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610 Federal Communications Commission Reports
F.C.C. 73-692
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
Wasziineron, D.C. 20554
In the Matter of
AMENDMENT oF SECTION 73.593 or THE COM-
aussron’s Rures Wrra Respect to Uses or
FM MULTIPLEX CHANNELS or Noncommer-
crau Epucationan FM STATIONS INVOLVING
A CHARGE TO THE AUDIENCE
Docket No. 19078
RM-1693
REPORT AND ORDER
(Adopted June 27, 1973; Released July 2, 1973
By TIE COMMISSION :
1. On November 4, 1970, responding to a petition filed by Educasting
Systems, Inc. (Educasting), we issued a Notice of Proposed Rule Mak-
ing in the above-entitled proceeding, in which we proposed to amend
Section 73.593 of our rules to permit a noncommercial educational FM
broadcast station, subject to appropriate safeguards, to accept payment
of tuition fees for educational courses and other appropriate material
broadcast on a multiplex basis pursuant to a Subsidiary Communica-
tions Authorization.
2. The petitioner was particularly interested in furthering the use
of an instructional system utilizing multiple subcarriers, which it had
developed and tested on an experimental basis, in which students with
especially equipped receivers might listen to an instructor on one sub-
carrier and choose answers to questions posed by the instructor by
depressing one of several buttons, each of which select. other subcar-
riers carrying material appropriate to the correctness of the chosen
answer. However, the proposition presented is of general application—
whether a noncommercial educational FM station appropriately may
charge “tuition or course fees” in connection with the kind of program
material authorized to be broadcast over its subcarrier.
3. The Commission made a tentative finding “that to some degree
the type of operation proposed by Educasting, or the transmission
of instructional types of programs on one or more subcarriers by a non-
commercial educational FM station for a fee, could be conducted with-
out undue “commercialization” of the educational FM service, and
would be in the public interest; and offered for comment an amend-
ment to Section 73.593 of its rules. The amendment to subparagraph
(a) (1) of this Section, with new or modified provisions underlined,
is set forth below:
§ 73.593 Subsidiary Communications Authorizations.
{a} ko
41 FCO. 2d
FM Multiplex Channels 611
(1) Transmission of programs which are noncommercial and in furtherance
of an educational purpose, and which are of a broadcast nature but of interest
primarily to limited segments of the station’s audience. Illustrative services
include: programs for presentation in classrooms; programs designed for special
professional groups such as doctors, lawyers and engineers; materials designed
ecial interest groups, including those of ethnic, safety and technical orien-
tations and the handicapped; and any use which would be permitted for a com-
mercial FM station under § 73.293{a) (1), subject to the prohibitions against
commercial operations and limitations as to purpose contained in this section and
in § 73.503. Uses under this subparagraph will not be considered “commercial” if
there is charged either a per-course or per-pupil fee, where: (a) the material is
presented by or for a bona fide educational institution; or if it is not, the licensee
of the noncommercial educational FM station has investigated the material and
deems it to be clearly of educational or publie service value; (b) the payment is
made to the educational institution or the noncommercial educational FM sta-
tions; and (c) the payments retained by the station licensee total no more than
the approximate cost of conducting the SCA operation (including purchase or
lease of equipment, course material, ete.) and general overhead and operational
costs incidental to it. Where the material is presented by or for an educational
institution, or other entity, the payments made to the station or directly to the
institution or entity may also include the usual tuition fees charged for similar
material presented otherwise.
The modifications incorporated in the rule are for the purpose of
insuring that the material broadcast for a fee, whether prepared by an
educational institution, or not, is of an appropriate nature for educa-
tional SCA transmission, that the fee payment is made to the educa-
tional institution or other entity or to the station, and that the funds
retained by the station licensee will not exceed the actual costs incurred
by the station in the presentation of the program material.
4. Comments and reply comments, timely filed within the specified
deadlines for those pleadings, of December 16, 1970, and January 6,
1971, respectively, were submitted by the following parties:
Comments
Bay Area Educational Television Association (KQED-FM) Corporation for
Publie Broadcasting (CPB) West Virginia Educational Brondeasting Authority
National Association of Educational Broadcasters (NAEB) Educasting Systems,
Ine.
Reply Comments
Educasting Systems, Ine.
5. All of those commenting support an amendment of the rules of
the nature proposed, but certain of the parties take some exception to
the specific language employed.
6. CPB notes that in stipulating that fees may be charged “per
course or per pupil” the proposed rule may be interpreted as allowing
such fee imposition only “for SCA services constituting formal instruc-
tion”, even though other language in the rule which requires that
program material be “clearly of educational or public service value”
suggests that the charging of fees for a broader range of services is per-
mitted. It is CPB’s conviction that SCA operation has great potential
for the provision of program services designed for special interest
groups, such as the blind, the aged, or other social, ethnic or minority
groups, but that the potential is unlikely to be realized fully unless
Ticensees are able to recover the costs incidental to SCA operation.
41 F.C.C. 2d
612 Federal Communications. Commission Reports
T. To clarify what it believes to be the intention of the proposed
rule, to which it subscribes, CPB suggests that the portion of the text
of the rule which states that “Uses under this subparagraph will not
be considered ‘commercial’ if there is charged either a per-course or
per-pupil fee...” be revised to read “Uses under this subparagraph
will not be considered ‘commercial’ if there is charged a per-course,
per-pupil or other fee...”
