Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | MM Docket No. 00-167         |
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| Children's Television            | ) |                              |
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| Of Digital Television            |   |                              |
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NOTICE OF PROPOSED RULE MAKING

**Adopted:** September 14, 2000 **Released:** October 5, 2000

Comment Date: December 18, 2000

Reply Comment Date: January 17, 2001

By the Commission: Commissioners Furchtgott-Roth and Tristani concurring
in part, dissenting in part, and issuing separate statements;
Commissioner Powell issuing a statement.

# introduction

1.  We issue this *Notice of Proposed Rule Making* ("*Notice*") to seek
    comment on a range of issues related to the obligation of digital
    television ("DTV") broadcasters to serve children. We focus in this
    proceeding primarily on two areas: the obligation of television
    broadcast licensees to provide educational and informational
    programming for children and the requirement that television
    broadcast licensees limit the amount of advertising in children's
    programs. Although we seek comment largely on challenges unique to
    the digital area, we also explore several issues that children's
    advocates have raised about children's educational and informational
    programming more generally.[^1]

    **II. BACKGROUND**

2.  American children spend a considerable amount of time watching
    television. Recent data show that children in this country spend, on
    average, almost three hours a day watching television.[^2] In view
    of the significant role that television plays in the lives of
    children, this medium has great potential to contribute to
    children's development. As Congress has stated, "\[i\]t is difficult
    to think of an interest more substantial than the promotion of the
    welfare of children who watch so much television and rely upon it
    for so much of the information they receive."[^3]

3.  For over 30 years, the Commission has recognized that, as part of
    their obligation as trustees of the public's airwaves, broadcasters
    must provide programming that serves the special needs of children.
    The Commission's efforts to promote programming for children began
    in 1960 with the statement that children were one of the several
    groups whose programming needs television licensees must meet to
    fulfill their community public interest responsibilities.[^4] In
    1974, the Commission instituted a wide ranging inquiry into
    children's programming and advertising practices, which led to
    publication of the *Children's Television Report and Policy
    Statement* ("*1974 Policy Statement*"). [^5] The Commission
    concluded that broadcasters have "a special obligation" to serve
    children and stated its expectation that licensees would increase
    the number of programs aimed at children in specific age groups. The
    Commission also concluded that children are more "trusting and
    vulnerable to commercial 'pitches' than adults" and that children
    "cannot distinguish conceptually between programming and
    advertising."[^6] The Commission stated its expectation that the
    industry would eliminate "host selling"[^7] and product "tie-ins,"
    use separation between programs and commercials during children's
    programming, and honor the industry's voluntary advertising
    guidelines for children's programs.[^8]

4.  Later in the 1970s, the Commission undertook further study of the
    availability of educational programming for children.[^9] Finding
    that the industry had failed to respond to its earlier call for
    improvements, the Commission considered formal regulation.[^10] In
    1984, however, the Commission decided not to establish quantitative
    program requirements for broadcasters, relying instead on market
    forces to ensure a sufficient supply of educational programming for
    children.[^11] Following this decision, the amount of children's
    educational programming aired by commercial television stations
    decreased markedly.[^12] Also in 1984, the Commission repealed the
    commercial guidelines for children's programming,[^13] leading to an
    increase in the amount of commercial matter broadcast during
    children's programming.[^14]

5.  In 1990, Congress enacted the Children's Television Act of 1990
    ("CTA"). [^15] The CTA imposes two principal requirements. First,
    commercial television broadcast licensees and cable operators must
    limit the amount of commercial matter that may be aired during
    children's programs to not more than 10.5 minutes per hour on
    weekends and not more than 12 minutes per hour on weekdays. Second,
    the CTA requires that, in its review of television broadcast renewal
    applications, the Commission must consider whether commercial
    television licensees have complied with the commercialization
    limits, and whether all television broadcast licensees have served
    "the educational and informational needs of children through the
    licensee's overall programming, including programming specifically
    designed to serve such needs." In enacting the CTA, Congress found
    that, while television can benefit society by helping to educate and
    inform children, there are significant market disincentives for
    commercial broadcasters to air children's educational and
    informational programming.[^16] The objective of Congress in
    enacting the CTA was to increase the amount of educational and
    informational programming on television.[^17]

6.  The Commission first promulgated rules implementing the CTA in 1991.
    The Commission determined that the statutory children's programming
    commercial limits would apply to programs originally produced and
    broadcast for an audience of children 12 years old and under.
    Commercial matter was defined as "air time sold for purposes of
    selling a product." In other words, the advertiser must give some
    valuable consideration either directly or indirectly to the
    broadcaster as an inducement for airing the material. [^18] The
    Commission also reaffirmed and clarified its long-standing policy
    that a program associated with a product, in which commercials for
    that product are aired, would cause the entire program to be counted
    as commercial time (a "program-length commercial").[^19] Television
    licensees are required to certify their compliance with the
    commercial limits as part of their license renewal application, and
    must maintain records sufficient to permit substantiation of the
    certification.[^20]

7.  In August 1996, the Commission adopted its current educational
    programming rules enforcing the CTA.[^21] The Commission's rules
    include several measures to improve public access to information
    about the availability of programming \"specifically designed" to
    serve children's educational and informational needs (otherwise
    known as "core" programming). These measures include a requirement
    that licensees identify core programming at the time it is aired and
    in information provided to publishers of television programming
    guides.[^22] Licensees are required to designate a children's
    liaison at the station responsible for collecting comments on the
    station's compliance with the CTA.[^23] Licensees must also prepare
    and place in their public inspection files a quarterly Children's
    Television Programming Report identifying their core programming and
    other efforts to comply with their educational programming
    obligations.[^24]

8.  In addition, our rules establish a definition of "core" programming.
    "Core" programming is defined as regularly scheduled, weekly
    programming of at least 30 minutes, aired between 7:00 a.m. and
    10:00 p.m., that has serving the educational and informational needs
    of children ages 16 and under as a significant purpose.[^25] The
    program must be identified as core programming when it is aired and
    in information provided to program guide publishers.[^26]

9.  Finally, to provide certainty to broadcasters about how to comply
    with the CTA and to facilitate fair and efficient processing of the
    CTA portion of broadcasters' renewal applications, the Commission
    also adopted a processing guideline. Under this guideline, a
    broadcaster can receive staff-level approval of the CTA portion of
    its renewal application by airing at least three hours per week of
    programming that meets the definition of "core" educational
    programming.[^27] Alternatively, a broadcaster can receive
    staff-level renewal by showing that it has aired a package of
    different types of educational and informational programming that,
    while containing somewhat less than three hours per week of core
    programming, demonstrates a level of commitment to educating and
    informing children that is at least equivalent to airing three hours
    per week of core programming.[^28] Licensees not meeting these
    criteria will have their license renewal applications referred to
    the Commission.[^29]

10. We seek comment today on how these existing children's television
    obligations, developed with analog technology in mind, should be
    adapted to apply to digital television broadcasting. Digital
    television is a new technology for transmitting and receiving
    broadcast television signals that delivers better pictures and
    sound, uses the broadcast spectrum more efficiently, and offers a
    range of possible applications. DTV broadcasters will have the
    technical capability and regulatory flexibility to: air high
    definition TV (HDTV); "multicast," that is, to send as many as 4 - 6
    digital "standard-definition television" (SDTV) signals; or provide
    "ancillary or supplementary services," including video and data
    services that are potentially revenue-producing, such as
    subscription television, computer software distribution, data
    transmissions, teletext, interactive services, and "time-shifted"
    video programming. Broadcasters could choose to shift back and forth
    among these different DTV modes \-- HDTV, SDTV, and new
    video/information services \-- during a single programming day. To
    facilitate the transition from analog to digital television,
    Congress directed the Commission to grant a second channel for each
    full-service television licensee in the country to be used for
    digital broadcasting during the period of conversion to an
    all-digital broadcast service.[^30]

11. In December 1999, we released a *Notice of Inquiry* ("*NOI"*) to
    commence collecting views on how the public interest obligations of
    television broadcasters should change in the digital era.[^31] As we
    observed in the *NOI*, both Congress and the Commission have
    recognized that digital television broadcasters have an obligation
    to serve the public interest. Congress stated in section 336 of the
    Communications Act that "\[n\]othing in this section shall be
    construed as relieving a television broadcasting station from its
    obligation to serve the public interest, convenience, and
    necessity."[^32] In implementing section 336, the Commission
    required that broadcasters air 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 period that their
    analog channel is broadcasting."[^33] The Commission also reaffirmed
    that "digital broadcasters remain public trustees with a
    responsibility to serve the public interest," [^34] and stated that
    "existing public interest requirements continue to apply to all
    broadcast licensees."[^35]

12. We recognize that the CTA is written broadly to apply to television
    broadcast licensees and that there is nothing in the CTA itself, nor
    the legislative history, to suggest that the statutory requirement,
    or the regulations promulgated thereunder, should be limited to
    analog broadcasters. Indeed, the objectives of the CTA -- *e.g*., to
    increase the amount of educational and information broadcast
    television programming available to children and to protect children
    from overcommercialization of programming -- would apply equally to
    the digital broadcasting context. Given this, and in light of
    explicit congressional intent expressed in section 336 to continue
    to require digital broadcasters to serve the public interest, we
    conclude that digital broadcasters are subject to all of the CTA's
    commercial limits and educational and informational programming
    requirements. Digital broadcasters must also continue to comply with
    our policies regarding program-commercial separation,[^36] host
    selling, and program-length commercials. The purpose of this
    proceeding is to determine how these requirements should be
    interpreted and adapted with respect to digital broadcasting in
    light of the new capabilities made possible by that technology.

