Public Radio in the United States:

An Opinionated Report on its Economic Realities

an address
by Fred Flaxman

to the North-South Radio Dialog
Quito, Ecuador
January 12, 2004

Thank you so much for inviting me to Quito and asking me to speak to you today. I am very honored.

I'm going to talk about public broadcasting in the United States, how it is presently funded, and how I think it should be funded in the future. First, a brief history.

From the very beginning, radio and television in the United States has been both public and private, commercial and non-commercial. Some of the very first experimental radio stations were run by universities. And today many universities still have their own non-commercial, educational, cultural radio and television stations.

My own station, WXEL-FM in West Palm Beach, Florida, was started in the 1960s by a high school principal as a low-power station to reach the parents of Mexican immigrants in their own language. Over the years the station evolved into a full-power, English-language station serving four million people all over southeastern Florida, from Martin County in the north, to Palm Beach County in the center, to Miami-Dade County in the south.

To understand the public broadcasting system in the U.S., you first have to realize that the stations in each locality are independent organizations. Some are still run by educational institutions, but many large-city stations are run by non-profit, community organizations established for the sole purpose of operating a non-commercial broadcasting service.

In 1968 the federal government established a non-profit, non-governmental organization in Washington, D.C., called the Corporation for Public Broadcasting to encourage the development of both public radio and television and to be the conduit of limited federal funding for the system.

Two years later National Public Radio (NPR) was established, also headquartered in Washington, D.C. This is also a non-profit, non-governmental institution.

Since NPR's founding, it has become a dominant intellectual force in American life and a primary source of news for millions. Begun with 30 employees and 90 charter stations, today's NPR has evolved into a major media enterprise with 700 employees. NPR programming is heard on more than 750 independent public radio stations.

NPR's audience has more than doubled in the last 10 years, from just over 10 million to more than 22 million weekly listeners in 2003. In the early 1980s, about 2 million people listened to NPR.

Published reports cite NPR's newsmagazines Morning Edition and All Things Considered as the 2nd and 3rd most listened-to national radio programs in the U.S. The two programs rank no. 1 and no. 2 in number of listeners on public radio. Morning Edition is now the most listened-to morning radio program in the country.

There are other non-commercial, non-profit radio stations in the United States that are not part of the NPR system. Many of these are religious stations, devoted to evangelical Christian broadcasting. Others are community stations designed to serve their particular communities.

NPR -- and PBS on the television side -- were created following, more or less, the recommendations of the first Carnegie Commission on the future of non-commercial broadcasting in the U.S. It was this commission, in fact, that invented the term " public broadcasting" for what, until 1967, had been referred to as " educational" or " non-commercial" radio and TV. It was this commission which, first of all, led to the federal legislation which created the Corporation for Public Broadcasting,

Americans, wanting to avoid at all costs a government-controlled broadcasting system, forbade the Corporation for Public Broadcasting from actually running a radio or television station or network, and from producing or distributing programs. Their role was to be more like that of a foundation, giving grants to others to make programs, run networks, and generally carry on the day-to-day activities of broadcasting.

Both NPR and PBS were set up as membership organizations, controlled by the individual public radio and television stations in a democratic fashion. PBS decides what television programs are going to be sent to the stations at what time, and manages the network satellite interconnection. But PBS is not allowed to produce programs itself. They are produced by the member stations and other organizations which offer them to PBS for national distribution.

NPR is very different in this respect. It does produce its own programs as well as distribute them through its satellite interconnection. But each independent station decides which programs it wants to broadcast, and the stations have a formula that splits the costs of producing these programs amongst the stations which carry them, based mostly on the size of the populations served.

Thus, the U.S. system of public broadcasting is very decentralized. And this has both its advantages and disadvantages.

On the advantage side, I note in jest, it would be impossible for a group of terrorists to take over and use U.S. public television for their own purposes, even if they were well-armed and exceedingly clever. For a start, they wouldn’t know where to go to take over the system.

Do they go to the offices of the Corporation for Public Broadcasting in Washington? CPB has some of the money for the system, but no studios or transmitters. No programs are made there.

Do they go to PBS in Virginia? There they would find plenty of videotapes being placed on plenty of videotape recorders for distribution by satellite to the stations. But they’d have a hard time making a program there. And they’d also have to find and capture the PBS satellite up-link.

