1965 National Association of Educational Broadcasters Convention; ETS Division Business Meeting (Reel 2)

The problems are rising and will continue to be seen as the seat of ATV instruments spreads and as a question of protection for existing television stations becomes less academic and more critical. Don Chang-in station is connected to his base with a possible establishment of a community system that would bring both WNVT and the ART and WGDH in Boston to his audiences. The issue raised by this possibility, stretched from a popper right to the very existence of non-station. And I'd add that one of the applicants for a CATV in Connecticut is proposing to bring forward. They're going to bring GDH, New York, and myself, and they're going to bring non-station into what we're going to do. There's generally accepted the CATV industry will grow during the next few years, and perhaps six million families will be reached with CATV signals will gain in the next three or four years. The artists have a concentration in people.

Large cities may also subscribe to CATV services. It seems to be considered elective to be going on, for instance, in New York City for CATV for the Parkland Brothers, maybe a very new building business. In addition to metropolitan areas, under-survey, there was another huge population-wise waiting in CATV. It is many channels can provide ultimately by any service. It can sell, will multitude of it can sell, will multitude of tolerate the signals, and a choice of FN radio signals to subscribe, and offer weather reports in seven. Thus, it might be possible for CATV systems to invade areas already served by the green networks and buying the next message. This will involve problems not yet discussed or perhaps not yet imagined, but at this point, we should be aware of the possible directions of which CATV can be spread. The Fisher and Site reports of the best known studies of CATV. Fisher attempted to determine what effect the transformation of a station viewer to a CATV would have on the revenues of local stations.

There are some suggestions that his findings give the impression of much greater CATV impact than its action depicts. Sighting on the other hand seems to suggest that the economic impact of CATV is on the model. The science figures, the science figures indicate that, instead of a number of CATV systems do not occur in local stations, this may be in direct opposition to the statements by the nice community television association, which is the large and sophisticated organization of CATV systems. Sighting also suggests that in the long run, there may be an answer to small market stations, in whose coverage area the CATV systems bring the signals of large market stations. This is appropriate to educational tolerance. In many cases, such as Thons, an example in Scenery. Earlier this year, the FCC requested comments on his proposal of the commission as jurisdiction over CATV systems, and on suggested controllers.

Two basic issues at the time had to do with carrier requirements and non-dimplication, especially through the same very important to educational stations. When a CAT system comes into an area that must carry the local stations as part of the service, this is the carrier requirement. In the original FCC plan, educational stations were protected under this regulation. In the sense that they would be carried along with all others, it was brought by the system. This kind of protection is obviously important. The non-dimplication sections have to do with programs being brought into a community by a CATV system that would be duplications of programs being put on the air by local stations. The commission stated that non-dimplication requirements were suggested to preserve for stations to compare the exclusivity that they have been able to obtain as against other stations, but nothing more. The non-dimplication requirements stated that CATV systems may not duplicate program

and be put on the air by local stations for a period beginning 15 days before the local stations brought gas. And in the 15 days after, educational stations were not included in the non-dimplication requirements, which may have occurred in the proposal. But an educational program in a community could be drawn in from another EDV station at any time. The reasoning I supported by some commercial interests in subsequent failed filings was education stations are not intended. The NAAB filing consists of the course that educational television stations must be provided some non-dimplication prevention, along with the commercial stations. Considering the present system of distribution is used by NAT, the whole problem becomes very complex. The NAAB filing is suggested that non-dimplication protection be provided on an open end basis in an individual submissions to the commission will be allowed for specific stations and programs.

The original comments to the FCC by all concerned remain. The major point has been made by those believing that educational stations should not be protected, because the EDV is not competitive. And the more education we can get on the air about other comments, of course, dealt with the question of the FCC, has jurisdiction in the first place? But why comments were submitted a few months ago, and the matter is now pending. Obviously, educational television is competitive, but not in the economic sense. The committee feels that educational television stations are really healthy. Their audiences must be as large as possible, and why. Each educational television station deserves a protection of some time, a non-dimplication requirement. At this point, the issue is being decided. There is no standard to mistake, but I would like to suggest that if you admit you hear a rumble of the CAPV in your community, that you let a chap or a Rick or somebody know it, because I'm a little scared.