13. We request comment herein on a variety of issues related to
    application of our existing children's programming rules to digital
    broadcasting. We also invite comment on a number of specific
    proposals offered by commenters responding to the *NOI*,[^37] and on
    some of the views expressed by the President's Advisory Committee on
    the Public Interest Obligations of Digital Television Broadcasters
    ("Advisory Committee").[^38] As we indicated in the *NOI*, the
    Advisory Committee, representing a broad cross-section of interests
    from industry, academia, and public interest organizations,
    submitted a report in 1998 containing recommendations on the public
    interest obligations digital television broadcasters should assume.
    Although the Advisory Committee focused on many issues beyond the
    scope of this proceeding, we will discuss below some of the
    recommendations of the committee and of individual participants that
    relate to children's television.

# ISSUES AND REQUEST FOR COMMENT

**A. Educational and Informational Programming**

14. *Background*. One of the questions we posed in the *NOI* is how
    public interest obligations generally, including the obligation to
    provide children's educational and informational programming, apply
    to a DTV broadcaster that chooses to multicast. We also asked how we
    should take into account the fact that DTV broadcasters have the
    flexibility to vary the amount and quality of broadcast programming
    they offer throughout the day.[^39] For example, a broadcaster could
    air 4 SDTV channels from 8 a.m. to 3 p.m., switch to two higher
    definition channels from 3 p.m. to 8 p.m., and finish with one HDTV
    channel for prime-time and late-night programming.[^40] Different
    broadcasters are likely to provide a different overall combination
    of broadcast hours and quality. We also note that DTV broadcasters
    may choose to devote a portion of their spectrum to either non-video
    services, such as datacasting, or to subscription broadcast services
    available only to viewers who pay a fee, consistent with the
    requirement that they provide at least one free, over-the-air video
    program service to viewers.

15. *Discussion*. Our current three-hour children's core educational
    programming processing guideline applies to DTV broadcasters.[^41]
    We invite comment, however, on how the guideline should be applied
    in light of the myriad of possible ways that broadcasters may choose
    to use their DTV spectrum. Should the processing guideline apply to
    only one digital broadcasting program stream, to more than one
    program stream, or to all program streams the broadcaster chooses to
    provide?[^42] Should the guideline apply only to free broadcast
    services, or also to services offered for a fee? In this regard, we
    note that the CTA requires that television broadcast licensees serve
    the educational and informational needs of children "through the
    licensee's *overall* programming, including programming specifically
    designed to serve such needs."[^43] How should we interpret this
    phrase in terms of digital broadcasters' requirement to provide
    educational programming?

16. We also ask how the existing three-hour guideline would be best
    applied in the digital context. Commenters responding to questions
    posed in the *NOI* offer a number of suggestions as to how the
    processing guideline could be adapted to apply in a multicast
    environment. We welcome comment on these specific proposals,
    outlined below, as well as other suggestions for ways our guideline
    should be interpreted and adapted with respect to digital
    broadcasting. We also seek comment on when any new requirements that
    relate to digital broadcasting should become effective.

17. [Proportional Hours]{.underline}. One approach, suggested by
    Children Now and People for Better TV,[^44] is that each digital
    television broadcaster be required to provide an amount of weekly
    core programming that is proportional to the three hour per week
    quantitative guideline. Specifically, these commenters propose that
    DTV broadcasters be required to devote three percent of their
    programmable broadcast hours per week to core educational
    programming. This three percent figure is derived by dividing the
    current 3 hour guideline by 105, or the total number of hours/week
    available for core programming during the 7 a.m. to 10 p.m.
    broadcast window (15 hours/day times 7 days/week equals 105
    hours/week). Under this approach, to derive their quantitative core
    programming obligation, broadcasters would calculate their total
    digital broadcast hours per week, multiply that total by 3 percent,
    and round up to the closest five-tenths as half-hour segments are
    the smallest unit for programming under the definition of core
    programming. Broadcasters would be required to report this
    calculation in their quarterly Children's Television Programming
    Reports, which would determine the broadcaster's core programming
    obligation for the following quarter.[^45]

18. In light of the range of possible technical qualities available with
    DTV technology, from SDTV to HDTV with different datacasting and
    interactive capabilities included, we also invite comment on whether
    we should require broadcasters to provide core educational
    programming in a certain technical format. One approach would be to
    require broadcasters to use for core programming a technical format
    that is consistent with the overall quality of the broadcaster's
    other programming. Our concern in this regard is to ensure that
    broadcasters not segregate core programming consistently to the
    lowest possible audio/visual quality offered by the
    broadcaster.[^46]

19. The Children Now proportional hours proposal raises a number of
    questions. If we were to impose a 3 percent core programming
    obligation, what kind of programming should be included for purposes
    of calculating the overall number of hours of core programming a DTV
    broadcaster would be required to provide? Should the percent
    requirement apply only to free video programming (*e.g*., 3 percent
    of all free video programming must be core), or should the percent
    also apply to datacasting (*e.g*., 3 percent of all free video
    programming and datacasting must be core)? Should subscription
    programming be included in the calculation? Should the 3 percent
    figure apply to a DTV broadcasters' total amount of programming, or
    to each programming stream? In addition, how should we address how
    core programming should be distributed on the broadcaster's
    channels? Should we require broadcasters to air their core
    programming on their "primary" channel, or allow them the
    flexibility to decide how that programming should be distributed
    over their various program streams? We invite comment on the
    proportional hours proposal and on these related issues.

20. [Pay or Play]{.underline}. Children Now also suggests that, as a
    corollary to their proportional hours proposal, the Commission could
    adopt a "Pay or Play" model to allow digital broadcasters maximum
    flexibility in meeting their core programming obligation.[^47] Under
    this approach, once the core programming obligation is quantified,
    broadcasters would have the choice of meeting these obligations
    either through their own programming or by paying other networks or
    channels to air these hours for them, or a combination of both.
    Children Now points out that this model could promote partnerships
    among commercial broadcasters or among commercial and non-commercial
    broadcasters in a given market, and could provide much needed
    support to public broadcasters who have a strong commitment to core
    programming. Children Now also notes, however, that, under such a
    model, children's programming could be limited to public
    broadcasting or to less popular commercial stations, resulting in
    less exposure to such programming for children. Another concern is
    that commercial broadcasters may not pay public broadcasters or less
    successful commercial broadcasters enough to fund high quality
    children's programming which could, in the end, result in an overall
    reduction in the quality of core programs. We note that the
    Commission's rules currently allow broadcasters, under certain
    conditions, to meet their CTA obligation by sponsoring core programs
    aired on another station in the same market.[^48] We invite comment
    on the "Pay or Play" approach and the advantages and disadvantages
    of adopting such a model for educational programming.

21. [Menu Approach]{.underline}. The Center for Media Education, filing
    jointly with nine other individuals and public interest
    organizations[^49] (collectively referred to herein as "CME *et
    al*."), urges the Commission to adopt children's guidelines that
    impose additional obligations on broadcasters, but provide them with
    flexibility in meeting these obligations. CME *et al*. argues that
    the current amount of three hours-per-week of core programming is
    insufficient in light of the added capacity multicasting offers.
    Specifically, CME *et al*. proposes that digital broadcasters have
    the option of satisfying their children's programming obligation by
    providing, at their option, some combination of the following: (1)
    additional "core" educational and informational programming; (2)
    broadband or datacasting services to local schools, libraries, or
    community centers that serve children; or (3) support for the
    production of children's educational programming by local public
    stations or other noncommercial program producers, such as the
    National Endowment for Children's Programming. CME *et al*. points
    out that public television stations could use additional funding to
    create new children's educational programs that take advantage of
    DTV's enhanced capabilities. CME *et al*. would not require that DTV
    broadcasters air core programs on each of their program streams, but
    instead would permit the creation of specialized channels where core
    programming could be more easily located by children and
    parents.[^50]

22. We invite comment on the CME *et al*. proposal and, more generally,
    on the concept of offering broadcasters a choice of ways they can
    meet their obligation under the CTA. If we were to adopt a menu
    approach, are there other types of obligations, apart from those
    suggested by CME *et al*., that we should allow broadcasters to
    choose from? One option would be to allow broadcasters to undertake
    additional outreach efforts to make parents and others aware of the
    availability of core programs and how to identify and locate them.
    If we were to include this as an option in a menu approach, what
    kind of outreach efforts should we require?

23. [Daily Core Programming Obligation]{.underline}. The Advisory
    Committee Report describes another approach regarding the obligation
    of digital broadcasters to air children's programming that would
    require digital broadcasters to air no less than 1 hour of
    children's educational programming each day on the broadcaster's
    main channel.[^51] We invite comment generally on this proposal.