Even if they managed to take over PBS and send out their own message on the PBS satellite, that message would get only as far as the individual stations where it would be stopped before being aired. Our imaginary terrorists would have to take over each and every public TV station in the country simultaneously –some 350 of them –in order to assure that their message got out to all the PBS viewers.

Taking over NPR would be somewhat easier in that NPR does have microphones and studios in Washington, D.C., and Los Angeles, California. On the other hand, they would have to take over more than 700 independent stations all around the country at the same time.

The decentralization of public broadcasting in the U.S. means, in theory at least, that it is almost as hard for the government to take over as for our imaginary terrorists. But Richard Nixon tried to bully public broadcasting into acting conservatively, avoiding controversial public affairs programs or at least making sure that his point of view received much greater emphasis. His main device was vetoing increased funding for the Corporation for Public Broadcasting until public television " reformed" itself. Other politicians have favored doing away with federal government funding of public broadcasting entirely. One U.S. Senator based his campaign for re-election on de-funding public broadcasting. But he was defeated, and we no longer hear that kind of talk very much.

One reason those efforts failed is that public broadcasting’s funding is also very decentralized. The station I work for, for example, gets only about 10% of its operating funds from the Corporation for Public Broadcasting. Another 10% comes from the Florida Department of Education. Some 60% of our $6 million budget comes from local companies, foundations, and our listeners and viewers, as we have both radio and television. We earn most of the rest of our budget by renting our production facilities to others. So, you see, with such diverse funding, if one source were to dry up, we would be hurt, but not killed.

This diversified funding means –again, at least in theory –that public broadcasting isn’t beholden to any one source, thereby creating a freer, more independent system. However, in my view at least, there is something less than ideal about each of these sources of funds:

Commercial corporations donate funds to produce public radio and television programs in return for an on-air credit before and after each program they pay for. Over the years this credit has grown more and more to resemble a commercial. I would have preferred to keep public broadcasting as non-commercial as possible. After all, it is supposed to be an alternative to commercial broadcasting and, Lord knows, we have plenty of commercial stations on the air and over cable and satellite without adding public stations to that list.

Also, corporate funds mean corporate influence over the choice of programs. A company is obviously not going to contribute money towards a program it doesn’t like. And surely, one of the goals of creating public broadcasting to begin with was to have at least one national TV and radio network where the programming could be free from commercial considerations and the influence of advertisers.

The cleanest money in public broadcasting comes, perhaps, from the philanthropic foundations. The main problem with this source of money is that there isn’t enough of it. Television, in particular, is very expensive, as everyone knows, and there are very few foundations in the U.S. wealthy enough and willing enough to devote the financial resources necessary to public broadcasting over a never-ending period of time. Even the famous Ford Foundation wasn’t rich enough to continue contributing funds to public broadcasting forever, and after having donated millions of dollars to help get public television started, it almost completely withdrew from the picture.

Also, public broadcasting has to compete with fighting diseases and other worthwhile causes for foundation dollars, and, as important as I think we are to the health of our democracy, very few foundations consider us a matter of life and death.

University-run public broadcasting stations are usually supported by the universities themselves to some extent. They are often under-financed by the university, which considers them of lesser importance than their main mission. After all, it is not the principal business of a university to run a radio or television station.

A few states have state-supported public broadcasting networks. But it is difficult for these state-supported systems to remain truly free of state government control and the influence of the statehouse or the governor. Then, too, when states get into financial trouble, as at present, and they need to cut their expenses, guess what happens to public broadcasting? Let’s face it, just as it is not the principal business of a university to run a radio or television station, it isn’t the principal business of a state government either.

As for voluntary contributions from the general public, this would be an ideal source of income for public broadcasting stations if the money rolled in without begging for it, if it were reliable, and if there were an awful lot more of it. As it is, in order to get people to contribute their hard-earned money to public broadcasting stations, it is necessary for these stations to bombard the public with direct-mail requests and, worse than that, to use up an ever-increasing amount of air time pleading with the viewers and listeners to send in their checks.

So-called " thank-you gifts" are offered as an incentive to contribute: CDs, videos, DVDs, books, umbrellas, etc. Some stations hold week-long on-air auctions to raise money for their operations. Some hold on-air lotteries and send out " sweepstakes" in the mail. In the end, public broadcasting’s " non-commerical" solicitation of funds is more annoying than even the most unimaginative and tasteless commercials.

