Public broadcasting revenues
An unending debate over federal aid

This Briefing pulls together articles from Current reporting on the conflict over federal taxpayer support for public broadcasting. See also our Briefings on nonfederal support and efforts to make the system more cost-efficient.

With the continuing growth of public broadcasting's private-sector revenues, the major congressional appropriation to the system, through the Corporation for Public Broadcasting (CPB), was down to 11.6 percent of the field's total revenues in fiscal 1999. [Table of total revenues in recent years. Pie chart of revenue sources.]

Advocates for the system maintain, however, that the CPB contribution is important in the revenue mix for a couple of reasons:

Though Congress cut back CPB appropriations in 1995, the outlay is growing again. It has risen from its plateau of $250 million to $300 million in fiscal year 2000 and $340 million in 2001. [Table of amounts over the years.] Some gains are necessary just to stay even. The bigger appropriation for fiscal 2000 was an upturn in current dollars, though slightly below the 1990 sum in buying power.

That's on the appropriations side of Congress. But Congress is divided on how to treat public broadcasting funding in the future and has not been able to pass an authorization bill for years.

Leaders of the key House subcommittee discussed a compromise deal in an October 1998 hearing, proposing a tradeoff between a big boost in CPB aid and a reduction of commericialism in underwriting credits. The bipartisan bill, introduced in June 1998, would have launched a commission to propose a long-term funding arrangement. But the bill didn't go anywhere. [Text of Tauzin/Markey reform act.] And the subcommittee's reauthorization bill stalled again in July 1999 during a blow-up over fundraising list exchanges between stations and political groups.

Though Congress didn't "zero out" CPB appropriations during 1995-96 [see below], as some leaders advocated, further cutbacks are likely to be proposed repeatedly.

-------------------------Proposed support from spectrum fees or spectrum auctions

Some observers continue to urge Congress to drop the annual appropriations and adopt a system that would require commercial spectrum users to support public broadcasting. If the FCC wants more public-interest programming in the digital TV age, it should pay public TV to do it rather than inventing rules to drag it out of unmotivated commercial broadcasters, according to policy guru Henry Geller in commission testimony, among others.

Geller recommends a spectrum fee on commercial stations of 1 percent of ad revenues. Similar proposals have been fiercely opposed by commercial broadcasters in the past, though advocates for the idea say that 79 percent of the public would back such a fee, and at a higher rate (5 percent). In 1998, a Clinton Administration commission recommended a spectrum fee as an option for stations doing DTV multicasting (recommendation No. 5).

Political leaders including Vice President Gore also have backed a funding mechanism more palatable to commercial broadcasters: creating a trust fund for public-interest services endowed by proceeds from FCC spectrum auctions.

In 2001, the Grossman-Minow proposal turned again to spectrum auctions as the source of an endowment for a Digital Opportunity Investment Trust that would back digital media production for a variety of nonprofits, not just public broadcasters.

 

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What happened in the federal funding debate of 1995-96?

Since the November 1994 election, the field has been warned that it must find alternatives to federal aid. House Speaker Newt Gingrich and Sen. Larry Pressler began saying that the federal government can't afford to help pubcasting, while contending that the field can support itself if it economizes and earns more of its own keep. Pressler claimed that Bell Atlantic might buy public broadcasting and take on its role at no cost to the taxpayer, but he overstated the company's interest.

Libertarians and some conservatives, who believe government has no good reason to support media, were glad to see the issue addressed and were pleased at the prospect of "defunding the Left." Pressler demanded that pubcasters turn over information on controversial programs and employees' political views. Conservatives armed themselves with material by pamphleteers Laurence Jarvik and David Horowitz.

But most polls show the majority of the public wants Congress to continue helping public broadcasting. When they compare it with other public services, they value it more highly than all except the armed forces and law enforcment.

Thousands of viewers and listeners told members of Congress to lay off pubcasting. Defenders stepped forward in unlikely places like Dunmore, W.Va., to dispel the notion that the field serves entirely upper-middle-class tastes. Professional organizers formed a Citizens' Committee for Public Broadcasting to coordinate grass roots activists.

