supplementary services other than those limited by the Telecommunications legislation then pending.34 Viacom urges that DTV licensees should be authorized to explore the full potential of the ATSC DTV system as long as those uses do not adversely affect the broadcaster's free video service.35 AAPTS/PBS favors ancillary broadcast and nonbroadcast use of the DTV channel, noting that flexible use will serve the public interest by helping to spur development of new technologies and to provide greater opportunities for noncommercial stations to enhance their public service to their respective communities. A noncommercial station could, for example, utilize digital transmission to distribute program-related course materials, textbooks, student and teacher guides, computer software and content areas of the World Wide Web as part of the station's instructional programming. Further, noncommercial stations could use ancillary and supplementary services, without regard to the educational content, as a revenue source to support nonprofit services and operations and the transition to DTV.36 23. Microsoft argues that licensees should be given maximum flexibility to provide a wide variety of services and any definition of free over-the-air broadcasting should be narrowly defined in the DTV environment." Texas Instruments, Inc. ("Texas Instruments") argues that it is premature for the Commission to regulate the mix of DTV services by requiring a certain amount of capacity to be used for video programming; freedom from regulatory restraints will enhance television's functionality and appeal beyond entertainment to encompass new and unforeseen services.38 24. Equipment manufacturers such as General Instrument, Motorola, Thomson, and Zenith, and EIA urge that the Commission should permit flexible use of the DTV channel consistent with the preservation of free over-the-air television and as long as there is a substantial commitment to HDTV.39 Motorola, however, supports a more restrictive definition of ancillary 34 Comments of Joint Broadcasters at 22-23. 35 Reply Comments of Viacom at 28. Viacom concurs with a minimum HDTV requirement and a minimum requirement for free over-the-air service. 36 Comments of AAPTS/PBS at 7-8, 20-22; Reply Comments of AAPTS/PBS at 6-8. AAPTS/PBS urges that the Commission should presume that ancillary uses do not interfere with the broadcast use of the spectrum so long as the licensee provides at least one SDTV or HDTV broadcast service on the DTV channel during normal operating hours (for example, 6 a.m. to midnight, 6 days a week). Comments at 21 n. 34. 37 Comments of Microsoft at 7. Indeed, Microsoft argues that the Commission's goal of preserving free overthe-air broadcasting would seem to be an outmoded policy goal. Id. at 6-7. 38 Comments of Texas Instruments at 4-5. 39 Comments of General Instrument at 5-6 (HDTV should be the predominant use of the channel); Comments of Motorola at 11; Comments of Thomson at 3-5; Comments of Zenith at 3; Comments of EIA at 7-8. services.40 The Digital Grand Alliance states that, while the predominant use should be for free over-the-air television and a minimum number of HDTV hours should be broadcast, the Commission should permit flexible uses of the DTV channel. Cohen, Dippell and Everist argues that a broadcaster should be permitted to provide new and innovative services that do not cause objectionable interference to existing users, provided that the primary use is broadcasting to the general public.42 43 25. NYNEX and Personal Communications Industry Association ("PCIA") urge that the primary use of the DTV channel should be free over-the-air broadcasting. NYNEX urges that allowing broadcasters to provide nonbroadcast and subscription services would threaten free, universal broadcasting and should be permitted only as a residual use of spectrum capacity." PCIA urges that a DTV licensee should be permitted to offer broadcast-related services, such as closed captioning, pay programming, broadcast or narrowcast audio service, and home shopping, but should not be allowed to offer mobile radio services like paging without open competition for DTV licenses by all qualified applicants." Golden Orange suggests that the Commission should permit all types of broadcast ancillary services that do not cause interference to the primary HDTV requirement it urges the Commission to adopt, but that the Commission should not permit nonbroadcast services or non-TV subscription services." HBO argues that the second channel should be used for HDTV and opposes affording broadcasters flexible use of the channel, but adds that if the Commission permits flexibility in the use of the channel, it should nonetheless require that a substantial portion of the day be devoted to HDTV programming." The Benton Foundation opposes spectrum flexibility as affording broadcasters an unfair competitive advantage over competitors and argues that the principal use of the second channel, defined as a minimum 40 Comments of General Instrument at 5-6; Comments of Motorola at 11. Motorola believes that ancillary services should be confined to traditional broadcast ancillary services, and ancillary information or interactive services should be substantially related to the video carried by the license holder. According to Motorola; it would be unfair to permit broadcasters to obtain spectrum free of charge and offer non-broadcast subscription services. Id. 46 Comments of Golden Orange at 2. Included in the ancillary services Golden Orange would permit are multiple SDTV services, subscription TV services, information data transmission, and digital radio (multilingual) services. Id. 47 Comments of HBO at 8, 14; Reply Comments of HBO at 2-4. of 75% of capacity, should be for broadcast. 26. Broadcasters, as a group, express their staunch support for the continuation of our tradition of universal and free broadcast television.49 For example, the comments of the Joint Broadcasters, a group constituting a wide cross-section of broadcast television stations and networks, emphasize broadcasters' commitment to provision of free television service.50 ALTV, Pacific FM, and Busse argue that broadcasters should be required to offer at least one free overthe-air channel enhanced by digital technology but should otherwise be unfettered as to the services they provide." MAP and the Benton Foundation argue that because broadcasters will receive free and exclusive use of the broadcast spectrum, free, over-the-air broadcasting should comprise no less than 75% of a broadcaster's capacity."2 52 - 27. Decision. As we have noted before, an overarching goal of this proceeding is to promote the success of a free, local television service using digital technology. Broadcast television's universal availability, appeal, and the programs it provides for example, entertainment, sports, local and national news, election results, weather advisories, access for candidates and public interest programming such as education television for children -- have made broadcast television a vital service. It is a service available free of charge to anyone who owns a television set, currently 98% of the population. 