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shey, San Francisco, indeed the Nation's Capital. The first desperate plea, I am sure not unexpected, is that we have a major leap forward in terms of funds for an extended insulated period.

Our second is one that was brought to you yesterday by Mr. Sheldon Siegel, who suggested that the percentage of that total, as related to unrestricted community grants to stations, was very important to us. We receive services in two ways: One, from the Corporation for Public Broadcasting, which provides our interconnection, our national programs and many other services that they described to you yesterday. We are very pleased with these services, they are essential. You may wonder when Carnegie said the No. 1 goal was stations why in the past the stations did not complain that 12.5 percent was left over for direct grant unrestricted community grants to stations. The simple reason is that the stations regard those services as basic, as essential and as important. They needed to be established first because we didn't have those.

We then moved to 30 percent, which we requested, and the Corporation yesterday suggested, could be met if the total figure moved to $45 million. Yesterday Mr. Siegel suggested that as that total becomes greater and as we look at not the corporate, but rather services from the Corporation and direct grants to us, it was the judgment of the stations that if it were to move up well beyond the $150 million mark and the other figures that are suggested over the years, that that should indeed be reversed, that 70 percent of the total dollars, the total Federal dollars, might more properly at that point, as we move on, go to stations and that 30 percent of such a much larger fund could meet the basic services that come from the Corporation.

What the exact percentage might be needs to be studied more carefully. In general, I think this and some of the questions about the diversification, decentralization, the station servicing the local community determining local needs receiving two kinds of services, answer this.

In the current bill it is stipulated in terms of the percentage, the 30 percent; we think it should be stipulated. We would much prefer, and the stations are in agreement on this, that the increase in the percentage be there as the increase in funds is there each year. That is not true in the present bill.

The third thing in addition to additional funds, the increasing percentage, the tilting toward the station later on, is the formula. The station suggested the present formula by which they receive these unrestricted grants. The Corporation listened to the stations and the formula we have today that they are following in an unrestricted way is the very one we suggested.

Experience has shown that it is a pretty good formula. It has about three features: One, that there be a minimum grant to protect the small station, a maximum grant so that the large stations wouldn't get an immense amount of money and that the amount in between would be determined by the amount of income that that station would receive from its area, thus providing incentive for the station to receive additional local funds and State funds which would be matched. That has worked out extremely well. We feel that that should be something which is definitely stipulated and, therefore, the Corporation in terms

of its basic services is a Corporation that can service us totally in a way that they have in the past.

Probably an additional element of that formula might be a percentage of the budget over which we should not receive Federal funds, perhaps not more than an amount equal to 25 to 30 percent, or whatever of the budget, should come from Federal funds. We are very concerned that we be diversified.

We receive most of our funds locally and statewide. As I mentioned earlier in the case of Pittsburgh, 1.6 percent of our budget at the moment comes from the unrestricted CPB grant. The final suggestion in addition to additional funds, the percentage going up as the amount goes up and the formula which the Corporation has administered so admirably being a part of this, is that we receive additional funds in the instructional area directly to the station to help that program for the reasons given earlier.

If this were done, I think a good many of the problems which we have had would be met. In the facilities area we should not have situations where stations have such low-power transmitters today that they can't reach all the people that they are expected to serve-70 percent of the stations do not have color tape recorders. They have no choice but to carry those programs as they come over the line in order to broadcast color.

If they are to analyze the needs within their area and the program timeliness for their community, they must have that. Only additional facilities funds would permit that. A good many of our stations do not receive this because they are not interconnected, and can't receive the programs at the same time as the interconnected stations.

Most of them are timely and are, therefore, lost to them. The cost of a transmitter, $1 million to $1.5 million, is the same as for commercial broadcasting.

The only way we can have the kind of insulated funding that we can plan on is in size that will permit that in terms of a local station. That kind of funding will also allow us to produce quality programs and serve our community. At the moment if a crisis develops in the area of drugs or in some other area of our community, we must then not respond immediately quite often, but rather go out and see if we can find the funds before we can respond.