24. [Other Digital Improvements]{.underline}. Finally, we ask commenters
    to address whether the advanced capabilities of digital broadcasting
    can be used in other ways to help implement the CTA. One approach
    would be to require broadcasters to use datacasting to make
    available during a core program information explaining why the
    program is considered to qualify as "core."[^52] Another option
    would be to require broadcasters to provide additional content
    ratings information on core programs from independent sources, such
    as public interest groups that rate educational children's
    programming. Such information could be provided through a direct
    link to the internet where the content ratings information could be
    accessed.[^53] We seek comment on these proposals, as well as other
    suggestions for how digital capacity could be used to help improve
    our existing children's programming requirements.

    **B. Preemption**

25. *Background.* Related to the issue of how the children's educational
    and informational programming obligation will apply in the digital
    age is the issue of how we will treat preemptions of core programs
    by DTV broadcasters. To qualify as "core programming" for purposes
    of the three-hour-per-week processing guideline, the Commission
    requires that a children's program be "regularly scheduled," that
    is, a core children's program must "be scheduled to air at least
    once a week" and "must air on a regular basis."[^54] In adopting its
    current educational programming rules, the Commission stated that
    television series typically air in the same time slot for 13
    consecutive weeks, although some episodes may be preempted for
    programs such as breaking news or live sports events. The Commission
    noted that programming that is aired on a regular basis is more
    easily anticipated and located by viewers, and can build loyalty
    that will improve its chance for commercial success. The Commission
    stated that it would leave to the staff to determine, with guidance
    from the full Commission as necessary, what constitutes regularly
    scheduled programming and what level of preemption is allowable.

26. Since the adoption of the *Children's Programming Report and Order*,
    the ABC, CBS, and NBC networks have requested flexibility to
    reschedule episodes of core programs that are preempted by live
    network sports events without adversely affecting the program's
    status as "regularly scheduled." Separate requests have been made in
    connection with each of the 1997-98, 1998-99, and 1999-2000
    television seasons. For two of these seasons, the Mass Media Bureau
    has allowed the networks limited flexibility in preempting core
    children's programming.[^55] Specifically, within certain
    limitations, the Bureau advised that preempted core programs could
    count toward a station's core programming obligation if the program
    were rescheduled. The Bureau also indicated that it would revisit
    this limited flexibility regarding preempted core programming based
    on the level of preempted programs, the rescheduling and broadcast
    of the preempted programs, the impact of promotions and other steps
    taken by the stations to make children's educational programming a
    success.

27. The Commission requires licensees, in their quarterly Children's
    Television Programming Reports, to identify for each core program
    the number of times the program was preempted and rescheduled. In
    another *Report and Order* adopted today, the Commission revised its
    quarterly Children's Television Programming Report to make the
    preemption information in that report clearer and to collect
    information on the reason for each preemption as well as the
    licensee's efforts to promote the rescheduled program.[^56] The
    purpose of these changes is to collect more complete data regarding
    the level of preemption of core programs and station practices in
    rescheduling these programs. This data will in turn allow the FCC
    and others to better monitor the impact of preemptions on the
    availability of core programs.

28. *Discussion.* As noted above, the Commission required that
    programming must be "regularly scheduled" to qualify under the
    three-hour guideline. This requirement was based on the fact that
    programming that is aired on a regular basis is more easily
    anticipated and located by viewers, and therefore more likely to be
    seen by its intended audience. Although acknowledging that
    preemption might occur, the Commission expected that preemption of
    core programming would be rare. The Mass Media Bureau staff has
    recently reviewed a random sample of the Children's Television
    Programming Reports, and determined that the average preemption rate
    by stations affiliated with the largest networks during the past two
    years is nearly 10%, and has been as high as 25% during a quarter
    when a network had a large number of sports programming commitments.
    Given this level of preemption, we believe we should consider
    whether we should adopt another approach to preemptions in the
    digital context to ensure that our preemption policy does not thwart
    the goals of the CTA. DTV broadcasters will have the option of
    airing multiple streams of programming simultaneously, thus
    increasing their flexibility to either avoid preempting core
    programs or to reschedule such programs to a regular "second home."
    Given this capability, are there ways in which the Commission could
    revise its preemption policies to simplify or eliminate the need for
    networks to seek approval of their planned preemption and
    rescheduling practices for each television season, and to streamline
    licensees' recordkeeping and reporting requirements? One approach
    would be to fashion a rule that would provide clear guidance to
    digital broadcasters on the meaning of the requirement that a "core"
    program be "regularly scheduled." Such a rule could cover the number
    of times a core program could be preempted and still count toward
    the three-hour-per-week processing guideline, and/or the efforts
    that must be made to reschedule and promote preempted programs in
    order for these programs to contribute toward the core programming
    guideline. If we were to adopt such a rule, should we continue to
    exempt from the requirement that core programs be rescheduled core
    programs preempted for breaking news? We request comment generally
    on all of these issues, and on how we could refine and clarify our
    definition of "regularly scheduled" to address the issue of
    preempted core programs in the digital age. We also ask commenters
    to address specifically the kind of rescheduling practices and
    promotion of rescheduled programs that we could require from digital
    broadcasters consistent with our goal of ensuring that viewers can
    anticipate and locate the rescheduled program. For example, should a
    station be allowed to shift a preempted core program to another
    digital program stream? If so, should we require that the substitute
    program stream be of the same technical quality as the stream on
    which the program is regularly scheduled? Should we permit a
    preempted program to be shifted from a free to a pay program stream?

    **C. Commercial Limits**

29. *Background.* Another issue posed by the transition from analog to
    digital broadcasting is how the Commission's children's programming
    advertising limits and policies will apply to DTV broadcasters. By
    converging internet capabilities with broadcasting, digital
    television permits a new level of interactivity between
    broadcasters, advertisers, and viewers. This capability offers great
    potential for enhancing the educational value of children's programs
    by, for example, permitting children to click on icons that appear
    on the screen during the program which take them to websites with
    more in-depth information about the topics covered in the program.
    However, the interactive capabilities of DTV also allow for the
    direct sale of goods and services over the television. This
    capability presents marketers with new opportunities to reach
    children, which raises concerns in light of the difficulty young
    children have in distinguishing commercials from programming and the
    particular vulnerability of children to advertising.

30. *Discussion.* [Application of Existing Commercial Limits Rules and
    Policies to DTV]{.underline}. We seek comment both on how the limits
    on the amount of commercial matter in children's programming should
    apply in this digital environment and how we should interpret with
    respect to DTV broadcasters the policies set forth in the *1974
    Policy Statement* on children's programming. One question that
    arises is whether children's advertising limits and policies should
    apply only to free over-the-air channels, or to all digital channels
    both free and pay? We raised this issue in our *NOI*, where we asked
    whether a licensee's public interest obligations apply to its
    ancillary and supplementary services, and asked commenters to
    address the relevance of section 336 in this regard.[^57]

31. CME *et al.* expresses the view that the existing advertising
    restrictions, including the separations, host-selling, and
    program-length commercial policies, should apply to all digital
    programs directed to children ages 12 and under, regardless of the
    program stream on which they are offered. Thus, CME *et al*. argues
    that these policies should apply when children are watching video
    programs, regardless of whether the channel is free or pay. [^58] We
    request comment on this view.

32. In addition, CME *et al*. proposes that the Commission prohibit all
    direct links to commercial websites during children's programming.
    We invite comment on this proposal. Should the Commission prohibit
    the use of digital television interactivity capability in children's
    programs to sell products? Is such a prohibition appropriate in
    light of the unique ability of children to be influenced by
    commercial matter and their difficulty distinguishing commercials
    from other programming? If commercial links are freely available in
    programs not subject to our commercial limits (*e.g*., programs
    directed at adults and children over the age of 12), would
    prohibiting them or restricting them in programming directed to
    children ages 12 and under make this programming less desirable and
    thus less likely to be selected by children? Should we make a
    distinction between websites that carry only commercial products,
    and websites that also offer educational information related to the
    program? If we permit certain kinds of direct commercial links
    during children's programs, should such links be permitted to appear
    during the program itself, or be limited to appearing during
    commercials adequately separated from program material as required
    by our separations policy? In addition, if we were to allow the use
    of direct commercial links, should we limit the duration of time
    they appear on the screen? How should the appearance of a commercial
    link be counted in calculating the number of commercial minutes for
    purposes of our commercial limits? Finally, if we allow certain
    kinds of direct commercial links, should we prohibit links to
    websites that sell products associated with the program in which the
    links appear under our program-length commercial policy, or links to
    websites where a the program host is used to sell products? We
    invite commenters to address all of these issues, as well as any
    other issues related to the use of direct website links during
    children's programming.

33. [Definition of Commercial Matter]{.underline}. We also invite
    commenters to address a broader question related to our restriction
    on the duration of advertising during children's programming. This
    is an issue that arises with respect to both analog and digital
    broadcasting. Under our current policy, the limitation of 10.5
    minutes per hour on weekends and 12 minutes per hour on weekdays
    applies to "commercial matter." "Commercial matter" is defined to
    exclude certain types of program interruptions from counting toward
    the commercial limits, including promotions of upcoming programs
    that do not contain sponsor-related mentions, public service
    messages promoting not-for-profit activities, and air-time sold for
    purposes of presenting educational and informational material.[^59]
    We have observed that there is a significant amount of time devoted
    to these types of announcements in children's programming. As a
    result, the amount of time devoted to actual program material is
    often far less than the limitation on the duration of commercial
    matter alone might suggest. For example, in an hour-long weekend
    program, only 10.5 minutes may be devoted to commercial matter,
    leaving 49.5 minutes for actual program material. In fact, however,
    many programs contain far less than this amount of actual program
    time as a result of numerous other interruptions that do not count
    toward the commercial limit restriction.