Then how should public broadcasting be funded in the U.S. –and perhaps in other countries as well? I’ll give you my opinion on this subject in a moment, but first a little story.

In the Broadway musical "Fiddler on the Roof," Reb Nahum, the beggar, makes a very simple and direct request for public funding:

"Alms for the poor!" he pleads. "Alms for the poor!"

"Here, Reb Nahum," says one of his regular patrons, "here's one kopek."

"One kopek?" the beggar responds incredulously. "Last week you gave me two kopeks!"

"I had a bad week," the funder replies.

"So if you had a bad week, why should I suffer?"

If Reb Nahum were alive today, he'd be a fund-raiser for public broadcasting.

When Texaco announced recently that it was no longer going to fund the public radio broadcasts of the Metropolitan Opera, Reb Nahum might well have asked: "So if you had a bad year, why should public radio suffer?"

But that's the way public broadcasting is set up in the U.S. It's a tin-cup system peopled by Reb Nahums from coast to coast, begging companies, individuals, foundations, states, universities, government agencies and Congress for alms to produce programs and keep their stations on the air.

Is this the way it has to be? Should public broadcasting be operated as an electronic charity? If not, how should it be supported?

I think the best way to fund public broadcasting would be to charge commercial TV and radio stations for their use of the airwaves that belong to the public. This would be as fair as taxing truckers for their use of the public highways, commercial airlines for using municipal airports, or oil companies for exploiting offshore reserves.

My nation's valuable and limited electronic spectrum is virtually given away. And these commercial licenses are then often sold for tremendous private gains. Having a license to operate a commercial broadcasting station in the U.S. is like receiving the government's permission to print money. Commercial broadcsting has a history of higher profits than even the oil companies.

For that matter, commercial broadcasting should pay for public broadcasting because it created the need for its existence. In the early years of commercial television, for example, there was an NBC Symphony Orchestra, conducted by Arturo Toscanini, serious plays, and educational programs for children and adults. These cultural and educational programs were gradually replaced by shows which gained larger audiences and thus higher profits for the networks and their stations. The fact that commercial broadcasting no longer provides the nation these cultural and educational services is what creates the need for public broadcasting. Why shouldn't they pay for it?

What would happen to all this money should the spectrum-fee idea become a reality? Would it go to support a huge, centralized BBC-like bureaucracy in Washington? I would suggest not.

Half of the funds resulting from these license fees could be turned over to public radio and television stations by a formula that would allow so many dollars per year for each person in that station’s coverage area. This money would be used for high-quality local programs and the costs of operating the stations.

The other half of the funds could be devoted to the production and acquisition of world-class national programs by a board of program directors elected by the stations. This would assure a democratic decision-making process responsive to the needs of the stations and their local audiences all over the country.

This method of funding public broadcasting has several distinct advantages:

As you might imagine, commercial broadcasters are opposed to this idea. Yet, it is really in their interest that public broadcasting survive and prosper as a noncommercial medium:

Nevertheless, a spectrum fee would probably have to be enacted into law over the objections of the commercial broadcasting lobby. They are powerful, but not invincible, or there would still be cigarette ads on TV and radio in the U.S.

Who else would be opposed? There would be those who sincerely believe public broadcasting is a left-wing conspiracy set on destroying the nation. But even they might prefer a decentralized system that wasn't subsidized by the taxpayers.

The spectrum fee appeals to liberals, who favor more money for public broadcasting, and conservatives, who see it as an alternative to governmental support.

The biggest hurdle the spectrum-fee idea faces seems to be the attitude that, however logical, however right it might be, it just won't happen. And it won't, if enough influential people react that way.

I’m realistic enough to know that this is not yet an idea whose time has come. But I’m also optimistic enough to think that the pendulum will one day swing back from the right, where private enterprise is seen as the solution to every problem, towards the left, where people see great value and potential in non-profit cultural and educational institutions like public broadcasting.

I’m hoping that some day in my lifetime we’ll exchange public broadcasting's tin cup begging for a solid system of financing. That some day in the not-too-distant future we’ll ask the beggar Reb Nahum to retire.

Thank you for your attention.