Before the Subcommittee on Labor, Health and Human Services, Education and Related Agencies, U.S. Senate Committee on Appropriations
May 20, 2011
Chairman Harkin, Ranking Member Shelby, and members of the subcommittee, thank you for allowing me to submit testimony on behalf of our nation’s public media system.
Every day across the country, people turn to public radio and television for programs that inform and inspire; for lifelong education; for local news and information; for arts and cultural content, and for a variety of other services. Public broadcasting, or what should more accurately be called “public media,” has many faces, and employs around 24,000 people, but is best-known by the 1,300 local public radio and television stations across the country that provide unique local service to their communities. These stations collectively reach more than 98 percent of the U.S. population with free, over-the-air television and radio programming and other services. When Congress appropriates money to the Corporation for Public Broadcasting (CPB), it is benefitting the 170 million Americans who use public broadcasting each month by supporting the stations that serve them.
CPB distributes federal funds in accordance with a statutory formula contained in the Public Broadcasting Act of 1967, under which more than 70 percent of our funds go directly to local public television and radio stations. CPB also supports the creation of programming for radio, television, and digital media. The statute ensures diversity in this programming by requiring CPB to fund independent and minority producers. CPB fulfills these obligations by funding the Independent Television Service and the five Minority Consortia in television (which represent African American, Latino, Asian American, Native American, and Pacific Islander producers) and similar organizations in radio. CPB funds the National Program Service at PBS, which supports signature programs like PBS NewsHour, NOVA and American Experience; as well as educational, scientifically-researched, impactful and trusted children’s programming like Sesame Street, Curious George, and Word Girl.
In addition, CPB spends six percent of its funds on projects that benefit the entire public broadcasting community, befitting its role as the only entity responsible for and answerable to the entirety of the public media system. CPB negotiates and pays music royalties for all of public broadcasting, for example, and funds research to explore audience needs and technological opportunities. Added together, these efforts account for 95 percent of the funds appropriated to CPB (which is limited by law to an administrative budget of no more than five percent).
Some have suggested that public broadcasting can easily do without federal funding. Let me briefly explain the critical importance of federal funding to public media as it exists today, and what the impact would be if it were to go away. Congress designed the public media system in this country as a public-private partnership, where minimal federal dollars are leveraged to the maximum extent to ensure universal service to every American and every community. While CPB’s appropriation accounts for around 15 percent of the entire cost of public broadcasting, this “lifeblood” funding leverages critical investments from state and local governments, universities, businesses, foundations and from viewers and listeners of local stations. Put simply, CPB funding is the foundation on which the entire system is built. Undermining the foundation puts the entire structure in jeopardy.
CPB funding is particularly important to minority-owned public stations and stations in rural areas, which are more challenging to operate due to low population density of viewers and listeners; the need to operate multiple transmitters to reach far-flung populations; and the limited disposable incomes and potential for private support often found in rural America. In FY 2009, individual donations represented 17 percent of an average rural station’s total revenue, versus almost 28 percent for the industry as a whole. The disproportional importance of federal funding to stations in rural areas is clear – in FY 2009, 108 rural stations relied on CPB for at least 25 percent of their revenue; while 22 rural stations, many on Native American reservations, relied on CPB funding for at least 50 percent of their revenue.
Finally, CPB funding is also the only funding source without a station cost associated with it – all other fundraising costs money (for stations and for any nonprofit). For example, in FY 2008 it costs the average station 40 cents on the dollar to raise funds from individuals and local businesses.
Numerous studies, including one conducted by the Government Accountability Office (GAO), have shown that the loss of federal funding would create a void not easily filled by other sources of funding. For the vast majority of stations, this would mean a drastic and immediate cutback in service, local programming and personnel, and in many cases stations would “go dark.” Further, the loss of federal funding would have a severe impact on a station’s ability to acquire national programming, such as The Electric Company, Super Why!, NOVA, American Experience, Frontline, PBS NewsHour, Marketplace and many others, from PBS, NPR, American Public Media and other sources. Federal funding has been the basis for this highly successful public media model since CPB was created nearly 45 years ago. Without it, public media ceases to exist as its creators intended.
Core System Support
One of CPB’s core responsibilities is to preserve, protect, and advance public media. Public television and radio stations are facing an unprecedented array of challenges. These include the challenging economy, reductions in federal and state support, shifting community demographics, fracturing audiences and emerging patterns in the way content is delivered and consumed. Public television has been hit especially hard. Over the past two years, the public television economy has declined by $250 million dollars, and CPB projects a further $250 million decline over the next two years. In addition, while the digital conversion in public television has provided exciting new opportunities for service, digital equipment becomes obsolete much more quickly than the analog equipment it replaced. The more or less constant cost of equipment replacement is further affecting public television. To cope with declining revenue and increasing equipment expenses, many stations have been forced to cut local service. As a result, the need to maintain infrastructure is draining resources from content and local service at stations.
CPB is working in two areas to help the system begin to facilitate collaboration and operational efficiencies: mergers and consolidations, and joint master control operations.
Mergers and Consolidation: Most communities are served by one or more stand-alone public broadcasting stations. While independent local stations theoretically have a great deal of flexibility in choosing how to serve their community, the limited scale of many stand-alone operations drives up operating costs and constrains stations’ ability to offer local service.
State networks like Iowa Public Television and Alabama Public Television have demonstrated the advantage of taking an alternative approach. Combining management and back office operations to serve multiple communities can increase efficiency and free resources for additional local service.
