But I think it goes, Mr. Shooshan, to the critical point about so many of those commercial programs. It is the interruption that has led to a degradation of the form. That is very, very severe. It is a cliche, but I think a real one, that no longer does commercial broadcasting in a sense think of programing as serving the public. It thinks of the program as delivering a product, you and me, to a commercial advertiser. And the space between commercials becomes just a gap to fill on the way to delivering the product to the advertiser.

That has set up a really fatal degradation of a very important instrument of society. I think one of the most important and essential differences that this committee has put into the rewrite is the clear insistence that programs not be interrupted.

Second, and I think this is another important consideration, whatever is done in the name of advertising not be so tied to a program that you are buying the show. It is quite a different thing to underwrite a program. I think that is a valid contribution. But as I understand the concept we are talking about in terms of clustered commercials, they really go very much toward some kind of an institutional message separated from programs themselves. I think if we got into the business of being tempted to slot advertisers in the show, we too would go right down the path Mr. Marks has so eloquently identified. It would be reason for everyone at this table to resign forthwith. We are in this business, because we believe that public broadcasting can deliver not a product to an advertiser but our own kind of product, and that is first-class programing, to the public.

Those of us who find the advertising cluster concept an intriguing and interesting one only approach it with those strictures upon it. I think it is the interruption bit and then the 7-minute bit, and then the fact that however appropriate vaudeville is as an American art form, and however appropriate it is that it is on the air, it is not for our air.

Mr. SHOOSHAN. Fine. Thank you, Mr. Chairman.

Mr. VAN DEERLIN. Mr. Wunder, minority counsel.

Mr. WUNDER. Thank you, Mr. Chairman.

Mr. Hart, I would like to ask you, Mr. Press, and Mr. Steen, who seem to be the strongest on this subject, whether you believe that the funding of public television should primarily continue to come from governmental sources.

Mr. HART. Mr. Wunder, when you say primarily, do you mean the majority or the lion's share?

Mr. WUNDER. Yes, the lion's share.

Mr. HART. I think it inevitable in our business that a great amount must come. We simply have limited means of producing income in our system. If those methods-if we are imaginative enough to generate new methods, if there are new methods provided in the bill that allow us to generate income outside the Federal sector, that is a great advantage to us. But I don't believe anyone in our industry looks to the Federal Government to be the primary funder of public television.

Mr. WUNDER. I am not talking about the Federal Government. I am talking about governmental sources.

Mr. HART. Governmental, local and State?

Mr. WUNDER. Whatever. Taxpayer-supported through taxes on the populace.

Mr. HART. Taxes. Well, it is so different from State to State. For example, I am a community-owned station and my tax base-and these two gentlemen are also-our tax base of support is so much smaller, for example, than these two gentlemen that it is difficult for us to answer that question. I am sure you will get quite a different answer from Mr. Press.

Ideally we should be supported by our constituents, our audience. As a practical matter, the way we are structured it is impossible. Mr. WUNDER. The point is that is not going to happen, is it? Mr. HART. I beg your pardon?

Mr. WUNDER. It is not going to happen.

Mr. HART. No, it is not.

Mr. WUNDER. If the primary source of your income is to come from taxpayers, from all of the taxpayers, I am somewhat troubled by our concern about not appealing to all of these people who are paying for you. The concern about appealing to mass audiences. You use these pejorative terms, such as "blatant commercialism,' as if it were somehow bad to appeal to mass audiences. Yet those are the people who are paying for it.

Mr. PRESS. Those are also the people who pay for our schools, our libraries, our museums. And in some of those cases it is not by any means the majority who use them.

Mr. WUNDER. Are they analogous, though? Is public television analogous to a hospital?

Mr. PRESS. Yes; I think it is. I think the thing that makes us like broadcasting, commercial broadcasting, is we are using the same device to get to the people. But I think the service we are offering is much more analogous to the library, the museum, and we are more related to the humanities fund than we are to the commercial sector.

