Mr. LEE. We certainly all live by a set of rules. Don't we broadcasters live by a set of rules? Why should they be freebooters? Why should they go off in any direction?

Mr. ROGERS of Texas. You live by a set of rules having to do with traffic in a spectrum. That is the point I am coming to. Do you think that the FCC should have economic control of the broadcasters?

Mr. LEE. No, sir; I don't think they should have economic control over either broadcasters or

Mr. ROGERS of Texas. Do you think they ought to limit and determine the length and frequency of commercials on your station? Mr. LEE. No, sir.

Mr. ROGERS of Texas. Do you think they ought to have that power over CATV?

Mr. LEE. No, sir.

Mr. ROGERS of Texas. Don't you think they are asking for it when they say they cannot originate anything on these facilities?

Mr. LEE. Let them apply, as we do, and put it on the same basis. Mr. ROGERS of Texas. In other words, what you are advocating is the adoption of the rules that the FCC has laid down with regard to CATV?

Mr. LEE. Yes, sir.

Mr. ROGERS of Texas. Now would you be willing for the broadcasters to go by the same rules and the same identical regulations? Mr. LEE. Don't we have to, Congressman?

Mr. ROGERS of Texas. No; I don't think you do. I think the FCC is trying to work it out to where you do. Let us go one step further on this about economics. You knew Mr. Henry, the chairman, is advocating that CATV's are public utilities. Now if it is a public utility. then the basic proposition involved is economic control over the business, is it not?

Mr. LEE. No, sir.

Mr. ROGERS of Texas. In other words, if you have a public utility you control the economics of it to prevent it from expanding out and becoming a monopoly and robbing the people.

Mr. LEE. All right, sir.

Mr. ROGERS of Texas. Do you go along with his thinking that a CATV is a public utility but broadcasting is not?

Mr. LEE. I didn't know I was going along with the Commission, and I have not stated this is a public utility. If you are asking me to state this at this point, the point is

Mr. ROGERS of Texas. No; I am not trying to put words in your mouth.

Mr. LEE. You have me at this point thoroughly confused as to what question I am supposed to answer. I don't go along with Mr. Henry on many things.

Mr. ROGERS of Texas. I mean this particular situation about CATV. Mr. LEE. Are you asking me is CATV a public utility, and then are you asking me a second question, is broadcasting a public utility? Mr. ROGERS of Texas. Do you think that CATV ought to be regulated as a public utility?

Mr. LEE. I don't think so.

Mr. ROGERS of Texas. I am glad you don't, because I don't think it measures up to a public utility. If it does and the FCC gets the power

that they are seeking in this thing, the broadcasters are whistling in the dark if they think they won't be right on your neck next. Frankly, I think that is exactly what they are searching for.

Mr. LEE. Congressman, I have only one comment. There is a division there between a CATV and a broadcaster, is that right?

Mr. ROGERS of Texas. What do you mean by "division"? There is no question about that. One of them is using the spectrum and the other is using a wired communication. That is right. That is the reason you have your question of jurisdiction involved.

Mr. LEE. I understand-this in on advice of counsel-that FCC has held that CATV will not be treated as a public utility.

Mr. ROGERS of Texas. Let me hear that again.

Mr. LEE. That FCC has held that CATV will not be treated as a public utility.

Mr. ROGERS of Texas. But the Chairman of the Commission has testified before this very committee that he thinks they are a public utility and he says that that is his own view. But there have been suggestions by the staff numerous times that CATV was a public utility. Actually they have not held that, because they have not taken jurisdiction of ČATV. They only took it recently.

Thank you very much, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Lee, for coming to the committee and giving us the benefit of your views.

Mr. LEE. Thank you, sir.

The CHAIRMAN. The committee will stand adjourned until 1:30. (Whereupon, at 12:35 p.m., the committee recessed to reconvene at 1:30 p.m. of the same day.)

AFTERNOON SESSION

The CHAIRMAN. The hearing will come to order.

Our first witness this afternoon will be Mr. Jack McBride.

Mr. McBride, will you come forward?

Mr. McBride, you are general manager of the TV station, KUON, Lincoln, Nebr.

