[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.
____________________