[Congressional Record Volume 141, Number 14 (Tuesday, January 24, 1995)]
[Senate]
[Pages S1412-S1415]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  CORPORATION FOR PUBLIC BROADCASTING

  Mr. PRESSLER. Madam President and Members of the Senate, I was 
concerned this morning to see in the Washington Post a story that was 
critical, essentially, of companies that might be interested in 
purchasing, acquiring, or partnering with the Corporation for Public 
Broadcasting and other public broadcasting entities. In fact, the story 
highlighted or used as a headline, referring to these companies as 
``vultures moving in,'' and quoting one public broadcasting executive 
as referring to them in that way.
  I think it is most unfortunate that fine, honest, telecommunications 
companies or other companies who might be interested in purchasing or 
running or managing the Corporation for Public Broadcasting and other 
public broadcasting entities or contributing the same amount of money 
the Federal Government now contributes in exchange for certain program 
and commercial rights with conditions of children's programming and 
conditions of rural radio and rural TV, to refer to them as 
``vultures'' indicates the mentality of the insider group at the 
Corporation for Public Broadcasting and the so-called public 
broadcasting family.
  This family consists of inside-the-beltway crowd at the Corporation 
for Public Broadcasting, the Public Broadcasting Service, National 
Public Radio, the Association of Public Television Stations, et cetera. 
It includes groups and certain foundations that surround the 
Corporation for Public Broadcasting such as the Children's Television 
Workshop. It includes some of the stations that get the lion's share of 
the funds such as WNET, which gets at least 20 times as much Federal 
money as my huge geographic State gets. This group is very defensive to 
any change.
  Madam President, I am chairman of the committee that has oversight 
over the Corporation for Public Broadcasting and related agencies. We 
are supposed to think of some new ideas. There has been a 
telecommunications revolution since 1967. I think it was good that 
public radio and TV were created. It is now up and running.
  There are several other privately funded areas that are producing the 
same kind of programming at a great profit, including Nickelodeon in 
children's television, including the Learning Channel, including the 
History Channel, and so forth. Granted these are on cable. Some say 
that they do not reach everybody.
  We are also in an age when we have the computer Internet and many 
other exciting telecommunications and information technologies which 
did not exist in 1967.
  We have VCR's, we have a number of additional new telecommunications 
and information technologies that will be coming if my 
Telecommunications Competition and Deregulation Act of 1995 is enacted. 
We will have an explosion of new telecommunications and information 
technologies. It is time that the Corporation for Public Broadcasting 
and other public broadcasting entities in this country be reformed and 
reinvented.
  So I put these suggestions forward in the most sincere of fashions, 
but every time I make a suggestion, somebody in the public broadcasting 
family comes back with a very critical comment, discrediting it without 
any discussion of the facts.
  The facts are that the American taxpayer is now providing a free 
public platform for many performers who make great profits, and I have 
nothing against profits, but the taxpayer is left out.
  So I want the quality programming. It could be sold with conditions. 
Telecommunications in this country is privately owned, but they have 
conditions for universal service and certain rules on telephones and 
telecommunications devices. Railroads in this country are sometimes 
sold with public conditions, such as the Conrail sale a few years ago. 
Airlines have public conditions under which they operate.
  We have reached a time when the Corporation for Public Broadcasting 
must rethink its role, it must rethink its relationship to some of the 
other communications technologies. It can profit from them. It can get 
along without a Federal subsidy, and it would be operated much better 
if it were privatized.
  I have spoken to several privatization experts in the last week. I 
find the only people opposed to this are those inside the beltway, the 
people in that public broadcasting family who get salaries of between 
$200,000 and $600,000 a year, in some cases, whose salaries exceed the 
Members of this body. But these people cloak themselves in the public 
robe, saying that they are public servants. Well, if they want to be 
public servants then they should be paid like public servants, I 
suppose, in the opinion of some, if they do not want to be private.
  They want to have their cake and eat it, too. They now have 
advertising on public radio and television. They get all sorts of 
grants. They have private-sector salaries, but yet they want the 
taxpayers' money.