With long-range insulated funding of a size that permits us to react to problems in which we can really play an important role for stations in terms of information in our communities. Only sizable funds of that nature would permit that.

In conclusion, I would suggest that in asking for additional funds and in the way that we have requested them we are not suggesting that the communities do not support their stations. In fact, about 3 years ago a survey was done in western Pennsylvania asking if you had dollars to give to only one source, which one would you give them to? First was the church and second was our station. We do have that kind of support. We receive around 40 cents average per person within our community. So, we have that kind of local support; we need the additional Federal dollars you propose.

In terms of people caring about their station, we have some of the responses to a survey in our area which indicate that the percentage watching has increased greatly year after year.

In conclusion I would suggest that we are saying to you that if you will give us the adequate, insulated long-range stipulated support that we are requesting today, that I am confident that you will see that we can do the job.

Thank you.

(Mr. Kaiser's prepared statement appears at p. 206.)

Mr. HARLEY. To introduce our next panelist, I yield to Congressman Brock Adams.

STATEMENT OF HON. BROCK ADAMS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WASHINGTON

Mr. ADAMS. I know of your great time limitations here under your 1-hour rule or 5-minute rule.

Mr. VAN DEERLIN. Thank you, Mr. Adams.

Mr. ADAMS. As a member of the full committee it gives me a great deal of pleasure today to introduce Mr. Kenneth Kager, who has the management of the station in Seattle. I have also enjoyed very much your panel presentation. Since I am on the full committee, I will be looking forward to the bill coming before the committee.

I think the presentation today has been excellent and Mr. Kager will contribute to the panel, Mr. Chairman and Mr. Tiernan. I am very hopeful for the future because we think we have an excellent station and it has contributed a great deal to our area.

Thank you for letting me introduce Mr. Kager. I am looking forward to his testimony.

Mr. VAN DEERLIN. Thank you.

STATEMENT OF KENNETH KAGER

Mr. KAGER. Gentlemen, I do rather get a feeling that you don't want a long dissertation. That is one of the marks of excellence that Congressman Adams spoke about. I have already submitted a statement. The statement will tell you what the Federal funding under the Public Broadcasting Act of 1967 has meant to public radio across this country because, in addition to being the manager of KUOW at the University of Washington in Seattle for this year, I am chairman of the board of directors of the National Educational Radio Division of the NAEB.

(Mr. Kager's prepared statement appears at p. 208.)

Mr. KAGER. I would like to speak informally and briefly to you for 3 or 4 minutes and delete a good part of what I had originally intended to say and try to speak with some directness in response to a question that you, Mr. Van Deerlin, raised some time ago which had to do with what kind of needs generate the station requirements for Federal funds.

I can speak in this case now for our own station about which I know quite a little bit since I have been there 20 years. I use that as a case history or a "for instance" example. Now we are talking about radio. We have to turn off the boob tube for a bit. The radio still lives. There is public radio in this country. It is very much alive. We are changing subjects here for just a moment.

We were one of the affluent stations in 1967 in the radio community. Nevertheless we had some very severe problems. One of them was that we had obsolete equipment. In 1967 we were operating on a 1941 monaural FM transmitter, cantankerous, temperamental, beautiful when it wished to be, but saying nothing otherwise.

We could not get maintenance for that transmitter. We did not have an item of major equipment that was any newer than 12 years old; 10 years is generally regarded as the outside edge of obsolescence in any type of electronic equipment. We were fortunate we had a fourman full-time staff there, but we were very substantially overworking that staff because we believed very sincerely in a high percentage of local program production and that takes time. More manpower was desperately needed and there was no chance for us to get that particular kind of funding from our institution.

One final very serious need that we had was in upgrading of our national and international programing. All we were getting of that type at that time was by mail, usually on tape or disc and mostly from the National Educational Radio Network. While there was some fine programing on that old tape network, the usual time lag was 3 to 4 weeks. You can see sometimes that would be disastrous when we were using material 3 to 4 weeks old on that medium of immediacy, which is radio.

