Mr. ARLYCK. Which one?

Mr. VAN DEERLIN. What you just said.

Mr. ARLYCK. On the "Rights to Programs". In other words, after the system broadcasts a program. We're talking about subsequent rights to programs in section 644. We think if you're going to have partial funding; that is, if the public television system is going to partially fund something, we can't really give away exclusive rights. And I said that's particularly true in the case of features because if you're doing a feature and only get partial funding, you need something to bargain. And on that 1-year business, you may not be able to have-in other words, you have to be able to bargain theatrical rights for the first year before it goes on television. We think all that should be up for negotiation.

And then finally, the same thing on educational and library rights. We think that has to be predicated on bigger budgets. That was my last suggestion. We think we can't give away those audiovisual rights afterward unless we have a decent salary included in the budget to begin with.

So finally, I'd just like to point out again that everything I've said about public television is predicated on the notion that a public television system would be in place before any deregulation

occurs.

I would be happy to answer questions.

Mr. SWIFT [presiding]. Thank you very much for your statement. I gather that in terms of your organization, you have just written off any real market for your group as far as commercial television is concerned.

Mr. ARLYCK. Definitely.

Mr. SWIFT. So you see as one of your major markets remaining as public television.

Mr. ARLYCK. I think in the context of this bill, if the deregulation that bill envisions goes through, we are absolutely dead ducks. There is some ferment going on. There is an antitrust suit going on against the networks and there is a little bit of movement there, but I think all of that will be rolled back if this bill goes through the way it is.

Mr. SWIFT. But still you see public television as a market which remains.

Mr. ARLYCK. Right, but we are a poor cousin. If they know we can't go anywhere else, then they can deal with us from a position of power.

Mr. SWIFT. And I do sense from your remarks that you would not agree with Mr. Collins that public television is a totally different breed of cat altogether and should be dealt with separately from the other television aspects of this bill.

Mr. ARLYCK. Well, it depends upon which way you go about it. We think television legislation, the public television legislation, should be in place and working before any deregulation is considered. No, we would like to see it as a separate entity.

Mr. SWIFT. I thought you said one of the two myths was that public television was different from

Mr. ARLYCK. That it was unique.

Mr. SWIFT. Well, what does unique mean?

Mr. ARLYCK. Well, I wasn't speaking as to the way it should be handled in a particular legislative bill. I was talking about a certain mentality. That is, I was speaking to the myth that we don't need to interfere with it; that simply because it is public television, it will automatically be bold and imaginative and right thinking. We don't buy that. We think it needs to be watched very carefully-and legislated.

Mr. SWIFT. You said the situation can only get worse. What situation were you talking about? It seemed to me you were talking about the situation in which you as a film or video producer try to find someone who will buy your product. Were you suggesting that if you totally deregulate, as the bill would indicate, that your situation vis-a-vis selling the product would only get worse? Is that what you mean?

Mr. ARLYCK. Yes, with the networks, because the sorts of programs we tend to produce are not the kinds of programs that are going to bring huge revenues to the networks. And the only reason they may ever be tempted to deal with us is to meet FCC requirements.

Mr. SWIFT. How would you go about funding public television? You said you did not like the provisions in the bill which would permit them to sell some commercial time, and you indicated you don't even like the underwriting concept of the bill. How would you go about providing the funding for public television?

Mr. ARLYCK. Let me say first I am not sure the system needs as much money as it thinks it does. We would like to see it have some more money but we don't think that is the core of the problem. I was a little distressed to listen to the discussion this morning because it all seemed to revolve around that.

I think this committee, in the public television funding bill hearings, has heard enough about the squabbles between CPB, PBS, and station preoccupation with fundraising precisely; that maybe if the system were streamlined and if more money were put into programing, it wouldn't need so much.

But we'd like to see the system have more money. We were sorry to see the spectrum use fee cutback. We think that is a good way to do it. The idea was brought up this morning about cable tax. That seems fine. We're just not so concerned about that Government interference bugaboo that is constantly brought up. We don't see it as the problem that the system sees it as.