  So I say decide what you are or who you are, but get caught up with 
the telecommunications revolution, in any event. And the fact that 
several telecommunications companies are interested in buying, 
acquiring, or partnering with the Corporation for Public Broadcasting 
and other public broadcasting entities indicates a synergistic 
relationship in this day and age. How wonderful it would be if public 
broadcasting would synergistically interact with the other new 
telecommunications, with computer Internet, with VCR's, cable TV, and 
with lots of other technologies. For example, Nickelodeon, which 
produces so much good children's programming that it is being sold in 
France.
                    PRIVATIZING PUBLIC BROADCASTING

  If one message is clear from November's elections, it is that 
Americans want deep cuts in Federal spending, without gimmicks or 
special pleading. As chairman of the Committee on Commerce, Science, 
and Transportation, I expect to propose cuts of tens of billions of 
dollars from current levels of spending--and to privatize wherever 
possible. The Clinton administration as well is calling increasingly 
for spending cuts and for privatizing government agencies and 
subsidized enterprises.
  A prime candidate for privatizing is the America's public 
broadcasting system. I want to wean public broadcasting from the $300 
million annual subsidy it gets from Federal taxpayers. I am convinced 
that the service public broadcasting is intended to provide could be 
better offered without costly Federal spending on posh Washington 
headquarters and legions of high-salaried bureaucratic personnel.
  As the Senate is well aware, we in America continue to face a severe 
fiscal crisis. With an annual budget deficit projected at $175 billion 
and a national debt of over $4.6 trillion--with a ``T''--we simply 
cannot afford to pay for all the good and worthy sounding projects 
which vie for American's tax dollars.
  [[Page S1413]] This past Sunday on the CBS news program ``Face The 
Nation,'' I announced that several telecommunications companies, 
including Regional Bell Operating Company Bell Atlantic, had expressed 
an interest in helping to fund public broadcasting in a partnership or 
acquisition of assets arrangement. Under such an arrangement, the 
private company would step into the role now played by the Federal 
Government. As I have indicated a number of other telecommunications 
companies have expressed interest. In particular, since that time Glen 
Jones of Jones Intercable and Brian Roberts of Comcast have publicly 
expressed interest.
  As in past efforts to privatize, such as the privatization of 
Conrail, such a deal could be approved with public service conditions. 
For instance legislation to privatize public broadcasting could include 
conditions that children's programming and rural broadcasting would be 
continued. As Bell Atlantic's President James Cullen stated in the Wall 
Street Journal yesterday, Bell Atlantic, under such an arrangement, 
would be ``looking for ways to keep public broadcasting whole, and 
maybe even enhance the quality'' by crafting better licensing 
arrangements.
  As the Wall Street Journal also pointed out, public broadcasting is 
not unfamiliar with making deals with big business. On the contrary, it 
is a regular occurrence. Last month, Liberty Media Corp., a subsidiary 
of TCI, the Nation's largest cable operator, agreed to purchase a two-
thirds stake in MacNeil-Lehrer Productions, the producer of PBS' 
nightly news program, MacNeil/Lehrer NewsHour.
  Yet to hear the smug and sanctimonious executives of public 
broadcasting tell it, a privatization proposal is ``not necessarily in 
touch with reality.'' Another of the pious managers of the current 
system declared that the system would be ``sold off for scrap to the 
highest commercial bidder.'' Alarmists who profit from the current 
scheme under which America's hard working taxpayers provide a 
subsidized platform for commercial entities hysterically point to the 
``vultures * * * circling over the endangered species of public 
television.'' Still another suggests an even more horrifying and 
devious explanation: a desire by these unworthy and dirty commercial 
entities to curry favor with me so as to influence the 
telecommunications legislation. As one of the profiteers stated: ``It 
would seem to me that the commercial interests would be looking at the 
telecom legislation and want to be cooperative.''