I think that every program we put on ought to be designed to do a specific thing for a specific audience, an audience being an interest group, not necessarily a number of certain people. And anything that interferes with that-

Mr. WUNDER. Do you believe that is the function of Government? Mr. PRESS. Yes.

Mr. WUNDER. To provide for special-interest groups?

Mr. PRESS. To provide services of which all people can avail themselves and which are important to all people.

Mr. WUNDER. That is contrary to what you have just said.

Mr. PRESS. No; I don't think so.

Mr. WUNDER. You have said that you think each program should appeal to a different interest group.

Mr. PRESS. It should appeal to some need of people. Now, that need may be universal. Everybody should read, and there are certain things about history every person should know. They will not avail themselves of the opportunity, but we do present it through our institutions, and I think this is one of those institutions.

So I think it entirely appropriate that it be funded by a tax base as those other institutions are.

Mr. VAN DEERLIN. If the gentleman will yield.

[Mr. Wunder nods affirmatively.]

Mr. VAN DEERLIN. What percentage of your operation would you say comes from governmental sources?

Mr. PRESS. Eighty percent.

Mr. VAN DEERLIN. Substantially higher than average.

[Mr. Press nods affirmatively.]

Mr. VAN DEERLIN. Ms. Sachs.

Ms. SACHS. Thank you, Mr. Chairman. I have one question for all the panelists. You all express support for retaining some form of a matching concept for distributing the funds to stations. Mr. Press is interested in a direct match to the stations, and Mr. Iselin suggested a base grant with some sort of incentive built on based on the amount of money raised by the stations.

Do the rest of you have any preference as between these two possibilities, or perhaps an alternative suggestion for us? And do you think we should build a distribution formula into the legislation? Some people have suggested that we leave that determination to the endowment to be worked out after the legislation passes. Do you think there is any benefit in building the distribution formula into the legislation?

Mr. McCarter.

Mr. MCCARTER. Yes, Ms. Sachs, I would support the base notion plus the incentive over and above, and I believe it probably is so important that it should be built into the legislation. It should be up front.

Mr. ISELIN. It is a fact that through a lot of trial and effort, we have worked together in this pluralistic system of ours. Finally, we have reached a point at which I think those two criteria are pretty well accepted by stations large and small.

So I think we really have something here that does conform to the ethic of this not-for-profit industry that still needs the incentive to go out and charge. I would say that however best we can preserve and extend that approach in the wisdom of this committee would be the way to go.

It would probably therefore be wise to at least accept the parameters within the bill.

I think those two principles probably ought to be incorporated because they solve the inequity question. Also, I think they encourage us all to do what we have to do. And that, quite honestly, is not to make a profit but to work for a living.

Mr. HART. Ms. Sachs, I agree with this position that it should be addressed in the bill. I support the concept of the basic grant, but I also strongly support the incentive portion of the grant being directly tied to generating new income from the station. I think that is a critically important issue if that money is to develop the maximum return.

Mr. PRESS. I agree that it should be written in. I think that we would do better and I would certainly rather conduct the dialog with the Congress, who know what it is they intend, than with others who seek to interpret it.

Mr. STEEN. I too endorse the notion. I think anything which can be included in the bill which reinforces the notion of the stations making the determination is a very sound notion. I would be very itchy about leaving that to the discretion of the endowment, and

for a lot of reasons. Many of us are very different, as we have already said. Many of us have very different local needs. Many of us have duplicated signals or there are additional stations in the area where we try to work in harmony and not duplicate schedules.

There are a lot of reasons why the station ought to have a good deal of local determination.

Ms. SACHS. If you have any specific suggestions on language in that area, we would be most appreciative if you would submit it to

us.

One final question. Mr. McCarter mentioned that a group of stations have petitioned the FCC for permission to try an experiment with "institutional-oriented underwriting," I believe it is called. Do you anticipate that the FCC will approve such an experiment? If the Congress decided not to go all the way and include the specific advertising provisions that are now contained in the billdo you feel that some direction to the Commission authorizing such an experiment would be necessary at this point?