8. NAEB notes that while the last sentence of the proposed rule
recognizes that the broadcast material may be presented by or for an
educational institution or other entity, and payments may be made to
the institution or entity, the alternative represented by the underlined
language is omitted from subparagraph (b) of the proposed rule, i.e.,
for consistency’s sake, that (b) should be made to read “the payment
is made to an educational institution or other entity or to the noncoms
mercial educational FM station ...”.
9. The modifications suggested by CPB and NAEB are for the
purpose of making more clear that the SCA program material for
which a fee is charged need not necessarily be prepared by an “educa-
tional institution” if it is of educational or “public service value”. The
atter term causes the West Virginia Educational Broadcasting Au-
thority some difficulty. It believes that while the educational station
icensee would have little difficulty in determining whether a program:
offering has “educational value”, “public service value” is an ill-defined
term, and its employment as an alternative test of the eligibility of
articular course material for the imposition of fees “could well be a
source of abuse”. It therefore suggests that this term be stricken, so
that the sole criterion to be applied in determining whether a fee may
e charged for program or course material, whether furnished by an
educational institution or not, will involve the assessment of its “edu-
cational” value.
10. The comments strongly support rule amendments which would
permit the imposition of charges for a rather broad range of services
resented over the subcarrier of the noncommercial educational FM
station. The rule which we are adopting is framed in aceordance with
this approach. However, on further consideration of all of the factors
involved, we have found it necessary, if the public is not to be misled
as to basic nature of the program material for which it is being asked
to pay, that a clear distinction be drawn between those offerings pre-.
pared, sponsored, and supervised by an educational institution, con-
stituting formal instructional or institutional credit material, and those
programs which, while they may be of considerable value to their
intended audience, do not have the imprimatur of an educational
institution.
11. Accordingly, without limiting the freedom of action of the sta-
tion to make charges for appropriate program material, we have re-
drafted the proposed rule to establish the distinction described above,
and to require that the noncommercial educational FM station make
clear for prospective subscribers to a program series or course of in-
struction the instrumentality primarily responsible for its preparation
and presentation.
41 F.C.C. 24
FM Multiples Channels 613
12. Since the rule which we are adopting differs substantially in
structure from the one we had proposed, the specific changes in word-
ing in the proposed rule suggested by the parties no longer has
pertinence. However, we believe that the rule, as now revised, by estab-
lishing a separate category of programs, not presented under the aus-
pices of an educational institution for which a charge may be made,
provides the clarification of intent which the parties sought to achieve
by their suggested changes.
18. Accordingly, IT IS ORDERED, That, effective August 13,
1973, Part 73 of the Rules and Regulations IS AMENDED as set
forth in the Appendix hereto. Authority for this action is found in
Sections 4(i) and 303(xr) of the Communications Act of 1984, as
amended.
14. IT IS FURTHER ORDERED, That this proceeding IS
TERMINATED.
FEDERAL Communications COMMISSION,
Ben F. Warre, Secretary.
APPENDIX
i. Section 73.593 (a) (1) is amended to read as follows :
§ 78.593 Subsidiary Communications Authorizations,
a) tee
8 Transmission of programs which are noncommercial and in furtherance
of an educational purpose, and which are of a broadcast nature but of interest
primarily to limited segments of the station’s audience. Typical services may
include: programs for presentation in classrooms; programs designed for specific
professional groups, such as doctors, lawyers, and engineers; programs intended
to serve the special needs and interests of the aged, the handicapped, particular
social and ethnic groups, and for those in a specific trade or sharing a common
interest or hobby; programs for individualized remedial or advanced learning
needs ; and any use permitted for a commercial PM station under § 73.293(a) (1),
subject to the prohibition against commercial operation and the limitation as to
purpose contained in this section and in § 13.503, such limitation especially in-
cluding those non-instructional services customarily provided by commercial
firms. Uses permitted under this subparagraph will not be considered “commer-
cial’, when charges are made for the service rendered, under the circumstances
and subject to the conditions set forth hereunder :
(i) A per-course, per-session, per-seminar, per-pupil or other appropriate fee
is charged for formal or informal instructional material, presented by, with
or for a bona fide educational institution. Payment of the fee shall be made to
the noncommercial educational FM station or to the educational institution;
such fee may include, in addition to the station expenses detailed in (iii), below,
the usual tuition charged for similar material presented by other means.
{ii) A charge is made for a program or series of programs, informational or
generally instructional in nature, intended to meet the special needs and inter-
ests of one or more of the groups the station is authorized to serve under its SCA.
Payment of the charge shall be made to the noncommercial educational FM
station.
(iii) Payments retained by the station shall total no more than the approxi-
mate cost of conducting the SOA operation (including purchase or lease of
equipment, course material, personnel services, etc.) and the general overhead
and operational costs attributable to such operation.
(iv) A. noncommercial educational FM station offering program material
subject to fee or other charge shall clearly indicate in any broadcast or printed
solicitation to prospective enrollees whether the material falls into category (i)
or (ii), above, so that informational and general educational materials are not
represented as formal instructional or institutional credit programs.
* + * * + * æ
41 F.0.C. 2d