It appears that U.S. low-power FM and noncom educational stations may not, in fact, sell ads on their digital multicast channels. Nor may they lease digital subchannels to entities that do.
The question came up after a commentary in Radio World. FCC staff have reviewed statements they shared then and took a closer look at the issues; they concluded that some of their earlier statements had been incorrect.
The discussion arose from a commentary by Dan Slentz exploring the idea of using HD Radio on an LPFM. He quoted an FCC official saying current rules do not prohibit sale of ads on digital HD2/3 channels; so it appeared that if advertisers could get excited about a 2 watt HD2 signal, LPFMs and maybe other NCEs could reap the rewards.
The article generated numerous questions. Now FCC staff provided us clarifying information to correct the record.
Although the commission’s 2007 digital audio broadcasting order gave licensees broad discretion to innovate and experiment on HD streams, this flexibility is limited by statutory restrictions; and per Section 399b of the Communications Act, an NCE licensee many not lease a channel for the purpose of airing commercial programming. A similar issue came up in digital television; a federal circuit court upheld the FCC’s view that HD subchannels — received off-air with no direct charge to listeners — cannot be characterized as ancillary or supplemental services, a classification that would have allowed commercials to be sold.
In sum, LPFMs may not, in fact, sell time on multicasts; nor may NCEs do so; nor may either of them lease digital subchannels for commercial sales. The commission has not formally ruled directly on much of this, so nothing here can be considered a “last word.” But the following remains true: No public broadcaster may make its facility available to any person for any advertisement.
Wth this and all such matters, I repeat what many smart broadcast people have said over the years: Seek help from a qualified broadcast attorney before investing time or money in building a broadcast strategy around any interpretation question of FCC rules.
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