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Trust fund would be ‘digital gift’ to U.S.
Grossman, Minow propose endowment for digital content

Originally published in Current, April 9, 2001
By Steve Behrens

The need for good educational material in digital media is so great, and nonprofits have so much to share, that Congress should endow an $18 billion trust fund to help with the work, Lawrence Grossman and Newton Minow proposed last week.

Grossman and Minow have longstanding ties with public TV, but their proposed Digital Opportunity Investment Trust (with the hortatory acronym DOIT) would work with libraries, museums and other nonprofits, as well as pubcasters.

By broadening the proposal's immediate constituency, they may get more political support, and by avoiding the idea of spectrum fees on media companies, they won't face the formidable corporate opposition that stymied many past proposals. Now they'll only have to overcome the combined forces of deficit reduction and tax-cutting, which have laid claim to the spectrum auction proceeds.

Minow met with members of Congress who would all like to be the Justin Smith Morrill of the 21st century, he said at the April 5 press conference announcing the DOIT proposal. Morrill was the 19th century Vermont Republican who proposed the land-grant college legislation that endowed 105 state universities with donated federal lands. Now DOIT is a "land grant of the airwaves," as Minow puts it.

Minow, a Chicago attorney and former chairman of the FCC and PBS, and Grossman, a former president of PBS and NBC News, know from personal experience that ambitious media-reform proposals can go nowhere. Minow served on the Gore Commission in 1998 and Grossman on the Twentieth Century Fund Task Force on Public Broadcasting in 1993.

To build support for action on the proposal, advocates will have to mount a national educational campaign, Grossman told Current. Though the foundations that funded their study are not permitted to lobby, he and Minow were not paid for the work and can try to influence legislation, Grossman said.

Grossman and Minow's Digital Promise Project raised $640,000 from foundations, but "there's not a great deal left" for a campaign, says Edith Bjornson, who heads the project staff. A $40,000 grant from George Soros' Open Society Institute is reserved for this follow-up phase she said. Major funders were the Century Foundation (formerly the Twentieth Century Fund) and the Carnegie Corp. of New York, which contributed $200,000 each, and the MacArthur and Knight foundations, which put in $100,000 each.

The concrete product of the project is the 280-page report, A Digital Gift to the Nation, including 17 background papers. The full report is posted on the Digital Promise Project's website, The executive summary of their report is reprinted in the April 9 issue of Current, along with a chapter from the study by producer Richard Somerset-Ward.

Leaders of the Library of Congress, the Smithsonian Institution, the National Science Foundation, various national and local organizations and high-tech companies endorsed the report and stood behind Grossman and Minow during the press conference at the National Press Club in Washington.

Though Grossman and Minow are members of a graying cohort, they may find support from younger Americans. Gregory Prince, president of Hampshire College, predicted they are "giving voice" to a younger generation eager to back the idea of creating better digital content.

Building human capital

Unlike landmark laws that provided federal funds for station equipment and operating expenses--and the more recent "e-rate" that subsidizes nonprofits' Internet access--the new proposal concentrates on the creation of content for the Internet and broadband digital technologies, including DTV.

"We've got the faucets built--now we want to get some water flowing through them," said Minow at the press conference.

James Billington, the librarian of Congress, stepped forward with his own example. The Library of Congress has been digitizing images and other pieces of its vast collection for 10 years, creating the American Memory website with 34 participating institutions. Yet their work has amounted to "only a drop in a very large ocean," he said.

Putting knowledge in digital form is essential for a knowledge-based economy, the report said, because such an economy runs on "human capital," or educated workers. At the same time, a quarter of high school seniors are functionally illiterate, and huge disparities remain in the education levels of white and nonwhite, rich and poor.

"We do not need costly new institutions or large institutional bureaucracies," the report says. With digital technology, including public broadcasting's new DTV capacity, the existing "vigorous network of first-rate educational, civic and cultural institutions" will be able to reach beyond their walls and connect with "every home, workplace and classroom."