  Such flashes of rhetorical excess are quite extreme even by the 
standards set by the always pompous beltway operatives and high-priced 
producers of public broadcasting. No one should be surprised to see 
those who profit the most from the current taxpayer supported system 
whining and wailing the loudest.
  Given these trying budgetary times I am wondering what CPB and 
leaders of public broadcasting propose for the future. I am anxious to 
hear CPB's, PBS', NPR's, Pacifica's, and APTS' plans for dealing with 
this problem. I want to see public broadcasting devise a privatization 
plan of its own. Technologies, markets, and Federal budgetary realities 
have changed drastically since CPB was created in 1967. In today's 
budget climate, the $300 million annual subsidy simply cannot be 
justified. CPB officials must face this reality and reinvent their 
system. Let's see a serious restructuring plan from CPB and the leaders 
of public broadcasting.
  Federal Government funding represents only 14 percent of the total 
public broadcasting budget. The other 86 percent comes from private 
contributions, grants, sponsorship, and State government funding.
  Public broadcasting subsidies are frills we can longer afford. It is 
impossible to argue that America does not have enough TV or radio or 
that it is a basic function of Government to satisfy every programming 
taste underserved by commercial stations. It is also hard to imagine 
that public broadcasting's most popular programs, ``MacNeil/Lehrer,'' 
``Wall Street Week,'' ``Sesame Street,'' or ``All Things Considered,'' 
would disappear without taxpayer subsidies. Indeed, these programs 
today already feature advertising--also known by the code word 
``underwriting'' by the public broadcasting crowd. The audiences for 
this advertising are among the wealthiest in America, and much of this 
advertising is highly sophisticated.
  The very size of the deficit and national debt has now become an 
excuse for irresponsibility, because no single step is sufficient to 
make a major difference. If every single program is sacrosanct, then 
the cause is hopeless. Typically, public broadcasting officials claim 
that the taxpayer subsidy for public broadcasting is so small that it 
does not matter. We can simply no longer tolerate this casual cynicism.
  Public broadcasting can best be described as one of Government's 
ornamental activities--pleasant but not essential. It clearly does not 
have as strong a claim on some of Government's and taxpayer's scarce 
resources as the National Institutes of Health, child immunization, 
national defense, and a thousand other competing causes.
  Public broadcasting is mired in waste and duplication. A Twentieth 
Century Fund study found that 75 cents out of every dollar spent on 
public television is spent on overhead. In 1983 an FCC staff study 
estimated that 40 percent of all public TV stations had signals that 
overlapped with another public TV station. CPB itself estimates that 
over one quarter of the PBS stations are duplicative.
  Another very troubling development is the illegal use of taxpayer 
funds to lobby for yet more taxpayer funds. Since the 1870's there has 
been a prohibition against any federally appropriated funds being 
utilized for lobbying for more taxpayer dollars. Yet there are numerous 
reports of on-air ``call your Congressman'' lobbying. Additionally, how 
do we segregate taxpayer funds from private donations or advertising 
dollars when it all goes into the same pot of money?
  When CPB was created during the heyday of the Great Society over 25 
years ago, market failure was the fundamental, underlying premise for 
Federal funding of the public broadcasting system.
  Most Americans in 1967 had access to only a handful of broadcast 
stations. Since that time there has been an absolute explosion in the 
number of media outlets and sources of information for the American 
people. For instance:
  Broadcast TV stations increased from 769 to 1,688.
  Broadcast radio more than doubled from 5,249 to 11,725.
  The percentage of TV homes subscribing to cable TV grew from 3 
percent to 65 percent--cable is available to 96 percent of TV homes.
  CNN, C-SPAN, Arts & Entertainment, Discovery, The Learning Channel, 
Bravo, The History Channel, and many other cable channels have 
programming that's a substitute for public broadcasting without 
Government subsidy.
  Direct Broadcast Satellite is now available everywhere in the 48 
contiguous States with over 150 channels of digital video and audio 
programming.
  Wireless Cable has several million subscribers.
  Over 85 percent of American homes have a VCR--VCR's were not 
available in 1967.
