PUBLIC TELECOMMUNICATIONS FINANCING ACT OF 1978-OVERSIGHT TUESDAY, APRIL 3, 1979 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Washington, D.C. The subcommittee met at 9:30 a.m., pursuant to notice, in room 2325, Rayburn House Office Building, Hon. Lionel Van Deerlin, chairman, presiding. Mr. VAN DEERLIN. Good morning. We will convene our first oversight hearing of the new Congress on the subject of the 1978 Public Telecommunications Financing Act. Good morning, Mr. Marks. Mr. MARKS. Good morning, Mr. Chairman. Mr. VAN DEERLIN. We will hear from three witnesses on the subject, bearing in mind that the act has been on the books only about 5 months. But it is important, I think, that the Congress should get some idea of how things are working under that law. After this, there will be a special panel with a discussion on the very important goal of insulating public broadcasting from Government interference. The leadoff witness this morning is the new president of the Corporation for Public Broadcasting, Mr. Robben Fleming. Only a southern Californian like myself would take note of the fact that Mr. Fleming assumed this new responsibility the day after the last Rose Bowl game, in which the University of Michigan was a participant. On a happier note, this is his first appearance before the subcommittee. Mr. Fleming, we are very pleased to have this first formal opportunity to welcome you to Washington and to your new post, to which I know you will bring considerable luster. Mr. FLEMING. Thank you, Mr. Chairman. I should say, apropos to your first remarks, that prior to my becoming president of the University of Michigan, they had never lost a Rose Bowl game. In my 11 years, they never won one. I hope that doesn't say anything about my career here. Mr. VAN DEERLIN. It is a good way to get along with this subcommittee. (1) STATEMENT OF ROBBEN W. FLEMING, PRESIDENT, CORPORATION FOR PUBLIC BROADCASTING, ACCOMPANIED BY LILLIE HERNDON, CHAIRMAN; BRUCE CARDWELL, VICE PRESIDENT, MANAGEMENT AND ADMINISTRATION; GEORGE LINN, SPECIAL ASSISTANT FOR LEGISLATIVE AFFAIRS; AND PAUL MUTINO, ACTING GENERAL COUNSEL. Mr. FLEMING. Mr. Chairman, may I first introduce our chairman. This is Lillie Herndon from Columbia, S.C. On my immediate left is Bruce Cardwell, our vice president for management and information. On my right is George Linn, our legislative representative, as you know. Paul Mutino, our acting general counsel, is sitting here immediately behind me. I have submitted a statement for you. I shall not read that statement but paraphrase it rather briefly as we go along. Then we will be glad to respond to any questions you may have. This is, of course, my first opportunity to report to you. I am glad to do that. There were in the 1978 act, as you know, various additional duties imposed upon CPB, and it is those matters about which we shall largely report. One of the provisions in the 1978 act had to do with the imposition of a set of uniform accounting principles which would enable better recordkeeping and more meaningful recordkeeping. In connection with that and some of the other requirements, we have distributed now to all stations the materials which you have before you, which interpret the meaning of some of the provisions of this act and call to their attention what those obligations are and so forth. Those accounting principles referred to by that one particular part of your bill were, of course, to be developed in consultation with the Comptroller General and with other interested parties. We were to have those principles established by next November, that is, November of 1979. Similarly, we were to complete the volunteer evaluation study, that is, the placing of a price on those volunteer services for purposes of the matching moneys. That, too, was to be done in consultation with the Comptroller General. We think the efforts to do both of these things are well under way now. We have contracted for one or more private contractor studies to help us supply some of the expertise we need in this connection, part of that being in connection with the volunteer studies, how one prices that in a fair and reasonable kind of way. Those studies are underway. They seem to be going along well, and we think that the whole project is well in hand. We see all of that as a part of a more comprehensive financial management improvement which we have undertaken to help the stations and the other organizations improve their general financial management. Really, the program will call not only for the creation of model accounting systems for various kinds of stations, but also some audit standards, professional development and other measures that will help those stations improve their management capacity and accountability to the public. In that connection, desiring, as we know that Congress did, to see that we not be unduly burdensome to the stations but rather attempt to be helpful in an attempt to create the kinds of standards which they can readily adapt to, we created a steering group, and it has on it representatives of all the various kinds of stations. Of course, the stations are quite different in size and complexity: The college and university business officers are represented because there is often complexity there, as you know, since the State systems or the colleges and universities may have requirements of their own with respect to accounting which must be accommodated; the NPR and the PBS and, of course, the General Accounting Office are in the group. Rather startlingly, I am told that this group, all of which would have some finger