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as the initial appointment; that is, if a Presidentially appointed Board member leaves, the President would appoint the replacement; if a Board-appointed member leaves, the Board would appoint the replacement.

Putting aside for a moment the question of reducing

the size of the Board, NTIA believes that a board

appointment process similar to the one proposed in H. R. 3333 ought to be used in making CPB Board appointments.

The nominating panel concept has been used to provide

a measure of insulation in connection with judicial
appointments. NTIA believes the same mechanism can be
used to insulate the governance of public broadcasting.
Every effort must be made to eliminate all possibility
of political control of a resource as potentially powerful
as public television and radio.

While we support the concept of a nominating panel,

we do not believe the split appointment process proposed in H. R. 3333 is workable. The first Carnegie Commission recommended that the CPB Board be appointed in a similar manner. The recommendation was rejected by Congress at the time. More recently, Congress turned down our own proposal to relinquish four Board appointments to the stations. On reconsidering this issue, we agree with the criticism that any appointment process which would have the effect

of creating two classes of Board members--one that would

be appointed by the President and confirmed by the Senate; the other that would not--is to be avoided.

NTIA would therefore recommend use of an outside nominating panel but have the President appoint and the Senate confirm all members of the Board. While this method would not insure total insulation in the Board appointment process, it would add an important layer of insulation.

In its February 1979 report, the Carnegie Commission or the Future of Public Broadcasting recommended that the President choose Board members from a list prepared by a blue-ribbon panel chaired by the Librarian of Congress and including the heads of the Arts and Humanities Endowments, the National Science Foundation, and the Smithsonian Institution. Among the reasons Carnegie cited for recommending use of a nominating commission were that it would reduce the ability of the Executive "to create a docile public broadcasting system" or "use appointments in political trades."

We agree with Carnegie that a use of a nominating

panel would help to insure against these occurrences.

However, we think the nominating panel proposed in H. R. 3333, consisting entirely of non-Federal officials, is preferable

to the one Carnegie recommends because its members would

be less subject to political pressures.

Coupled with CPB's own reorganization efforts, changing

the Board appointment process should afford CPB the protection

it has needed from political interference. We strongly

support these changes.

H. R. 3333 sets the size of the Endowment Board at

nine members, six less than the present CPB Board of 15. This issue calls for judgment between two competing

considerations.

Having a larger Board enables a greater diversity of interests to be represented, but on the other hand, a 15-member board cannot function as efficiently as a smaller one. While the decision is a close one, support the proposed reduction to nine-members as a reasonable striking of the balance.

we

Mr. VAN DEERLIN. The thrust of your testimony is that except for the proposals it contains, the section of the bill on public broadcasting is first rate.

And there may be much in what you say.

Do you think that the reduction of the size of the board is desirable because a smaller group is usually more expeditious than a larger group?

Mr. LUCAS. Exactly. You have to balance that out against the difficulty of creating diversity of representation. That seems to us to be the greatest difficulty with reducing the size of the board. But nine people would be a workable group. We all know about large committees.

Mr. VAN DEERLIN. It is no more difficult to get a quorum of 9 than of 15.

Mr. LUCAS. That is true.

Mr. VAN DEERLIN. It may be easier, in fact, very often.

Mr. Mottl.

Mr. MOTTL. No questions, Mr. Chairman.

Mr. VAN DEERLIN. Ms. Sachs.

Ms. SACHS. Thank you, Mr. Chairman.

A couple of questions. According to your testimony, NTIA supports the emphasis on program production and development that is in the bill. NTIA supports the one-third/two-thirds split proposed in the bill with one-third passing through to the stations for the purpose of funding programing production rather than as basic operational grants.

You support the elimination of direct Federal funding of the interconnection. You support the nominating panel for board appointments, and the reduction of the size of the board from 15 to 9, and the limitation on board service as proposed in the bill.

In short, you support most of title VI; and yet, you suggest that all of this can be done to or by CPB without what you call compre

hensive legislation. Maybe we define "comprehensive legislation" differently. Could you explain why you feel that we should create the endowment but call it CPB?

Mr. LUCAS. There are certain management functions that we feel could very valuably be retained at the current moment. Part of it, I think, also stems from a difference in philosophy. We are trying to practice what we preach. That is to say, if the Federal Government should do all it can to stay out of efforts to influence the political process internal to the public broadcasting community and that community is going in the right direction, we have a sense that we all agree that they ought to go. We have a sense that we ought to stand back a certain distance and let them do what they are doing, particularly in this case since we think it is going in much the same direction as the goals you have set.

