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 NEWS  News  media  Information  202  /  418-  0500  TTY  202  /  418-  25  Fax-  On-  Demand  202  /  418-  2830  Internet:  http://  www.  fcc.  gov  ftp.  fcc.  gov  Federal  Communications  Commission  445  12  th  Street,  S.  W.  Washington,  D.  C.  20554  This  is  an  unofficial  announcement  of  Commission  action.  Release  of  the  full  text  of  a  Commission  order  constitutes  official  action.  See  MCI  v.  FCC.  515  F  2d  385  (D.  C.  Circ  1974). 
 For  Immediate  Release  News  Media  Contact:  October  11,  2001  Audrey  Spivack  202-  418-  0512 
 FCC  CLARIFIES  RULES  FOR  NONCOMMERCIAL  TELEVISION  STATIONS’  USE  OF  DIGITAL  TELEVISION  CHANNEL  CAPACITY 
 Washington,  D.  C.  –  The  FCC  ruled  today  that  Noncommercial  Educational  (NCE) 
 Television  licensees  are  required  to  use  their  entire  digital  television  (DTV)  bitstream  capacity 
 primarily  for  nonprofit,  noncommercial,  educational  broadcast  services. 


 In  a  Report  and  Order  issued  today,  the  FCC  also  ruled  that  the  statutory  prohibition 
 against  broadcasting  of  advertising  on  (NCE)  television  stations  applies  only  to  broadcast 
 programming  streams  provided  by  NCE  licensees,  but  does  not  apply  to  any  ancillary  or 
 supplementary  services  presented  on  their  excess  DTV  channels  that  do  not  constitute 
 broadcasting.  The  Commission  further  ruled  that  NCE  licensees  must  pay  a  fee  of  five  percent  of 
 gross  revenues  generated  by  ancillary  or  supplementary  services  provided  on  their  DTV  service. 


 The  Commission  said  it  would  not  establish  a  bright  line  test  to  define  the  term 
 “primarily”  but  will  instead  define  it  as  a  “substantial  majority”  of  a  NCE  station’s  entire  digital 
 capacity,  measured  on  a  weekly  basis.  It  said  the  use  of  a  weekly  period  would  provide  NCE 
 stations  with  sufficient  flexibility  because  stations  typically  schedule  their  programming  on  a 
 weekly  basis. 


 Examples  of  the  kinds  of  services  that  may  be  offered  as  ancillary  or  supplementary  in 
 the  digital  TV  signal  include,  but  are  not  limited  to,  computer  software  distribution,  data 
 transmissions,  teletext,  interactive  materials,  aural  messages,  paging  services,  audio  signals,  and 
 subscription  video.  The  Commission  said  that  allowing  NCE  stations  to  offer  subscription 
 services  on  their  excess  digital  capacity  served  the  goal  of  providing  NCE  licensees  with 
 flexibility  in  the  use  of  their  digital  spectrum. 


 The  Commission  said  that  allowing  advertising  on  NCE  licensees’  ancillary  or 
 supplementary  services  that  are  non-  broadcasting  would  permit  NCE  stations  flexibility  in 
 providing  such  services  as  well  as  enhance  their  ability  to  raise  revenue  for  their  support  and  the 
 transition  to  digital  television. 


 The  Commission  said  that  at  the  same  time,  observing  the  ban  on  advertising  on  any  free-over- 
 the  air  service  will  preserve  NCE  licensees’  fundamental  mission  of  providing  a  nonprofit, 
 noncommercial,  educational  broadcast  service. 


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 The  FCC  concluded  that  NCE  licensees  are  not  exempt  from  the  statutory  requirement  to 
 pay  fees  on  revenues  generated  by  the  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  December  1  st  each  year  on  their  use  of 
 their  digital  bitstreams  during  the  twelve  month  period  ending  the  previous  September  30th,  and 
 remit  fees  of  five  percent  of  their  gross  revenues  received  during  the  reporting  period  for  feeable 
 ancillary  or  supplementary  services  provided  on  their  digital  bitstreams. 


 Action  by  the  Commission  October  11,  2001,  by  Report  and  Order  (FCC  01-  306). 
 Chairman  Powell,  Commissioners  Abernathy  and  Martin,  with  Commissioner  Copps  dissenting 
 and  Chairman  Powell  and  Commissioner  Copps  issuing  separate  statements 


 MM  Docket  No.  98-  203 
 Mass  Media  Bureau  contact:  Jane  Gross  202-  418-  2130 


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