The new trust fund would serve as a "venture capital fund" for education and nonprofit public-service institutions that otherwise lack the resources to develop content for new technologies, according to the report. The fund would:

  • commission experiments with digital techniques and systems to enhance learning and retrain workers,
  • broaden knowledge and inform the citizenry,
  • make available works in the humanities and arts,
  • teach skills and disciplines needed in the information-based economy, and
  • help libraries, museums, school systems and pubcasters connect with the public and with the best minds in society.

Content developed with the help of the Trust would be "open-source data," remaining in the public domain and countering the trend toward copyrighted, privatized "pay-per-view" scholarship that threatens the university system, the report said.

The report sees mutual benefit in alliances among pubcasters and other community institutions, as Grossman has argued for years. Grants from the trust fund would help make good use of public TV's multicasting and other new capabilities that come with DTV. And the public TV system would "act as a giant megaphone" for schools, libraries, museums and other community institutions. Stations could develop low-cost C-SPAN-like services at the local and regional levels that would include cultural and scientific as well as political forums.

Somerset-Ward's paper in the Digital Gift book hails the advent of local multimedia "portals" like WTTW's Network Chicago and projects in formal education like the MoKan Kids Network based at KCPT in Kansas City.

A billion a year

The trust fund would be endowed by a federal investment of $18 billion, expected to be collected from auctions of spectrum between now and 2006, Minow said. FCC spectrum auctions already have brought in $17 billion, the report says, citing an estimate by the Congressional Budget Office. "Prudently invested and managed, these revenues would give the Trust more than a billion dollars a year to invest," the report says. Grants would be designed to bring out matching funds from states and other funders.

This could be the nation's fourth big and bold investment in educating the public. The report cites three earlier initiatives:

  • the Northwest Ordinance of 1787, which used proceeds from land to support public schools in every new state,
  • the Morrill Act of 1862, which again used the wealth of land, endowing 105 land-grant colleges and extending college education to many children of working people, and
  • the GI Bill of 1944, which opened colleges to millions of World War II vets.

A later forerunner was the FCC's 1952 decision to allocate about a quarter of TV channels to educational broadcasting.

The new Digital Opportunity Investment Trust would be modeled after the National Science Foundation. With a budget of almost $4 billion from Congress, NSF doesn't do research itself, but uses peer-review panels to choose the best ideas and most capable scientists. The foundation supports more than 20,000 research projects in science and engineering, equal to a fifth of federal research spending in those fields, according to the report.

A quasi-governmental body like NSF is the most appropriate form for DOIT because it would be bound by fewer restrictions than a federal agency and it would provide more accountability to government than an independent nonprofit, wrote Marion R. Fremont-Smith, a specialist on nonprofit governance at Harvard University, in a Digital Gift background paper.

The new trust would be governed by "a board of distinguished citizens from many backgrounds, fields and disciplines," the study said.

The 24 members of NSF's board are appointed by the White House for six-year terms and must be eminent in their scientific fields, according to Fremont-Smith. NSF's charter requests that the President consider nominees submitted by the National Academy of Sciences and certain other engineering and university groups.


Minow (left) and Grossman describe their proposal to endow a grantmaker to aid digital content production.

. To Current's home page
. Earlier documents: Every study and proposal of this kind is eventually compared to the first Carnegie Commission report, which brought legislative action within a year, authorizing CPB and federal aid to stations. But less political groundwork was done for the second Carnegie report and subsequent reports, which have had little effect.
. Earlier news: Grossman served on a 1993 task force set up by the Century Foundation (then the Twentieth Century Fund).
. Earlier news: Minow has recommended spectrum auctions as a funding source for several years. He served on the 1998 Gore Commission, whose recommendations were largely ignored by both the Clinton Administration and Congress.
. Outside link: Full text of the report on the Digital Promise Project website.

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