upon you here. We have not yet had administration consideration of that, and we do not know when there will be. But I do want to emphasize that if you proceed along the lines we have urged in NTIA, then it would be a different ball game.

Ms. SACHS. If there were a substantial spectrum fee, you would suggest that the administration support increased funding for public broadcasting?

Mr. GELLER. We would certainly urge that. What the administration's answer would be, I do not know. But we would urge it. As you remember, we think the present system of public trusteeship is ineffective. It has large first amendment costs and does not accomplish the goals Congress wanted to accomplish in the way of cultural, children's, and informational programing. We think it would be a good idea to eliminate that public trustee regulation and substitute in lieu of it the spectrum fee and use the moneys thus obtained more directly to accomplish those goals.

The first goal is minority ownership. But another goal, just as important, is in the area of public broadcasting. We see public broadcasting as a way to accomplish those programing goals more efficiently, more effectively and without the first amendment costs which are so large in the public trustee area.

I do not want to go over old testimony. As you say, this is my fourth appearance. You have heard this now, I would say, a good three times. My answer is yes to the question, and it remains yes. But NTIA remains convinced that that is an excellent way to proceed, and we strongly support it.

Mr. VAN DEERLIN. In your opinion, is the imposition of a fee on commercial use of the spectrum conditioned on abandonment of the public trustee concept?

Mr. GELLER. I think that is very sound and it would be sound policy to do so, yes.

Mr. VAN DEERLIN. That is not entirely responsive.

Mr. GELLER. Let me say a fee is needed, obviously, to recover the costs of the regulatory agency. So we start with that as a base. Whatever it is necessary to take from commercial broadcasting in order to cover the costs of regulating broadcasting, that is desirable and there should be a fee for that.

Mr. VAN DEERLIN. You look upon that as an irreducible minimum?

Mr. GELLER. That is right. A second consideration is whether the fee would aid in the efficient management of the spectrum. To be frank, we don't see how imposing a fee will add any efficiency in managing the spectrum in the commercial broadcast area. It has large potential in nonbroadcast spectrum allocation, but very little in the commercial one.

That brings us to the third possible use of the fee, which would be using a fee in lieu of the public trustee obligation. Licensees have volunteered to be public trustees. But the system has not worked well. It tries to make people, licensees, act against their interests, against their structure. It is on that basis that we urge a significant fee to recover sums that can then be used to help finance minority ownership and public broadcasting.

I am talking of a matter of policy. That is where we see the policy leading.

Mr. VAN DEERLIN. In theory. The answer to why not is that there are about eight or nine members of the subcommittee who will not vote for it.

Mr. GELLER. I understand that. All I can say is we would, as strongly as we can, urge that the least the subcommittee should do is to proceed in the area of radio deregulation, and at least should proceed in areas where there are so many radio stations, in Chicago, New York and here. At the least the subcommittee ought to get data. By allowing that to proceed, we think that, life being evolutionary, the subcommittee could then build upon that experience. It seems to us a pity that this window, as we have referred to it, Mr. Chairman, is closing without making any effort to find out what effects deregulation might have. We believe that a deregulated system would be far preferable to the one we have now.

Mr. VAN DEERLIN. Thank you.

Minority counsel, Mr. Wunder.

Mr. WUNDER. Thank you, Mr. Chairman.

As I understand your testimony on the need for legislation in this area, it is that legislation may be needed but the sense of urgency is not as great as in, say, common carrier. Is that correct? Mr. LUCAS. Most definitely.

Mr. WUNDER. On page 10 in your statement, you talk about the language "program production and acquisition" as possibly presenting a problem. Is your reference there to the fact that it could hide a multitude of things under that category?

Mr. LUCAS. That there are a lot of different programs in there. There is some question, for example, on when was it produced or when was it released, to use to start the life of the programing. That kind of thing could be cleaned up. Should the rights be vested 3 or 4 years, as the marketplace normally has these contracts going right now, or should it be shorter? If it is shorter, public broadcasting could be taking the risks, developing the advanced programing and then not being able to use it as the producers reclaim it, take it off, and use it in some other way.