There was truly a classic example of too little too late. We had a lot of other problems, but these will illustrate the kind of problems, Mr. Van Deerlin, that in one case, in our case in Seattle, one of the relatively affluent radio stations in the country in 1967, led to the needs that have been partially fulfilled through Federal dollars.

Let us take a quick look at some of the things that have been accomplished in the past 4 years under the Public Broadcasting Act of 1967. We, KUOW, did receive an equipment grant under title I of the act, $33,000 matched by $11,000 from our university. We have a $44,000 modernization of our physical plant. We have stereo FM second to none in our area. We also have an SCA capability so we can carry simultaneously other programs.

We confidently expect it to develop to a full 18-hour daily use for instruction in and out of classrooms and for specialized services. I learned just this morning that our State Library for the Blind this morning allocated $10,000 to purchase SCA receivers for a pilot program for us to use for services to the blind in their homes in the State of Washington.

This would not have been possible had it not been for the equipment money in title I of the Public Broadcasting Act.

About station support grants, and you must realize that about 110 stations receive them, I think Mr. Keith asked what some of the stations do with their station support grant money. We had four full-time people, as I mentioned a moment ago. We added one full-time man because of the CPB grant of $7,500 per year which we received.

Now one man is not a very big addition in personnel, but it was 25 percent when we started only with four. It has helped us tremendously. In fact, I can't understand how we could possibly do the job we are doing now without that man whom we renewed again in his second year, also we were able to do some other things.

NATIONAL PUBLIC RADIO

Remember, I spoke a moment ago of the problems of timeliness in programing. We had no way to distribute our programing except by mail. That would be worse today than 4 years ago.

Now we have this CPB-funded daily network, National Public Radio. It has been effective and needed by us all.

Mr. MACDONALD. Sir, at that point could I break the ground rules which have been set, but we have difficulty in understanding how money goes to local stations. I understand in Richmond they have two stations, one does well with money in the bank, the other one is broke.

I don't know about broke, but they are in financial difficulty. As local station personnel interested in this matter how does that work with allocation of funds from the Corporation to you people?

Mr. KAGER. You are talking now about funds to radio stations, is that correct?

Mr. MACDONald. Yes.

Mr. KAGER. Very much as Mr. Kaiser described a moment ago for television. For those stations that meet the CPB criteria they receive a $7,500 annual grant.

Mr. MACDONALD. Why would they need two stations in one city?

Mr. KAGER. Well, sir, I don't think they, the CPB, exactly create two. The two were already there. They had been there for some time. Evidently two different educational agencies wanted to use radio to perform two different educational or public radio services.

Mr. MACDONALD. Couldn't they sort of put together the two stations? Mr. KAGER. If there are two stations in Richmond and I am in Seattle, I might say, "Yes," I think they ought to get together. But in Seattle we have two stations also that are already here. I don't think those two ought to get together because we want to do different things at the same time.

Mr. MACDONALD. We had a witness yesterday who entertained us, but did not give us much information. You know, that is funny, but it is not much of a response. Does anybody have any response to that? Especially Mr. Harley.

Mr. HARLEY. Why there are two stations in some cities? You are asking, Mr. Macdonald, why in some situations there are two educational stations?

Mr. MACDONALD. In one area such as Richmond, which I am using as an illustration. If it is true in Richmond, it must be true in other parts of the country.

Mr. HARLEY. I don't know the Richmond situation, but in some cases clearly it would be a matter of historical development in which a station is licensed, for example, to a university and another station might come along and have a broader community service. So that they might have different foci of emphasis in their programing and be complementary to one another.

I don't think it necessarily is a waste in that respect because I think

Mr. MACDONALD. I didn't say it is a waste. I said it would seem to be an overlap.

Mr. HARLEY. Right.

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