillary and supplementary services on DTV spectrum. AAPTS/PBS points out that Section 399B was  d(#enacted by Congress in 1981 in an effort to reduce public television's dependence on federal  S- d(#appropriations.X z yO-ԍAAPTS/PBS Reply to MAP Opposition at 4.X Although Congress was also concerned that public broadcasting's primary broadcasting  d(#Lservice remain noncommercial, AAPTS/PBS notes that the balance Congress struck in Section 399B was  S:- d(#to allow such remunerative activities, provided that the public broadcast service remained noncommercial.[!:  yO-ԍAAPTS/PBS Reply to MAP Opposition at 56. [  S- d(#] 17. AAPTS/PBS also notes that previous Commission decisions have allowed noncommercial  d(#licensees to provide subsidiary communications services without regard to whether they include  Sn- d(#yadvertisements."n {O$- v MԍAAPTS/PBS Reply to MAP Opposition at 56 (citing Transmission of Teletext by TV Stations, 53 R.R.2d 1309, 1322 (1983)). AAPTS/PBS maintains that even if the Section 399B advertising restrictions are found  d(#to apply to these services, the Commission has discretion under Section 336(a)(2) to allow public TV"; ",l(l(,,<"  S- d(#licensees to include advertisersupported services if it finds these services to be in the public interest.r# {Oh-ԍAAPTS/PBS Reply at 67 (citing 47 U.S.C.  336 (a)(2)). r  d(#AAPTS/PBS urges an interpretation in which the advertising ban in Section 399B would continue to apply  d(#Mto the primary noncommercial broadcast service, while any ancillary and supplementary use of DTV channels would be free from the restrictions of this section.  S4-   S- d(# 18. AAPTS/PBS's Request for Exemption From Fees under Section 336(e). In its Petition for  S- d(#Reconsideration of the Fifth Report and Order, AAPTS/PBS requested that the Commission exempt public  d(#television licensees from any fee assessed in connection with revenuegenerating use of the ancillary or  d(#.supplementary services on their DTV spectrum "to the extent that revenues from those service are used  S7- d(#\to support the licensee's missionrelated activities."$7Z yO1 - v kԍPetition for Reconsideration and Clarification of Association of America's Public Television Stations and Public Broadcasting Service in MM Docket No. 87268 filed June 13, 1997, p. 28, n. 29. We sought comment in the Fees Proceeding on  d(#whether noncommercial television licensees should be exempt from such fees or subject to a nominal fee  S-where they offer ancillary and supplementary services as a source of funding for public television.M% {O#-ԍSee n. 6, supra.M  Sk - d(# 19. In its comments in the Fees Proceeding, AAPTS/PBS argues that public television stations should  d(#be exempt from such fees because the statutory purposes of Section 336(e)(2) do not apply to services  d(#provided by public television licensees. AAPTS/PBS notes that if these revenues would be used to  d(#support noncommercial activities, there would be no need to "recover" a portion of the value of the  d(#spectrum for the public and that an exemption would not result in any "unjust enrichment". AAPTS/PBS  d(#Lalso argues that, as public television stations are not auctioned, there is no equivalent amount that would  S9- d(#lhave been received at auction.^&9D yO-ԍAAPTS/PBS Comments in Fees Proceeding at 67.^ Further, AAPTS/PBS contends that such an exemption would be  d(#consistent with other Congressional and regulatory policies, and that the Commission has concluded in  d(#other proceedings that the imposition of a fee on public broadcasting would dilute the financial support  S-paid to public broadcasting by Congress.J'*  yO- v ]ԍFor example, Congress has repeatedly confirmed its commitment to universal access to public service  d(#programming in its appropriations deliberations and in its reauthorization of funding. Since 1967, Congress has  d(#appropriated approximately $4.67 Billion (through FY 1998) to fund public service programming through the  d(#xCorporation for Public Broadcasting, and approximately $734.8 million (through FY 1998) for the planning and  d(#construction of public television and radio facilities, including the public broadcasting satellite distribution system.  d(#AAPTS/PBS Comments in Fees Proceeding at 8. The Commission has consistently concluded that "exacting fees  d(#zfrom noncommercial educational applicants would dilute the financial support offered by Congress." The  d(#<Commission exempts noncommercial educational broadcasters from application fees and annual regulatory fees.  {OT!- d(#wAAPTS/PBS Comments in Fees Proceeding at 10 citing In the Matter of Establishment of a Fee Collection Program  d(#Jto Implement the Provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, Docket No. 86285,  d(#3 FCC Rcd 5987, 5988 (1988); In the Matter of Implementation of Section 9 of the Communications Act,  d(#Assessment and Collection of Regulatory Fees for the 1994 Fiscal Year, MM Docket No. 9419, 9 FCC Rcd 6957 (1994). J  S:- d(# 20. MAP generally supports allowing public broadcasters to be exempt from such fees, but only if  d(#they do not provide advertisersupported ancillary and supplementary services. MAP asserts that the"',l(l(,,D"  d(#statute makes no distinction between noncommercial and commercial licensees, either in their ability to  d(#provide advertisersupported ancillary and supplementary services, or in their obligation to pay fees on  S- d(#such services.Z( yO-ԍMAP Comments in Fees Proceeding at 1517.Z We have determined that AAPTS/PBS's request for such exemption should be considered  d(#in this proceeding. Accordingly, we seek additional comment on this issue in light of the comments received in the Fees Proceeding and the tentative proposals set forth in this Notice.  S- III.  REQUEST FOR COMMENTS    S5- d(#\ 21. Noncommercial Educational Television. Public broadcasting's mission has long been to provide  d(#jquality educational and cultural programming to a wide and diverse audience. Noncommercial educational  d(#television stations have also been at the forefront of exploring innovative services and new technologies  d(#to accomplish this mission. These stations also appear poised to take full advantage of the opportunities  d(#made available by digital technology. We fully recognize the public interest benefits inherent in the services that may be offered by NCE licensees on the digital spectrum.  S - d(# 22. As we stated in the Fifth Report and Order, granting broadcasters the flexibility to offer the  d(#ancillary or supplementary services they choose will help them attract consumers to the service, which  d(#will, in turn, speed the transition to digital television. We stated that such flexibility will encourage  d(#entrepreneurship and innovation, will contribute to efficient spectrum use, and will expand and enhance  d(#zuse of existing spectrum. We seek comment on whether these same considerations apply to the NCE context.  Sl- d(#m 23. Throughout the development of the public broadcasting system, both Congress and the  d(#Commission have continually balanced the desire to maintain the integrity of its noncommercial status  d(#with the fact that public television must have access to adequate funding in order to survive. Congress  d(#[enacted the Public Broadcasting Act of 1967 in response to increasing public demand for the government  d(#to sponsor independent sources of broadcast programming as an alternative to commercial broadcasting.  d(#LThis legislation sought to promote the development of noncommercial, educational broadcasting stations  S:-and established the framework for today's public broadcasting system.Z):X {O2- v ԍPub. L. 90-129, 81 Stat. 365, codified at 47 U.S.C.  390 et seq. Until 1962, Congress did not provide  {O- d(#any direct financial assistance to noncommercial, educational broadcasting.  See Educational Television Act of 1962,  d(#Pub. L. 87-447, 76 Stat. 64. An expanded federal effort to address public broadcasting was not undertaken until  d(#Y1967 when the Carnegie Corporation sponsored a commission to review the state of educational broadcasting. The  d(#Carnegie Commission found that the future of an expanded public broadcasting system rested on the strength of its  d(#local stations, but also found that these stations were greatly restricted by chronic funding shortfalls. The Carnegie  d(#Commission called upon the Federal Government to supplement existing state, local, and private financing in order  d(#,that educational broadcasting could realize its full potential as a viable alternative to commercial broadcasting. The  {Ov!