CPB plans to continue to work with stations to explore operating models that bring multiple stations together as an important focus of our work. Our efforts include offering informal advice to stations considering mergers and, once stations issue a formal intent to merge, providing some financial assistance with merger-related costs.
Central Master Control: A master control room is the central hub of a television station’s technical operation, the point where content sources come together to be routed to the station transmitter. In the past, each television station has needed a master control room. Digital technology now allows the master control function to be provided from a remote location. A single master control facility can now serve multiple stations. This is important because master controls are expensive; they are both capital- and people-intensive. Combining master control operations can yield significant cost savings, increase productivity, and encourage station collaboration in other back-office areas.
CPB is supporting the design and construction of multi-station master control facilities. We are also exploring the practicality of creating a nationwide “master plan” for master control facilities. As the specifics of a new consolidated master control function evolve, there is an opportunity to realize cost savings, reduce the capital burden on stations, and improve efficiency for public television.
In the words of our statute, “[I]t is in the public interest to encourage ...the use of [public] media for instructional, educational, and cultural purposes.” Education continues to be a core value of the public broadcasting community, as it has been since its inception. For over 40 years, public broadcasting stations have made a robust and vital contribution to education and an informed and strengthened civil society, and these contributions are reflected in CPB’s recently-launched American Graduate initiative.
American Graduate is a significant new public media initiative to help improve our nation’s high school graduation rates. Every year, more than 1 million students drop out of high school. If that trend continues, over the next 10 years, it will cost the nation more than $3 trillion in lost wages, productivity and taxes. American Graduate expands on public media’s record of success in early childhood education to reach students in middle school – a critical point when the disengagement that leads to dropping out in high school often begins. Local public radio and television stations are at the core of this initiative and are uniquely positioned to educate and engage various stakeholders on the dropout problem, rally support and help coordinate efforts in communities, something experts say is crucial to a solution.
CPB’s Requests for Appropriations
Public media stations continue to evolve, both operationally and more importantly in the myriad ways they serve their communities. Stations are committed to reaching viewers and listeners on whatever platform they use – from smart phones to iPads to radios to television sets. While stations can and will continue to adapt and thrive in the digital age, without sufficient support they cannot provide service on evolving platforms. As the Federal Communications Commission’s National Broadband Plan noted, “Today, public media is at a crossroads…[it] must continue expanding beyond its original broadcast-based mission to form the core of a broader new public media network that better serves the new multi-platform information needs of America. To achieve these important expansions, public media will require additional funding.”
CPB Base Appropriation (FY 2014): CPB has requested a $495 million advance appropriation for FY 2014, to be spent in accordance with the Public Broadcasting Act’s funding formula. The two-year advance appropriation for public broadcasting, in place since 1976, is the most important part of the “firewall” that Congress constructed between federal funding and the programs that appear on public television and radio. President Gerald Ford, who initially proposed a five-year advance appropriation for CPB, said it best when he said that advance funding “is a constructive approach to the sensitive relationship between federal funding and freedom of expression. It would eliminate the scrutiny of programming that could be associated with the normal budgetary and appropriations processes of the government.”
Our FY 2014 request balances the fiscal reality facing our nation with the stark fact that stations are struggling to maintain service to their communities in the face of shrinking non-federal revenues – a $218 million, or 9.2 percent, drop between FY 2008 and 2009 alone. Even with these challenges, public broadcasting contributes to American society in many ways that are worthy of greater federal investment. In FY 2014, CPB will continue to support a range of programming and initiatives through which stations provide a valuable and trusted service to millions of Americans.
CPB Digital Funding (FY 2012): CPB requests $48 million for CPB Digital for FY 2012, $11.5 million less than requested in FY 2011. The digital conversion of public media is a much more extensive process than simply replacing analog with digital equipment. Digital conversion requires the development of new organizational models optimized for the digital environment, with new workflows, multi-channel services, and multi-platform distribution. CPB Digital funding, which can fund a wider range of projects than our formula-governed main account, has led to some of the most important innovation in public broadcasting’s history. The continuing availability of this funding is critical to public broadcasting’s progress toward a true, digital public service media.
Ready To Learn (FY 2012): CPB requests that the U.S. Department of Education’s Ready To Learn (RTL) program be funded at $27.3 million, the same level as FY 2011. A partnership between the Department, CPB, PBS and local public television stations, RTL leverages the power of digital television technology, the Internet, gaming platforms and other media to help millions of young children learn the reading and math skills they need to succeed in school. The partnership’s work over the past few years has demonstrably increased reading scores particularly among low-income children and has erased the performance gap between children from low-income households and their more affluent peers. An appropriation of $27.3 million in FY 2012 will enable RTL to develop tools to improve children’s performance in math as well as reading and bring on-the-ground, station-convened early learning activities to more communities.
All told, the federal contribution to public media through CPB amounts to $1.39 per American per year and, in a model private-public partnership, the public media system takes each of these dollars and raises six dollars more. The returns for taxpayers are exponential. They include in-depth news and public affairs programming on the local, state, national and international level; unmatched, commercial-free children’s programming; formal and informal educational instruction for all ages; and inspiring arts and cultural content.
Mr. Chairman and Ranking Member, thank you again for allowing CPB to submit this testimony. We are under no illusions about the pressures you face on a daily basis as Congress works to address our country’s perilous fiscal situation. As such, on behalf of the public broadcasting community, including the stations in your states and those they serve, we sincerely appreciate your support.