With reports from:

State DTV aid sought for 'unfunded mandate'

Originally published in Current, April 19, 1999

By Karen Everhart Bedford

Legislatures in several states recently committed new monies to aid public TV's digital conversion, and a handful more are about to do so.

With no assurance of major federal assistance, many public broadcasters are describing the FCC conversion decree as an "unfunded federal mandate." Among some state politicians, that's a really bad rap. New York Gov. George Pataki believes the feds should put up first money for public broadcasters to meet the FCC's conversion deadline, according to Norm Silverstein, president of WXXI in Rochester and chairman of the Association of Public Broadcasting Stations of New York State. "The lack of progress on Capitol Hill has hurt our efforts in New York," he said.

The Maryland General Assembly recently committed $7.2 million in new digital assistance to the state's public TV network, but with some "consternation at an FCC mandate not funded by the federal government," said Rob Shuman, Maryland PTV president. Maryland legislators also view the White House proposal of a $450 million federal contribution as inadequate.

The FCC mandates that public TV stations begin digital transmission by May 2003. The Clinton Administration proposed a federal share of $450 million to help stations at least achieve the ability to "pass-through" national satellite feeds to DTV viewers.

The White House plan would distribute most of the funds--some $355 million over five years--primarily through the National Telecommunications and Information Administration's existing Public Telecommunications Facilities Program. CPB would administer another $95 million to aid DTV production and national distribution.

The two pots of money add up to less than 60 percent of the $770 million originally requested by pubcasters, who also recommended that CPB distribute most of the DTV monies. CPB's task force on digital funding proposed to distribute most of the funds in flat sums to every station; the remainder would be awarded to stations with special needs.

Early this month, the task force wrote to Bernadette McGuire Rivera, director of grant programs for NTIA, expressing deep concern that the Administration's funding levels will be inadequate. Out of the proposed $355 million, PTFP must also fund public radio facilities, emergency equipment replacement, and PTFP's administration. Those needs bring the amount available for public TV's digital transition to less than $300 million, by the task force's estimate. "There can be no assurance that PTFP (even if funded at the level recommended by the Administration) will have sufficient funds to guarantee that each licensee will achieve pass-through status," the task force wrote.

"Right now, there's a limited pot, and how it's divided among stations is unclear," said Shuman, during an interview. Station leaders are worrying that, if the federal contribution to DTV is less than what's needed, PTFP monies will not be available to all stations. "Who can apply for federal grants; who's in competition for those monies?," he asked. "Who goes first?"

"People are saying it's not enough money, but they'll be lucky to get it," said McGuire Rivera, noting predictions at APTS's Capitol Hill Day that increases in federal spending will be hard-won in this Congress. "There should be enough money to get to pass-through."

Data on recent grant rounds show that PTFP spent 62-66 percent of its available funding on public TV's equipment needs in the past three fiscal years.

Uncertainties over federal conversion aid will likely continue until late this summer, while some public TV stations individually move toward partial conversion. Sixteen stations indicated that they plan to turn on digital signals by the end of the year in a recent survey by PBS's digital planning office. Another 20 stations told PBS that they now aim to go digital next year.

In Seattle, KCTS launched its DTV service April 10 with the premiere of "Rainier: The Mountain," its latest scenic high-def special. During its premiere weekend, KCTS-DT's schedule featured high-def documentaries from the station's extensive HDTV library: on weekdays, it offers multicasts of three program streams.

Even with a shelf-full of HDTV productions and a digital service on the air, KCTS still must convert its production facilities and master control. "We do not have the full complement of equipment," noted Burnie Clark, president. "It'll take us five years to get there."

KCTS and four other public TV stations in Washington State have jointly requested $5.1 million from the state legislature for a statewide digital planning study and assistance with DTV transition costs, according to Clark. "Indications are positive" for the $350,000 study, but "we don't know whether we'll get the rest of the $5.1 million approved in this session." Washington pubcasters plan to request more state monies from the legislature next year.

Station executives in several states reported varying degrees of progress:

Arkansas: Gov. Mike Huckabee in late March released $3 million to the Arkansas ETV Network to purchase digital equipment for its expanded facility, now under construction. The monies became available shortly after PBS's DTV Express truck spent a week parked outside the state capitol in Little Rock, displaying DTV's potential to the state's political leaders, noted Susan Howarth, executive director of AETN.