Mr. SWIFT. That was the other myth of the two you referred to. You feel that there is no real danger of Government financing bringing about Government control over programing. Obviously there are other countries in the world in which they seem to be unable to develop an appropriate amount of insulation, Canada being one of them.

What mechanisms do you think we might have to put in place if we were to go into full Federal Government funding of all public television? Just to make that clear cut, what kinds of insulation do you think we would have to have to prevent Congress or an administrative agency from then beginning to get too much control over programing?

Mr. ARLYCK. The insulation boils down to democratizing the system. You have got to let the "outs" in. You've got to elect local

boards. You've got to get people on those boards who are not necessarily tied in to the power structure of the society.

Mr. SWIFT. We elect public school boards and we have Federal aid to education, and with that comes a tremendous amount of strength.

Mr. ARLYCK. Well, I don't know that it has to be that way. Mr. SWIFT. I would agree with you, but I can't think of any instance where it has not been that way. Perhaps it is not appropriate to be concerned that history might repeat itself in public broadcasting as it has in other areas where the Federal dollar has come along.

One thing I would like to correct for the record. I am informed-

Mr. ARLYCK. Let me just say that I am not suggesting that the Government ought to—I mean, I think this committee's reluctance, to be very specific, particularly in the programing area, is quite correct, and I think it ought to continue to exercise that restraint. We are certainly not advocating that the Government get more heavily into programing.

Mr. SWIFT. I understand that. I tend to agree that there ought to be a mechanism by which we could have more direct Government funding without necessarily assuming there is going to be a followon of Government control. But I am thinking you had better be sure what that mechanism is, because just to say it is not going to happen or that by doing it at the local level it won't happen seems to be incorrect from the experience we have had in other programs. For the record, I want to correct one thing. Counsel informs me the EEO section in this bill is the same as it was in the last bill, and it is the same the way it is now. In other words, it does not eliminate responsibility of broadcasters in equal employment opportunity.

Mr. ARLYCK. I don't believe that title VI and title IX are there, are they?

Mr. SWIFT. I would defer to counsel on that.

Mr. ARLYCK. My understanding is it was up to the States. There are no title IX and title VI provisions in the bill.

Ms. SACHS. If I could just clarify that, Mr. Chairman, the EEO provisions in title VI of H.R. 3333 are carried over from the provisions that were enacted into law in the Financing Act last year, so that you will have essentially the same situation. And titles VI and IX will apply as they have in the past.

Mr. ARLYCK. And how will affirmative action operate in that context?

Ms. SACHS. The Office of Civil Rights at HEW is in the process of working up regulations. They have told us in oversight hearings that affirmative action will be a part of those regulations.

Mr. SWIFT. I have no further questions.

I am not sure, Mr. Chairman, of the exact way in which I both recognize you and turn the gavel back to you at the same time. I think I do it by moving my body down.

Mr. VAN DEERLIN. Ms. Šachs.

Ms. SACHS. Thank you, Mr. Chairman.

As the chairman said at the outset this morning, we are moving quite quickly into a markup session, so I wondered if you could be

more specific in regard to a couple of suggestions you gave us this morning. One had to do with the selection of national board members for the endowment. You suggested we try to elicit names from some of the groups who are testifying during our hearings.

Could you be more specific in suggesting how that mechanism would work? Are you suggesting a nominating panel composed of the groups that testified or something broader than that, or eliminating Presidential appointments entirely? Exactly what did you have in mind?

Mr. ARLYCK. We don't have the expertise to know the best way to set that up, and we don't feel strongly about it. We can see the dangers in both ways. We're not happy with a complete Presidential appointment system. The main thing we want to stress is that if at the beginning of that process you got names from consumer organizations, from the sorts of groups that are testifying here, if the process started there, you would get a lot of people in the pot who might not be so easily intimidated by anyone who might decide to put the squeeze on.

