Twentieth Century Fund panel seeks more federal aid for PTV, but would halt CPB grants to stations

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With the warning that public television must “reinvent itself” if it is to “meet the needs of the American public in the 21st century,” a task force appointed by the Twentieth Century Fund recommended fundamental restructuring of the existing public television system in a report issued [in July 1993].

[Task force members included former PBS President Lawrence Grossman; Ervin Duggan, soon to be appointed to head PBS later in 1993; and other prominent national-level figures in media and finance.]

Completing what task force members characterized as a reexamination of the basic purpose and principles of public broadcasting on the 25th anniversary of the field’s creation, the 21-member group envisioned a significant role for public television in the multichannel environment of the future — one that calls for an expansion of educational programming, strengthening of its mission at all levels, and a redirection of federal funds toward diversified national programming.

Most controversial among the panel’s recommendations is a proposal to cut off federal funding to local stations within three years and aggregate those dollars for national programs.

“A feeling of ‘entitlement” is rampant within the system,” wrote Richard Somerset-Ward. “There are 351 local stations to be accommodated, and they (or their 175 licensees who receive [grants] from the CPB each year) effectively hold most of the purse strings.”

That would mean the end of the Community Service Grants (CSGs) to public TV stations, which consumed half of CPB’s federal appropriation in 1992 and amount to 13.5 percent of the public TV system’s total income, according to the report. Annual CSGs are one of the few non-earmarked paychecks that stations receive.

If the CSG money went instead to national programming, that would provide a net increase of $42 million for program production. But even that boost would not be enough to allow public TV to “shine like a beacon” — as the task force said it must do to maintain or increase its impact in the multichannel environment.

To achieve that level of visibility, public TV’s national program budget of $300 million must be doubled by the “latter part” of this decade.

“The best role of the federal government is not to support local stations, except under very unusual circumstances, but to provide resources for critical national programming, which has become the keystone of building public broadcasting and public service,” said Larry Grossman, task force member and former PBS president, at a July 12 press conference.

“It is my solemn hope that quality national programming is going to rescue public television stations from becoming auxiliary,” said Brown University President Vartan Gregorian, who chaired the task force. “While we welcome local interests, which are essential …, we worried that localism might become parochialism in the absence of national interests.”

Dividing its list of 22 recommendations into four categories — mission, education, funding and governance — the task force also proposed that:

  • the mission of each local station be defined and supported within its own community,
  • sources of programming be diversified beyond the “three large PTV stations” that now produce “more than 60 percent of national programming,”
  • educational programming emphasize lifelong learning, and an expansion of adult education services become a high priority,
  • federal funding be increased and authorized on a multiyear basis, contingent upon the elimination of CSGs,
  • proceeds from spectrum auctions or usage fees, if approved by Congress, be partially allocated to support public telecommunications, and
  • appointments to the CPB Board be made on a nonpolitical basis.

For local stations, hard to swallow

While many public TV leaders welcomed the panel’s calls for increased spending and new sources of revenue, they also found its challenge to local stations a bitter pill to swallow.

Following the press conference at which the task force unveiled its report, David Brugger, president of America’s Public Television Stations, expressed regret that, in its press release, the Twentieth Century Fund chose to headline the redirection of federal funding. “It’s the one thing that will be the most divisive, instead of the priniciple of the need for greater funding, the need for a greater role for public telecommunications in the future.”

“Taking the money in the system and moving it around doesn’t generate new revenue,” said Brugger in an interview. “New revenue is what’s needed.”

Bob Ottenhoff, executive v.p. of PBS, observed, “The report grossly undervalues the current importance and potential significance of local PTV stations and the role they can play in the new multichannel environment.”

“At the heart of this is a seeming lack of recognition that there is national interest in strong local broadcasting,” said Skip Hinton, president of SECA. “Hell, if that’s the argument, exits off the Interstate would only be in communities that … pay for the ramps.”

Hinton expressed concern that the task force’s argument relied on information from the Boston Consulting Group (BCG) report, published by CPB in 1991. BCG’s conclusions, he said, were “wrong in themselves.”

The BCG study, like the new task force report, predicted that public TV would become peripheral in the multichannel world without increased program investment, and questioned whether stations’ expenditures on local production were an efficient use of the system’s limited resources.