in the pie in terms of helping to put this package together, has come together and did rather readily reach an overall agreement on the kinds of standards that were to be incorporated in this. So we think that is moving ahead and that these projects will meet the time schedules which you had in mind of May and November. As of this moment, we see no complications in that. We think it is proceeding well. If you wish, in the questioning period, Mr. Cardwell, who has been working directly with that, will be glad to respond to specific questions about any of the details of that that may interest you. Apart from the accounting problems, there were, of course, these other matters about the maintenance and disclosure of records, the increased opportunity for public_involvement and so forth that we were to undertake. We have, as I said earlier, sent out to all of the stations interpretations of that part of the law. We believe that with that advice and the help that some of their own agencies are giving them, that those provisions too are moving along well. We see no reason to feel at this time that those will not come in onstream, and the wishes of the Congress in that respect will be carried out. Mr. MARKS. Excuse me, gentlemen. Mr. Chairman, may I ask a question? Mr. VAN DEERLIN. Yes, Mr. Marks. Mr. MARKS. Do we have in our record a copy of those interpretations you sent out? Have you supplied those to the committee? Mr. LINN. Yes, sir. Mr. MARKS. Fine. Thank you. Mr. FLEMING. We would be glad to have them included in the record. They have been submitted along with this other material. Mr. MARKS. As long as we have them. Mr. FLEMING. As these documents reflect, CPB will require that each station or public telecommunications entity provide CPB with a letter certifying its compliance with all of the provisions of that act, and we will continue to provide them with information on all aspects of public participation, as well as interpretative papers on satellite interconnection access and that sort of thing. We believe that the advisory boards and all of those things, as I indicated, are proceeding well. We see no hitches in that. We believe that is going to be adequately taken care of. As to the equal employment opportunity aspect of the act, you will remember that a significant feature of the 1978 act was the decision to place within HEW the responsibility for assuring compliance with the equal opportunity laws bv recipients of CPB funds. HEW was to write the criteria, and they, I assume, will testify about that later this morning. We have been working with them in that connection, discussing particularly the public broadcasting aspects of that. We have supplied information to them. At this point we are awaiting the draft of those criteria from HEW. With respect to EEO, we are awaiting the draft of those rules from HEW. There clearly is room for improvement in this whole area. We do expect to take steps in that direction, and we believe that program will move. We do have one problem in this respect which we would like to call to the attention of the committee and on which we would be glad to work with your staff. That is with respect to some of the reporting requirements. If there were a technical amendment to the 1978 act which moved the current February 15 CPB annual report date to May 15, it would solve a problem which we seem to be incapable of dealing with at the moment, because our statistics cannot, under present arrangements, at least, be gathered by February 5, which means we either end up furnishing you last year's statistics, which are by then 1 year old, or we would have the new ones completed by May 15, and be the current year. If we may, we would like to work with your staff in providing a technical amendment which would change that reporting date and therefore enable us to be able to give you current statistics. We think there is no great substantive matter involved here; that it really is basically a technical amendment and we would be in touch in that respect if we may. Mr. MARKS. Mr. Chairman, I am sorry. I didn't hear what you said about a change of▬▬ Mr. FLEMING. I said there was one technical amendment on which we would like to work with your staff. The present law, the 1978 act, requires us to report our current EEO statistics by February 15. Our gathering of statistics is such that it is almost impossible for us to give you current year statistics before May 15. In other words, we just can't quite get it done by that point. Therefore, we would like to change that February 15 date to May 15. If that could be done, we could then supply the current year's statistics rather than year-old ones. Mr. VAN DEERLIN. Í understand we are accustomed to taking the corporation's advice in these matters inasmuch as the February 15 date was set at the request of the corporation. Mr. FLEMING. I am glad to know we are consistent. Mr. VAN DEERLIN. We are equally openminded to new suggestions. Mr. FLEMING. Thank you. If I may turn, then, to the nonbroadcast activities, because the 1978 act did include some CPB missions in connection with support of nonbroadcast as well as broadcast activities, this gives us the discretion to support the establishment of interconnection systems for distribution as well as program production and acquisition for nonbroadcast uses. We have provided support for nonbroadcast activities in the past, and we expect to continue to invest in telecommunications technologies which are cost-efficient and improve services. We are presently preparing to fund a demonstration with the Agency for Instruc |