During its recently completed session, the Arkansas legislature authorized up to $10.6 million in capital funding for AETN in the state's new biennial budget, which takes effect July 1.

But the legislature's munificence came with a caveat: only a $100,000 planning grant for a new production facility in northwest Arkansas is definitely committed to AETN. "The rest is available for the governor to release to us as he sees the need," explains Howarth. In essence, AETN now must compete against other state agencies that received similar authorizations. "We'll have to fight it out and make the best case for why we need the money and why we need it now," she explained.

AETN estimates its conversion to digital will cost $20 million, and aims to secure $14 million from the state (in two $7 million chunks) and $6 million from the feds. "If we find in the next two years that the federal government comes through with less, we will amend our request to the state," added Howarth.

California: The state Senate's Energy, Utilities and Communications Committee on April 13 approved SB 844, a bill that would provide state funding for digital conversion of California's 13 public TV and 25 public radio stations.

After brief testimony from KQED President Mary Bitterman, and discussion of reviving the now dormant California Public Broadcasting Commission to administer the funds, the committee approved the bill on a 7-1 vote, said Colin Dougherty, g.m. of Fresno's KVPT-TV and chairman of the California Public Television and Radio Station Association. The California Senate's Finance Committee will take up the bill next.

At this point, SB 844 doesn't assign a specific sum to the state's digital aid, but California pubcasters "would like to arrive at the figure of $1 per person," said Doughtery. "What we will eventually get may be different." That dollar-per-resident ratio would translate to $33-35 million.

The association estimates that the cost of converting California's stations to digital will total $95 million. The state monies would match the anticipated federal investment in achieving pass-through digital services. "This will assist stations in finding all the monies needed for pass-through. It will not take us past that point."

Georgia: Already housed in a new digitally equipped building, Georgia Public TV recently won a $17 million commitment from the state legislature to aid conversion of its nine transmitters, according to Nancy Hall, special assistant to the executive director. The network's transmitter on Stone Mountain, which broadcasts to Atlanta and serves nearly 70 percent of the network's viewers, will turn on next spring.

Idaho: Through supplemental appropriations for the current fiscal year and the recently approved state budget for fiscal 2000, Idaho Public TV last month secured its first DTV conversion monies. The state provided funding for the network to hire two DTV planners--an administrator and an engineer--and assisted with unanticipated translator displacement costs for nine of Idaho PTV's 34 translators, said Peter Morrill, g.m.

In its fiscal 2000 budget, also approved during the recently concluded session, the state legislature matched PTFP monies aiding an upgrade of Idaho's south-to-north microwave link. The new interconnect can carry both analog and digital signals and will be fully compatible with DTV. The state also will invest $2.9 million in a high-speed digital microwave system connecting eastern and western Idaho. The public TV network will share the east-west system with public safety and administrative agencies. Lastly, Idaho PTV's budget includes $200,000 to replace analog video equipment with machines that can handle DTV.

Initial cost estimates for Idaho PTV to make the digital conversion with some local origination capabilities were $10 million; that number is subject to change as network's DTV planners work with sharpened pencils. But Morrill says it's hard to make a persuasive argument for state money if it will buy only a pass-through system for national programming.

Florida: Four major players in the state's budgeting process--the commissioner of education, the governor, the state House and the state Senate--have included $5 million in digital transition assistance to Florida's 13 public TV stations in their proposed spending plans for fiscal 2000, according to Steve Rogers, president of WEDU in Tampa and chairman of the Florida Public Broadcasting Service. The legislative session ends this month.

Once secured, the $5 million would be the first installment of a proposed $20 million state investment in digital TV. Under FPB's proposal each station will be required to match state monies with federal and local contributions, and to certify its participation in the Florida Knowledge Network, a digital multicasting channel that will deliver instructional programs from sign-on to 6 p.m. daily. "We took the approach of not asking for grant money, but asking the state to invest in a service that will benefit public education in our state," explained Rogers. "It's done well by us."

Although the Florida Department of Education's public broadcasting office is working on the guidelines through which state monies will be distributed among stations, the match will be "somewhere around" $1.3 million per transmitter, estimates Eric Smith, director.

FPB's digital plans anticipate that each station will complete the transition with pass-through capabilities.

