PBS decides time isn't right for strict underwriting rules

Originally published in Current, May 15, 1995

By Geneva Collins

In view of the uncertain future of federal funding and the recommendations that public broadcasters themselves are making for their fiscal salvation, PBS is postponing its crackdown on stations that do not conform to its national underwriting rules.

The network will still assess nonstandard usage fees--i.e., fines--on stations failing to comply with national common carriage policy, however.

The Executive Committee action comes at a time when at least a handful of station executives accuse PBS of overstepping its authority in imposing penalties of any kind. Some are balking at signing commitment forms that outline controversial policy changes for the National Program Service. The changes were set to take effect July 1, 1995.

Peter Downey, senior v.p. of program business affairs, said that PBS was not backing down under fire but "addressing an inconsistency"--asking stations to conform their local underwriting credits to PBS' stricter national guidelines at the same time PBS and other national groups were asking Congress to loosen underwriting guidelines.

The suspension is expected to last only until a task force re-evaluates underwriting rules in the existing financial climate.

"In light of the [likelihood of] reduced federal funding and our request to ask the FCC to revisit the underwriting requirements, we don't want to be in the position of making it difficult for stations to make ends meet," Downey said. "We want to wait and see what the government does."

"Recognition of the world changing"

"We're not backing down," echoed Beth Courtney, executive director of Louisiana ETV and chairman of the task force that outlined the NPS policy overhaul approved by the PBS Board in January. "We see it as recognition of the world changing since the task force first met last fall."

The Executive Committee decided to postpone underwriting penalties in a May 5 conference call that had been arranged to discuss modifications to the grand plan recommended by Courtney's task force.

Besides dropping underwriting penalties for now, the Task Force on Program Pricing and Membership Policies recommended:

The Executive Committee approved the recommendations with one minor exception. Although Courtney's group asked that a new task force be created to revise the underwriting guidelines, the committee placed the sticky business back in the laps of the program pricing task force "because they understand the issues," said Downey. A few fundraising specialists, as yet undetermined, would be appointed to the task force to help with the review.

The task force is scheduled to meet again June 6. By then, Courtney said, the group will have received feedback from the stations through completed commitment forms, indicating which stations plan to comply with common carriage and underwriting requirements. The forms are due back May 26.

Downey said the task force's goal will be "to work with stations to identify underwriting guidelines everybody's comfortable with."

Fees called "an outrage"

Some station executives are decidedly uncomfortable with PBS exhibiting what Joe Welling, director of the Ohio University Telecommunications Center, labeled "punitive behavior."

It's "an outrage" for PBS to be fining stations, he said. "Their role is to support and serve the licensees who own PBS, not to control them. Our legal counsel felt that the agreement as submitted earlier violated FCC regulations with regard to network option time. If those problems still exist [on the newest commitment forms], we certainly won't sign."

"I'm against the notion of PBS penalizing stations for programming it considers wrong," seconded Rick Breitenfeld, president of WHYY in Philadelphia. He estimated that "several dozen" station executives oppose the nonstandard usage fees, although a PBS source put the number of disgruntled at "10 to a dozen."

PBS uses the term "nonstandard usage fees" to describe the money stations are expected to pay for not complying with common carriage--carrying certain PBS programs on certain nights. The network argues that lack of common carriage cuts into its ability to attract national underwriters.

PBS also made the case to stations that lack of consistency between local and national underwriting guidelines hurt producers' ability to woo national underwriters. Nonstandard usage fees, equivalent to 20 percent of a station's 1996 dues, are "a sharing of riches generated" from underwriters, not a penalty, in the words of PBS President Ervin Duggan in April.

Three days before the Executive Committee suspended underwriting penalties in May, PBS, America's Public Television Stations, NPR and Public Radio International unveiled their funding plan to Congress, "The Road to Self-Sufficiency." The plan states on page 8: "A modest adjustment of the underwriting requirements would increase the underwriting income of national and regional program providers and local stations without adversely affecting the character and integrity of public broadcasting."

CPB's separate plan to Congress called for a similar loosening of FCC guidelines to permit enhanced underwriting. The Lehman Brothers analysis commissioned by CPB projected such an action could generate as much as $64 million by the year 2000.

"Had all this not happened, the federal appropriations and all, the proposal we adopted in January would have stood, notwithstanding a handful of stations opposing it. . . . Our fiscal year starts July 1 whether we like it or not. We have to move ahead."



Common carriage is achieved when all local stations air a program at the same time, or at least on the same day, usually the day when PBS distributes it by satellite. It makes national tune-in publicity more effective but interferes with stations' local scheduling.



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Earlier news: Stations rebel at PBS "penalty"


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