- d(#Carnegie Commission's Report and proposals became the foundation for the Public Broadcasting Act of 1967. See Carnegie Commission on Educational Television: A Program for Action (1967). Z  S- d(#/ 24. Public television has since flourished and developed from an experimental educational service  d(#Linto the valuable and unique programming service that exists today. The Commission has supported the  d(#goals of the public broadcasting system and promulgated rules to implement the public broadcasting  d(#jprovisions of the Communications Act. For example, in 1952, recognizing the important and unique role"; ),l(l(,,"  d(#to be served by public television, the Commission reserved spectrum exclusively for the noncommercial  S-broadcasting service.* {O5-ԍSee Table of Allotments, 41 F.C.C. 148, 159, 161 (1952) (codified at 47 C.F.R.  73.606(a), 73.621).  Sg- d(# 25. We are consequently sympathetic to the relief requested in the AAPTS/PBS petition. The petition  d(#jdescribes a range of revenuegenerating ancillary or supplementary services that could help NCE stations  d(#jflourish in a digital age. We seek comment on these new services and specifically on NCE stations' plans  d(#^for using excess digital capacity. We note that the costs of converting to digital service will be  d(#Lconsiderable, and that many NCE stations rely on public funds to provide the buildout to DTV service.  d(#At the same time we are sensitive to the concerns raised by MAP that in permitting NCE stations  d(#flexibility in providing such services we must be consistent with Section 399B and also not undermine  d(#their fundamental mission of providing a noncommercial educational broadcast service. To help us  d(#determine the limits, if any, on the remunerative activities of NCE licensees on their DTV capacity, we  S -seek comment below on a number of issues.  S6 - d(#. 26. Noncommercial Educational Television: Funding Issues. Many NCE stations have traditionally  d(#received most of their funding from federal, state and local government sources in addition to corporate  S - d(#and viewer contributions.+ Z yO- v ԍLegislation that would overhaul the federal funding structure of public television by creating a federal trust  d(#Zfund has been introduced in Congress. For example, a bill was introduced that would create a federal trust fund to  d(#provide 70 percent of the financing for public television. The fund would be financed by voluntary contributions  d(#from commercial TV stations in return for exemption from fulfilling contentbased public interest broadcasting  {O- d(#requirements. See H.R. 4067, 105th Congress, 2d Sess. 16 (June 16, 1998) ("Public Broadcasting Reform Act of 1998"). In its request for clarification, AAPTS/PBS notes the uncertainty of continued  d(#federal financial support and the tightening of support from the corporate sector. We seek comment on  d(#/such funding trends and on NCE licensees' specific funding needs to convert to digital and maintain a  d(#/robust NCE television service. We also seek comment on the appropriate role of the Commission in ensuring that such funding needs are met.  S- d(#|X` hp x (#%'0*,.8135@8:analog technology, being "dominated" by STV.:36 pf{ {OF-ԍId.: It therefore concluded at the time that it should not generally authorize such operation through a rule change.  S - d(#> 30. The Commission nonetheless recognized that STV operations can benefit public stations as a  d(#supplementary funding source. It consequently stated that it would permit individual public television  S7- d(#stations to engage in STV operations on a waiver basis.47f{ {O"- v ԍId. To date, no waivers have been granted to noncommercial television stations. Approximately six waivers have been granted to commercial television stations. The Commission has also given public  d(#television stations flexibility in their use of the analog channels in other ways. In particular, the  d(#Commission has ruled that noncommercial spectrum, like commercial spectrum, can be used for  d(#remunerative ancillary services such as data delivery or teletext provided by NTSC licensees on the" \4,l(l(,,"  d(#vertical blanking interval (VBI) and the video portion of the analog signal in accordance with Section  S-399B of the Act.s5f{ {O5-ԍSee 47 C.F.R.  73.621 (f), (g) and 73.646 (b), (d). s  Sg- d(# 31. The AAPTS/PBS petition raises many of the same legal and policy questions raised by our  d(#Mprevious consideration of requests to provide STV and other revenuegenerating ancillary services on  S- d(#[analog NCE channels. Unlike the previous requests, however, the AAPTS/PBS petition concerns digital  d(#television, which offers significant new challenges and opportunities to NCE stations. We are inclined  d(#to permit NCE stations to take advantage of these opportunities and offer innovative ancillary and  d(#supplementary services that are remunerative and consistent with their educational mission. We therefore  d(#seek comment on whether, and under what conditions, NCE licensees should be permitted to use their DTV capacity to offer ancillary or supplementary services, including STV, on a remunerative basis.  