PBS will penalize stations airing more ad-like spots

Excerpted from an article originally published in Current, Feb. 6, 1995
By Karen Everhart Bedford

The PBS Board addressed a long-running conflict over program dues discounts on Jan. 28, 1995, approving a set of reforms that sets off a new quarrel over underwriting guidelines.

To promote a consistent noncommercial character for public TV, the board established fines for stations that carry local underwriting credits more ad-like than those PBS itself permits in national programs.

"It's unfortunate that PBS chose to do this at this time in our history," said Mike Hardgrove, president of KETC in St. Louis. "This is a divisive step."

Meeting in Beaufort, S.C., the board considered a series of important reforms proposed by a 17-member Task Force on Program Pricing and Membership Policy charged with achieving compromise on long-festering problems over program dues.

But the provision drawing the heaviest fire, on local underwriting rules, was developed separately by PBS's National Funding Climate project in fall 1994. That project, one of PBS President Ervin Duggan's first restructuring efforts, surveyed the public TV underwriting landscape and recommended two major policy changes to enhance underwriting for national programming: common carriage of selected programs (totalling about 350 hours per year), and adherence to a 15-second limit for underwriting announcements that accompany PBS programs. The board also requires that stations make a "good faith effort" to enforce local underwriting policies that are consistent with the network's.

On an experimental basis, the policy allows PBS to charge stations that do not agree to these terms a "nonstandard usage fee" equal to 20 percent of their NPS dues, and calls for PBS to evaluate whether this system of fines is an "effective disincentive" to stations that are inclined to violate the guidelines.

The fines would affect stations airing more ad-like underwriting credits, which pass the FCC's looser standards but violate the stricter guidelines that PBS previously applied only to its national shows. Those stations question whether PBS has the authority to make judgments about local on-air decisions, and resent fines levied by their own membership organization.

During the board's open session, two board members delivered messages from station managers voicing these concerns and "outrage" over the penalities. Milton Wilkins, a lay representative of KETC, St. Louis, offered an unsuccessful motion to split the provision from the plan for a separate vote.

Wilkins, a member of the pricing task force, said his station would see its revenues drop by $400,000 if it adhered to PBS's more stringent underwriting rules--an especially severe loss if CPB is defunded and stops sending federal grants to stations. He added that a group of five stations "fairly substantial in size" are prepared to make "a real issue" over the policy.

"I do not know whether . . . PBS really has the ability to enforce the guidelines," said Wilkins. "I also would hate to see a fight over these guidelines in the context of everything else that is going on with the system."

"Right now, we should fight for what we are," responded Bill Baker, president of WNET, New York. "The one thing that separates us is not being driven by commercial needs." An inconsistent approach to underwriting nationally serves the field's critics by providing examples of stations that make more money with more commercialized practices, he said. It also undercuts producers' ability to raise funds for national programming.

"What you have before you is the best thinking of that task force" weighing station input from public TV's fall 1994 planning meeting, said Wayne Godwin, president of WCET, Cincinnati, also a member of the group that hammered out the compromise. Godwin said he supported the plan because it moved public TV closer to a "one station-one vote" system and addressed "problems that have been on the shelves in the closet for entirely too many years. . ."

"This is a difficult issue within the system," he acknowledged. "We have not [previously] put penalties before it, and it's going to be a bit of a disruptive element with some stations. We as a board are going to have to come to terms with that."

Other board members were concerned about the underwriting policy's impact on stations, but none was willing to oppose the plan on that basis or strip it out of the reform package entirely. The plan before them, with all its complexities and difficult compromises, was the end product of a "legitimate, representative process" of decision-making, as Duggan put it. "Representatives of the dissenting stations sat on both task forces and had a full opportunity to air their views."

Passage of the plan was less than unanimous, however, with Wilkins abstaining from the vote. Wilkins' motion to hold a separate vote on the underwriting rules failed to draw support.

Godwin and others board members urged management to show flexibility in enforcing the underwriting requirements, and Bill Arhos, g.m. of KLRU, Austin, suggested that PBS consider phasing-in the penalties.

However, PBS Chairman Gerald Baliles rejected any delay in implementing the plan. "The fact that concerns still exist is probably unavoidable, given the magnitude of the assignment and the representation of the task force," he said. "Whatever we do today is designed to be phased in on July 1."

PBS extended the deadline for stations to make commitments on their fiscal 1996 dues. Commitment forms and the new "station users agreement" will be sent out to members soon, said Executive Vice President Bob Ottenhoff. Stations will have until the March 22, 1995, executive committee meeting to sign them.

The network may not have to wait until then to get a clear indication of how easily the new reforms can be put into practice, however. While Peter Downey, senior v.p. of program business affairs, estimated at the board meeting that no more than a dozen stations would be affected by the underwriting policy, the leaders of those stations feel intensely that they have been wronged.

In St. Louis, KETC's Hardgrove said as many as 20 community licensees will have to decide whether to go along with PBS's uniform policy and perhaps forego some underwriting revenue. As for KETC, "we are not going to lose that money."

He also suggested that PBS has no legal standing to enforce the new rules. "It would seem to me that for PBS to impose its judgment over the . . . licensee probably is not legal," Hardgrove added. "The idea of PBS trying to extract a penalty from a member is outrageous. We'll take it from here."

Also during the PBS Board meeting in South Carolina:



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Earlier news: PBS task forces seeks consistency in underwriting rules

Later news: stations rebel against PBS "penalties"


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