28. We expect that the fundamental use of the 6 MHz DTV license will be for the provision of free over-the-air television service. In order to ease the transition from our current analog broadcasting system to a digital system, we will require broadcasters to provide on their digital channel the free over-the-air television service on which the public has come to rely. Specifically, broadcasters must provide a free digital video programming service the resolution of which is comparable to or better than that of today's service and aired during the same time periods that their analog channel is broadcasting.53 29. We wish to preserve for viewers the public good of free television that is widely available today. At the same time, we recognize the benefit of permitting broadcasters the opportunity to develop additional revenue streams from innovative digital services. This will help 48 49 Reply Comments of the Benton Foundation at 4-5. See, e.g., Comments of Joint Broadcasters at 3-5; Comments of ALTV at 13; Comments of National Broadcasting Company, Inc. ("NBC") at 2-3; Comments of CBS, Inc. ("CBS") at 5-6. 50 Comments of Joint Broadcasters at 3. 51 52 Comments of ALTV at 13; Comments of Pacific FM at 2; Comments of Busse at 2. Comments of MAP at 19-20; Reply Comments of the Benton Foundation at 4-5. 53 For example, a broadcaster who provides programming on its analog channel from 6:00 am until midnight must provide a free over-the-air digital signal during those hours. broadcast television to remain a strong presence in the video programming market that will, in turn, help support a free programming service. Thus, we will allow broadcasters flexibility to respond to the demands of their audience by providing ancillary and supplementary services that do not derogate the mandated free, over-the-air program service. Ancillary and supplementary services could include, but are not limited to, subscription television programming, computer software distribution, data transmissions, teletext, interactive services, audio signals, and any other services that do not interfere with the required free service. 54 30. This decision is supported by the overwhelming weight of the record. Consistent with precedent that has treated telecommunications services provided by an NTSC station other than the regular television program service as ancillary, we will consider as ancillary and supplementary any service provided on the digital channel other than free, over-the-air services. In addition, we will not impose a requirement that the ancillary and supplementary services provided by the broadcaster must be broadcast-related. 31. The approach we take here, of allowing broadcasters flexibility to provide ancillary and supplementary services is supported both generally and specifically by the 1996 Act, enacted after issuance of the Fourth Further Notice/Third Inquiry. In general, the 1996 Act seeks "[t]o promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and encourage the rapid deployment of new telecommunications technologies."55 More importantly, the 1996 Act specifically gives the Commission discretion to determine, in the public interest, whether to permit broadcasters to offer such services. Section 336(a)(2) of the Communications Act, contained in Section 201 of the 1996 Act, provides that if the Commission issues additional licenses for advanced television services, it "shall adopt regulations that allow the holders of such licenses to offer such ancillary or supplementary services on designated frequencies as may be consistent with the public interest, convenience, and necessity."56 32. Section 336(b)(2) sets out the specific parameters of our authority to permit ancillary and supplementary services," and the approach we take here fully complies with those 54 See Report and Order in MM Docket No. 84-168, 101 FCC 2d 973, ¶ 10 (1985); Report and Order in MM Docket No. 95-42, 11 FCC Rcd 7799 (1996); 47 C.F.R. § 73.646. 57 Section 336(b) of the Communications Act, also added by Section 201 of the 1996 Act, provides that in prescribing the regulations required by Section 336(a), the Commission shall: (1) only permit such licensee or permittee to offer ancillary or supplementary services if the use parameters. Thus, under Section 336(b)(2), the Commission is required to limit ancillary and supplementary services to avoid derogation of any advanced television services that the Commission may require. The Commission has exercised its discretion and is requiring broadcasters to continue to provide the free over-the-air service on which the public has come to rely. We herein require that any ancillary and supplementary services broadcasters provide will not derogate that required service. Further, Section 336(b)(1) requires that the Commission may only permit broadcasters to offer ancillary or supplementary services "if the use of a designated frequency for such services is consistent with the technology or method designated by the Commission for the provision of advanced television services. 33. Moreover, we believe that the approach we take here will serve the public interest by fostering the growth of innovative services to the public and by permitting the full possibilities of the DTV system to be realized. One of our goals is to promote spectrum efficiency. Encouraging an expeditious transition from analog to digital television and a quick recovery of spectrum will promote that goal. By permitting broadcasters to assemble packages of services that consumers desire, we will promote the swift acceptance of DTV and the penetration of DTV receivers and converters. That, in turn, will help promote the success of the free television service. As discussed above, digital television promises a wealth of possibilities in terms of the kinds and numbers of enhanced services that could be provided to the public. Indeed, we believe that giving broadcasters flexibility to offer whatever ancillary and supplementary services they choose may help them attract consumers to the service, which will, in turn, hasten the transition. In addition, the flexibility we authorize should encourage entrepreneurship and innovation. For example, it may encourage the development of compression technologies that could allow even more digital capacity on a 6 MHz channel, paving the way for multiple high definition programs and more free programming than would otherwise be offered. (2) limit the broadcasting of ancillary or supplementary services on designated frequencies so as (3) apply to any other ancillary or supplementary service such of the Commission's regulations as (4) adopt such technical or other requirements as may be necessary or appropriate to assure the (5) prescribe such other regulations as may be necessary for the protection of the public interest, |