One option which we believe could accommodate all of the funding concerns we have expressed would be to establish a statutory system match whereby one Federal dollar would be put into a radio station fund for each $2.00 the public radio system raised, to be dispersed according to a formula developed by the Endowment and the stations. An additional $0.50 for These each two radio dollars could go into a supplemental fund to assist with the developmental needs described earlier. supplemental funds could be: 1) administered by the Endowment, or 2) given in grants to be administered by station representational organizations, or 3) merged with the basic station grants in anticipation that they would be reaggregated at the organization of their choice. Today, the public radio system does not yet raise a share of public broadcasting's non-Federal match comparable to what it must receive from CPB to survive. However, the radio system's (although not necessarily the individual stations') fundraising ability is growing at a faster rate than public television's. The latest non-Federal fundraising information from CPB (from 1977) shows that radio raised 44 million non-federal dollars. We anticipate that that amount would continue to increase over time so that a 1:2 system match, supplemented by a development fund, would cover station needs. Through this method, radio and television stations would not have to scurry for the same funds. It should be noted however, that in accommodating television's and radio's needs through projections based on their current station grants, public television would receive substantial funds at the local level for national programming, but radio would not. This is because NPR is paid directly by CPB for producing programs for national distribution. Facilities Funding Running through my testimony thus far is the strong belief that there will continue to be a critical need for facilities funding assistance for public radio beyond 1983 and the urgent hope that the Subcommittee will include such assistance in a final bill. As I've said in every forum I could, development of programming services for public radio delivery is a top priority. But so is insuring that our satellite does not become a sophisticated programming warehouse because the public can't hear most of our programs. The new local communications delivery systems that could revolutionize the television marketplace in the next several years are likely to have limited applicability to public radio for two reasons: One, because the public uses radio as a portable medium; and two, because only community-based stations providing local programming can sustain the local integrity of the medium. Further, when a public radio licensee enters a community, it defines its services against the commercial mean. In other words, it attempts to provide those services which have proved either only marginally profitable or not profitable and which are therefore not otherwise being provided in that market. In larger markets, there are often substantial audiences for more than one public radio service. The beauty of the satellite is that it makes possible the simultaneous delivery to any market a range of these services. The bane is that its existence underscores the dire need for more radio outlets. This Subcommittee recognized in the 1978 Financing Act the need to extend the reach of our services beyond the 50% to 60% of the public who can now hear at least a single signal. From the vantage point of Summer 1979, we cannot yet predict with any accuracy how effective the new Public Telecommunications Facilities Program contained in that Act will be by 1983 in extending the system, nor how well timed the availability of PTFP monies will be with current efforts to open up additional frequencies for public radio use. Nevertheless, based on the fits and starts of the appropriations process, the current scarcity of frequencies and the magnitude of the expansion task, we can forecast with certainty that there will still be a need for more public radio stations beyond 1983. Further, since our primary focus thus far has been on the expansion of public radio, we have only begun to turn our attention to the need to upgrade some of the "museum pieces" with which many of our stations operate. Facilities funding may be another area where public radio's and public television's needs beyond 1983 will differ substantially enough to treat them separately in continuing a facilities program. The split of 75% for expansion and 25% would continue to serve well our needs. Since few public radio stations are well-enough situated financially to budget for equipment, most must come through new dollars. Many of our stations are still operating under severe technical limitations that make it impossible for them to contribute programming to or deliver programming from the satellite that is comparable to the high quality sound that that system makes possible. The last link between the satellite and the listener needs to be strengthened. Opening New Avenues to Revenue It is clear that public broadcasting faces some rough times in raising non-federal revenues. Public radio has only recently begun to develop significant fundraising skills, the returns on which may be necessary to supplant declining support by many state and local governments. We appreciate, therefore, the bill's attempt to infuse public broadcasting with new sources of funds and greater fundraising flexibility. As a new class of nonprofit, cultural and educational licensee through the elimination of commercial restrictions on Federally funded facilities, the public broadcasting station would be permitted to seek money through commercial ventures, including advertising. allow public radio to pursue other revenue sources on a nonprofit basis, except when they extend to advertising. We support the provisions which would We have problems both philosophically and practically with opening the door to advertising on public radio. As noted earlier, public radio often defines itself against the commercial mean, according to what services are not being provided by commercial broadcasters. The strong (nearly unanimous) view of our membership is that commercials represent the antithesis of what they perceive as their mission. Practically, experiences with public radio advertising in the generally less active Canadian radio marketplace have failed. Their experience, what we know about the busy U.S. radio marketplace and the inherent non-profitability of public radio programming strongly suggest that without altering a station's format, the amount of advertising money that a station could draw would not warrant risking the "public" orientation of the station. Again, on purely practical grounds, about 70% of our licensees are states or institutions, many of whom would not be permitted to advertise. We therefore |