34. We invite comment on whether the Commission should revise its
    definition of "commercial matter" to include some or all of these
    types of program interruptions that do not currently contribute
    toward the commercial limits. We note that some of the types of
    program interruptions currently excluded from the commercial limits
    may contain information valuable to children, such as promotion of
    upcoming educational programs or certain types of public service
    messages. Should we require that the time devoted to these
    announcements nonetheless count toward the commercial limits to
    maximize the amount of time devoted to program material and reduce
    the time taken by interruptions? This might prove especially
    beneficial for educational and informational programs, where it
    would increase the amount of time available for delivering
    educational messages. The issue of the total time taken by program
    interruptions in children's programs arises in both the analog and
    digital world. If we were to revise our definition, is there any
    reason to apply the new definition only to digital broadcasting?
    Finally, we ask commenters to address whether our ability to revise
    this definition is restricted by the CTA and its legislative
    history. The CTA itself does not define the phrases "commercial
    matter" or "advertising." Both the House and Senate Reports state
    that "\[t\]he Committee intends that the definition of 'commercial
    matter'... be consistent with the definition used by the Commission
    in its Former FCC Form 303."[^60] We seek comment on whether we must
    apply the definition of "commercial matter" in the way defined on
    former FCC Form 303 for purposes of administering the CTA.

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D.  **Promotions**

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35. *Background*. Another issue we raised in the *NOI* relates to the
    airing, in programs viewed by children, of promotions for other
    upcoming programs that may be unsuitable for children to watch
    because either the promotions themselves or the programs they refer
    to contain sexual or violent content or inappropriate language. This
    is another issue that arises with respect to both analog and digital
    broadcasting. The Commission staff has received many informal
    complaints from members of the public and children's advocates about
    inappropriate promotions in programs viewed by children. We asked in
    the *NOI* whether the ratings of programs promoted by broadcasters
    should be consistent with the ratings of the program during which
    the promotions run. We note that the broadcast, cable, and motion
    picture industries have voluntarily agreed to rate video programming
    that contains sexual, violent, or other indecent material and to
    broadcast signals containing these ratings so that these programs
    can be screened by "V-Chip" technology available in television sets.
    The ratings identify the age group for which a particular program is
    appropriate and when the program contains violence, sexual content,
    or suggestive or coarse language.[^61]

36. *Discussion.* We again invite commenters to address this issue. Are
    there steps the FCC can take to ensure that programs designed for
    children or families do not contain promotions for broadcast, cable
    or theater movies or other age-inappropriate product promotions that
    are unsuitable for children to watch? One option would be to require
    that promotions themselves be rated and encoded so they can be
    screened by V-Chip technology. Yet another option would be to
    require that promotions be rated and that programs with a
    significant child audience contain only promotions consistent with
    the rating of the program in which they appear. We invite comment on
    these and other approaches that might be used to address this issue.

37. We recognize that the current ratings system was adopted by the
    broadcast, cable, and motion picture industries voluntarily, and was
    found acceptable by the Commission.[^62] Would it be preferable to
    urge the industry itself to make a voluntarily commitment to take
    steps to protect against the airing of inappropriate promotions in
    children's programs? As we noted above, the issue of inappropriate
    promotions in children's programming arises with respect to both
    analog and digital programming. If we were to take steps to address
    this issue, should these steps be limited to digital broadcasting or
    should they apply to analog broadcasting as well? Does DTV
    technology offer any additional capability that could be used to
    address this issue in digital broadcasting?

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E.  **Other Steps to Improve Educational Programming**

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38. We seek further information on children\'s television viewing
    habits, and in particular empirical evidence concerning the extent
    to which they watch designated educational and informational
    programming. We note that the Annenberg Public Policy Center has
    annually evaluated the educational and informational programming
    provided by networks and certain individual stations. We seek
    further information including the audience share of such programs
    and, in particular, the audience share of educational and
    informational programming contrasted with that of other programming
    for children. We additionally seek information on stations\' and
    networks\' efforts to promote educational and informational
    programming to children and parents. Are stations promoting this
    programming? How and where? Is the programming being promoted during
    network prime time programming? During children\'s programming? Is
    the promotion effective? Studies of the effectiveness of the
    three-hour-per-week processing guideline show that parents continue
    to be unaware of the availability of educational programming and
    continue to fail to identify core programs.[^63] We invite
    commenters to address what steps the FCC might take to increase
    public awareness of the availability of core programming and how to
    locate it. Should the FCC require that broadcasters promote core
    programs? If so, what kind of requirement should we impose? Should
    we require promotion during prime time or other specific day parts?
    Should we require stations to air PSAs about the value of
    educational programming and the meaning of the E/I icon? Are there
    other steps we could take apart from establishing a rule for
    promotions and PSAs? Should the FCC itself undertake promotional
    efforts to highlight and publicize core educational programming?
    Apart from the issue of public awareness, are there other steps the
    FCC could take to improve the quality of educational programming? We
    invite comment on all of these questions and welcome other
    suggestions for ways to improve both the quality and public
    awareness of educational and informational children's programming.

# CONCLUSION

39. We institute this proceeding to examine how our existing children's
    educational programming rules and our preemption policies should be
    adapted to apply to digital broadcasters. Our goal is to ensure
    that, as we transition from analog to digital television, children
    and parents continue to have access, as Congress intended, to an
    ample supply of educational and informational programming
    specifically designed for children. We also seek comment on how the
    current limitations on advertising in children's programming should
    be applied to DTV broadcasters in light of the new capabilities
    offered by digital technology. Our objective in this effort is to
    ensure that children continue to be protected from
    overcommercialization on television. Finally, we raise a number of
    issues related to the definition of "commercial matter" for purposes
    of the commercial limits for children's programs, promotions of
    programs for more mature audiences aired during children's programs,
    and other steps the Commission could take to help improve the
    availability of educational and informational programming. These
    latter issues arise in both the analog and digital worlds. We seek
    comment on all of the issues we have raised herein, and welcome
    other ideas commenters may have to achieve our objectives.

# AdMINISTRATIVE MATTERS

40. *Comments and Reply Comments*. Pursuant to Sections 1.415 and 1.419
    of the Commission\'s rules, 47 C.F.R. §§ 1.415, 1.419, interested
    parties may file comments on or before December 18, 2000 and reply
    comments on or before January 17, 2001. Comments may be filed using
    the Commission\'s Electronic Filing System (ECFS) or by filing paper
    copies. *See* Electronic Filing of Documents in Rulemaking
    Proceedings, 63 Fed. Reg. 24,121 (1998).

41. Comments filed through the ECFS can be sent as an electronic file
    via the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>.
    Generally, only one copy of an electronic submission must be filed.
    If multiple docket or rulemaking numbers appear in the caption of
    this proceeding, however, commenters must transmit one electronic
    copy of the comments to each docket or rulemaking number referenced
    in the caption. In completing the transmittal screen, commenters
    should include their full name, postal service mailing address, and
    the applicable docket or rulemaking number. Parties may also submit
    an electronic comment by Internet e-mail. To get filing instructions
    for e-mail comments, commenters should send an e-mail to
    ecfs@fcc.gov, and should include the following words in the body of
    the message, \"get form, \<your e-mail address.\" A sample form and
    directions will be sent in reply.

42. Parties who choose to file by paper must file an original and four
    copies of each filing. If more than one docket or rulemaking number
    appear in the caption of this proceeding, commenters must submit two
    additional copies for each additional docket or rulemaking number.
    All filings must be sent to the Commission\'s Secretary, Magalie
    Roman Salas, Office of the Secretary, Federal Communications
    Commission, 445 Twelfth Street, S.W.; TW-A325, Washington, D.C.
    20554.

43. Parties who choose to file by paper should also submit their
    comments on diskette. These diskettes should be submitted to: Wanda
    Hardy, 445 Twelfth Street, S.W.; 2-C221, Washington, D.C. 20554.
    Such a submission should be on a 3.5 inch diskette formatted in an
    IBM compatible format using WordPerfect 5.1 for Windows or
    compatible software. the diskette should be accompanied by a cover
    letter and should be submitted in \"read only\" mode. The diskette
    should be clearly labeled with the commenter\'s name, proceeding
    (including the docket number (MM Docket No. 00-167), type of
    pleading (comment or reply comment), date of submission, and the
    name of the electronic file on the diskette. The label should also
    include the following phrase \"Disk Copy - Not an Original.\" Each
    diskette should contain only one party\'s pleadings, preferably in a
    single electronic file. In addition, commenters must send diskette
    copies to the Commission\'s copy contractor, International
    Transcription Service, Inc., 445 Twelfth Street, S.W.; CY-B402,
    Washington, D.C. 20554.

44. *Ex Parte Rules*. This is a permit-but-disclose notice and comment
    rulemaking proceeding. Ex parte presentations are permitted except
    during the Sunshine Agenda period, provided they are disclosed as
    provided in the Commission\'s Rules. See generally 47 C.F.R.
    Sections 1.1202, 1.1203, and 1.1206(a).