Holding the strings

A background paper written Richard Somerset-Ward, a former BBC programmer who now specializes in international media, contains much of the information that raised Hinton’s eyebrows. Titled, “Public Television: The Ballpark’s Changing,” the 100-page paper is the brief that prepared task force members for their verdict. It also forms the largest section of task force’s final report.

“It is a fact (and an oft-quoted one in the recent Senate debates) that in this $1.25 billion industry only $500 million is spent on programs and over $700 million on administration and overhead,” wrote Somerset-Ward in a chapter weighing the risks and advantages of various reforms. “It is a fact that national and instructional programming, both of them starved for funds, generate almost all the income. It is a fact that local programming consumes nearly half the system’s total resources for only 7 percent of its airtime.”

“In any $1.25 billion industry there must be ways of redeploying resources,” he wrote in the chapter that examines the system’s finances. While Somerset-Ward saw “some scope for that in public television,” local stations are the major obstacle.

“A feeling of ‘entitlement’ is rampant within the system, and the amount of redeployment that is practicable is very different than the amount that might be desirable. There are 351 local stations to be accommodated, and they (or their 175 licensees who receive [CSGs] from the CPB each year) effectively hold most of the purse strings.”

Fiscal Darwinism

Though the Twentieth Century Fund report did not detail what would happen to under-financed stations or those located in small communities if CSGs ended, it did imply the system would be reshaped through a kind of fiscal Darwinism.

“The task force believes that a legitimate (and perhaps the only legitimate) test of how well a local station is fulfilling its mission is whether it can be supported and financed within its local community, without recourse to federal subsidies,” the report said.

The only stations that should continue to receive federal subsidies, according to the task force, would be “those few communities where poverty or geographical remoteness make additional federal support desirable and necessary.” The report didn’t suggest protection for fiscally weak stations in small communities.

It gave its most critical notice to stations whose signals overlap geographically. Noting that an “excessive number of local stations” — more than 100 of 351 “substantially overlap one another” — the task force stated its belief that, “unless overlapping stations have altogether different missions, overlapping and duplication of schedules are inefficient, wasteful and counterproductive.”

Brugger downplayed the significance of this argument. “The whole idea of duplication is overblown. Only 19 markets have more than one licensee,” he said. “Where there has been duplication between licensees, there have been a lot of stations working to make sure this is eliminated.”

“If stations had remained the kind of organizations that they were 10 years ago, this kind of criticism might have been justified,” said Ottenhoff. He described a “massive transformation taking place right now” whereby stations already are restructuring and redefining their community roles.

Nevertheless, Ottenhoff cautioned against dismissing the task force’s proposal out-of-hand. “We’ve got to do a better job in making sure our stations offer distinctive and alternative services, so that people don’t think having multiple stations in a market as a problem but an opportunity.”

Within the task force itself, consensus around the redirection of federal funds was by no means universal. The task force report, titled Quality Time?, includes supplemental comments from six panel members, four of whom put forth dissenting opinions.

“Diluting the amount of money that public broadcasting’s funding sources provide to local stations would directly undermine the hope for improved local service,” said the dissent of task force participant Ervin Duggan, an FCC member who has been mentioned as a candidate for the PBS presidency.

“[C]reation of a programming ‘superpower’ to administer and dispense these national programming dollars” would undermine the panel’s recommendations for more diverse programming and “could lead to more programming centralization rather than less,” argued Henry Kravis, the financier who is board chairman of WNET, New York.

Two task force members took a different position on congressional subsidy. Challenging the task force premise that “federal funding, although a relatively small portion of total funding, is the glue that holds public broadcasting together,” Lloyd Morrisett, president of the Markle Foundation, proposed that public broadcasters choose one of two tradeoffs — either allow the federal government to fully underwrite its national programming in exchange for limited editorial independence, or forgo all federal dollars and achieve complete editorial independence.

David Burke, v.p. of the Dreyfus Corp., concurred. “[F]ederal funds … carry with them a silent, but perverse, form of political censorship,” he wrote. “[A]s we enter the modern world of telecommunications, any such restraint on the ability to be different and intellectually competitive threatens the very existence of public broadcasting.”

Will Congress act?

With all the attention members of Congress have given to violence on commercial television this summer, and the rush to approve President Clinton’s economic package before the August recess, the potential impact of the Twentieth Century Fund’s recommendations remains a point of speculation.

