Jnterooanection Rate fo' Noncom. Educational Broadcasting 155
BEFORE TilE
F.C.C. 69-371
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In the Matter of
FREE OR REDUCED RATE INTERCONNECTION1
SERVICE FOR NONCOMMERCIAL EDUCATIONAL Docket No. 18316
BROADCASTING
RETORT AND ORDER
(Adopted April 9, 1969)
Br TUE CosnxrssloN CoManssIoNERs WADSWORTH AND JoHNsoN
ABSENT.
I. BACKGROUND
1. The Commission has under consideration its notice of proposed
rulemaking, F.CC. 68-909, issued on September 6, 1068 (33 F.R.
12853, Sept. 11, 1068), inviting comments on a proposed rule designed
as a first step toward implementing the provisions of new section
396(h) of the Communications Act of 1934. The rule provided that
such service may be rendered and required the reporting of various
data pertinent thereto.
2. Timely comments were ifieci by 21 parties, including carriers,
broadcasters, associations, States, the Ford Foundation, and, the U.S.
Department of Health, Education, and Welfare (HEW). The orig-
inal deadline for reply comments of October 28, 1968, was extended to
November 18, 1968, upon motion of the American Telephone & Tele-
graph Co. (A.T. & T.). Prior to that date, reply comments were re-
ceived from A.T. & T., United States Independent Telephone Associa-
tion (IJSITA), and the State Education Department of the University
of the State of New York.
3. Subsequent to our adoption of the notice of proposed rulemaking
in this proceedina, negotiations between AT. & T. and the Corporation
for Public Broa1castng (OPB) resulted in a special 6-month experi-
mental tariff offering to CPB which became effective December 1, 1968.
This tariff, now scheduled to expire May 31, 1969, provides for inter-
connection service to 57 points for 2 hours of prime time per night, 5
nights per week, at a charge generally of $43 per point connected per
occasion of use. While this provides service at substantially lower
charges than would apply if commercial rates were charged, the tariff
also provides that,. because the service is provided through spare
channels, the telephone company reserves the right to preempt any por-
tion of the CPB service without prior notice whenever the spare
channels are required for commercial customers. From the beginning
of this service, there have been a number of short-notice preemptions
of the CPB service in favor of commercial users.
17 F.C.C. 2d
156 Federal Cornimwnications Commission Reports
II COMMENTS RECEIVED
4. Generally, those commenting support the proposed rule as a first
step toward meeting the established desires for greatly increased inter-
connection of educational broadcast stations at a price they can afford.
The comments recite the benefits to the public of interconnected edu-
cational broadcasting and the alleged prohibitive cost thereof at com-
mercial rates. The most common recommendation of these parties is
that the frequency of reporting be increased to at least quarterly and
that provisions be made for reporting pending requests for free or
reduced rate interconnection service.
5. In its initial comments, A.T. & T. noted that it recognizes the
public interest in the development of educational broadcasting and
cites its tariff providing for a trial of interruptible interconnection
service to the Corporation for Public Broadcasting at charges sub-
stantially lower than commercial charges. A.T. & T. has no objections
to the proposed rule, but asks that, in cases where service is requested
and furnished at less than cost to the carrier, the Commission require
that such service be subject to its approval upon determination of
public interest and that all such expenses be treated as operating ex-
pemises so that the users of communications services, rather than the
stockholders, would bear the cost. In its reply comments, A.T. & T.
states that it has no objection to the increase in frequency of the re-
ports to a quarterly basis, but believes that the Commission could be
sufficiently informed of pending requests by the expedient of requiring
copies of applications by broadcasters and denials by carriers regard-
mo' free or reduced service to be filed with the Commission. In addition,
A. & T. opposes the proposal of some of the parties that carriers
report their intention to deny a proposal. A.T. & P. also points to the
languao'e of section 396(h) as being permissive rather than mandatory.
6. UITA, the only other party to advance the point of view of the
carriers, noted in its initial comments that while it has no objection to
the proposed rule, it urges the Commission to consider what it believes
to be serious problems presented to the independent telephone industry
in that, unlike the situation generally with interexehange channels, idle
facilities are not likely to be available for locally situated studio-
transmitter or network access lines so that new construction would
generally be required to provide initial service in the territory of in-
dependent, non-Bell companies. Where this construction is performed
by such an independent telephone company, the company must go be-
fore a State regulatory commission to make up, any loss. In its reply
comments, TJSITA follows A.T. & T. in emphasizing that, contrary to
the position taken by the Ford Foundation, HEW, and others, it 1oes
not read the language of section 396 (h) as a "mandate" to the Com-
mission to insure that free or reduced rates are provided to educational
broadcasting. Rather TJSITA construes section 396(h) as merely pro-
viding a defense to a complaint by a third party that free or reduced
rates for service to educational broadcasting are unduly discriinina-
tory. 1JSITA has no problem with a requirement for more frequent
reports, but suggests that a portion of the information might be sup-
plied by ffliamg copies of requests and denials for service with the
Commission. In addition to the issue of the proposed rule, USITA
emphasizes its belief that the Commission should act promptly to
17 F.C.C. 2
Interconnection 1?ate for Noncom. Edncationa Broadcasting 157
resolve the questions of whether or not carriers can be required to pro-
vide free or reduced rate service and construction and how the costs
of these are to be borne.