I've heard a lot of us in my community. They know what they're doing. They know together what they're doing. And I think we've got it on our side as well. Thank you, Bennett. A couple of announcements. Our panelists will distribute cards, and one of them will be sure we have an accurate record from this period following the same thing. So, this will happen a little bit, and I'm just going to drop them on your way out when you drop. We're doing this, by the way, I don't have a meeting tonight, and that's almost to be noticed this. I'm delighted to see the rooms. I'm so proud of all these meetings, the attendance, and for this is a wrap-on. We're trying to take a profile of all of the meeting. I have them here, so we can start to the meeting to serve the needs of the people in the library, and try to get the right people in the right place at the right time. On the fact sheets, they are available on the same note of $25,000 plus shipping.

If you want to meet, let us know. Now, as I said, that's pretty cheap to all the facts about ETV. They're in your focus there. They will, again, $25,000,000, and let us know if you want to make this. We will be happy to send it to you. I have a telegram here, and I just read it to you. That's for sure for a successful convention, meaning, sorry, I cannot be with you, but we'll be happy to receive all of the NADV groups to visit for a week or after the convention. Would you pay or collect all of the NADVs who will arrive at the time of the day, so on? This is from Jack Lennon, the General Manager of the Library of the R&D, Puerto Rico. Continuing right on, right up here, we will move into the next community report, which is Label Classroom TV. This one is, to be given to you by John Schwartz, an honorable explain precisely what this means. John, I'm happy to have this chance to talk with you about my regard

as the greatest potential threat to the very existence of your stations and mine. It's got nothing to do with Classroom TV, except that it is a threat to take anything to do with Classroom TV away from the ETV stations. In a recent speech, a representative of AT&T said that they had nothing against broadcast educational television stations, but that they, the broadcast educational television stations, should confine themselves solely to cultural programs and that they should have no light to put programs into the classrooms of the schools or colleges. Indeed, he justified this position on two general grounds, one, that it was impossible to put programs of any controversial nature whatsoever on broadcast ETV.

And secondly, that there was a great need for multiple channels, which only presumably the telephone company could supply. Therefore, we are to subsist in his view solely on cultural programs, presumably for an adult audience in need. In front of this group, I do not think I need to later the point that any such program as that means bankruptcy for almost any station represented in this group that we cannot subsist in this fashion. I might point out that this is not local or regional inquiry. Similar statements to this one that I have just quoted to you, which I personally heard, similar statements have been made in New England, in North Carolina, in Minnesota, in South Dakota, in Texas, and in a number of other states as well. I suggest to you that this is extremely serious. The telephone company's attack takes two separate grounds

and many of you are familiar with them. The first has to do with interconnection, which is one subject. As you know, there's been a great deal of opposition to our owning, our own privately owned microwave interconnections, and this has taken place in Pennsylvania, in Nebraska, in South Dakota, in North Carolina, and in a number of other places. The second, in my mind, even more important aspect of which we are confronted is a well-organized campaign on the part of the telephone company, which is sending representatives to see school superintendents and which is suggesting to those school superintendents in both large cities and small that they should remove their educational programs from broadcast TV stations and that they should install four-channel or six-channel capacity within their schools or which they can rent with in facilities from telephone company. And that this would be educationally in which sound their way

what the school superintendents would receive. They mentioned these facts, for example, that the school superintendents in Minneapolis and he simply asked whether costs were prepared to cost with our costs and found out, of course, that the cost were somewhere on the neighborhood of 4 or 6 to 1, and that was enough for that. The other aspect of their attack, however, has been to build with state legislatures and a number of state legislatures have been approached by representatives of the telephone company this year whether it requests that these state legislatures should appropriate money. In most cases, to the state department of education, but the state department of education would then pay that money over to the school systems, the school systems would then use that money to compensate the telephone company for furnishing multiple channels. This attack has had some success in a number of states that I think some of you know about. We've been looking at this, and we think that our unsupposed defense against these tactics is simply to make known to all concerned, but especially to make known to schools