As to exactly how you want to set that up, through a nominating panel, or if you want names to be directly considered, we would not like to see the whole thing in the President's office. We would like to see this committee have a voice in that and we would like to see a nominating panel representing lots of groups that appear before this committee to put names into that hopper.

Ms. SACHS. Interestingly enough, as the chairman can verify, this subcommittee and other subcommittees and other individuals around the country have participated in the process, have submitted names to the White House at the time of selection of new appointees to the board. Something very strange happens between the time those names are submitted and the time that the list of appointees comes out. That is the problem we were trying to address in the legislation by proposing that only three of the members actually be appointed by the President and that the others be appointed by the board based upon some sort of nominating panel. Mr. ARLYCK. That's fine. We have no problem with that?

Ms. SACHS. You have no problem with that.

Mr. ARLYCK. No.

Ms. SACHS. You said you were not only against the advertising provisions in the bill but also against corporate underwriting. [Mr. Arlyck nods affirmatively.]

Mr. SACHS. Would you oppose corporate underwriting of independent productions as well as public broadcasting productions? Mr. ARLYCK. Yes.

Ms. SACHS. You would?

Mr. ARLYCK. Yes.

Ms. SACHS. Do you think the Congress should enact a ban on corporate underwriting of productions by independent producers or a ban on the broadcasting of those programs that might be underwritten by corporations?

Mr. ARLYCK. I think it depends upon what kind of system we're dealing with. If we're dealing with a system that adequately funds independents, and there are some independents who choose to go to corporate underwriters for their funding, then they would give up

the possibility of having that film broadcast on public television. I don't see a problem with that.

Ms. SACHS. Do you think your colleagues would agree with you on that one?

Mr. ARLYCK. I think so; yes. Certainly our association takes that position.

Ms. SACHS. One additional question.

Mr. ARLYCK. I would say at a minimum we want corporation funds pooled. We think that is a fallback position. We think funding of individual programs is bad.

Mr. SWIFT. Did you just say you think it is all right to have underwriting of productions and then the producer would take his chances as to whether that would be accepted under those circumstances by public television?

Mr. ARLYCK. We don't think there should be corporate underwriting of public television. Now, if a filmmaker or a videomaker wants to go out and produce a product and can get corporate underwriting for that, then he does so with the understanding that it does not get on public television.

Mr. SWIFT. Would you agree that, whatever evil may exist with the underwriting of a program, once it is produced that evil is going to be greater if the underwriting comes prior to production of the program?

Mr. ARLYCK. Do you mean as opposed to step-up fees and this sort of thing to get the program on the air?

Mr. SWIFT. What I am suggesting is a concern expressed at some length by Mr. Marks, that if you permit the advertiser anywhere near a program, it will corrupt it. I am suggesting you said earlier that the more a commercial entity gets involved with a production, the greater the chance for corruption. If your film is all produced and you are just trying to find someone to help you recoup your cost and maybe to help you get it on the air, there is very little they can do to change the content of the program. What you do is go out and contact a commercial entity and say will you help me finance this film? If you just have a script in your hand, the opportunity to influence how that product actually comes out is infinitely greater.

Mr. ARLYCK. I know what you are saying, but I think in a way it's a straw man. That is, we don't claim there is insidious, allpowerful influence on the part of corporate underwriters directly influencing programing. What we think is it creates a false emphasis on the whole system.

Mr. SWIFT. I see.

Mr. ARLYCK. You often tend to get this funding spiral where stations are hiring, hiring more and more staff people to work on underwriting, and it creates a focus in the system which we think is misguided.

Mr. SWIFT. I thank counsel for yielding.

MS. SACHS. One further question. You also expressed some concerns about the copyright provisions in the bill. As it stands now, the stations would have, in effect, a right of first refusal on the programs, after which the rights would revert to the program producers. Are you suggesting that we need to allow more latitude in this area for the endowment to negotiate rights?