REMARKS
 
                                by

                        Michael K. Powell
                           Commissioner
                Federal Communications Commission

                            Before the

                        Annual Meeting of 
              America's Public Television Stations 

                   "Round Pegs in Square Holes"

                    (As prepared for delivery)

                     Crystal City, Virginia 
                          March 23, 1998

     Good morning and thank you for inviting me to speak to you today.  I am happy to
share a few of my views about that national treasure, public television, that each of you is
entrusted to safeguard.  When station operators come to town, they usually want answers to
their questions rather than a lecture, so I will try to keep my remarks brief to allow you a
chance to ask those questions.  

     I am continually dismayed that in the debate about television and its value, or potential,
we still hear that T.V. is a wasteland of mediocre programs, that T.V. has no educational
value, that it has no intellectual value, and that it is not stimulating.  These people obviously
need to be introduced to their remote controls, for such programming does exist, free and over
the air, just down the dial on PBS.  By any standard, programs such as Ken Burn's Civil War
and Baseball mini-series, Lewis & Clark, the American Experience, Arthur and the venerable
Sesame Street are precisely the types of quality programs that many bemoan are missing in our
T.V. culture.

      Now, you will not hear me express undying devotion to a certain large purple dinosaur
that has a way of putting my three year old in a trance-like state, but I praise the wonderful job
that public television does of presenting high quality news, public affairs, children's and other
programming.  Public television adds a unique value to the video marketplace.  The service
that public broadcasting offers to the American people is invaluable and, I submit, never will
be found regularly on commercial stations.  PTV is today, what people dream of when they
long for public interest broadcasting.  For that I commend you.  

     Why can public broadcasting reach the mark more consistently than commercial
broadcasters?  The answer really is simple: institutions, like people, act primarily in their own
self-interest.  To a commercial broadcaster, or any commercial entity, that self-interest is to
make money.  Indeed, microeconomics is dependent upon the assumption that commercial
firms will consistently seek to maximize profit -- in the case of T.V. that is advertising
revenue.  Ad revenue flows to those that can maximize eyeballs.  Capturing large numbers of
viewers necessarily leads, more often than not, to lowest-common-denominator programming. 
A stimulating, provocative and educational program is by its very nature rarely a mass market
product, particularly in our couch potato culture.  

     Yet, since T.V. first came on the scene we have vigorously pursued policies designed
to produce a standard of programming much higher than commercial motivations will usually
achieve.  There is no shame in making a buck, but we too often try to jam a round public
interest peg into a square commercial interest hole.  Most often, the policymaker and the
public is not impressed with the results and the collective anxiety about the T.V. wasteland
goes on.   

     Public broadcasting, however, is different.  It is not as dependent on advertising
revenue and thus marches to a different drummer than does the commercial broadcaster.  Its
sole existence is to serve the public interest.  It is not constrained to produce mass audience
fare, because it does not need to deliver eyeballs to the cereal, soap, and soft drink companies
to achieve its mission.  It is free, then, to pursue dramatic, cutting edge programs that may not
attract a mass audience, but does stimulate the minds of those willing to tune in.  This is why
public broadcasting is a national treasure.

     The curious question is why in the face of these truths about public and commercial
broadcasting, we dedicate so much energy, time and resources to trying to put that round
public interest peg in to that square commercial interest hole.  It makes little sense.  When
faced with this question T.V.'s public interest standard bearers respond that (1) public
broadcasting does not reach enough people, (2) that it is inhibited by its use of UHF stations,
and (3) people do not really watch it.  These are the myths of public television.

     First, it is wrong that PBS does not reach Americans.  PBS now can be seen free and
over the air in 99 percent of American T.V. homes.  The most widely distributed cable
networks are available to only 74 percent of homes.  PTV clearly has substantial coverage.

     Second, it is wrong to assert that PBS is somehow a secondary UHF service.  First of
all, out of 353 stations and transmitters, PBS has 127 VHF stations.  More importantly, in
recent years UHF stations have come into their own, proving so viable that they even have
spawned, what was once thought unlikely, a doubling of commercial networks.  In any event,
digital technology promises to erase any traditional disadvantage in quality once thought to
cripple UHF broadcasting.     

     The last myth is the most enduring and the most wrong.  PTV is watched.  Some 95
million viewers a week tune in to PTV, representing 60 percent of American television
households.  That is more viewers than any single cable network.  PTV is number one among
pre-schoolers age 2-5 and it did not take 3 hours of government-mandated educational
programming to do it.  And PTV attracts a diverse audience.  Primetime trends show a 29
percent increase in viewing among African Americans alone.  Perhaps most telling, is that
Americans think PBS is a exceptional value -- 63 percent rank it an excellent/good value,
second only to public radio and our military defense (at a cost of 73 cents per person per year,
it is no wonder).  Now that is serving the public interest!   