7 In the comments of HEW, it is suggested that the provision of
free or reduced rates should not be limited to broadcastmg facilities,
but could include closed local distribution systems since § 396(h)
states that free or reduced rate interconnection services may be pro-
vided" * for noncommercial educational television or radio serv-
ices * ." (Emphasis supplied.) TISITA's response objects to this
interpretation on the ground that the interconnection services to be
supplied are defined in the act (§ 397 (8)) as providing for " *
the transmission and distribution of television or radio programs to
noncommercial educational television or radio broadcast stations."
(Emphasis supplied.) And therefore, section 396(h) cannot be read
to comprehend interconnection services provided to nonbro adcasters
or for nonbroadcast purposes.
III CONCLUSIONS
8. Inasmuch as the proposed rule appears desirable for the efficient
discharge of the Commission's duties at this stage of the implementa-
tion of section 396(h), we intend to adopt it with certain of the sug-
gested modifications. First, we agree with t'he majority of the com-
ments received that reports should be made more frequently than
every 6 months, at least initially, and we are, therefore, changing the
reporting period to a quarterly basis. In regard to the issue of report-
ing pending requests and demals of requests for free or reduced rate
service, it appears that this area can be adequately covered b,y includino
a requirement in the rule that the carrier's report shall identify all
unfulfilled pending requests for service. in those cases whore time is of
the essence, or the prospective user believes needed service is beino
improperly delayed or denied, tile Commission's established inform
complaint procedures should provide adequate and timely relief.
9. We wish to make clear at this point that we construe an ultimate
objective of the Public Broadcasting Act of 1967 to be the rendition
of free or reduced rate interconnection service that is comparable in
all material respects with service furnished commercial users at pub-
lislied tariff rates with the only difference in treatment being the
free or reduced rate. Therefore, we consider the present experimental
tariff offering by A.T. & T. to CPB only as an interim step toward
meeting the ultimate objective because the terms and conditions of
the offering, particularly the provision for preemption without prior
notice, significantly distinguish the quality of this service from com-
mercial service. We, therefore, expect that the carriers will proceed
expeditiously to equip themselves with facilities necessary to fulfill the
objectives of the act. Furthermore, it should be made clear that car-
riers are not precluded from providing special classes of interconnec-
tion services for educational broadcast stations at low rates under tar-
iffs filed with us. However, the rule we are adopting is intended to
apply only to those situations where the same services or facilities of-
fered under tariffs filed with us are furnished, or are requested to be
furnished, for the interconnection of educational broadcast stations
either at no charge or at charges below those published in the tariffs.
10. In regard to the scope of section 398(h), we agree with TJSITA
iT F.C.C. 2c1
158 Federa Communiation Commission Reports
that this section should not be construed as providing for free or re-
duced rates for interconnection among nonbroadcast stations. Section
397(8) states that, for the purpose of the act, "The. term 'intercon-
nection' means the use of microwave equipment, boosters, translators,
repeaters, communication space satellites, or other apparatus or equip-
ment for the transmission and distribution of television or radio pro-
grains to noncommercial educational television or radio broadcast
stations," 47 U.S.C. 397(8). (Italic supplied.)
11. Finally, we understand the concern of the carriers as to how
the costs of service rendered pursuant to section 396(h) are to be re-
covered by the carriers. We believe that it is desirable to state the
Commission's policy in this area so far as it is possible at this time.
Consistent with the policy of the Public Broadcasting Act, it is reason-
able and appropriate that all costs, including the cost of new con-
struction, shall be treated as related to common carrier interstate
service and as such shall b included in the carriers total interstate
rate base and operating expenses. It should also be made clear that,
although the language of section 396(h) is permissive, the national
policy expressed is that the public interest is served by the expansion
of noncommercial educational broadcasting service to the public
through free or reduced rate interconnection common carrier services
for educational broadcast stations. While we need not definitively re-
solve the question raised by IJSITA as to whether or not the Commis-
sion can require or order common carriers to provide, such free or
reduced rate service, we do believe that we have ample authority to
promote the congressional purpose and the public interest in this
important area.
12. Authority for the adoption of the addition contained herein
is contained in sections 4(i), 218, 219(b), and 396(h) of the Conimum-
cation Act of 1934, as amended.
13. In view of the foregoing, It is ordered, That effective July 1,
1969, par.t 43 of the Commission's rules is amended to add section
43.74 to read as follows:
Section 43.74 Service rendered free or at reduced rates pursuant to section
39f3(b) of the act; reports relative thereto.
Any common carrier subject to the Communications Act may render free or re-
duced rate communications interconnection services for noncommercial educa-
tional television or radio services, subject to the rules contained in this part.
Every carrier furnishing such service shall make and me. in duplicate, with
the Commission within 40 days. after the end of each calendar quarter, two certi-
fied copies of reports covering each quarter of the year. The reports Shall show
the call signs and locations of the stations to which such service was rendered
pursuant to this rule and the dates such service was rendered: the names of any
agency, corporation or association of stations, other than the stations inter-
connected, to which service was charged or credited; the general character of
the service provided; the charges in dollars which would have accrued to the
carrier for such services rendered if all charges for such services had been cal-
culated at the published tariff rates; the charges in dollars. if any, actually
made or credited for such service; the name and address of any person whose
request for such service is pending as of the last day of the reporting period, the
date of such request, a general description of the service requested, and the
expected date of decision on the pending request; the name and address of any
person whose request for such free or reduced rate service has been denied dur-
mg the reporting period together with a general description of the service re-
quested, and the reasons for such denials of service and the dates thereof.
FEDERAL CoMniuN1crIoNs CoMinssIoN,
BEN F. WAPni, ore tary.
17 F.C.C. Zd