45. *Initial Regulatory Flexibility Analysis*. With respect to this
    *Notice*, an Initial Regulatory Flexibility Analysis (\"IRFA\") is
    contained in Appendix B. As required by the Regulatory Flexibility
    Act, *see* 5 U.S.C. § 603, the Commission has prepared an IRFA of
    the possible economic impact on small entities of the proposals
    contained in this *Notice*. Written public comments are requested on
    the IRFA. Comments on the IRFA must be filed in accordance with the
    same filing deadlines as comments on the *Notice*, and should have a
    distinct heading designating them as responses to the IRFA.

46. *Initial Paperwork Reduction Act Analysis.* This *Notice* may
    contain either proposed or modified information collections. As part
    of our continuing effort to reduce paperwork burdens, we invite the
    general public to take this opportunity to comment on the
    information collections contained in this *Notice*, as required by
    the Paperwork Reduction Act of 1996. Public and agency comments are
    due at the same time as other comments on the *Notice.* Comments
    should address: (a) whether the proposed collection of information
    is necessary for the proper performance of the functions of the
    Commission, including whether the information shall have practical
    utility; (b) ways to enhance the quality, utility, and clarity of
    the information collected; and (c) ways to minimize the burden of
    the collection of information on the respondents, including the use
    of automated collection techniques or other forms of information
    technology. In addition to filing comments with the Secretary, a
    copy of any comments on the information collections contained herein
    should be submitted to Judy Boley, Federal Communications
    Commission, 445 Twelfth Street, S.W., Room C-1804, Washington, D.C.
    20554, or via the Internet to <jboley@fcc.gov> and to Edward
    Springer, OMB Desk Officer, 10236 NEOB, 725 17^th^ Street, N.W.,
    Washington, D.C. 20503 or via the Internet to
    [edward.springer@omb.eop.gov](mailto:edward.prunger@omb.eop.gov).

47. *Additional Information*. For additional information on this
    proceeding, please contact Kim Matthews, Policy and Rules Division,
    Mass Media Bureau, (202) 418-2130.

#####  VI. ORDERING CLAUSES {#vi.-ordering-clauses .unnumbered}

48. Accordingly, IT IS ORDERED that this *Notice of Proposed Rule
    Making* is issued pursuant to the authority contained in Sections
    4(i), 303, 307, and 336(d) of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 154(i), 303, 307, and 336(d), and in the
    Children's Television Act of 1990.

49. IT IS FURTHER ORDERED that the Commission's Consumer Information
    Bureau, Reference Information Center, SHALL SEND a copy of this
    *Notice*, including the Initial Regulatory Flexibility Analysis, to
    the Chief Counsel for Advocacy of the Small Business Administration.

    FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

Secretary

**APPENDIX A**

The following parties filed comments in response to the FCC's *Notice of
Inquiry*:

1.  Alliance for Better Campaigns, et al

2.  American Federation for the Blind (Alan Dinsmore)

3.  American Federation of Labor and Congress of Industrial
    Organizations

4.  Anderson, Thomas V.

5.  Association of America's Public Television Stations

6.  Association of Local Television Station, Inc.

7.  BELO

8.  Baker, Fred

9.  Bass, Nichole D.

10. Benton Foundation

11. Berman, Michael L.

12. Bernal, Victoria

13. Berry, Kenneth H. Jr.

14. Brunetz, Neil

15. Burdette, Dale E.

16. CBS Corporations

17. Canna, William

18. Capital Broadcasting Company, Inc.

19. Carmack, Tausha

20. Castelow, Shandry

21. Center for Information, Technology Society

22. Center for Media Education, et al

23. Children Now

24. Citizens for Community Values

25. Coffin, Jennifer Niles

26. Community Technology Policy Council

27. Council of Chief State School Officers

28. Cox, Amanda Renea

29. Cox, Stephen Jr.

30. Crnkovic, Sarah

31. Dennis, Vance W.

32. Dixon, John T.

33. Dykstra, Thomas A.

34. Easley, Brian Robert

35. Eaton, Rachel M.

36. Family Friendly Libraries

37. Family Research Council

38. Fletcher, Amy

39. Flory, Heather L.

40. Gallagher, Mary Taylor

41. Griffin, Grae M.

42. Guthrie, Carol

43. Herman, Emily L.

44. Hood, William D.

45. Huffman, Cheri

46. Human Relations Foundation of Chicago

47. Jones, Valorri

48. Kern, Montague

49. Kol, Alexandra

50. Kranz, Ralph

51. Kurtz, Robert R.

52. Lally, Nicole C.

53. Lambert, Regina M.

54. Lewis, South

55. Martin, Justin R.

56. Mason, Valerie Latosha

57. McCormack, Mauann

58. McElroy, Robert Lee IV

59. McMurray, Jama

60. Media Institute

61. Michigan Consumer Federation

62. Mitchell, Darren

63. Molde, Brian

64. Morality in Media, Inc.

65. Named State Broadcasters Associations

66. National Association of Broadcasters (NAB)

67. National Law Center for Children and Families

68. National Minority T.V., Inc.

69. Neff, Amy E.

70. Osborn, Dationa

71. Ozment, Kenneth R.

72. Paul, Amy

73. Paxson Communications Corporation

74. People for Better TV

75. Peterson, Nicholas J.

76. Pinkston, Neal

77. Pipkin, Glenda H.

78. Poley, Dr. Janet

79. Pope, Jackson R.

80. Progress & Freedom Foundation

81. Radio-Television News Directors Association

82. Randolph, Jason S.

83. Rose, Ben M.

84. Schmidtke, Jill R.

85. Scrugham, Richard T. Jr.

86. Snyder, Brent

87. Sowers, Natalya L.

88. Sukhia, Nathan D.

89. Suttles, Jennifer C.

90. Telecommunications for the Deaf, Inc.

91. United Church of Christ, et al

92. United States Catholic Conference

93. Vance, Robert L.

94. Verotsky, Stephen E.

95. WGBH (Media Access)

96. Waddey, Alex

97. Wallace, Chad E.

98. Williams, Raymond Kyle

99. Williamson, Theresa

100. Wilson, Gary

101. Wimberly, Chris

102. York, April M.

**APPENDIX B**

**Initial Regulatory Flexibility Act Analysis**

As required by the Regulatory Flexibility Act, 5 U.S.C. § 603
(\"RFA\"),[^64] the Commission has prepared an Initial Regulatory
Flexibility Analysis (\"IRFA\") of the expected impact on small entities
of the proposals contained in this *Notice*. Written public comments are
requested with respect to the IRFA. These comments must be filed in
accordance with the same filing deadlines for comments on the rest of
the *Notice*, but they must have a separate and distinct heading,
designating the comments as responses to the IRFA. The Commission shall
send a copy of this *Notice*, including the IRFA, to the Chief Counsel
for Advocacy of the Small Business Administration in accordance with the
RFA, 5 U.S.C. § 603(a).

a\. Need for and Objectives of the Proposed Rules. Our goal in
commencing this proceeding is to seek comment on how the existing
children's educational television programming obligations and
limitations on advertising in children's programs should be interpreted
and adapted to apply to digital television broadcasting in light of the
new capabilities made possible by that technology. In seeking comment on
what steps the FCC might take to address the issue of the airing of
promotions inappropriate for children in programs viewed by children,
our goal is to protect children from programming with inappropriate
sexual or violent content or suggestive or coarse language. We also
invite comment on a number of specific proposals offered by commenters
responding to the *NOI* in MM Docket No. 99-360.

We invite comment on how the children's core educational programming
processing guideline should be applied to DTV broadcasters that choose
to multicast. For example, we ask whether the guideline should apply to
only one digital broadcasting program stream, to more than one program
stream, or to all program streams the broadcaster chooses to provide. We
also ask whether the guideline should apply only to free broadcast
services or also to pay services, and whether a three-hour guideline is
sufficient in light of the additional program capacity made available by
digital technology. We also seek comment on whether the Commission's
policies regarding preemption of core programs should be revised in view
of the greater programming capacity available to DTV broadcasters.

With respect to the children's programming advertising limits and
policies, we ask whether these rules and policies should apply to both
free and pay program streams. We also seek comment on how these rules
and policies should be interpreted in light of the interactive
capabilities made possible by digital technology. For example, we ask
whether we should permit the use of direct commercial website links in
children's programs and, if so, whether we should limit the duration of
time they appear on the screen. We also ask how such links should be
treated under our program-length commercial and host-selling policies.

We also invite comment on a broader question related to the advertising
limits that arises with respect to both analog and digital broadcasting.
Specifically, we ask whether the Commission should revise its definition
of "commercial matter" to include types of program interruptions that do
not currently contribute toward the commercial limits, such as certain
program promotions.

In addition, we invite comment on how to address the issue of the airing
in programs viewed by children of promotions for other upcoming programs
that may be unsuitable for children to watch because either the
promotions themselves or the programs they refer to contain sexual or
violent content. This is an issue that arises with respect to both
analog and digital broadcasting.