S - d(#> 32. In particular, we seek comment on whether and how we should amend Section 73.621 of our  d(#Rules, which requires NCE stations to provide a noncommercial service that "primarily" serves the  d(#/educational needs of the community. For example, should we extend this requirement to ancillary or  d(#ysupplementary services provided by noncommercial licensees on their DTV capacity? Should we clarify  d(#Mthat an NCE licensee's obligation to provide a primarily educational service applies to its entire DTV  d(#bitstream? Under this proposal, NCE stations would be permitted to provide ancillary or supplementary  d(#services, but still would be required to ensure that their overall digital bitstream was primarily devoted  d(#to serving the educational needs of the community. Should we clarify that the requirement to provide a  d(#primarily educational service applies only to the single, freeovertheair broadcast service it is required to provide? We seek comment on these and any other options for amending Section 73.621 in this regard.  Sl- d(#y  33. We also seek comment on whether and how we can permit NCE stations to provide remunerative  d(#/ancillary or supplementary services in a manner that does "not interfere with the provision of public  S- d(#telecommunications services" by such stations as required by Section 399B of the Act. 6Zf{ {O- v zԍ 47 U.S.C.  399B(c). See  28, supra, for definition of a "noncommercial educational broadcast station"  d(#and "public broadcast station" under Section 397(6) of the Communications Act of 1934, 47 U.S.C.  397(6).  d(#Section 73.621(a) of the Commission's Rules, 47 C.F.R.  73.621(a), reiterates the purpose of public television  d(#-stations, stating that such licenses will be granted only upon a showing that the stations will be used primarily to  d(#serve the educational needs of the community; for the advancement of educational programs; and to furnish a nonprofit and noncommercial television broadcast service.  In particular, we  d(#-seek comment on whether NCE DTV stations will have the capacity to provide ancillary or supplementary  d(#services without interfering with their ability to provide a primarily educational NCE service. We also  d(#seek comment on whether such ancillary or supplementary services can provide an important funding  d(#source that could facilitate the transition to DTV for NCE stations, and, more generally, enhance their primary mission of providing a robust noncommercial, educational broadcasting service.  S- d(#> !34. We ask commenters specifically to address how the provision of ancillary or supplementary  d(#1services would affect our noncommercial channel reservation policies, regulatory treatment of  d(#noncommercial licensees, and other government support for noncommercial stations. While we are  d(#inclined to give NCE stations some flexibility in offering remunerative ancillary or supplementary services,  d(#|we will continue to expect these stations to adhere to their fundamental mission of providing a  d(#noncommercial, educational broadcast service, as required by Section 73.621(a) of the Commission's rules.  d(#We therefore seek comment on whether parties believe our proposed amendment to Section 73.621 should  d(#incorporate any particular safeguards regarding a public television station's use of its DTV capacity to"< 6,l(l(,,e""  d(#jprovide remunerative services to ensure that its DTV license is primarily being used for a noncommercial  d(#Neducational broadcast service, and that the proceeds of such services are used to support its NCE  d(#programming. We also ask commenters to address whether the accounting procedures and funding  d(#restrictions outlined in Section 399B should apply to the provision of ancillary or supplementary services  S4-by NCE licensees on DTV capacity.7 4f{ yO- v zԍSection 399B(c) and (d) requires that public stations engaged in revenue generating activities comply with  d(#accounting procedures designed to separately identify these commercial revenues and costs, and it prohibits  d(#Corporation for Public Broadcasting funds from being used to defray any costs associated with these activities. 