Gingrich tried to make it clear that he had no problems with the good people of Georgia Public Television, lending his hand in a pledge drive in March 1995.

In April, the head of the House subcommittee that oversees CPB, Jack Fields (R-Tex.), asked pubcasters to draw up a plan for their financial future within a month. Fields got two separate plans, one from CPB and one from the quartet of organizations representing the stations.

The quartet proposed that Congress endow a "trust fund" at the level of several billion dollars that would pay out an annual amount similar to the present CPB appropriations, and offered several options for finding the money without recommending any in particular. The quartet plan and CPB's had a great deal of overlap.

By summer 1995, pubcasters were detecting a "sea change'' in attitudes on Capitol Hill. Factions within the field took their own legislative pleas to Congress — one group of stations seeking authority to start carrying commercials on public TV. Pressler made one of the most pronounced shifts, from loudest critic to problem-solving friend of pubcasting.

In the Senate, Pressler looked for ways to replace federal aid to pubcasting rather than cutting it off cold turkey. He stepped forward briefly in September with the most promising proposal for a trust fund assisting the field.

Pressler looked at the FCC's planned transition of TV to digital transmission and proposed (as Majority Leader Bob Dole did later) that commercial broadcasters be required to bid for the "advanced TV" (later known as digital TV) channels that would be used to make the transition to digital. Pressler proposed spending a portion of the huge proceeds to aid pubcasting; others like Dole looked mainly at reducing the national debt.

Though Pressler's idea didn't go anywhere, ATV spectrum became the most promising potential source of capital for the trust fund, and it had some political chance if it were limited to the spectrum already promised to public TV by the FCC. But ATV spectrum was tied up in a tangle of conflicting possibilities, including the technological future of TV, as well as deficit reduction and competing interests among the public TV stations. [Briefing on the muddle surrounding the transition to digital ATV.]

Late in February 1996, after his subcommittee completed the big telecom act rewrite, Fields drew up a bill that would end CPB appropriations in four years and create a trust fund to pick up aid to the field thereafter. [Full text of the Fields bill, H.R. 2979.]

But pubcasters said the trust fund would be woefully underendowed. The vacant channels that Fields proposed to auction off as capital for the trust fund may not be as available or as valuable as hoped. And it may take a much larger pool of capital to pay out enough each year to come close to the present $275 million appropriation. Endowment experts nearly universally believe investment plans like the trust fund need to be started with 20 times as much capital as you hope to spend each year.

The Fields bill offered substantial relief to some stations — especially welcome to those that are already under financial stress like Pittsburgh's WQED-FM/TV. In cities where there's more than one public TV channel, pubcasters would be permitted to sell off one of them, though at a loss to potential public service. Seeking a solid backing for his bill from pubcasters, Fields was frustrated by divisions within public TV, and gave its leaders an ultimatum to reach consensus. By May 1996, when Pressler informally floated a draft bill to establish a trust fund on future funding, it was late for Congress to work out the details, so he proposed a commission to take on that task.[Text of the Pressler bill.]

Even some of the strongest critics of federal spending — including John Kasich, the House leader in charge of deficit reduction — supported substantial aid to a trust fund that would get CPB out of the budget. Fields revised his bill, but his approach lacked support from both parties. By fall 1996 the issue was dead for the year.

With the defeat of Pressler in the 1996 elections, Sen. John McCain (R-Ariz.) inherited the key Senate subcommittee. And with Fields' retirement, Rep. W.J. (Billy) Tauzin (R-La.) took over the House subcommittee. Tauzin floated a trial balloon about a spectrum fee, through which commercial broadcasters would help support public broadcasting.

Federal cutbacks also threatened the arts and humanities endowments, backers of some of the strongest programming carried on public TV and radio. NEA cut its number of grants in half for 1997.

 

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To Current's home page

Current Briefing: What can be done — and is being done — to raise support from nonfederal sources.

Current Briefing: What pubcasters are doing to improve their efficiency.

 

Web page revised April 13, 2001
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