Finally, we invite commenters to address what steps the FCC might take
to increase public awareness of the availability of core programming and
how to locate it. We also ask whether there are other steps the FCC
could take, apart from the issue of public awareness, to improve the
quality of educational programming by, for example, seeking legislation
to establish a mechanism to fund the production of high-quality
educational and informational programming.

b\. [Legal Basis]{.underline}. Authority for the actions proposed in the
*Notice* may be found in Sections 4(i) and 303, 307, and 336(d) of the
Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 303, 307,
and 336(d), and in the Children's Television Act of 1990.

c\. [Recording, Recordkeeping, and Other Compliance
Requirements]{.underline}. The *Notice* invites comment on how the
existing children's educational television programming requirements and
children's commercial limits should apply to digital broadcasters. The
*Notice* also invites comment on whether the Commission should revise
its definition of "commercial matter" to include types of program
interruptions in children programs that do not currently contribute
toward the commercial limits. We also ask what steps the FCC might take
to address the issue of the airing in programs viewed by children of
promotions for other upcoming programs that may be unsuitable for
children to watch because either the promotions themselves or the
programs they refer to contain sexual or violent content or suggestive
or coarse language.

d\. [Federal Rules that Overlap, Duplicate, or Conflict with the
Proposed Rules]{.underline}. The rules under consideration in this
proceeding do not overlap, duplicate, or conflict with any other rules.

f\. [Description and Estimate of the Number of Small Entities to Which
the Rules Would Apply]{.underline}. The RFA directs agencies to provide
a description of, and where feasible, an estimate of the number of small
entities that may be affected by the proposed rules, if adopted. Under
the RFA, small entities may include small organizations, small
businesses, and small governmental jurisdictions. 5 U.S.C. § 601(6). The
RFA, 5 U.S.C. § 601(3), generally defines the term \"small business\" as
having the same meaning as the term \"small business concern\" under the
Small Business Act, 15 U.S.C. § 632. A small business concern is one
which: (1) is independently owned and operated; (2) is not dominant in
its field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (\"SBA\"). Pursuant to
5 U.S.C. § 601(3), the statutory definition of a small business applies
\"unless an agency after consultation with the Office of Advocacy of the
SBA and after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of the
agency and publishes such definition(s) in the Federal Register.

Small TV Broadcast Stations. The SBA defines small television
broadcasting stations as television broadcasting stations with \$10.5
million or less in annual receipts.[^65]

The children's educational and informational programming requirements
apply to commercial and noncommercial television stations. There are
approximately 1,243 existing commercial television stations and 373
existing noncommercial television stations of all sizes that may be
affected by the proposals contained in this *Notice* related to our
educational and informational programming requirements. The children's
commercial limits apply to commercial television broadcasters and cable
operators. Thus, in addition to the above, there are approximately
10,500 cable systems of all sizes that could be affected by the
proposals in the *Notice* related to the children's commercial limits.

g\. [Any Significant Alternatives Minimizing the Impact on Small
Entities and Consistent with the Stated Objectives]{.underline}: The RFA
requires an agency to describe any significant alternatives that it has
considered in reaching its proposed approach, which may include the
following four alternatives (among others): (1) the establishment of
differing compliance or reporting requirements or timetables that take
into account the resources available to small entities; (2) the
clarification, consolidation, or simplification of compliance or
reporting requirements under the rule for small entities; (3) the use of
performance, rather than design, standards; and (4) an exemption from
coverage of the rule, or any part thereof, for small entities. 5 U.S.C.
§ 603( c).

This *Notice* invites comment generally on a number of issues related to
application of the existing children's television programming
requirements to digital broadcasters, and asks commenters to address
various proposals advanced by commenters responding to the NOI in this
proceeding. We seek comment on whether there is any significant impact
on small entities that might result from any of these proposals. Any
significant alternatives presented in the comments will be considered.

SEPARATE STATEMENT OF

COMMISSIONER HAROLD FURCHTGOTT-ROTH,\
CONCURRING IN PART AND DISSENTING IN PART

*Re: Children's Television Obligations of Digital Television
Broadcasters,* Notice of Proposed Rulemaking, MM Docket \# 00-167
(adopted September 14, 2000)

As I stated at the NOI phase of this proceeding, we have an obligation
to "implement\[\] Section 336\'s directives regarding the transition
from analog to digital broadcast services. The birth of digital
television raises discrete issues regarding application of our existing
public interest requirements during the transition period and
beyond."[^66] Today's Notice of Proposed Rulemaking seeks comment on
some of the legitimate issues raised by the transition of broadcasting
from analog to digital. However, as I did at the Notice of Inquiry
stage, I must dissent from those portions of today's decision that go
beyond these transition issues to address new and burdensome proposals
for additional regulatory obligations.

Today's NPRM is a missed opportunity. It should read: "Here are the old
rules that are no longer necessary for digital broadcasting." Instead,
it reads: "Here are new additional burdensome rules that will discourage
and delay digital broadcasting."

The increased burdens posited in the Notice are both ill timed and
technologically misdirected. We are in a critical phase of the
transition from analog to digital broadcasting. There are already
substantial and costly impediments to the transition -- and our ability
to achieve the targeted 2006 transition date is by no means certain. It
is counterintuitive that the Commission would now consider expanding the
regulatory burden imposed on this nascent technology. In addition, the
ability of digital broadcasters to supply 4 or perhaps 6 over the air
signals will greatly enhance the variety of programming available. Thus
multicasting is likely to allow for the provision of more niche
programming, such as those shows targeted to children. To the extent
that any changes are warranted, it seems that multicasting would
actually argue in favor of reducing these regulatory obligations, not
increasing them.

Today's NPRM suggests some policies that I find particularly intrusive
and contrary to this Commission's purportedly deregulatory philosophy.
For example, the Notice suggests the Commission may want to monitor and
compare the quality of the audio and visual presentation of core versus
children's programming.[^67] Or perhaps broadcasters will be required to
provide "additional content ratings information on core programs from
independent sources, such as public interest groups that rate
educational children's programming . . .through a direct link to the
internet where the content ratings information could be assessed."[^68]
The Notice also suggests a possible requirement that broadcasters do
more to promote children's programming during prime time?[^69] Other
proposals, such as prohibiting direct Internet links to commercial sites
during children's programming, may raise serious constitutional and
policy concerns.[^70] In the end, I fear that a valuable opportunity to
explore the opportunities presented by the digital transition may be
lost by an NPRM that seems to move the Commission in the wrong
direction.

**SEPARATE STATEMENT OF COMMISSIONER MICHAEL K. POWELL**

Re: Children's Television Obligations of Digital Television
Broadcasters, Notice of Proposed Rulemaking, MM Docket No. 00-167
(adopted September 14, 2000)

My general policy is not to oppose Notices of Inquiry and Notices of
Proposed Rulemaking as long as they seek comments in a neutral fashion
and are sufficiently broad in scope. I write separately in this NPRM to
express some concerns I have with this Item.

First, let me state the NPRM raises important questions related to the
application of the existing children's television rules to digital
broadcast services. There are undoubtedly important questions concerning
the application of existing obligations to the new digital medium. Yet,
we are at the very preliminary stages of the digital transition, and it
is far from clear what form new services will take in the digital era.

It seems to me premature to attempt to fix public interest obligations
to a service that has yet to blossom. For example, the NPRM seeks
comment on whether the Commission should prohibit all direct links to
commercial Internet sites, a capability that is not even available today
on broadcast television. In my view, the wiser course would have been to
initiate an Inquiry at a time when we understand more about the proposed
or likely applications of digital television, so our proposal would bear
some plausible nexus to the service itself, rather than its potential.
At a minimum, I would have preferred that any public interest
obligations be considered in the broader DTV proceeding.

Second, I caution against introducing subjective tests that require the
Commission to make value judgments about the appropriateness of certain
content for children's viewing. The NPRM asks, for example, whether
"unsuitable promotions" should be banned during children's programming.
I am skeptical that we can, or should, make this subjective
determination. But assuming, *arguendo*, we could, I am troubled by the
fact that we have not established, as a threshold matter, that a serious
problem exists in this area. There is little, if any, empirical data in
the record to substantiate the conclusion that unsuitable promotions are
being aired during children's programming. I would hope that we gather
this type of hard data here, so we can then make fact-based decisions

SEPARATE STATEMENT OF COMMISSIONER GLORIA TRISTANI

**CONCURRING IN PART AND DISSENTING IN PART**

In the Matter of Children\'s Television Obligations of Digital
Television Broadcasters, MM Docket No. 00-167

I am pleased to support this item for the most part, but will be
dissenting in part on one narrow issue. As I have said before, the
public interest standard should protect and enrich our children. The
Notice of Proposed Rulemaking is a first step towards fulfilling our
duty to ensure that quality educational and informational programming is
available to children in the digital era.

It also asks important questions about whether we are sufficiently
protecting our children from age inappropriate materials in product
promotions that run during children\'s programming. These questions
follow on the heels of this week\'s Federal Trade Commission Report
which found, among other things, that age inappropriate violent movies
are deliberately marketed during television shows watched by children.
For example, and I cite from that report: \"Seven of the nine PG-13
rated films that were targeted to children 11 and younger were
advertised on afternoon and Saturday morning cartoon programs.\"

The questions also follow the multiple inquiries, complaints and
concerns that we routinely receive from the American public concerning
age inappropriate product promotions during times when children are
likely to be watching. A case in point is a copy of an e-mail Mr.
Charles Van Genderen of Helena, MT, sent to the Discovery Channel and
forwarded to us, which reads as follows:

> I am writing to express my concern over a couple of commercials which
> my children observed. This morning my two daughters ages 7 & 9 and I
> were watching a show on sharks, 8-9 a.m. MST on the Discovery channel
> (actually Discovery kids was listed on the screen). During this show,
> two commercials came on regarding issues which I feel are
> inappropriate for children to see. The first was for Bloussant, an
> alleged breast enhancement pill and the second was for energex, an
> alleged sexual potency stimulant.
>
> Our society sends so many messages to girls that they have to be
> perfect and sexually attractive. These commercials do nothing to help.
> With eating disorders, the pressure to develop, etc. on children all
> the time, please rearrange your programming so that a young child does
> not have to be introduced to this type of commercial during what is
> clearly a children\'s program.
>
> I am by no means a moral or religious zealot but am concerned that my
> daughters are introduced to enough negative messages. I would have
> thought the Discovery channel to have better sense than that -
> especially on a Sunday Morning. Do I need a v-chip for this too?
> Please respond to my complaint with how this will be handled in the
> future and feel free to contact me if you need further information.