and school boards, college presidents and other administrators, the differential in costs. And since the North Central Association has had a committee looking into various EDV costs, we have approached them happily, the chairman of that committee, and the other members of that committee are members of your own group, notably Jack McBride and Dick Hall. We are looking into that with a whole of obtaining sufficient funds so that we may do a study all over the United States. And when this sort of thing comes up, we can go to the superintendent and say, ah, yes, this is their offer, this is their typical cost, this is their tariff schedule, this is what it will cost you. Now, what are you paying now? Similarly, on the interconnection, I think that it is no surprise to many of you here to know that connection between various cities, generally speaking, if you own your own private life or way, and even at a proper business depreciation schedule, even so the cost of providing this service by the telephone company

are generally from 3 to 5 times as high as providing it by your own private life or way, own microwave system. So I have suggested to you these things that may be done. First of all, will you send any information you have as to this sort of activity in your area to Chuck Mark this year so that you can give it to the requisite committee? Secondly, I would be very, very happy. If you would in terms of your school administrators be so close to them, when this sort of approach is made for them, they automatically ask you about, I am not worried about this thing, when the facts are laid out on the table, I am worried about this thing. If you, as station managers, don't even know that your superintendent has been approached on this particular ground. Thirdly, we will pledge to you that we are going to do our very best to get sufficient funds to do a first class cost study on these various things all over the United States. And when these figure talks are capable, they will then be made available for you. And you and your term can present these cost figures to your educational administrators.

I have no question of the matter of not only the survival of the prosperity of the EGD station. If the facts are known, I am worried that your educational administrators and your community may not be fully aware of these facts. I am worried that when these approaches are made, they may not communicate the knowledge of these approaches to you. Therefore, I urge you to do your best to give a little forewarning of the school's superintendent's college president, school board members in your area. And secondly, to communicate anything you are a similar activist to the NADB where I am sure the judge will take care of. Thank you all very much. I apologize for taking time, but this is important. Thank you. Thank you. I think this one is sufficiently new and different in speech to you. If you do have questions, let's get them asked here. If they have some general concern, are there any questions that I'm understanding what he said or why is the further information? I wonder what John's answer is from the argument of the morning channel service versus the two that he can give at the moment and what it's going to be.

Well, the best answer that you can give. Are you all hearing? Yes. I think the best answer you can give on this is, don't you need four or six times? So honestly, the sort of answer that any of us would give. In our own case, it took us seven years to completely fill up the school day on one channel. Is that a second, but now I expect it to fill up in another three or four years. But under these circumstances, I wonder who is asking for four channels. I don't think, in most cases, it's your school superintendent. There are, of course, other answers in addition after the one channel or the two channels are filled up. Then there's the question of who will provide the total circumference. You can do it. There's the matter of the 25 hundred megacylion. It's the matter of the district and your brothers to the country of the third or fourth U.A. Jeff channel are available in most parts of the United States. But I think the main answer is to go to your school superintendent, say, who's going to teach on four or six channels. And who's going to produce these programs.

And it's to this that the telephone company offers no solution at all. They proposed to provide an annual cost of over three million dollars by four channel capacity to 32 different centers in Minnesota. But the cost of over three million dollars per year was simply for the interconnection. The matter of who was going to teach, who was going to produce, who was going to meet those costs. It was not brought up. So the best answer I've had to come right down to is to say, all right, I took the seven years to fill up one channel. As you read more channels, we will provide more channels. A little bit of a fraction of the cost. John Hader suggests also that multiple types of channels provide an answer to this thing. I think this is also probably true. How practical is that? All the questions? John Hader. Thank you. All right. The only thing I know about this is that more than five years ago, we went here to work together. They had a contract with CVS in Africa, which is very popular.

So you can invest in it in a possible way. This has already been done experimentally in their laboratories. I see that it's great. It does not be FCC from this end of the day. I see that it's very popular. And for the end of the period of the different requirements. But for why is it satisfactory from what we need? Then it does. We have confirmed work. The engineers have done pretty well at the end of the year. As we need these additional channels, I'm excited to say that they are. Okay. I'm going to point your hands. I think hands on the hand-ass way. Any others? How? We just say it again, please. The days are all well. And we're all in it. The feedback circles, aren't you? Do you have an answer or a list?

