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Thank
you, Chairman Upton and Ranking Member Markey, for inviting me to testify today
on behalf of National Public Radio (NPR). As President and Chief Executive
Officer of NPR, I am pleased to come before the Telecommunications and Internet
Subcommittee to provide an overview of NPR as well apprise members of two major
issues facing the public radio community – the conversion to digital audio
broadcasting and spectrum policy. I
hope that in the near future we will also have the opportunity to engage in a
discussion regarding reauthorization.
NPR:
An Established Leader in Broadcast Media
For
the past 32 years, NPR, a non-profit company, has provided listeners with
in-depth, news analysis and cultural programming such as Morning Edition,
All Things Considered, Car Talk, and Talk of the Nation.
Most recently, NPR launched The Tavis Smiley Show, a daily
one-hour magazine originating from Los Angeles.
The creation of the show was the result of an ongoing collaboration
between NPR and a consortium of African-American public radio stations,
including WCLK-FM, Atlanta, GA; WNCU-FM, Durham, NC; WJSU, Jackson, MS; and WEAA,
Baltimore, MD.
Deploying
over 300 professional reporters, editors, directors, producers, engineers, and
managers, NPR news is a premier 24 hours-a-day, seven days a week, news service.
NPR News works with 17 national bureaus and 11 foreign bureaus. NPR News also
works with member public radio stations nationwide to expand and supplement
national news reports and segments. This
fall NPR will open its West Coast studios, providing even greater connectivity
to the West. This local-national partnership is a fundamental part of the
vitality of the company’s robust and expanding news delivery network.
We
believe NPR performs a vital public service and, at its best, our news coverage
provides for its listeners’ needs, fulfilling our mission “to create a more
informed public – one challenged and invigorated by a deeper understanding and
appreciation of events, ideas and cultures.” This year our service was more
robust than ever, especially after the events of September 11th.
That first day, as the country’s air traffic system was shut down, the
borders closed and federal government offices evacuated, NPR moved rapidly to
24-hour live coverage, expanding its news coverage to an unprecedented level.
This incorporated all scheduled news programs, included additional
afternoon and late night programming and provided expanded talk shows so
listeners could engage directly in what was going on around them.
To mount this coverage, we marshaled the resources of NPR member stations
around the country to generate the programming that enable us to extend our
hours of broadcast. To give you a sense of the role NPR’s coverage played
around the world, we should note that on the day of the attacks, the Armed
Forces Network dropped their regular programming and ran NPR’s live coverage
to U.S. military bases throughout the world.
NPR Worldwide also provided NPR’s programs to Europe, Asia, and
Australia through the regular distribution of 140 stations and throughout Japan
via cable.
In
recognition of this coverage, this spring the Overseas Press Club presented NPR
with the 2001 Lowell Thomas Award for the best radio news for interpretation of
international affairs. During the ceremony, the judges praised NPR for “the
best coverage of September 11th and the best radio coverage we have
ever heard.”
NPR
also collected a Peabody Award for broadcast excellence for its news, cultural
and online coverage of the events and aftermath of September 11 “that enabled
audiences to mourn and reflect upon those unsettled days.”
We at NPR believe that this award – more than any other received by NPR
in recent times – is an award for the effort of the entire company and honors
the exhaustive effort and dedicated professionalism of hundreds people at NPR.
The award is also a tribute to our member stations, especially WNYC, WBUR,
KQED and WAMU who worked with us to bring listeners 24-hour coverage of the
events of September 11. I am so
happy that Laura Walker, President and CEO of WNYC, is here today to speak to
you about public broadcasting and its important mission.
The
coverage also resulted in NPR’s largest audience ever -- according to
Arbitron’s figures for last Fall, NPR’s total audience grew by 19% to 19.5
million. This number reflects a
simple but significant fact: in a time of national crisis, more Americans turned
to NPR to try to understand the world we live in.
The audience for Morning Edition alone is now as large as the total NPR
audience was in 1996. All this
comes at a time when radio listening is declining and Americans have even more
media choices. Simply put, NPR’s
listeners now outnumber the combined circulation of the top 35 U.S. daily
newspapers.
NPR – A Membership Organization
NPR
also serves as a voluntary membership organization that works in partnership
with its member stations to increase member stations’ audience, revenue, and
value in their communities. Those member stations are independent and autonomous
entities licensed to community organizations, local school boards, other local
institutions, and public and private universities and colleges.
The stations themselves originate on average 40 percent of their
programming locally, and WNYC is a fine example of the kind of local station
origination that exists in public radio. Such
program origination is made possible in large part every year by general support
from the federal government through the Corporation for Public Broadcasting (CPB).
For example, in 2000, public radio stations received approximately 13
percent of their revenue on average from CPB.
To
clarify, NPR receives no direct general operating support from any national or
local government source – indeed, NPR does not own or operate radio stations.
However, NPR does compete, along with other producers, for project grants
from federally funded entities such as CPB, the National Endowments for the Arts
and Humanities (NEA, NEH), and the National Science Foundation (NSF). Such
grants typically account for less than 2 percent of NPR’s revenues in any
given year. (NPR’s budget is about $100 million annually.)