Ms. SACHS. Well, if CPB is going in the right direction, why should we not cement that with legislation? Under this legislation, the endowment would not come into existence until 1984. In the meantime, we have been supportive of the efforts of the Corporation to create the kind of environment that is proposed in title VI. Does it seem unwise at this time, to provide for a period of transition?

Mr. LUCAS. You are proposing something which would obviously cause rather severe dislocation and a period of great uncertainty in that community. We are saying that a more modest approach, a more evolutionary approach, seems to be prudent to us at this point, particularly since just a very few changes could make that possible.

Ms. SACHS. If the changes are not made until the reauthorization is necessary in 1981, then there will only be time for a 2-year transition period. The bill proposes a 4-year transition period. Would that not lead to less "dislocation" than a 2-year transition period?

Mr. LUCAS. You are assuming we will not learn a lot in the intervening 2 years. Hopefully, if CPB keeps going in the direction it has and also there is some very encouraging rethinking going on elsewhere in the industry—if that continues to go in that direction, hopefully we will learn a lot in the next year or two. And that could guide that future development.

I am not sure that we feel with certainty that we know so much that we can reach a firm conclusion at this point. You know, to turn this around, if what we are saying is so much like what you are proposing, assuming that there should be some management functions, it could be argued that what you are proposing could still be called CPB.

Mr. GELLER. I would just add that really the differences between us may be semantic. We do see the need for legislation. It is, as I said, significant legislation. You ticked off a whole number of possible elements of such legislation. When you get to the point that Bill has been emphasizing-whether you should change the structure-I think we would all agree that if CPB is moving in the right direction, if it does form exactly the type of structure that you desire, that we desire, then it is an open question whether you need to enact legislation.

We understand that legislation would cement that form forever, but we are thinking once a new structure is established by CPB, there will be no need for legislation. And letting the system correct itself is a desirable way to go.

I am saying the same thing Bill is saying, that structural change by legislation does not strike us as something urgently needed under the circumstances.

Ms. SACHS. If I could move on to another area, two years ago the President sent over a major message and legislation on public broadcasting and pledged strong support for the development and growth of public broadcasting. He made some proposals, and promised to revisit the area after the Carnegie Commission report had come out.

In the area of funding, you state in your prepared testimony that an increase in public broadcasting funding from $220 million in 1983 to $330 million in 1984 appears "inflationary and unjustifiable in the face of present budgetary constraints." Would the administration be opposed to such an increase?

Mr. GELLER. Yes.

Ms. SACHS. In the area of program rights, you stated it is difficult to legislate in the areas of copyright and the relationships between the endowment and the program producers. Can you give us any specific suggestions on clarifying the provisions of the bill?

Mr. LUCAS. I wish there were a simple solution to that. We have arm wrestled with that one. You get into a lot of very different kinds of programing. In one case you might have programing largely developed for schools and for which you might expect the rights to be held by educational institutions or whatever almost in perpetuity, and you might want to exclude that from being supported by this kind of programing. But some of that kind of programing will undoubtedly, we feel, be on the fringes in there.

Similarly, you have other kinds of programing which have an almost immediate commercial or wide audience appeal. There, we get into difficulties about whether or not the Public Broadcasting System itself should try to recapture, in a sense, the programing benefit in terms of dollars to the Public Broadcasting System.

I refer to some of the PBS plans that clearly signal consideration of a pay service being made available on cable or elsewhere as a second service in the system, possibly a revenue-generating service. We see so many conflicting kinds of programing in there that we simply have not been able to come up with language. We did try. Ms. SACHS. Thank you very much.

Mr. GELLER. May I add one thing? I answered yes to your question about the fiscal year 1983 funding increase, and I do want to point out that my opposition reflects the view of the administration. However, we have as NTIA taken a very strong position in favor of the spectrum fee. We favor it in lieu of the public trustee obligation, and we believe that when the Congress get moneys from that source, it should take those moneys into account in more directly achieving its important social goals in communications. Those goals, we think, include greater funding of public broadcasting, and that is the route that we have urged. Now, this point-about a spectrum fee and its use-has not been cleared with the administration. It is what NTIA has worked out and has urged

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