Friday, October 12, 2001

Federal Agency Permits Public TV to Include Advertising in New Digital Services By ANDREA L. FOSTER The Federal Communications Commission announced Thursday that it will allow public-television stations, including those operated by colleges, to sell advertisements on any supplemental services they offer through the new digital-television spectrum. The government has allotted every television station a portion of the broadcast spectrum that is large enough to accommodate both a digital broadcast signal and additional digital services, such as distance-education courses, subscription video, and paging. By 2003, public-television stations are expected to begin offering digital programs. The goal is to have all-digital programming on noncommercial stations by 2006. The commission's ruling partly lifts a long-standing ban on the broadcasting of advertisements by noncommercial educational-television stations. Most colleges that have public-television licenses support the change because it will allow them to generate revenue for new television programs. "It's a wise decision by the commission," said Kenneth D. Salomon, a Washington lawyer who represents colleges. "It give [colleges] the tools to increase their economic self-sufficiency." Under the rule, noncommercial broadcasters must use a "substantial majority" of their digital-television spectrum for nonprofit educational services. And stations will still be barred from airing advertisements during traditional public-television programs. But the rule allows stations to sell advertising for ancillary digital-television services, which may also include software distribution, data transmission, teletext, voice messaging, and audio signals. In return for this new flexibility, the commission ruled that public stations must pay the federal government 5 percent of their revenues from the ancillary digital services. "We provide a limited but critical additional funding source that can facilitate the transition of public television to digital television," said Michael K. Powell, chairman of the commission. He said public-television stations have spent $1.7-billion to make the transition to digital television, but only 11 percent of them have completed the infrastructure for such programming. Mr. Powell also announced Thursday the formation of a committee to help television stations make the transition to digital television. Mr. Powell was among three commissioners who supported the rule. Michael J. Copps was the lone dissenter, saying that the rule might force public-television stations to compete with commercial broadcasters, and could dampen public television's fund-raising efforts. A fifth commissioner has yet to be appointed. "Public television is about serving the better angels of our nature," Mr. Copps said. "It is about sustaining the virtues of education, civic involvement, and American democracy. ... When it begins to lose this different identity, it begins to lose its soul." Nonetheless, the advertising change was strongly supported by the Association of America's Public Television Stations. "It creates a big opportunity for [colleges] to create and deliver a new generation of distance-learning courses," said John M. Lawson, president of the association. However, he doubts that colleges will soon start selling banner ads on digital-television services. Instead, he predicts that they will prefer to rely on revenue from subscription and pay-per-view services, and maybe several years later consider selling advertisements. He said about one-third of the public-television license holders, or 174 stations, are colleges. These are primarily land-grant colleges, but also include community colleges and some private institutions. The University of Missouri, which operates KOMU-TV in Columbia, hinted in a January 1999 letter to the commission that selling ads would help finance new equipment it must buy to begin transmitting a high-definition digital-television signal. "Revenue from ancillary and supplementary services will help KOMU-TV to repay the loans it will incur to upgrade its facilities," lawyers for the university wrote. They also wrote that the university opposed paying the government a portion of its revenues from ancillary digital-television services, but the commission added the 5-percent giveback anyway. Jane Gross, a spokesman for the Federal Communications Commission, said the agency is drafting a notice detailing how the rule will be implemented. It could be as long as two months before the rule takes effect. Easy-to-print version E-mail this article

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