“I sense that this is a report Congress is not going to act on,” said Hinton. “I’d be surprised if members of Congress would rush to take money away from their local constituencies.” Nevertheless, he is concerned that inaccuracies within the report, particularly the importance it gave to the BCG’s conclusions, will come back to haunt the system in future congressional debates.

While the Twentieth Century Fund planned to give the task force’s recommendations to members of Congress and the White House, the fund is “not among that class of nonprofits that is relentless in pursuing its agenda,” acknowledged Richard Leone, president of the New York-based foundation, at the press conference. “We intend to involve ourselves and members of the task force in the continuing dialogue. How far that goes depends really on what happens to the conversation.”

Though Duggan dissented on some task force recommendations, he expressed hope the task force would press its point with political leaders. “This process has gone forward within the philosophy of the Twentieth Century Fund, which is that ideas have a kind of force of their own,” Duggan said at the press conference. “If the ideas are good they will create gravitational pull.”

“I am not so confident,” he continued. The original Carnegie commission had an “umbilical link” with the White House that “created a kind of political clout … from day one.”

“It does trouble this individual that that umbilical process has not been a part of this process. I hope that we can create that after the fact,” Duggan said.

With the Clinton Administration’s strong interest in new technologies and building the information superhighway, said Charles H. Revson Foundation President Eli Evans, “the atmosphere is here for some headway to be made for a new vision of public broadcasting. But it can’t be to save what’s there, and it can’t be to sit still, because to sit still is to move into irrelevancy.”

Considering the task force’s prominent membership, its conclusions are of “major significance,” said Ottenhoff. “Given the role they think we can play, they think it’s necessary for our society to come up with a way to provide more long-term, financial support for public television.” That conclusion is “pretty remarkable.”

Ottenhoff noted that the recommendations were coming from “friends” of public broadcasting. “When they tell us we’ve got problems we ought to work on, said within the context of overall support for public broadcasting … we need to spend time reflecting on them and how we can improve.”


Who’s who on the Twentieth Century Fund task force

These are the 21 members of the Twentieth Century Fund’s Task Force on the Future of Public Television.

Vartan Gregorian, Task Force chairman
President, Brown University; former president, New York Public Library; former board member, WNYC

Peter A. A. Berle
President and c.e.o., National Audubon Society

David W. Burke
Vice president and chief administrative officer, Dreyfus Corp.

Joseph A. Califano Jr.
Chairman and president, Center on Addiction and Substance Abuse at Columbia University; former U.S. secretary of health, education and welfare

Peggy Charren
Founder, Action for Children’s Television

Ervin S. Duggan
Commissioner, FCC

Eli N. Evans
President, Charles H. Revson Foundation

Leonard Garment
Partner, Dickstein, Shapiro & Morin; former counsel to President Nixon

Henry Geller
Communications Fellow, The Markle Foundation; former general counsel, FCC

Lawrence K. Grossman
President, Horizons Television; former president of PBS and of NBC News

Henry F. Henderson Jr.
President and c.e.o., H. F. Henderson Industries

Henry R. Kravis
Founding partner, Kohlberg Kravis Roberts & Co., and chairman, WNET, New York

Sue Yung Li
Independent producer, PBS series Cities in China and A Taste of China

Margaret E. Mahoney
President, the Commonwealth Fund

Lloyd N. Morrisett
President, The Markle Foundation

Steven Rattner
General Partner, Lazard Freres Co.; former New York Times reporter

Lesley Stahl
CBS News correspondent; co-editor, 60 Minutes

Stuart F. Sucherman
President, Hilton/Sucherman Productions; longtime producer of Fred Friendly’s Media & Society Seminars on PBS; former WNET general counsel

The Honorable Timothy E. Wirth Counselor for the Department of State; former U.S. senator and representative from Colorado; former chairman, House telecommunications subcommittee.

Robert J. Wussler
media consultant; former Turner Broadcasting and CBS executive.

Mortimer B. Zuckerman
Chairman and editor-in-chief, U.S. News & World Report; chairman, The Atlantic; real estate developer.

Chloe W. Aaron, Task Force executive director
Fellow, Twentieth Century Fund; former programming v.p., PBS.

Richard Somerset-Ward, background paper author
President, RSW Enterprises; former BBC arts programming executive

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