Ohio: A state-funded conversion plan for Ohio's eight public TV licensees put a $28 million price tag on digital transmission facilities with some local-origination capabilities. A request now pending before the Ohio legislature seeks $12 million in the state's new biennial budget. If provided, the monies would be distributed equally among the 12 transmitters covering the state, said Bill Glaeser, g.m. of WNEO/WEAO of Akron, who is spearheading the request for Ohio public TV stations. The stations would use the funds to place equipment orders and to get started on tower construction and upgrades.

Last year, the Ohio legislature declined to fund the stations' request because neighboring states hadn't made similar investments and because the FCC's conversion deadline of 2003 was perceived as soft, recalled Glaeser. This year, the Ohio Educational Television Stations are running a "full-court press" to secure state aid.

Last week, DTV consultant Gary Poon visited the state capitol in Columbus for "Digital Television Day." He demonstrated multicasting and other DTV capabilities, and delivered a seminar-type briefing to legislative leaders. "The legislature needs to see this to easily understand what we're talking about," said Glaeser. The educational potential of DTV, and the notion of the conversion as an unfunded federal mandate appears to be getting political leaders' attention.

With a 35-plus-year history of supporting its public TV stations, Ohio is in a situation similar to other states, noted Glaeser. "If we don't make the transition to digital, that investment will be lost." This year, that message has "fallen on receptive ears."

Michigan: Public TV stations in Michigan are about to pay for their own technical study of conversion costs, which they roughly estimate will approach $40 million for transmission and interconnection, according to Steve Meuche, g.m. of WKAR in East Lansing. The stations have also written a case statement and produced a video that offer the use of one digital channel for K-12 instructional programming. The video has been shown to legislators, and Republican Gov. John Engler has "expressed an interest in at least learning more."

The state does not directly fund public TV in Michigan, although most stations receive state monies indirectly through their university licensees. These stations had to work their DTV plans through their licensees before Michigan pubcasters could begin to make their case publicly for state investment, explained Meuche. "We're feeling a lot better about it these days. We know some members of the legislature and the governor are now intrigued and interested. They're starting to ask questions, which is good."

"We're at the point now where we need to wait and see what advice we get to do next," he added.

Nebraska: Earlier this year political leaders advised Nebraska ETV that they would be unable to directly appropriate $60 million in requested DTV aid because the state is prohibited from going into debt. So the network has proposed an alternative means of financing its conversion that appears to have support from the legislature's Appropriations Committee.

Nebraska ETV now is proposing to form a tax-exempt facilities corporation that would go into debt on its own, issuing tax-exempt financing and using the entire telecommunications system as collateral, explained Rod Bates, g.m. The state would pay off the debt.

The network has revised its original request, which included $17.4 million to lease replacement satellite capacity. By opting for reduced-power DTV transmitters, scaling back conversion of its production facilities, and deferring a request for $18 million until the next biennial state budget, Bates aims to raise $33 million through the facilities corporation over 10 years. If approved by the legislature, this plan would provide $6 million annually to finance the network's digital conversion and satellite replacement.

This proposal has the added benefit of allowing the state to pay off the debt over 10 years instead of five, Bates noted. And in two years, when it comes time for the network to make its next request to the state for DTV aid, Bates anticipates that conversion costs will drop and the federal investment in DTV will be known.

State appropriators are scheduled to vote April 23 on the bill that will move Nebraska ETV's proposal through the legislature. Both the governor and the appropriations committee have agreed to the proposal "in spirit," said Bates.

Utah: KUED and KULC, sister stations and university licensees serving Salt Lake City, in late March secured a $1.8 million commitment from the state legislature for their digital conversion, the first installment of the three-year request for $6 million in state monies. The stations estimate that putting pass-through digital signals on the air by 2003 will cost a total of $15.1 million. "The case we're making is that state and CPB/PTFP monies will get us up to pass-through," said Fred Esplin, g.m. of KUED. Local production capabilities will be financed in other ways.

The stations have already converted almost all of their editing facilities to digital, along with some internal infrastructure. "The whopper we're dealing with immediately is a new tower and building" that will serve as a transmission "supersite" for eight of Salt Lake's nine stations, explained Esplin. The first state DTV monies and a CPB overlap grant go toward construction of this facility, securing KUED and KULC's spots on the tower.

KBYU, the Provo station licensed to Brigham Young University, will receive funding from the Church of the Latter Day Saints for its conversion.



To Current's home page

Earlier news: Some stations get off to a fast start, fundraising at state legislatures, 1998.

Current Briefing on the digital transition for public TV.


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