  Close to 40 percent of American homes have a PC--a product which was 
not available until the early 1980s.
  Multimedia CD-ROM sales are flourishing with educational titles 
particularly popular.
  The Internet and computer on-line services such as Prodigy, American 
On-Line, Compuserve are reaching over 6 million homes.
  Most important, this is just the beginning of a new era of 
information plenty. With the passage of the new Telecommunications 
Competition and De-Regulation Act of 1995 which we will introduce and 
pass early in the 104th Congress, an explosion of still more media and 
information outlets will be unleashed.
  Telephone companies, electric utilities and other new players will 
enter the media programming field. And with digital compression 
technology, broadcasters, cable companies, satellite, and other 
traditional media outlets will significantly expand their channel and 
program offerings.
  As a result, the days when Americans watched the same TV shows day in 
and day out, as they did in 1967, is history. As a result, the original 
justification 
[[Page S1414]] for taxpayer funding of public broadcasting due to 
market failure no longer holds water.
  At a minimum there should be a rational discussion as to the 
appropriate role, if any, for public broadcasting in the digital, 
multimedia age--to determine how best to reinvent and liberate public 
broadcasting given the age of information plenty.
  Equally troubling is the fact that public broadcasting provides a 
free, publicly subsidized platform for the promotion of related 
products and paraphernalia. Yet the American taxpayer who makes it all 
possible does not participate in this windfall.
  Forbes magazine recently listed Barney, the loveable purple dinosaur, 
as the third richest entertainer in America after Stephen Spielberg and 
Oprah Winfrey. Barney is estimated to gross almost $1 billion a year. 
Sesame Street is close behind with $800 million.
  How much of those hundreds of millions of dollars are paid as 
dividends to America's taxpayers? The answer is: scarcely a penny.
  There is in many respects a shopping channel mentality for public 
broadcasting including Bill Moyer's books, Ken Burns' ``Civil War'' and 
``Baseball'' videos, Louis Rukeyser newsletters, and Frugal Gourmet 
cookbooks.
  Millions of dollars which could be returned to the taxpayer are 
diverted to private parties, with nonprofit entities fronting for 
profit making enterprises.
  Since 1968, actual appropriations to the Corporation for Public 
Broadcasting have totaled almost $3 billion. This Federal support has 
produced a system of 340 public TV stations and more than 1,000 
noncommercial radio stations--about two-thirds of which are CPB-
qualified and get Federal money.
  But Federal appropriations, large as they have been, are only a 
fraction of the total Federal support package. Under the FCC's channel 
set aside program, adopted in 1952, many extremely valuable TV channels 
were allocated to public broadcasting. Included are VHF--channels 2 to 
13--stations in several major markets like WNET-Channel 13 in New York, 
WTTW-Channel 11 to Chicago, KETC-Channel 9 in St. Louis, and WYES-
Channel 12 in New Orleans.
  These stations and many others are worth literally hundreds of 
millions of dollars. There is a similar set aside allocation scheme for 
public broadcasting in the FM radio spectrum band as well.
  Non-Federal support of public broadcasting totals about $15.5 billion 
to date. A good portion of that total comes from State college and 
university funds which, in turn, derives it money from Federal sources 
in some cases. Much of it is also tax deductible gifts and grants. 
Under current budget accounting, these would be counted as tax 
expenditures.
  The Commerce Department's NTIA administers the Public 
Telecommunications Facilities Program [PTFP]. Over the decades, PTFP 
has distributed more than $\1/2\ billion in equipment and facilities 
grants. That is an enormous amount of money for a business like 
broadcasting which is not considered very capitial intensive.
  In addition, Congress has largely funded the development of a 
nationwide satellite interconnection system for public broadcasting. 
More recently, NTIA has been given funds to help stimulate the 
development of children's programming.
  The question is this: How much seed money is enough. Tens of billions 
of dollars have been spent to date to help get public broadcasting 
started. But are we now locked into a long run Federal dependency 
situation?