STATEMENT OF JACK G. MCBRIDE, DIRECTOR OF TELEVISION AND GENERAL MANAGER, KUON-TV, UNIVERSITY OF NEBRASKA, AS PRESENTED BY DR. FREDERICK BREITENFELD, JR., ASSOCIATE DIRECTOR, EDUCATIONAL TELEVISION STATIONS DIVISION, NATIONAL ASSOCIATION OF EDUCATIONAL BROADCASTERS

Dr. BREITENFELD. Sir, I mentioned to the clerk of the committee. that Mr. McBride was here a week ago. He is not here today. I shall be reading the statement with your permission.

The CHAIRMAN. What is your name?

Dr. BREITENFELD. I am Frederick Breitenfeld and I am associate director of the educational television stations division of the National Association of Educational Broadcasters. It was with our CATV committee, made up of representatives of educational television stations across the country, that this statement was developed.

There are presently 114 educational television stations on the air. Approximately one-third of them are owned by universities, another

third are owned by nonprofit community organizations established specifically for that purpose, and the rest are divided among schools. school systems, State authorities, and State commissions. The broadcasts of these stations are aimed at school and college classrooms, children at home after school, adults at home, and a variety of special professional and vocational audiences. The typical ETV station is on the air 50 hours weekly, 5 days a week, although broadcast schedules are expanding rapidly and many areas are being served 70 hours each week. It has been estimated that 60 percent of America's population. is now within reach of these stations. Within the next 2 years we expect that another 30 educational television stations will begin broadcast operations.

At the national level, national educational television has provided a major source of quality and cultural and public affairs programs to a growing number of American homes via ETV stations. The Educational Television Stations Program Service provides a national program exchange capability. For schools and colleges, the National Center for School and College Television and other regional libraries have provided major supplementary sources of quality instructional television materials to local stations. There are other program sources, as well as regional networks, extensive State plans for educational television development and other facets of educational television. but for those details I refer you to the educational television fact sheet which I submit as exhibit A to my statement.

The original purpose of community antenna television, as we understand it, was to bring the signals of television stations to areas in which reception was difficult because of the terrain or the scarcity of local stations. Where this function is served, community antenna television installations can assist educational television stations in enlarging their potential audiences. Almost half of the ETV stations across the country report that their signals are being retransmitted by at least one CATV system.

When it appears that a CATV system will be used not only to improve reception of nearby stations, but also to bring signals from other communities into metropolitan areas already served by two, three, or more existing commercial stations as well as an educational station. then the function of CATV assumes new implications, resulting in a different analysis. Where there is concern among educational station operators about a potentially negative impact of community antenna systems, it is largely because of this circumstance.

As CATV extends its role, there is the possibility that the presence of the signal from an educational station in another community will inhibit development of local service. While it could indeed stimulate such development to some degree, the likelihood is that the presence of an outside ETV signal on the CATV system would be reason to postpone plans for local educational service. The limitations of CATV in covering outlying rural areas, and the ease with which inappropriate school programs designed for schools in other communities can be misused in the CATV community are both important considerations that illustrate the need for local ETV services. To the extent that widespread development of CATV goes beyond its original purpose, many are anticipating that CATV systems will inhibit the development of local educational television stations.

Technically, educational television and commercial television are identical. Their tools are the same, and they both seek audiences, though the educational broadcaster is usually more interested in who is watching than he is in how many are watching.

Economically, educational and commercial television systems are totally different. The latter in this country has become a giant industry, and the ownership of a local television station can be extremely profitable. Educational licensees, on the other hand, are forbidden to operate at a profit and forbidden to carry commercial messages. This is the only system of broadcasting in the world that does not have a firm, permanent and definite base of support. Educational stations operate on funds from a variety of sources, and the very existence of a station often depends upon these sources. For instance, stations earn an average of 23 percent of their income from the gifts, grants, and donations of local subscribers, businesses, and foundations. In addition, an average of 20 percent of station income comes from services rendered to public schools, universities, and local industries. If signals are brought into a community from distant ETV stations via CÂTV, it is possible that the loyalties of various audiences to the local ETV station can be split. Considering the economic base on which educational television in this country must operate, this is an extremely dangerous prospect.

We do not wish to dwell here on the details of any proposed regulation. We do wish to make the point, however, that regulation of CATV will be essential to educational television stations across the country if the original concept of broadcasting in this country—that is, that the greatest benefit to the entire country can be realized by means of a multitude of local broadcast services-is not to be changed. We suggest further that the only agency equipped to take on the responsibility of such regulation is the Federal Communications Commission. We therefore urge that H.R. 13286, as proposed by Representative Staggers, of West Virginia, be considered by this committee for approval.

(The attachments to Mr. McBride's statement follow :)

EXHIBIT A

FACTS ABOUT EDUCATIONAL TELEVISION COMPILED BY EDUCATIONAL TELEVISION STATIONS, A DIVISION OF NATIONAL ASSOCIATION OF EDUCATIONAL BROADCASTERS, WASHINGTON, D.C.

By March 1, 1966, 114 educational television stations were on the air with some 80 more in various stages of future development. Telecasts aimed at in-school programing reach 2 out of 3 of the Nation's students, in more than 800 school systems and 400 colleges and universities. General educational or cultural programing is now within reach of the homes of an estimated 130 million people. Thus, television, which has become such an important part of our national life, is now making available vast new educational opportunities for children and adults alike.

ETV LICENSEES

Noncommercial educational television licenses are granted by the Federal Communications Commission to nonprofit educational organizations "to serve the educational needs of a community; for the advancement of educational programs; and to furnish a nonprofit and noncommercial TV broadcast service." "No announcement (visual or aural) promoting the sale of a product or service" is permitted.

In addition, ETV stations must abide by the same technical rules that govern all television stations. They are subject to the same programing rules that apply to commercial operators in areas such as controversial issues, equal time for political candidates, and editorializing. Regulations specifically concerning educational television are set forth in section 73.621 of the FCC rules and regulations governing all U.S. broadcasting. All ETV stations are tax exempt under 501-C (3) of the Internal Revenue Code, and contributions to them are tax deductible. Four general types of licensees operate educational television stations: (1) Universities, (2) public school systems, (3) statewide ETV commissions, and (4) nonprofit "community" corporations. More than half of the ETV stations now on the air broadcast over VHF frequencies (2-13), but most of the channels reserved by the FCC for future ETV stations are in the UHF band (1483). Recent legislation now requires all manufacturers of television receivers to include capability for UHF reception on their sets.

ETV HISTORY

In early 1952 the Federal Communications Commission reserved 242 channel assignments for noncommercial educational use, constituting about 12 percent of the total number of VHF-UHF channels then allocated. In 1965 a new allocation table provided 632 reserved assignments.

The first ETV station to go on the air was KUHT at the University of Houston. Tex., on May 25, 1953. Financing of noncommercial television was a major drawback; but nevertheless, 80 ETV stations managed to go on the air within a decade, aided significantly by the Fund for Adult Education, the Ford Foundation, and many other private sources.

To ease financial pressures and encourage the development of the new educational medium, the Educational Television Facilities Act was passed on May 1, 1962, authorizing $32 million over a 5-year period for Federal matching grants to be used in the activation of new ETV stations and for the expansion of facilities of existing stations. The act administered by the Department of Health, Education, and Welfare, specifies that the applicant for Federal matching funds must demonstrate financial ability to provide the non-Federal funds needed for the construction, operation, and maintenance of an ETV station. Thus far 87 grants have been approved for a total of over $17 million and within the coming fiscal year an additional 64 applications amounting to approximately $14 million are expected to be processed.

Today's ETV stations serve 40 States. Some cities including New York, Chicago, Milwaukee, Pittsburgh, Miami, and Minneapolis-St. Paul, have more than one educational television station. Several States have already established ETV networks-including Alabama, Georgia, Maine, Nebraska, New York, North Carolina, and Oklahoma. Other States are expected to do so soon.

ETV STATION FINANCING

A report. "The Financing of ETV Stations," available from the Educational Television Stations Division of the National Association of Educational Broadcasters at $2 per copy, shows that the average ETV station spends $370,000 annually, based on a comprehensive survey of station capital outlay, operating costs and sources of income. The report reveals that, although station budgets as high as $2 million annually have been reported. 37 of the 95 stations on the air in December 1964 were operating on less than $200,000 annually, and only 26 stations had budgets higher than $400,000.

An analysis of income sources shows 54 percent of the income received by all stations during the year of the financing study comes from "direct budgeted support"-money appropriated by universities, school systems, and State legislatures. An additional 23 percent of income was derived from gifts, grants, and donations and an equal amount was earned by the stations through services rendered to their communities.

ETV PROGRAMING

The average educational television station broadcasts from 5 to 6 days a week: 10 to 11 hours a day. Programs are divided almost equally between classroom instruction for schools and colleges and programing designed to be viewed in the home by all age groups.

Telecourses, both credit and noncredit, at all levels of instruction are available through television, bringing a larger range of educational resources to a far