     It is mind-boggling to find, given these facts, that public broadcasting is often
overlooked or downplayed in debates about public interest programming.  Take free air time
for candidates.  The country is in a national tizzy over whether broadcasters contribute
adequately (or even undermine) our democratic process.  This is old hat to PTV.  Public
television has always been at the forefront of the effort to provide free airtime for political
candidates, for example.  PBS' "Democracy Project" represents a concerted effort to draw
American back into the democratic process and encourage civic involvement.  Through this
project, PBS developed the 1996 Debate Night which featured a national debate among four
leaders of Congress along with local congressional debates that aired across the country.  PBS
also, with special dispensation from the FCC, offered 2 and 1/2 minute spots to the major
presidential candidates.  Again, I applaud you for your commitment to this programming.  

     The commitment of public television is not only seen in its current programming.  I
have been very impressed to learn that public television is at the forefront of the move to
digital technology.  Always a pioneer in using technology to serve the public interest, public
broadcasting has embraced digital technology as a new tool to further its mission.  

     Indeed, a recent Wall Street Journal article describing the digital transition noted that
PBS is the only television network with a real plan for digital TV!  The article quotes Bob
Ottenhoff of PBS saying "We see this as technology catching up to what we've always wanted
to do."  I think Bob has got it right.  The flexibility that digital TV offers will enable you to
improve your programming and, perhaps through multiple channels, to tailor programs to
specific audience segments, such as classrooms.  The prospects are exciting.

     I believe that PTV will not only be viable in the digital era, it will excel.  We often
overlook the fact that while technology can open up for us a world of information, it has no
benefit without people and institutions to harness that information.  The excitement felt by new
users of the internet often falls flat, once they have exhausted the thrill of seeing the miracle of
instant access to a bounty of information.  Surfing is all well and good, but users lose interest
is they do not get information they really need and can use in a meaningful way.  Similarly,
having the internet in schools, without teachers who can help students assimilate, process and
make sense of the information is of limited use.  The same will be true of digital T.V.  It will
be as useful as the zeros and ones that we deliver to viewers.  This is where PBS has always
excelled and I expect it will bring more digital T.V. value to consumers than commercial
broadcasters.  Where they are figuring out how to make money, you are exploring more
smashing, higher quality programming.  Again, economics 101. 

     But, all is not rosy for PTV.  Because it is not a commercial service it is constantly
struggling to fund its operations.  And, quality programming is not cheaper to produce simply
because it is on public television.  The cost of transitioning to digital technology makes this
challenge exponentially harder.  The estimated cost of just the initial infrastructure investment
required for public broadcasting to transition to digital technology is $1.7 billion.  That is a lot
of pledge weeks!  The more of them you do the more viewers tune out.  I even heard recently a
commercial radio station advertisement urging listeners to avoid stations that "beg for your
hard earned money." 

     How can Public Broadcasting find the money to support the transition to digital?  I am
happy to see that the federal government has agreed to foot some 26% of the bill.  That is a
start, but we all know that more is needed.  It is going to take some creative thinking.  For
example, we cannot assume that there is a one-size fits all approach for funding the change.  It
may well be that different markets -- depending on size -- need different funding mechanisms.  

     One public broadcaster from North Dakota recently visited me with an intriguing plan
to partner with a commercial broadcaster to initially share a DTV facility.  Of course, we have
to think through all the possible ramifications of such a plan, but at first blush, this plan offers
a lot.  Such an experimental partnership likely will bring digital service to North Dakota much
sooner.  It will create an environment of cooperation with commercial interests and could
become a stable funding source.  We should pursue creative approaches like this.  

     Other creative approaches may come from allowing public broadcasters to use some
digital capacity to create a funding source.  This path is not without peril, of course.  A
commercial interest cannot be allowed to detract from your basic mission.  There may be ways
to ensure that does not happen, however, and I would urge others to at least consider this path.

     Yet another path that could be explored would involve contributions from commercial
broadcasters.  Over the years, communications policy thinkers such as Henry Geller have
occasionally suggested that commercial broadcasters could discharge some of their public
interest obligation by supporting public interest programming on public television.  Billy
Tauzin has presented a variation on this idea too.  And, I understand this is an idea being
pursued by the so-called "Gore Commission" and is probably worthy of more consideration.  

     Like I said at the outset, we spend too much effort trying to reach television
enlightenment through commercial broadcasting, and not enough focusing on the one
institution that has all the right incentives to produce programming as close to that ideal as
possible.  Public broadcasting can provide the kind of win-win outlet for public interest
programming that would work on a long-term basis.  We, thus, should be exploring more fully
how to promote the public interest through public television.  

     In closing, let me again congratulate you on your outstanding public service, encourage
you to keep up the good work and take full advantage of the opportunities available in the
coming digital age.  
  
     I am happy to take questions.  Thank you.