The appropriateness of public TV (PTV) stations’ using federal, s...

FCC order that permitted PTV stations to solicit ads on their excess nonbroadcast digital capacity. While the arguments of petitioners the United Church of Christ and Media Access Project (MAP) and the FCC focused on whether the statutory prohibition on carrying ads covered PTV’s subscription services and the definition of broadcasting, Judges Raymond Randolph and Judith Rogers showed more interest in issues such as tax dollars’ being used for such services and the tax status of PTV. Randolph asked Kevin Newsom, counsel for the Assn. of Public TV Stations (APTS), the intervenor, whether: (1) There was no prohibition on the use of federal, state and local funds for funding subscription services. (2) PTV stations proposed to use taxpayer dollars for these services to turn a profit. PTV stations weren’t planning on turning a profit from those services, Newsom said, but would plough all revenue generated from them back into the system to broaden their noncommercial educational service offerings. Rogers asked what problems would be created under tax laws if public broadcasters put their spectrum to commercial use and why it would be a good thing for them to do so. Newsom clarified that ad-supported revenue wouldn’t supplant govt. and membership funding. In fact, he said, Sec. 399(B) of the Communications Act, gives broad authority to public broadcasters to use their facilities for remunerative purposes, he said. Referring to FCC counsel Daniel Armstrong’s statement that PTV stations would use excess digital capacity to provide Internet service to rural areas, stock quotes and information on homeland security, Randolph wondered whether the stock quote service by PTV stations would be in competition with cable and other offerings. “You are subsidized and they are not,” he said. Newsom said the Commission had made it clear in its order that it would address such issues. Harold Feld, counsel for petitioners, said it was clear that Congress intended the meaning of “broadcasting” to include subscription services and Congress had no reason to think it had to explicitly prohibit ads on subscription services. Even if the meaning of broadcasting were ambiguous in the statute, the FCC’s order was “arbitrary and capricious” and contrary to past precedent, he said. The Commission in 1951 had rejected the public broadcasters’ plea for limited commercial operations, Feld said, saying it was imperative to insulate noncommercial educational stations (NCEs) from commercial pressures. Armstrong sought to assure the court that the Commission’s order would ensure that the ad-free nature of PTV’s over-the- air broadcasts would continue. The FCC’s order allows ad- support only on PTV’s ancillary and supplementary services, while stipulating that public broadcasters should use a substantial majority of their digital capacity for noncommercial educational services. The same court 15 years ago in National Assn. for Better Broadcasting v. FCC had upheld the Commission’s authority to interpret the term “broadcasting” to not include subscription services. Referring to tax breaks enjoyed by NCEs, Randolph asked whether if there were anything to prevent them from putting all kinds of editorials on their subscription services. Armstrong said that as long as public broadcasters’ tax- exempt status was in jeopardy, there were limitations on their ability to do that.