They did. The answer to that is very simple. On their costs. And this is inner connection between two points. On their costs, the middle connect us with the loop. 157 miles away. They quoted $44,500. We have just completed a full year of operation, including the appreciation of that circuit. $47,000. Now for $33,500,000, I can do an awful lot of feedback circles. Now that's fine with the answer to that. Their costs are roughly between three and five times as high. As you would activate it, do it yourself. Even taking a healthy appreciation for your equipment. Relish you can provide all kinds of feedback channels. Thank you. We have the Appalachian Committee. We're going to skip this one right now. And move ahead to the program practices committee. I will on the report on the Appalachian Committee. It has kept going. It meets again tomorrow for breakfast at 730. They have a joint committee with radio and TV membership. They have a report.

But when pressed in most of the work, it's a quick group. This report has been submitted to the Appalachian Commission. And is being considered, should it be accepted? It will resolve in a major study project to utilize it. If you can tell if you can do radio in the Appalachian region. This is a very interesting blanket. It's quite likely to happen. And we will keep you informed about it. Now we move into the area of program practices. The program practices committee consists of John Taylor Chicago's chairman, Win Parkland, and many T-1 on the stone from Seattle throughout Schengen from Austin Center. John Taylor. Another word for the committee, program practice committee, is program underwriting. I might report that this committee has been accused of an all and not doing much work. And I submit that we have been doing some work and approved that we've been doing some work.

We have counsel here to do our report. Thank you. Thank you. Good. We found out that we had to do this work at practice this morning. So our notes are a little days old and we say, you know what I'm saying? But let me start off by saying that we are not attempting here to make policy lawyers are artificially not policy makers when they work for some of the else. But we do have a problem and my purpose is simply to state. I think that the problem stems from a commission rule. And I don't have the rule here. But I remember enough about it to discuss it. It's 73.611. I got the number correctly. And it deals with the furnishing of programs to EGD stations.

In that rule, there is a provided, it says that you cannot accept consideration for a program and there's a provider at the end of it which says it does not include the furnishing of network lines. Some people will say that there's an exclusive provision and everything else should go following that. There are arguments on both sides of the question. I think that when you begin to analyze the rule, you have actually remembered that really nothing ever means what it says. It's a question of interpretation of the last place we want to go to find out as a selection. Now, on the rule itself, there is one school of thought, and I call this the restrictive school. They would read the rule sort of like my younger son would read it.

Here's the program. It was brought to a station and you could run it. If you do, you announce we did. Or on the other hand, somebody comes to a station and gets them a grant and says you produce a program. And when they get through producing it, they put it in a can at the end. But that's, I think, to respect the rule or interpretation, and I have another school's position, which I like to call the level school. The individual itself, the word of thought, that I would hand in more level of interpretation, are the words called produced by or at the expense or furnished by others. Maybe as a lawyer, I'm straining at making the words at the expense carry over too much work.

But I didn't point out to you in a station financing report, produced by Rick Reiner, you will find that 44% of the expense on the average of the station is sourced a lot. Now, if the word is to carry some meaning, there are program-producing functions which can be tied to the words at the expense of. And we have got to know at the commendable, what kind of interpretation the association might itself. There are a lot of varying set of practices that are going on. We do not know at all. I know that as far as the HFCC is concerned, there is a variety of opinion.

As that, there are differences of opinion between lawyers. And there may be some differences given between stations. As I understand it, the committee is presently considering circulating the stations to find out what practices may be and what stations feel practices should be. When these directors come back, the committee will be in a better position to evaluate the entire situation. Thank you. So thank you for the season. Thanks for your move. Yes, great to have you. Yes. I would have reminded there that I had sort of a promise when I skipped over my health shares on the only commission present that we have in this area,

which is a letter they wrote to WMDT. I would not try to characterize this too strongly. I had nothing to do with making the request of the commission or in formulating its answer. However, that letter, in my opinion, is as open to interpretation as is the commission's rule. They have a rule in that instance of what the commission has called, and I think what WMDT told the commission they would do, a concept of vertical property. In other words, they would get funds from variety of commercial enterprises, produce programs, and announce vertically that it's in groups the donors of the problem, the donors of the funds to make the programs possible. The letter has come completely in terms of program production. I think it will take a very careful accounting analysis