The question in this notice, whether such product promotions should be
rated, so a V-Chip can be used, and the answer, I hope, may give Mr. Van
Genderen and many other parents better means to protect their children.
Despite these continued concerns, the new digital era promises many
exciting possibilities that will set an abundance of information and
choice before our children. The ability to blend broadcast programs with
consumer products through point and click technology will both empower
our children and expose them to risks we can only imagine. If we are to
improve on our past record, it is imperative that the obligations of
broadcasters in the digital era be identified, discussed and openly
debated.

Today\'s adoption of this Notice of Proposed Rulemaking sets us on the
right course and explores the public interest obligations of
broadcasters to our children.

On one matter, however, I regret that my fellow Commissioners would not
join me in asking the following questions: (1) Whether, in light of the
additional program capacity made available by digital technology, a
three-hour guideline is sufficient, or whether the guideline should be
increased to ensure an adequate supply of educational and informational
programming for children? and (2) If we were to require broadcasters to
provide more than a total of three hours per week of core programming,
could broadcasters choose to air this programming on a single program
stream or should we require that it be distributed among more than one
or all of the broadcaster\'s program streams? On the failure to ask
these questions, I respectfully dissent.

All in all, the opportunity to increase the availability of educational
and informational programming and to limit the availability of age
inappropriate content during children\'s programming is squarely before
us. Some here would say the last chapter on broadcaster obligations to
children was written during the analog era. I believe the story is not
finished. There is no higher obligation and no greater task. I urge
everyone to examine our obligations and to write the chapter that
ensures our children are the winners in the new digital era.

[^1]: In the following sections of this *Notice*, we seek comment on
    issues that arise in both the analog and digital broadcasting
    contexts: the section entitled \"Definition of Commercial Matter,\"
    section D entitled \"Promotions,\" and section E entitled \"Other
    Steps to Improve Educational Programming.

[^2]: *See, e.g*., Henry J. Kaiser Family Foundation, Kids and Media at
    the New Millenium at 20 (Nov. 1999). In contrast, children spend per
    day, on average, twenty-one minutes using the computer, twenty
    minutes playing video games, and eight minutes on the internet.

[^3]: S. Rep. No. 227, 101st Cong., 1st Sess. 17 (1989) ("Senate
    Report").

[^4]: *Report and Statement of Policy Re: Commission En Banc Programming
    Inquiry*, 44 FCC 2303 (1960).

[^5]: *Children's Television Report and Policy Statement*, 50 FCC 2d 1
    (1974), *affd*., *Action for Children's Television v. FCC*, 564 F.2d
    458 (D.C. Cir. 1977) ("*1974 Policy Statement*").

[^6]: *1974 Policy Statement*, 50 FCC 2d at 11.

[^7]: "Host-selling" is the use of program characters or show hosts to
    sell products in commercials during or adjacent to the shows in
    which the character or host appears.

[^8]: *Id.* at 12-13. Under the voluntary advertising guidelines,
    broadcasters were to air no more than 12 minutes per hour of
    advertising on weekday children's programs and 9.5 minutes per hour
    on weekend programming.

[^9]: FCC, *Television Programming for Children, A Report of the
    Children's Task Force* (1979).

[^10]: *Notice of Proposed Rulemaking, Children's Television Programming
    and Advertising Practices*, Docket No. 19142, 75 FCC 2d 138 (1979).
    The 1979 *Notice* proposed to require that all commercial television
    stations provide five hours per week of educational programming for
    preschool children (ages two to five) and two and one-half hours per
    week of educational programming for school age children (ages six to
    twelve). *Id*. at 148.

[^11]: *Report and Order*, *Children's Television Programming and
    Advertising Practices*, MM Docket No. 19142, 96 FCC 2d 634 (1984),
    *aff'd*, *Action for Children's Television v. FCC*, 756 F.2d 899
    (D.C. Cir. 1985).

[^12]: Ellen Wartella, Katherine Heintz, Amy Aidman, and Sharon
    Mazzarella, *Television and Beyond: Children's Video Media in One
    Community*, *Communication Research* (1990); Dennis Kerkman, Dale
    Kunkel, Alethea Huston, John Wright, and Marites Pinon, *Children's
    Television Programming and the "Free Market" Solution*, *Journalism
    Quarterly* (1990).

[^13]: *Report and Order*, *Revision of Programming and
    Commercialization Policies, Ascertainment Requirements, and Program
    Logs for Commercial Television Stations*, 98 FCC 2d 1076 (1984).

[^14]: *See* Senate Report at 9.

[^15]: Children's Television Act of 1990, Pub. L. No. 101-437, 104 Stat.
    996-1000, *codified at* 47 U.S.C. §§ 303a, 303b, 394. The Senate
    Report on the CTA cited the Commission's 1984 decisions as
    precipitating factors in the enactment of the CTA. *See* Senate
    Report at 4-5.

[^16]: Senate Report at 5-9.

[^17]: Senate Report at 1.

[^18]: *Report and Order, In the Matter of Policies and Rules Concerning
    Children's Television Programming*, MM Docket Nos. 90-570 & 83-670,
    6 FCC Rcd 2111, 2112 (1991), *recon. granted in part*, 6 FCC Rcd
    5093 (1991).

[^19]: In the CTA, Congress reaffirmed the Commission's policies
    regarding separation of programming and commercial material,
    host-selling, tie-ins, and "other practices which unfairly take
    advantage of the inability of children to distinguish between
    programming and commercial content." S. Rep. No. 227, 101st Cong.,
    1st Sess. 22 (1989).

[^20]: Broadcasters who cannot certify compliance must explain in their
    renewal applications all instances during their license terms in
    which they have exceeded the commercial limits. The Commission has
    admonished or fined licensees for commercial overages. The level of
    sanctions has been based on the number of overages, the length of
    the overages, and the period of time over which the overages have
    occurred.

[^21]: *See Report and Order, Policies and Rules Concerning Children's
    Television Programming*, MM Docket No. 93-48, 11 FCC Rcd 10660
    (1996) ("*Children's Programming Report and Order*"). The Commission
    first adopted rules implementing the CTA's educational programming
    mandate in 1991. These rules included a very flexible definition of
    educational programming, did not establish quantitative guidelines
    regarding the amount of educational programming licensees were
    required to provide, and did not include measures designed to inform
    the public about educational programming. Within a few years after
    these initial rules took effect, questions began to be raised
    regarding the effectiveness of the new rules, and in particular
    about the content of the programs stations claimed were educational.

[^22]: 47 C.F.R. § 73.673.

[^23]: 47 C.F.R. § 73.3526(a)(11)(iii).

[^24]: For an experimental period of three years after the effective
    date of the 1996 rules, the Reports were required to be filed with
    the Commission on an annual basis, and can be accessed by the public
    through the FCC's children's television webpage. The Commission has
    adopted a *Report and Order and Further Notice of Proposed
    Rulemaking* today that extends indefinitely the requirement that
    Children's Television Programming Reports be filed with the
    Commission, requires that they be filed quarterly rather than
    annually, makes certain changes to the form, and seeks comment on
    whether to require that broadcasters post the reports on their own
    websites. *See Report and Order and FurtherNotice of Proposed Rule
    Making, In the Matter of Extension of the Filing Requirement for
    Children's Television Programming Reports (FCC Form 398*), MM Docket
    No. 00-44, FCC 00-343 (rel. Oct. 5, 2000).

[^25]: 47 C.F.R. § 73.671(c).

[^26]: *Id*.

[^27]: 47 C.F.R. § 73.671, Note 2.

[^28]: *Id*. In this regard, specials, public service announcements
    (PSAs), short-form programs, and regularly scheduled non-weekly
    programs with a signficant purpose of educating and informing
    children can count toward the three-hour processing guideline. *Id*.

[^29]: *Id*. At a Commission-level review, licensees can demonstrate
    compliance with the CTA by relying, in part, for example, on
    sponsorship of core programs on other stations in the market that
    increases the amount of core educational and informational
    programming on the station airing the sponsored program or on
    special nonbroadcast efforts which enhance the value of children's
    educational and informational programming. *Id*.

[^30]: 47 U.S.C. § 336(a).

[^31]: *Notice of Inquiry, Public Interest Obligations of TV Broadcast
    Licensees*, MM Docket No. 99-360, 14 FCC Rcd 21633 (1999).

[^32]: 47 U.S.C. § 336(d). That section also provides: "In the
    Commission's review of any application for renewal of a broadcast
    license for a television station that provides ancillary or
    supplementary services, the television licensee shall establish that
    all of its program services on the existing or advanced television
    spectrum are in the public interest."