47 U.S.C.  399B(c),(d).  S- d(#L "35. We note that in addition to those restrictions imposed by provisions in the Communications Act  d(#and the Commission's rules, the commercial activities of NCE stations are also restricted by their status  d(#as nonprofit corporations, as well as by state and local government oversight. We seek comment on the  d(#scope of these existing limits and oversight and on the extent to which they help ensure that public  d(#<television stations offering remunerative ancillary or supplementary services continue to serve their mission of providing a noncommercial educational broadcasting service?  Si - d(# #36. Advertising. We also seek comment on how the advertising ban set forth in Section 399B of the  d(#jCommunications Act implicates the provision of remunerative services by public DTV stations. Section  d(#[399B prohibits a public station from "making its facilities available to any person for the broadcasting of  S - d(#any advertisement."8  f{ yO!- v {ԍ47 U.S.C.  399B. An advertisement is defined as a "message or other programming material which is  d(#<broadcast or otherwise transmitted in exchange for any remuneration, and which is intended (1) to promote any  d(#service, facility, or product offered by any person who is engaged in such offering for profit; (2) to express the views  d(#of any person with respect to any matter of public importance or interest; or (3) to support or oppose any candidate  d(#xfor political office." Under Section 399A, public stations may acknowledge underwriting contributions with brief  {O - d(#-messages that identify but do not promote (e.g., do not provide information on sales or discounts, call upon the  d(#hviewer to take action, provide qualitative claims such as "the best," etc.) underwriters and their products. Moreover,  d(#,although public stations may conduct fundraising activities onair to benefit their stations, they may not suspend or alter regular programming to raise funds for any other entity. 47 U.S.C.  399A. By its plain language, this section would appear to prohibit advertisements on any  d(#service that would constitute "broadcasting," while permitting a public DTV station to air advertisements  d(#on any "nonbroadcast" service. The term "broadcasting" is defined in the Communications Act as "the  d(#dissemination of radio communications intended to be received by the public, directly or by the  S- d(#yintermediary of relay stations."G9 f{ yO'-ԍ47 U.S.C.  153(6).G The Commission further clarified the definition of "broadcasting" in its  S- d(#?1986 Subscription Video proceeding.:f{ {O - v zԍSubscription Video, 2 FCC Rcd 1001 (1987), aff'd sub nom. National Association for Better Broadcasting  {ON!-v. FCC, 849 F.2d 665 (D.C. Cir. 1988). In that decision the Commission determined that the term  d(#/"broadcasting" as defined by the Communications Act "refers only to those signals which the sender  Sm- d(#intends to be received by the indeterminate public."<;mnf{ {O{$-ԍ Id. at 1004.< We therefore found that "a necessary condition for  d(#the classification of a service as broadcasting is that the licensee's programming is available to all": ;,l(l(,,c"  S- d(#members of the public, without any special arrangements or equipment."3<f{ {Oh-ԍ Id.3 Based on these criteria, the Commission ruled that subscription television does not constitute broadcasting.  Sg- d(# $37. Applying these factors to the issue before us, we tentatively conclude that while Section 399B  d(#continues to apply to all video broadcast programming streams provided by public DTV stations, it does  d(#not apply to any subscription services they provide on their DTV channels since such services do not  S- d(#>constitute "broadcasting."=$Zf{ yO- v ԍFor example, a public television station would not be permitted to enter into an agreement that would allow  {O - d(#"Network A" to broadcast its advertisersupported "Popular Program B" over the public television station's excess  d(#[digital capacity, while an agreement that would allow "Network A" to transmit its "Popular Program B" on a  {O" -subscription basis would be permitted. We seek comment on this view. We also seek comment on the extent to  d(#which Section 399B applies to advertising carried on any other nonsubscription ancillary or  d(#supplementary services carried by a public TV station. Finally, we ask parties to address AAPTS/PBS's  d(#argument that even if Section 399B's advertising restrictions apply to some ancillary or supplementary  d(#.services, the Commission has discretion under Section 336(a)(2) of the Act to allow public TV licensees  S-to include advertisersupported services if it finds these services to be in the public interest.i>XFf{ yO- d(#ԍ AAPTS/PBS Reply at 67. Section 336(a)(2) requires the FCC to "adopt regulations that allow [DTV  d(#licensees] to offer such ancillary or supplementary services on designated frequencies as may be consistent with the public interest, convenience, and necessity." 