  Alternatives are available. Let us not forget that from 1981 to 1984 
there was a congressionally authorized Temporary Commission on 
Alternative Financing for Public Telecommunications [TCAF]. It included 
the Republican and Democratic members of the House and Senate 
Communications Subcommittees, the FCC, the Reagan administration, and 
the industry. TCAF authorized a test of advertising on public TV 
stations. Public radio was also authorized to participate but they 
boycotted the experiment.
  As part of the 18-month experiment with advertising on public 
broadcasting, TCAF was required to conduct viewer polls--10,000 
interviews were conducted. There was virtually no negative viewer 
response to advertising. The majority of the respondents were of the 
opinion that public broadcasting should have advertising and the 
majority disagreed that advertising would hurt the programs or that 
people would stop watching public broadcasting that ran advertising.
  One of the viewers in Chicago, for example, when asked before and 
after the experiment, replied, ``Well, I am not sure I liked the 
commercials--but I sure liked them more than the old kind.'' She was, 
of course, referring to ``Pledge Week'', also known as Beg-A-Thons.
  The public broadcasting audience and contributor lists are an 
extremely attractive group for many, many advertisers. According to the 
viewer magazine of WETA in Washington, its viewers have an average 
household net worth of $627,000 plus an average investment portfolio of 
$249,000. One out of eight contributors is a millionaire, one out of 
seven has a wine cellar, and one out of three spent time in Europe in 
the past 3 years. This is the target audience for PBS' prime time 
programming.
  As a WETA fundraiser told Washingtonian magazine, the corporate 
giants that underwrite the most popular shows ``know that during prime 
time, public television can deliver the demographic they want: 
affluent, highly educated, the movers and shakers, the socially 
conscious and well informed.''
  Moreoever, the wealthy donors to public broadcasting could rather 
easily make up the 14-percent funding. For instance, if the 5.2 million 
PBS members were to contribute only $55 more a year it would equal the 
Federal share for CPB. It is clear that those donors are the very 
people who can afford to contribute an additional $55 a year.
  Today, the American public clearly agrees that something should be 
done. A Louis Harris poll conducted for Business Week this month put 
CPB third on the list of Federal agencies Americans want abolished. 
Only the National Endowment for the Arts and the Department of Housing 
and Urban Development ranked higher among the public's priorities for 
elimination. Meanwhile the PBS taxpayer funded poll has been completely 
discredited by the leading polling firm in America--Times Mirror. 
Moreover, the CNN/Gallop poll found support for funding only at some
 level. What none of these polls has asked yet is ``do you favor 
continuation of public broadcasting as a privatized enterprise''? The 
overwhelming majority of Americans would answer with a resounding yes.

  Faced with this sort of sentiment, defenders of taxpayer spending for 
CPB have put up two heat shields they hope will preserve the subsidy--
rural service and children's programming.
  As a Senator from South Dakota, a State with smaller cities and many 
farms, I have heard all the scare tactics about rural and smaller city 
broadcasting service before. But rural service can be sustained--even 
improved--through measures that actually save money to the taxpayers.
  The key is leaner management. As I mentioned earlier, in Washington 
and throughout the system, reports the Twentieth Century Fund, 75 
percent of public broadcasting funds go to overhead. CPB requires rural 
stations to hire full-time paid staff in many instances where students 
and volunteers are willing and available. This needlessly drives up the 
cost of rural community broadcasting.
  Let us not also forget for a moment that current funding formulas 
favor the large urban, elite stations which get the lion's share of the 
funds because CPB matches private donations. In addition, as of 1992, 
of the 340 local TV stations in the public broadcasting network, only 7 
get part of the $100 million programming fund to produce programs for 
the PBS network. Of those seven, only two stations, New York and 
Boston, produce by far the lion's share.
  One TV station in New York, WNET, for example, gets eight times as 
much from CPB as the entire State of South Dakota for all TV and 
radio--South Dakota: $1.7 million; WNET: $9.3 million. This does not 
include the additional millions received by WNET and other elite 
stations through the $100 million programming fund.