[^33]: *Fifth Report and Order, Advanced Television Systems and Their
    Impact upon the Existing Television Broadcast Service*, MM Docket
    No. 87-268, 12 FCC Rcd 12809, 12820 (1997) ("*Fifth Report and
    Order*"); 47 C.F.R. § 624(b).

[^34]: *Fifth Report and Order*, 12 FCC Rcd at 12810, 21811.

[^35]: *Fifth Report and Order*, 12 FCC Rcd at 12830.

[^36]: Children's programs are required to contain bumpers separating
    the program from adjacent commercial material. Bumpers must be at
    least 5 seconds long, and include messages such as "and now a word
    from our sponsor."

[^37]: A list of the parties that filed comments in response to the
    *NOI* is attached as Appendix A. Only a few of these commenters
    addressed children's television issues specifically.

[^38]: *See* Advisory Committee on Public Interest Obligations of
    Digital Television Broadcasters, *Charting the Digital Broadcasting
    Future: Final Report of the Advisory Committee on the Public
    Interest Obligations of Digital Television Broadcasters* (1998).

[^39]: *See NOI* at ¶ 11.

[^40]: Children Now Comments at 13.

[^41]: *See* 47 U.S.C. § 336(d) ("Nothing in this section shall be
    construed as relieving a television broadcasting station from its
    obligation to serve the public interest, convenience, and
    necessity."). *See also Fifth Report and Order*, 12 FCC Rcd at 12830
    ("As we authorize digital service, . . . broadcast licensees and the
    public are on notice that existing public interest requirements
    continue to apply to all broadcast licensees.").

[^42]: In its comments responding to the *NOI*, the Benton Foundation
    advocated applying the children's educational programming
    obligations to every "channel" a digital broadcaster provides.
    Benton Foundation Comments at 12. The Association of Local
    Television Stations (ALTV) would apply the children's advertising
    restrictions to each "free broadcast channel," but not the
    educational programming obligations. ALTV argues that a digital
    station's compliance with its public interest obligations, including
    its educational programming requirements, should be based on an
    evaluation of its overall programming performance across all of the"
    free, broadcast digital services" it provides. This approach would
    give digital broadcasters the flexibility to create specialized
    services, such as a service devoted only to children's programming.
    ALTV also would not apply any content-related broadcasting
    requirements to pay services or other ancillary or supplementary
    services. ALTV Comments at 13-15.

[^43]: 47 U.S.C. § 303b (emphasis added).

[^44]: Children Now is a member of the People for Better TV steering
    committee. The Children Now comments were filed separately and
    included also as an attachment to the comments of People for Better
    TV.

[^45]: Children Now Comments at 34-35.

[^46]: Children Now offers a proposal to address this issue. Children
    Now would require that core programming be offered with the same
    proportion of technological advances that the broadcaster chooses to
    use in its overall programming. Under this proposal, in their
    quarterly reports broadcasters would be required to calculate the
    "digital viewer experience quality" or "DVEQ" of their non-core
    programming (*e.g*., the number of hours broadcast in HDTV with
    streaming datacast, the number of hours broadcast in SDTV as part of
    a four-channel multicast with no multiplexing, etc.). Once the
    overall DVEQ distribution is computed, broadcasters would be
    required to offer in their core programming at least proportionally
    the same technical capabilities as offered in their overall
    programming. Children Now Comments at 35-36.

[^47]: Children Now Comments at 36-39.

[^48]: *See* 47 C.F.R. § 73.671 Note 2. With respect to program
    sponsorship, that section provides: "Licensees that do not meet
    these processing guidelines will be referred to the Commission,
    where they will have full opportunity to demonstrate compliance with
    the CTA (*e.g*., by relying in part on sponsorship of core
    educational/informational programs on other stations in the market
    that increases the amount of core educational and informational
    programming on the station airing the sponsored program and/or on
    special nonbroadcast efforts which enhance the value of children's
    educational and informational television programming).

[^49]: The other individuals and groups joining in the CME comments are:
    Peggy Charren, the American Academy of Child and Adolescent
    Psychiatry, the American Psychological Association, Junkbusters, the
    National Alliance for Non-Violent Programming, the National
    Education Association, the National PTA, Privacy Times, and Public
    Advocacy for Kids.

[^50]: CME *et al*. Comments at 5-6.

[^51]: Advisory Committee Report at § IV. This approach was most
    recently articulated by Lois Jean White, president of the National
    PTA and member of the Advisory Committee on Public Interest
    Obligations of Digital Television Broadcasters. She argued that such
    a requirement is reasonable in view of the "tantamount importance"
    of broadcasters' obligations to serve children and in light of the
    expanded broadcast capacity made possible by digital technology.

[^52]: Children Now Comments at 44.

[^53]: Children Now Comments at 44.

[^54]: *Children's Television Programming Report and Order*, 11 FCC Rcd
    at 10711.

[^55]: *See, e.g.*, letters dated July 11, 1997 from Roy J. Stewart,
    Chief, Mass Media Bureau to: Martin D. Franks, Senior Vice
    President, Washington, CBS, Inc.; Alan Braverman, Senior Vice
    President & General Counsel, ABC, Inc.; Rick Cotton and Diane
    Zipursky, NBC, Inc.

[^56]: *Report and Order and Further Notice of Proposed Rule Making,
    Extension of the Filing Requirement for Children's Television
    Programming Reports (FCC Form 398*), MM Docket No. 00-44, FCC No.
    00-343 (adopted September 14, 2000).

[^57]: Section 336(a)(2) states that the Commission "shall adopt
    regulations that allow the holders of \[DTV\] licenses to offer such
    ancillary and supplementary services on designated frequencies as
    may be consistent with the public interest, convenience, and
    necessity." Section 336(e) requires the Commission to collect fees
    from DTV broadcasters that offer ancillary and supplementary
    services, which fees must "recover for the public an amount that, to
    the extent feasible, equals but does not exceed (over the term of
    the license) the amount that would have been recovered had such
    services been licensed pursuant to the provision of section 309(j)
    of this Act and the Commission's regulations thereunder."

[^58]: CME et al. Comments at 13.

[^59]: *Report and Order*, *Policies and Rules Concerning Children's
    Television Programming*, 6 FCC Rcd at 2112.

[^60]: *See* H.R. Rep. No 385, 101st Cong., 1st Sess. 15-16 (1989)
    (House Report); S. Rep. No. 227, 101st Cong., 1st Sess. 21 (1989)
    (Senate Report). *See* FCC Form 303-C, Renewal Application Audit
    Form for Commercial TV Broadcast Stations (Sept. 1981) (former FCC
    Form 303). The Committee noted that the Commission defined
    commercial matter to include "commercial continuity (advertising
    message of a program sponsor) and commercial announcements (any
    other advertising message for which a charge is made, or other
    consideration is received." The Committee also noted that the
    following were specifically included in the definition of commercial
    matter: "bonus spots," "trade-out spots," promotional announcements
    by a commercial TV broadcast station for a commonly owned and
    operated station in the same market, and promotional announcements
    about a future program (under certain circumstances). The Committee
    noted that, among others, the following were not included as
    commercial matter: promotional announcements (except as otherwise
    defined to constistute commercial matter), station identification
    announcements for which no charge was made, and public service
    announcements.

[^61]: For programs designed solely for children, the ratings categories
    are: TV-Y (suitable for all children), TV-Y7 (directed to children 7
    and above). For programs designed for the entire audience, the
    ratings categories are: TV-G (general audience), TV-PG (parental
    guidance suggested -- program contains material parents may find
    unsuitable for younger children), TV-14 (parents strongly
    cautioned - program may contain material unsuitable for children
    under 14), TV-MA (mature audience only -- program is designed to be
    viewed by adults and therefore may be unsuitable for children under
    17).

[^62]: Section 151 of the Telecommunications Act of 1996 authorized the
    Commission to prescribe a ratings system for video programming if
    distributors of such programming did not establish a voluntary
    rating system within one year acceptable to the Commission.
    Telecommunications Act of 1996, Pub. L. No. 104-104, 111 Stat. 56
    (1996). The current ratings system was adopted voluntarily by the
    broadcast, cable, and motion picture industries in 1997. The
    Commission requires that television set manufacturers include in
    certain new sets "V-Chip" technology that will screen programming
    bases on these ratings.

[^63]: *See, e.g*., Kelly L. Schmidt, *The Three-Hour Rule: Is it Living
    Up to Expectations?*, The Annenberg Public Policy Center of the
    University of Pennsylvania (1999).

[^64]: *See* 5 U.S.C. § 603. The RFA, see 5 U.S.C. § 601 *et. seq*. has
    been amended by the Contract With America Advancement Act of 1996,
    Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the
    CWAAA is the Small Business Regulatory Enforcement Fairness Act of
    1996 (SBREFA).

[^65]: 13 C.F.R. § 121.201 (SIC Code 4833).

[^66]: See Separate Statement of Commissioner Harold Furchtgott-Roth,
    Concurring in Part and Dissenting in Part, in *Public Interest
    Obligations of TV Broadcast Licensees, Notice of Inquiry,* 14 FCC
    Rcd 21633 (1999).

[^67]: Order at ¶ 19.

[^68]: Order at ¶ 25.

[^69]: Order at ¶ 39

[^70]: Order at ¶ 33.