47 U.S.C.  336(a)(2).i  Si - d(# %38.  Fees Under Section 336. In the Fees Proceeding we determined that the issue of whether  d(#>ancillary or supplementary services offered by noncommercial licensees are subject to fees should be  d(#considered in this proceeding. We take this opportunity to seek additional comment in light of the  d(#comments received in the Fees Proceeding and the tentative proposals outlined above. In the event that  d(#{we clarify that Section 73.621 does not apply to ancillary or supplementary services provided by  d(#noncommercial licensees on their DTV capacity, we seek comment on whether noncommercial licensees  d(#>should be exempt from DTV fees when they offer ancillary or supplementary services as a source of funding for their mission related activities.  S- d(# &39.  AAPTS/PBS submitted comments in the Fees Proceeding arguing that there is no need to  d(#k"recover" a portion of the value of the DTV spectrum for the public if the revenue is used to support  d(#=noncommercial services that Congress has declared to be in the public interest. AAPTS/PBS also argues  d(#\that exemption would not result in any "unjust enrichment" because these revenues would be used to  d(#>support noncommercial activities, and that as public television stations are not auctioned, there is no  d(#equivalent amount that would have been received at auction. An exemption from fees would allow public  d(#ztelevision stations to dedicate greater resources to their mission. Indeed, this reasoning has prompted  S;- d(#Congress and the Commission to exempt public television stations from other regulatory and filing fees.N?;f f{ {OA"-ԍSee n. 39, supra.N  S- d(#We seek comment generally on AAPTS/PBS's arguments to exempt noncommercial licensees from fees for remunerative ancillary or supplementary services offered on their excess digital capacity.  So- d(#/ '40.  We particularly seek comment on whether such an exemption is consistent with Section 336.  d(#Specifically, Section 336(e)(1) draws no distinction between commercial and noncommercial stations in  d(#/stating that the Commission "shall establish a program to assess and collect . . . . an annual fee" from"  ?,l(l(,,"  d(#DTV licensees offering subscriptionbased ancillary or supplementary services. Can this provision, or the  d(#criteria for establishing the fee set forth in Section 336(e)(2) be interpreted to permit an exemption from  d(#ysuch fees for noncommercial licensees? If an exemption is inconsistent with the statute, would a nominal  d(#jor reduced fee be consistent with the statute? We also ask parties to address MAP's argument that if we  d(#allow noncommercial licensees to include advertising in any ancillary or supplementary services, these licensees should pay a fee comparable to that imposed on commercial broadcasters.  Sh- IV. ADMINISTRATIVE MATTERS    S- d(#\ (41.  Comments and Reply Comments. Pursuant to applicable procedures set forth in Sections 1.415  d(#and 1.419 of the Commission's Rules, 47 C.F.R.  1.415 and 1.419, interested parties may file comments  d(#on or before January 28, 1999, and reply comments on or before March 1, 1999. Comments may be filed  S7 - d(#lby filing paper copies or using the Commission's Electronic Comment Filing System (ECFS). See  S -Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998).  S - d(# )42.  To file paper copies formally in this proceeding, you must file an original plus four copies of all  d(#comments, reply comments, and supporting comments. If you want each Commissioner to receive a copy  d(#of your comments, you must file an original plus nine copies. You should send comments and reply  d(#comments to Office of the Secretary, Federal Communications Commission, 445 Twelfth Street, S.W.;  d(#NTWA306; Washington, D.C. 20554. Comments and reply comments will be available for public  d(#inspection during regular business hours in the FCC Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C. 20554.  