That would enrich, perhaps, television generally, but it may cause problems for public broadcasting's new approaches to finding funding.

Mr. WUNDER. My final question is about your concern about the cluster advertising provision. You express concern about certain practical problems in that the advertising provisions are optional and not mandatory. If practical problems ensued, why wouldn't the station just drop them or modify them to correct the practical problems?

Mr. LUCAS. In this particular area I think we are concerned that once you go down that road, you may not be able to return. Particularly, you may have a very negative impact on subscribers' individual contributions as the system goes commercial. We think it might also have a very serious deleterious effect on the image of the public broadcasting industry as a whole at a time when we are at a sensitive fork in the road.

Mr. WUNDER. Thank you, Mr. Chairman.

Mr. VAN DEERLIN. Thanks to both of you for very helpful testimony.

I believe that a scheduling conflict made it difficult for the National Endowment for the Arts to be represented until tomorrow morning, so we will move directly to the chairman of the Carnegie Commission on the Future of Public Broadcasting, Dr. William J. McGill, who is president, also, of Columbia University.

Mr. MCGILL. Current president of Columbia University, Mr. Chairman.

Mr. VAN DEERLIN. And distinguished former chancellor of the University of California at San Diego.

STATEMENTS OF WILLIAM J. McGILL, PH. D., CHAIRMAN, CARNEGIE COMMISSION ON THE FUTURE OF PUBLIC BROADCASTING; AND WALTER W. HELLER, PH. D., FORMER CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS, ACCOMPANIED BY SHEILA MAHONY, COUNSEL

Dr. MCGILL. Mr. Chairman, I am grateful for and welcome the opportunity to appear before this distinguished committee and offer comments on H.R. 3333, the rewrite legislation. I had hoped to have and expected to have a colleague of mine, Walter Heller, the regents professor of economics at the University of Minnesota and former Chairman of the Council of Economic Advisers to help me with some of the subtleties of funding. I hope he will be here, but if not, we will do our best to handle it ourselves.

I have and Dr. Heller has submitted prepared statements, and with your permission we will submit them for the record. I should apologize to the Chair that in my professorial way, I made last minute corrections of spelling and punctuation and errors of syntax that make the submitted text differ slightly but not in any fundamental way.

Mr. VAN DEERLIN. I am moved to wonder how they got in there in the first place.

Dr. MCGILL. I would like to spend about 5 or 10 minutes just summarizing the position we have taken and then make myself available for your questions.

First of all I ought to say that the members of the Carnegie Commission to whom I have talked, and that is nearly all of them, are very impressed by the general thrust of the rewrite legislation, H.R. 3333, and a number of the major provisions as they affect public broadcasting. If in the discussion this morning we appear to concentrate on points of difference, that is only for the purpose of our mutual illumination and not in any respect to attempt to convey an impression of large-scale disagreement.

We think that the job which has been done is very fine and that if, indeed, legislation of this type is passed by the Congress and signed by the President, in those parts affecting public broadcasting it will produce a very considerably improved climate for the public enlightenment and for the development of a more effective and creative system of public broadcasting.

Indeed, it seems to me that the place to begin this morning is to observe that since the rather enhanced activities, legislative activities, activities of independent study groups in the last year have begun to take shape, it does appear to me that there is for the first time in many years an emerging consensus on what to do to try to

heal the wounds and reshape the mechanisms of public broadcasting in the United States.

With the development of the H.R. 3333 legislative proposals and the appearance of the Carnegie Commission's report, it seems to me that first a stimulus has been created that is making its effect now quite clear in the internal reforms of the Corporation for the Public Broadcasting, taking structural lines rather similar to those you propose and those we propose.

It is also clear from the news coming from Los Angeles that the Public Broadcasting Service is beginning to move effectively to try to reorganize itself administratively so that it takes both maximum advantage of new technology and moves to a decision process which does not require the concurrence of several hundred different independent agencies before elementary decisions can be made.