Instead, NPR receives its overall funding from a variety of sources
including membership dues, programming purchases, corporate underwriting,
private foundation grants, distribution services, investments, and merchandising
sales account. Finally, NPR manages
the Public Radio Satellite System (PRSS), which provides program delivery and
interconnection services to the public radio industry, including independent
producers and distributors.
The Digital Landscape
The
public radio industry is at a fundamental turning point in its history. At the
dawn of the 21st century, there are more outlets for media than ever
before. Competition for consumers has increased significantly and audiences are
splintering into niche markets at a rapid pace. Yet, media consolidations have
reduced the diversity of voices on the radio dial at a time when there is little
spectrum available for public radio stations to acquire.
In
addition, the digital revolution is fostering major technological changes in
broadcast media. Radio will soon begin the process of changing its transmission
system from analog to digital, which will: improve the quality of audio signals,
allow public radio stations to evolve and expand new program offerings and
services to listeners, and allow stations to compete with the emerging satellite
radio industry.
The
public radio community is excited about the emerging changes in media and
particularly in the radio industry. Despite
our excitement, we do face some challenges. They include the cost of converting
to digital audio broadcasting and the need for additional spectrum. I will now
elaborate on each topic.
Public
radio stations are preparing to upgrade their equipment and digitize their
programming in anticipation of the Federal Communication Commission’s
impending decision on the creation of a digital FM radio standard.
Once the Commission issues its final rule later this year, public radio
broadcasters will begin the expensive process of converting to a digital format.
Based on the preliminary results of an ongoing NPR study, the estimated cost of
conversion per station is about $100,000.
That amount is solely for the cost of transmission and does not include the cost
of digitizing production.
Digital
radio is expected to transform the radio industry and allow it to compete on
equal footing with other digitized media. Digital technology will allow stations
to broadcast near CD quality sound free of interference to listeners.
It will help utilize spectrum more efficiently since stations will
simultaneously broadcast their analog and digital signals using their existing
analog AM and FM frequency. In other words, if the pending approach is
sanctioned by the FCC, radio stations will not require additional spectrum to
convert to a digital format unlike television stations.
Most
importantly, digital radio will afford new service opportunities, including the
ability of a single FM station to offer two content services, one focused on
news and information and the other focusing on jazz or classical music.
It can also help stations offer:
-
Expanded
assisted-living services, such as radio reading services for the
print-impaired as well as radio captioning;
-
Expanded
public safety services such as geographically targeted weather alerts,
traffic safety, and national security notifications;
-
Foreign
language programming to serve an increasingly diverse America; and
-
Audio-on-demand
to increase user satisfaction.
Digital radio will also
enable new functions such as the ability to search program formats, scan
selective programming, and read music lyrics and song titles.
Federal
funding will play an important role in the public radio system’s conversion to
digital radio technology. If an FM IBOC standard is adopted, many stations will
plan to begin the process of converting, which will involve high capital costs.
We look forward to working with this Committee to insure that such funding is
available from the Congress and other sources.
In addition, this Committee can play a positive role in insuring that the
conversion to digital radio is done in a way that helps public radio enhance its
service to the American public. We
believe that the best use of digital technology and public spectrum is to
provide multiple content streams to the public and to maximize the diversity of
content on the radio dial. It is
not clear that digital technology will move in this direction, but this
Committee can help create the environment for such positive changes.
Spectrum Auctions -- What Public Radio has at
Stake
One of the greatest impediments
to increased public radio service to the American people is the lack of
available spectrum. As you
know, the Commission initially reserved the lower twenty percent of the FM band
for noncommercial educational ("NCE") use in the 1940s.
That reserved spectrum is now far from adequate to meet the present and
future needs of public radio. The
reserved spectrum itself is less than ideal because it is immediately adjacent
to television channel 6. In fact,
demand for spectrum has been so great that reserved FM spectrum is unavailable
in many parts of the country. Compounding
the problem, the FCC has refused to accept applications for new full power and
translator stations during the last few years.
Although NCE stations are not
limited to the reserved FM spectrum, and, in fact, are statutorily exempt from
having to participate in spectrum auctions when applying for non-reserved
spectrum, the ability of public radio broadcasters to obtain non-reserved
spectrum is uncertain. Currently,
the Commission is considering whether: (1) to bar NCEs from even applying for
non-reserved spectrum, (2) to dismiss an NCE applicant if it conflicts with a
commercial application or (3) to
expand opportunities for entities to reserve individual FM channels.
Unless additional spectrum is allocated for digital radio use, however,
the opportunity for transmitting additional program services is limited.
As
a general policy matter, more needs to be done to preserve access to spectrum
for public interest uses, including public broadcasting.
Despite a specter of riches, recent spectrum auctions have failed to
raise expected amounts or have been mired in litigation or administrative
gridlock. In addition, while
spectrum auctions are, in many cases, an appropriate means of realizing the
public's interest in the value of a scarce resource, other uses of spectrum may
be just as valuable, even though the value is not readily measured in revenue.
In
the more immediate term, the reallocation of television channel 6 to radio would
address several long-standing and future needs.
In addition, access to non-reserved spectrum must be preserved.
If NCE applicants are barred from applying for non-reserved spectrum or
forced to participate in spectrum auctions as the sole means of obtaining
spectrum, public radio service to the American people -- now and in the future
-- will surely suffer as a result.
Conclusion
Thank you for your time.
I am happy to answer any questions you may have.
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