Mr. MCCARTER. It might be necessary. It is hard to read the attitude of the Commission on these matters now. There seems to be a period of enlightenment underway, and it might be very helpful to move as you suggest.

Ms. SACHS. Does anyone else have any thoughts on that? [No response.]

That is all, Mr. Chairman.

Mr. SWIFT [presiding]. I want to thank the panel. This has been for me an extremely useful and positive discussion of very difficult issues, for which I am sure we all wish the answers were more clear to each of us than they are in this area of trying to develop a public policy to see that the public is served through public television and at the same time figure out how to finance it. That is always difficult.

I thank the panel very much for your help to the committee. The committee will now hear from Mr. Ralph Arlyck.

Welcome to the committee, and if you would state for the record your name and address and who you are in relationship to this bill, we would be happy to take your testimony in any form you would care to present it.

STATEMENT OF RALPH ARLYCK, ASSOCIATION OF
INDEPENDENT VIDEO AND FILM MAKERS

Mr. ARLYCK. Mr. Acting Chairman, thank you for the opportunity to appear here this morning. My name is Ralph Arlyck and I represent the Association of Independent Video and Film Makers. There is a conventional wisdom among the consumer advocate and public interest groups opposed to this bill, that while in general, it has some very serious problems, the public television section is excellent.

We're not so sure about that. We think the bill in general does have some serious problems, but we think the public television section needs some first aid also.

Let me say first we very much admire the work this committee did on the funding bill, and to the extent that the best of that work is included here, we're very happy about that. But we think it is

only a beginning. We think there are some weaknesses which need to be strengthened.

But what's more important, we're afraid that in the context of the total deregulation this bill envisions, it won't mean a whole lot. So in anything I say here, there is an underlying assumption that we think, in answer to Mr. Collins' question, that a public television system needs to be in place and working before any deregulation is considered.

Perhaps I should say a little bit about who we are. AIVF is an association of at least 1,000 video and film makers all across the country, and the films and tapes we make win academy awards, Emmy nominations, and are shown in foreign festivals. In other words, we are not the lunatic fringe going around expressing ourselves.

We are really small business people. We're entrepreneurs. At tax time we fill out schedule C, profit and loss from business and profession-admittedly, more often a loss than a profit. But that's because even though we're interested in earning a living, we're also frequently interested in communicating an idea about which we feel strongly, regardless of its profitability.

But there is a limit to how long you can go on doing that and I know that's not the way this country was built. But we don't think it's un-American. We're wondering if-

Mr. SWIFT. I am not sure that that is not the way this country was built. It is just not what gets written up in the history books. Mr. ARLYCK. I would agree with you.

We wonder if you haven't allowed yourself to fall into a trap in considering this bill, in feeling that your only choice in these matters lies between unbridled free enterprise on the one hand and some sort of State socialism on a Soviet model. It seems to us that you've gone the free enterprise route and you've painted all regulation with the same big Government, bureaucratic brush. And then you seen to have tried to make the whole thing swing on something you envision as "benign marketplace forces.'

One almost gets the feeling that you expect that somewhere in the recesses of the Justice Department or the new CRC, at some point an alarm is going to go off and there's going to be a computerized voice that says, "Marketplace forces are now deficient; please take appropriate corrective action."

We know the marketplace because we're out there every day, and none of our members has been anywhere near a network newscast or documentary in 30 years. And as far as entertainment is concerned, independents-and I'm talking about big independents now-have only had a shot at that recently because the FCC and the courts have insisted upon it.

So we think the situation can only get worse if you grant licenses in perpetuity, if you eliminate comparative hearings and weaken the fairness doctrine and don't provide equal access to developing technologies. We don't think the programs we make and the views we represent will ever be heard.

The reason I've made some comments about how your bill relates to commercial television before my remarks about public television is because we think those things are tied together. That is, if our access to the networks continues to decrease-and we don't see