All of these steps seem to me to have been produced by the activities in which we are now engaged in colloquy. I think that we are on a sound course. There is an emerging consensus and one ought to take public note of that and to encourage its continuance while we debate the pros and cons of specific actions.

The principal point of difference, it appears to me, in H.R. 3333 and the Carnegie Commission's recommendations relates to whether or not it is appropriate to have a single or a double statutory structure. The endowment for program development and the program services endowment, the endowment for program development as proposed in the legislation, and the program services endowment as proposed in the Carnegie Commission's report are at least natural first cousins.

They perform essentially the same functions for the same goals. They are organized in slightly different ways. In our statement to the committee we dwell on these points of difference because it seems to me that at various points in our own deliberations we came rather close to an outcome such as the one that appears in the proposed legislation, and in the end, we moved toward double organization because we sought to stress the point that I would like to make just briefly before you this morning, which is that the mixture of functions, of the monitoring functions of the operation of the system and the support of programing, one essentially creative and the other administrative, that this mixture, as the history of the Corporation for Public Broadcasting has shown, tends to develop a line of structural conflict in which one or the other is driven out. And typically it is the creative part that is driven out. Accordingly, we moved very consciously for the development of an encapsulated creative structure inside of the Trust, as we called it, which would support the creative role and which would doubly insulate the creative function from the public pressures that typically, while ostensibly dialoging with us as to why things are done, in fact represent in this immensely adversarial society that we have now constructed, create mechanisms which seek to shape the creative function toward the serving of ends of special interest groups.

We don't oppose that. We think that is the public process. But when it happens in too proximate a way, when the administrator, whose principal job it is to develop the grants function and support creative activity, is constantly being hauled before public bodies in

order to justify his decisions, his ability to create or to foster creativity is limited in some respect.

We have seen that in the Corporation for Public Broadcasting. That accounts for the position which the Carnegie Commission took.

We note your concern for the board administration of this endowment activity, and we think that you have a fine proposal. Our proposal differs in detail. This is always the case. One is forced when one proposes board organizations to be specific, and you get down to choices in which alternatives can be almost equally attractive.

In any event, your notion that a screening panel of some sort should be used to buttress the integrity of the President's nominations here is something that we think is very fine. We chose a different mechanism; we like your mechanism too.

We like very much the idea of a nine-person board. That is a relatively small board. We chose a 9-year appointment; I think your choice is 6. Our idea and your idea, it appears to me, is to have a limited number of people appear for qualification in any given year so that their qualities could be spotlighted publicly and one could make decisions out in the open as to the nature of the appointments to this board.

Our view is and your view is that it is political but nonpartisan. We are looking for a kind of person who is, as we say it, a fiduciary, someone whose principal role is the management of the public trust rather than the manipulation of a sensitive communications medium toward ends that represent the interest of the constituency.

We like that. Our approach to your proposals for the governance is different but we are very impressed with the way in which the legislation goes about this. I would commend to the committee the idea of choosing as panel members on the selection panel certain public officials whose principal role involves the support of the science activities or the artistic activities at the public level in Congress. We had the Librarian of Congress, the Director of the National Science Foundation, the Directors of the National Endowment for the Arts and Humanities.

We will then agree that out of this process there seems to me to be a sufficient concurrence of view so that we do not think major difficulties would emerge from the legislation.

Mr. VAN DEERLIN. Could I interrupt just briefly, Dr. McGill? Dr. MCGILL. Yes, Mr. Chairman.

Mr. VAN DEERLIN. Dr. McGill, there is a vote on the House floor and I must step down for about 10 minutes so I may protect my record for all of those people who are watching it in our home town. If you would, please wait until I come back.

Dr. MCGILL. Very good, sir. I would be delighted to.

[Brief recess.]

Mr. VAN DEERLIN. I don't know whether you can possibly make things interesting for Mr. Collins. He said at the Republican caucus this morning they were discussing the Democrats. I just don't know that you can possibly match the intensity of that drama.

Dr. MCGILL. As a full-fledged Independent, I feel safe in this company.