unanticipated inequities. There are some small States that may be unfairly penalized.

It also, in my opinion, does not fully encourage an important principle. That is the self-help ethic. The third sector's effort to attract support from all parts of the public is a healthy one. It ought to be encouraged through some kind of a match or incentive approach. We believe, therefore, that it is premature to deny the good old American premise that there ought to be some relationship between the success of an operation and the amount of money that would be returned to it.

More that that, we recognize there are tremendous differences in costs across the country. In New York City, for example, we work under very severe cost burdens because of the high price of everything in our marketplace. We also work under conditions not dissimilar to those Bill experiences in Chicago.

Our need is to serve a really gigantic community. No less than 18 million viewers reside within our signal alone. The variety of programs we need to provide locally is incredibly demanding of, quite honestly, a substantial amount of those moneys we can both raise, and hopefully those moneys that will be returned through a match.

So we would urge the distribution mechanism, in particular, be a device that we carefully review together so that we might hopefully continue to be encouraged to go forth for funds.

I would volunteer the cooperation of New York in its entirety. The nine public stations there will happily work with this committee because we now in our State have a per capita approach. New York State does indeed stipulate a per capita contribution. It also provides very important base grants. No matter what the size of the station, each starts out with a substantial lump sum. There is thus no fundamental inability to do a basic job. Then, based upon a series of criteria, the stations divide the rest of the money, both according to performance, which is important, and according to the size of the marketplace that has to be served.

We have found that approach to be fair and the basis for an extraordinary degree of cooperation among the nine stations. Some are small and some are large. Together, we would offer our services to this committee if it would be of some constructive use in developing a distribution formula.

Finally, Mr. Chairman, I would like to reaffirm the point that I stressed at the outset. I think this committee has been tremendously useful to us in helping clarify this very important not-for-profit concept. I cannot stress enough the utility of challenging pieces of legislation and say how much they have helped expand our hori

zons.

I think the progress you have seen over the past year in public broadcasting is partly attributable to the series of tough questions and, creative solutions you have put forward.

Some will say: Gee, public broadcasting is forever fumbling around trying to get its act together. I think public broadcasting is constructively moving toward tomorrow's broadcasting at a very deliberate pace. If we can put together an economic model for a reliable base of funding, I think you are going to see us able to provide multiple-program services.

I cannot help but believe that this legislation can help speed that process. We, of course, would like to work with you as closely as possible in achieving that end.

[Testimony resumes on p. 15.]

[Mr. Iselin's prepared statement follows:]

STATEMENT BY JOHN JAY ISELIN

PRESIDENT, WNET/THIRTEEN, NEWARK/NEW YORK

BEFORE THE HOUSE SUBCOMMITTEE ON COMMUNICATIONS

JUNE 20, 1979

Mr. Chairman, I want to thank you and other members of the Subcommittee for the opportunity to comment on HR3333. Ever since Federal financing became part of the public broadcasting environment, we have been faced with a classic political problem: how to secure essential assistance from Congress, while providing sufficient accountability to Congress, and not

compromising our independence?

It seems to me that HR3333 offers some innovative answers to

this issue. With some I agree--and with some I do not.

Most of the debate involving Federal funding has failed to acknowledge an inevitable political reality. Once Federal funds enter our life, they by definition make us part of the American political process. For those who believe in the independence of the voluntary sector of American society, this political dilemma has been confounding. How to preserve institutional integrity while providing political accountability?

By proposing a new funding mechanism for public broadcasting, HR3333 is consistent with our tradition of keeping what Alexis de Tocqueville referred to as the Third Sector of our society in

healthy existence.

HR3333 would permit stations the option of accepting a

limited amount of advertising during the broadcast day. There are many reasons to be concerned about any form of advertising. Nevertheless, it seems to me that this proposal could serve public broadcasting's need for increased and diversified funding. So much depends upon the precise guidelines established for any advertising access to public broadcasting. Properly and carefully designed, limited advertising could broaden the system's funding base. By further diversifying financial support, it could advance public broadcasting's mission to deliver high quality programming to the American people.

The proposed legislation surfaces two unavoidable financial

facts. First, underwriting support by corporations has been

commendable but limited.

Underwriting has failed to match the

system's program needs. Second, Federal assistance seems stalled at levels short of minimum requirements for a full program service. some fresh and creative funding initiative is pressingly needed. Otherwise, public broadcasting may fail to fulfill its bright promise to our times.

In sum,

We recognize the many concerns about the dangers of uncontrolled advertising. We share them. We do believe, however, that HR3333 has designed safeguards against the principal excesses that may be associated with advertising. Properly circumscribed, we believe that limited advertising could expand public broadcasting's

existing funding sources.

Such an approach has worked in Canada,

France and Germany. Much would depend upon the precise guidelines established to keep such advertising segregated from programs. Furthermore, we believe that HR3333 represents an opportunity further to encourage corporate partnerships with public broadcasting. We very much believe the corporate community should increase its involvement in public television. It may well be, in fact, that current underwriting procedures first should be reviewed and revised. Possibly, the next steps should be undertaken only on an experimental basis. Still, we commend the Subcommittee's initiative in confronting a basic funding dilemma. We also welcome the opportunity mutually to examine these options with the Sub

committee.

There are many other sections of the HR3333 I would like to address. In the interests of time, I shall limit my comments to two other provisions.

Section 621 establishes an Endowment for Program Development. Its exclusive function is to concentrate on the development of programming. Whether there is a Corporation for Public Broadcasting or an Endowment for the Program Development, we believe there must be adherence to a number of basic principles.

First, the organization must be as free as possible from political pressure.

HR3333 attempts to develop a number of insulat

ing devices. It creates a new appointment procedure for the Board of Directors and stipulates that the Endowment cannot even be incorporated in Washington. We applaud these proposals, even as