  In addition, private sector-like salaries are paid to personnel in 
public broadcasting. While I have no problem 
[[Page S1415]] with people in the private sector making large salaries, 
I do have a problem with private sector salaries being paid to those 
who cloak themselves in public service, especially when my State gets 
so little of the Federal money. While CPB and PBS salaries do generally 
follow congressional caps, the highest salaries in the system are 
routed through stations, producers, and performers.
  For instance, as Senator Dole pointed out in 1992, WNET of New York 
reported paying Executive Director Lester Crystal $309,375 in 
compensation plus a package of $92,000 plus in benefits; George Page a 
director gets $184,000 plus $55,000 in benefits; Robert Lipsyte a host 
gets $184,000 plus $54,000 in benefits. KCET of Los Angeles had a 
salary package of over $250,000 per year in 1992. According to the Wall 
Street Journal, the president of Pittsburgh's WQED resigned in disgrace 
in 1993
 when it was revealed he was receiving a second salary of $300,000 from 
a station contractor. Other stations still permit other sources of 
income. Station perks often include cars, travel, service on other 
boards etc.

  Children's Television Workshop, the producer of Sesame Street, 
reported a top salary plus benefits package totalling some $625,000 in 
1992.
  The biggest unknown is payments to PBS stars--since stations contract 
with private companies to pay the talent. As a result, we do not 
currently know what MacNeil, Lehrer, Ken Burns, Bill Moyers, or the 
Frugal Gourmet make. It has been reported that Norm Abrams, the 
carpenter on ``This Old House'', makes over $250,000 a year.
  CPB's campaign on children's television is even more alarmist. At a 
public relations event this month in Washington, CPB trotted out the 
president of the local PBS station from New Orleans, who gave his dire 
prediction of what would happen at his station without Federal 
taxpayers' funds.
  ``Early morning broadcasts of Barney and Lamb Chop's Play-Along would 
go away,'' the station president said emotionally. ``It would be a huge 
step backward for America.''
  That's what I call a ``close the Washington Monument'' strategy: 
Threaten to shut down the most popular and visible attraction when 
threatened with a marginal loss of tax dollars. And for public 
broadcasting, the end of Federal subsidies would be but a marginal 
loss. To reiterate a point made earlier, only 14 percent of public 
broadcasting's revenues comes from Federal taxpayers. The other 86 
percent comes from private contributions, corporate underwriting and 
State government grants.
  Any decently managed organization should be able to sustain a loss of 
one source accounting for 14 percent of revenues--especially when its 
horizons are wide open for revenues from other sources.
  High quality children's programming is available now through free 
market media that did not even exist when CPB was chartered and its 
taxpayer spending began to grow. The Learning Channel, the Discovery 
Channel, the Disney Channel are but a few. Another, Nickelodeon, has 
fared so well both critically and commercially that it has sold 
programming to television in France--an exceedingly hard market for 
U.S. cultural offerings to penetrate.
  Profit and commercialization are treated as obscenities by 
sanctimonious public broadcasting executives. These prim people remind 
me of the ``sportin' house'' piano player who swore he had no idea what 
was going on upstairs.
  As I mentioned before, profit certainly isn't a dirty word to the 
creators and licensees of such successful shows as Barney and Sesame 
Street. While hundreds of millions of dollars were being made, thanks 
to the contracts negotiated by CPB's pious managers, CPB failed to reap 
a penny in return.
  Restructured and truly privatized, CPB could be a clearinghouse for 
quality programming from our highly creative competitive marketplace. 
And it would have the right incentives to prevent squandering 
opportunities and resources.
  The American people are right on target in making it a priority to 
halt taxpayer spending for the CPB bureaucracy, to privatize the public 
broadcasting industry and bring it up to date with today's markets and 
technologies. This is one of my top goals as the new chairman of the 
Senate Commerce Committee.
  Mr. BAUCUS addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Montana.
  Mr. BAUCUS. Madam President, I ask unanimous consent to proceed as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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