Public TV Allowed to Sell Ad Time

In a decision that has triggered an outcry from media watchdog groups, federal regulators on Thursday voted to let public broadcasters earn money by selling ads and other services on their new digital television broadcasts.

The 3-1 vote by the Federal Communications Commission paves the way for a dramatic expansion in commercialism at public TV stations, which Congress has ordered to convert to digital TV technology by May 2003.

The ruling, which was pushed by public television broadcasters, also marks one of the clearest signs yet that FCC Chairman Michael K. Powell--supported by a Republican majority at the agency--intends to engineer a sweeping deregulation of the communications industry. That’s especially true of new technologies such as digital TV--which promises compact-disc-quality sound, sharper video and new flexibility that will enable broadcasters to air up to five channels in place of one analog channel.

“The soul of public broadcasting is in no way compromised” by our change in policy, Powell said during Thursday’s FCC meeting. “This will provide some flexibility to allow them to serve their mission.”

Under the new ruling, a “substantial” majority of a station’s digital programming still must be noncommercial.

Just 38 of the nation’s 354 public TV stations--including KCET-TV in Los Angeles--broadcast digital signals. Most have been deterred by the estimated $1.7-billion price tag for converting to digital TV. What’s more, the head of the public TV trade group that sought the digital TV reform measure said the launch of any subscription digital TV or advertising is months, if not years, away because few consumers have digital TV sets.

“Right now there is no business model that gives any confidence that anyone can make a lot of money under digital TV now,” said John Lawson, president of the Assn. of America’s Public Television Stations in Washington.

But the FCC vote raised concerns among some watchdog groups that public TV stations will use their newfound entrepreneurial freedom to stray from public service in favor of commercialism.

“The whole point of creating public broadcasting was to have a noncommercial preserve for television,” said Andy Schwartzman, president of Media Access Project, a Washington advocacy group that follows communications law issues. “By definition, public broadcasting is supposed to be free from market forces. The plain language of the law does not permit it . . . and we intend to challenge this in court.”

“Michael Powell and his associates have such blind faith that the public interest will be served by the withdrawal of government regulation,” added Jerold M. Starr, executive director of Citizens for Independent Public Broadcasting in Pittsburgh. “But this will only result in the further commercialization of public broadcasting.”

Since 1996, when congressional budget slashers threatened to cut off funding, public television has been on a mission to find alternatives to the government, which now provides about 14% of PBS’ $313 million in annual operating revenue.

Public stations now supplement that funding by merchandising popular PBS characters such as Barney, operating a record label and, since the mid-1990s, selling wireless data services through a for-profit subsidiary called PBS National Datacast Inc.

The FCC ruled that, like the wireless data services now peddled by National Datacast over PBS stations’ closed-captioned frequencies, digital pay-TV services don’t qualify as public broadcasting. Therefore, the FCC said, such channels can contain ads without violating the federal prohibition against advertising on public TV.

But Michael J. Copps, the only Democrat at the FCC, said he was troubled by the FCC’s legal reasoning.

“The sale of advertising puts on the block one of the very things that makes public television special and different from commercial broadcasting,” Copps said at the FCC meeting. “I believe that permitting advertisements on the digital spectrum of public television is contrary to statute, contrary to the will of Congress and contrary to the mission of public television.”

But Powell and his Republican colleagues appeared unconcerned about running afoul of Congress or powerful constituencies such as commercial broadcasters who privately expressed anxiety Thursday about public TV’s new freedom to solicit advertising.

Dennis Wharton, a spokesman for the National Assn. of Broadcasters, declined to comment.