S - d(# *43.  Comments filed through the ECFS can be sent as an electronic file via the Internet to  d(#-. Generally, only one copy of an electronic submission must be filed.  d(#yIf multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters  d(#must transmit one electronic copy of the comments to each docket or rulemaking number referenced in  d(#the caption. In completing the transmittal screen, commenters should include their full name, Postal  d(#MService mailing address, and the applicable docket or rulemaking number. Parties may also submit an  d(#electronic comment by Internet email. To get filing instructions for email comments, commenters should  d(#[send am email to ecfs@fcc.gov, and should include the following words in the body of the message, "get form be filed in accordance with the same filing deadlines for comments on the rest of the NPRM, but they  d(#/must have a separate and distinct heading, designating the comments as responses to the IRFA. The  S - d(#Office of Public Affairs, Reference Operations Division, will send a copy of this NPRM, including the  d(#IRFA, to the Chief Counsel for Advocacy of the Small Business Administration, in accordance with the Regulatory Flexibility Act.  S?- d(# .47. Accordingly, IT IS ORDERED that pursuant to authority contained in Sections 4(i), 303, and 336  d(#of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303, 307 and 336, this Notice of Proposed Rulemaking IS ADOPTED.  Ss- d(# /48. IT IS FURTHER ORDERED that the Commission's Office of Public Affairs, Reference  S@- d(#kOperations Division, SHALL SEND a copy of this Notice, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.  S- d(#[  049. Additional Information. For additional information on this proceeding, please contact Jane Gross or Robert Somers, Policy and Rules Division, Mass Media Bureau (202) 4182130.  S-  FEDERAL COMMUNICATIONS COMMISSION ă SMagalie Roman Salas  Sx"-qSecretary#o\  PC cXP#у "E#?,l(l(,,&"  S- # &J\  P6Q[&P# `APPENDIX A Ã  S-r INITIAL REGULATORY FLEXIBILITY ANALYSIS ă  S4- d(#!As required by the Regulatory Flexibility Act (RFA),@X4f{ yO- d(##]\  PCP#э See 5 U.S.C.  603. The RFA, see 5 U.S.C.  601 et. seq.#]\  PCP#, has been amended by the Contract With America  d(#Advancement Act of 1996, Pub. L. No. 104121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the  yO,-Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).#x6X@K X@# the Commission has prepared this Initial  d(#Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by  S- d(#the policies and rules proposed in the present Notice of Proposed Rulemaking,  % N  % N Ancillary or Supplementary  S- d(#yUse of Digital Television Capacity by Noncommercial Licensees % N  % N . Written public comments are requested  d(#on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines  d(#for comments on the IRFA provided above in paragraph 46. The Commission will send a copy of the  S- d(#NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration.  S- d(#See 5U.S.C. 603(a). In addition, the NPRM and IRFA (or summaries thereof) will be published in the  S -Federal Register. See id.  S; - d(# I. Need For and Objectives of the Proposed Rule Change: In the Fifth Report and Order the  d(#\Commission adopted rules permitting broadcasters to offer feeable ancillary or supplementary use of  d(#\digital television (DTV) capacity. In their Petition for Reconsideration, the Association of America's  d(#Public Television Stations and the Public Broadcasting Service (AAPTS/PBS) requested clarification on  d(#the ability of public television stations to use excess capacity on DTV channels for commercial purposes.  d(#Media Access Project and other public interest parties jointly opposed this request, arguing that while  d(#public television stations should be able to provide some revenuegenerating ancillary and supplementary  d(#services, these services must be consistent with the noncommercial nature of public television as set forth  d(#in Section 399B of the Communications Act, the provision restricting advertising by these stations.  d(#AAPTS/PBS also requested that the Commission exempt, to the extent feasible, public television licensees  d(#from any obligation to pay fees when they offer ancillary services on their DTV capacity as a source of funding for their public television operation.  S-  S- d(# 4 <DL!T$&)\+- 0d24X` hp x (#%'0*,.8135@8: