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Mr. POWELL. I doubt it very much.
Ms. Sachs. What level of funds do you think would be necessary?

Mr. POWELL. I am not equipped to make a guess on that. It would have to be a lot more than is in the bill, and a lot more than Congress would currently approve.

Ms. Sachs. Thank you. Mr. VAN DEERLIN. Mr. Wunder? Mr. WUNDER. Yes. Well, I don't really understand your testimony then, on the basis of the answers to those questions, because your complaint, apparently, is that the legislation-and I assume through its provisions allowing for advertising and the selling of commercial time, that H.R. 3333 is making public television like commercial television; is that your point?

Mr. POWELL. Yes, that is my point.

Mr. WUNDER. Well, one of the reasons why the provisions in the bill that you complain of are in the bill is because of the fact that there is not enough money, and there is not going to be enough money.

Now, you just testified that public television does not have the money to pay you, that there is no market for writers. You also said that there would have to be a lot more in terms of taxpayer funding, a lot more than currently exists in the bill, which is $330 million.

How do you reconcile those? They are mutually exclusive.

Mr. Powell. Well, let me address myself to what I intended the thrust of my testimony to be, which is this: that I think, considering the bill as a whole, that the legislation should concern itself with breaking the monopoly that the networks now hold over television; they should be addressing themselves to this, instead of addressing themselves to deregulating. In other words, I think that the thrust of H.R. 3333 is that the networks have done such a good job that we can trust them to go on to do the same sort of job in the future; and what I would like to see, if I may elaborate here, would be a system where the networks would be out of programing completely, that they would be distributors and not programers. And often this is a moot legal point, and the Justice Department has addressed itself to this question rather tentatively on numerous occasions and has not brought it to court. They seem overeager to settle the matter; but I would like to see a situation in which the production companies in Hollywood and in New York make a pilot, expose it on television as a trial, let the viewers and the critics vote on whether they want it as a series or not; and take it out of the networks' hands.

Mr. WUNDER. Well, it seems what you are saying is that you, on the one hand, argue freedm for yourself, but then you urge rejection. What the bill purports to do is open up many, many other avenues so that the types of things that you are urging can be accomplished.

I go back to your colloquy with the chairman about the availability of new technologies, whereby even network affiliations can get programing off of satellites, which is encouraged by this legislation.

I don't really follow your logic at all.

Mr. Powell. OK, my logic is based on my years of experience in the industry and seeing at close hand how the networks operate; and I have full confidence in them to protect their own business interest; and I do not think that the present bill would do anything to bring about what I would like to see, which is a breaking up of the networks' monopoly on programing.

I think we have lowest common denominator programing in this country because we have a monopoly of the three networks, who are all alike, they think alike and they program alike; and you get like programing; and I am afraid that this bill would just perpetuate that commercial monopoly in the future.

Mr. VAN DEERLIN. Mr. Powell, in your ideal network system, the five owned and operated stations would be peeled off, I suppose, and divested from the networks. Would that be a part of it?

Mr. POWELL. Yes.

Mr. VAN DEERLIN. Then how would you trace the cash flow in this system? The networks would be used as conduits for distributing programing, which is independently produced and independently sold to the affiliate stations of the networks? Would that be it?

Mr. POWELL. Yes.

Mr. Van DEERLIN. Where would the network management come in on any decision making? How would it be determined what pro gram was carried on NBC between 8 and 9 o'clock this evening?

Mr. POWELL. Well, it would be determined pretty much the same way, or in a similar manner, that it was done prior to the networks taking over complete programing control, which happened around 1958, as you will recall.

At that time there was independent financing of pilots and there was also financing by the advertising agencies; we had a great deal to say about it; and the programs were sold to the sponsors, but not sold by the networks; they were sold by the advertising agencies or by the people who put up the risk capital to make the pilot. The networks merely allotted time, and some sponsors, like Procter & Gamble, had certain reserve time traditionally on certain networks. So the function of where to put it was out of networks' hands, at least in regard to the case of the certain sponsors.

Mr. VAN DEERLIN. But that system, too, was not without its shortcomings?

Mr. POWELL. Correct.

Mr. Van DEERLIN. I remember the question of advertiser pressure was raised almost habitually then. One hears very little of it today.

Mr. POWELL. Well, the advertiser pressure is there, because the networks and the advertisers are really the same sort of people; they think alike. The network knows what the advertiser likes and doesn't like, and filters those likes and dislikes down to the creators.

I am not saying that the present—that the former system was ideal or anything, but it proves that an alternative system can exist. The networks say somebody has to make the decisions. Well, it is not true that it is only the three networks' heads that have to make the decisions; they can be made elsewhere.

Mr. Van DEERLIN. So would you return to that system for openers? Where Procter & Gamble goes out and commissions a program

and arranges with a specific network to air it, and is responsible for programing judgments?

Mr. POWELL. If certain sponsors wanted to do that, I would say, yes, let them do that; but I also think that production companies in Hollywood-and I am saying Hollywood because that is where I work-would want to make pilots and finance them independently if they would have a fair shake at selling them.

Mr. VAN DEERLIN. It would still come back to going to an advertising agency, I suppose, wouldn't it?

Mr. POWELL. Or a number of advertising agencies, if you had multiple sponsorship, as you probably would. We probably won't go back, no matter what we do, we won't go back to the system where one sponsor would sponsor one program; it really becomes too costly and the advertiser and his agencies want to spread their money around more.

Mr. VAN DEERLIN. Thank you very much, Mr. Powell. We appreciate your courtesy in enabling us to complete the hearing without a luncheon break.

We will resume at 9:30 a.m. in the same room.

(Whereupon, at 1:20 p.m., the hearing was adjourned, the subcommittee to resume its hearing at 9:30 a.m., Wednesday, June 27, 1979, in the same room.]

THE COMMUNICATIONS ACT OF 1979

WEDNESDAY, JUNE 27, 1979

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COMMUNICATIONS,
COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D.C. The committee met, pursuant to notice, at 9:35 a.m., in room 2322, Rayburn House Office Building, Hon. Lionel Van Deerlin, chairman, presiding.

Mr. VAN DEERLIN. The subcommittee will resume its hearings on the public broadcasting sections of the proposed H.R. 3333.

We have this morning, making his fourth appearance in this series of hearings, Mr. Henry Geller, Assistant Secretary of Commerce, Director of the National Telecommunications and Information Administration, accompanied, I understand, by Mr. William A. Lucas, the Associate Administrator.

Good morning, Mr. Geller.

Mr. GELLER. Good morning, Mr. Chairman.
STATEMENTS OF HENRY GELLER, ASSISTANT SECRETARY FOR

COMMUNICATIONS AND INFORMATION, NATIONAL TELECOM.
MUNICATIONS AND INFORMATION ADMINISTRATION, DE-
PARTMENT OF COMMERCE; AND WILLIAM A. LUCAS, ASSO-
CIATE ADMINISTRATOR FOR TELECOMMUNICATIONS APPLI.
CATIONS
Mr. GELLER. This is the final round of testimony on H.R. 3333.
Mr. VAN DEERLIN. I certainly hope so.

Mr. GELLER. I did want to say, however, that while public broadcasting, or public telecommunications, is coming at the end, we regard it of very great importance because of the contribution it can make to diversity, both today and, in an even greater way, tomorrow.

I thought I would make just a very few introductory remarks and then turn to Mr. Lucas; but I will be available to answer any questions you might have.

We do not think there is a need for a comprehensive, detailed legislation in this area for two reasons. One, just last year you passed rather detailed legislation. Second, under the very able leadership of Robben Fleming, the Corporation for Public Broadcasting is moving to reorganize itself in a way which we think is very sound and commendable. And, we note, so is PBS.

However, there is a need to examine the area, we agree, and there is a need for some legislative change. The areas of possible change are few but they are important, and Mr. Lucas will discuss

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