to determine which of those funds did not go in a general way to support the station, as well as the production of the programs. I want to emphasize the letter. I think it was better to determine that the commission regarded this as an experiment, that they cautioned WMDT, that it wasn't an experiment, and that they would like to have a continuing reporting back to the commission as to the results of that which happened during this particular project. It may well be that some of you would like to pose a question to all these lines, and we have Council here to react on interpretations. I can start from all rolling. We have announced in Chicago that next week

we're going to put on a series of regular commercial television commercials. I think maybe I'm better as a cable buddy. I regard this as a matter of fact, I might take a little more about it. There's a film festival in town, and one of the categories is the best television commercials. So we have put and bring up them together, and we are putting all these television commercials on the air, and they're going to be judged. We in trouble, Council. Wow. This is a tough question. The apparel is on top of my head. My initial reaction would be that the key to the rule is one of consideration. If there is not consideration involved, I think they're halfway home. They're all a little less clear for the moment. Any other questions?

I'm just going to put that aside. Well, somebody wants to have a question. I might have to think of a serious one. Yeah, that's it. Well, there are a lot of dances, concerts, but I would like to contribute to $10,000 to get count. His name is Pat. So right now, I believe there's $5,000 in the station. Because your name after a long replay of the ball. $4,000 for time today. Well, we thought right to the heart of the problem. The question revolves around an interpretation of a rule I mentioned. If there is the liberal interpretation of this goes to the expansive,

the production of the program, this is one view. I've got to say that this is an argument. This is a more liberal interpretation of that rule. I mean, if you're asking me if I can say it's popular, or if I can say it's popular, I can say it's popular. I think we simply then say something. I think we know more questions if you have questions. Pat, let's check the work list in the meantime, we're going to prepare a little question there that will help us. We hope to find out some of your views and some of your practices so that we, at some point, will be able to have a good census. Let me add one more point here.

There's tremendous pressure on fighting the street by commission at various times to rewrite a rule. There are, I think, the question of underwriting from when I get most of them from the stations. Now, if you have questions for heaven, say ask them now about underwriting practices. What do you want to do? What are you doing? What's the answer? Because since maybe one of the key times, you've got free legal opinion. And you've done well, but it'd be right because the first time you're wrong will be the last time. You better be awake, I guess it. I'm not sure if it's right or not. It's a paper, I guess. Oh, another piece. Oh, I mean, advertising another 80. I do not regard that as a lady, the FCC problems. Would not the underwriting of program airplane or the Boston mile political program on the year, and I produced it. What do you have here?

Your grandparents and all. That's what the government on the irritations the rule of respect to expense. The word to call it. So I mentioned earlier. Oh, I haven't got the slightest light. If you're asking about the FCC, thanks a little bit, I do not know. All I know is that I've got the WNDT level, which I say is couch in terms of program. But I do not know whether or not the commission writing is, is that there could be other expenses that WNDT faces with respect to that program. It does mean that they had to operate during those meeting hours, whether that includes operating expenses, there's a question that's not answered. The WNDT situation aside, what if someone provides a program for you that's already been produced elsewhere, it says they will also provide your operating expenses for that hour or two hour or three hours, or it might be a mistake to have them out, that you're out of the air.

You think we are, because our people will point here. That this is part of the expense producing the program, yes. Even though you are after producing the program to produce somewhere else, it's a question of whether you would want to include in producing as well. The chairman of the reason to be encouraging us to always see the wider basis for just underwriting one of the wider basis support that doesn't seem to indicate to me. The mission is to make a plan for this type of authority. Well, that could be a conclusion you could arise, but I would say that you've got to remember that the chairman of Henry is one vote aside. We should report that at the FCC meeting yesterday. The question was asked, what about this? What is the commission feel about? The commission staff response, which is different from the commissioning response, was that they are instituting and studying, they're in process of study.

They may recommend they rules and change. They don't know. This is simply an area of open inquiry at the staff level. That doesn't mean, again, it's at the commission level. But they are concerned about practices. What would be your opinion about the university station? We ask people to have a pattern, and it's great to contribute to the university's bomb. I think it's good that there are a thing all over it, and it's helpful for them to support the university, not directly into the station. The last day, the production of any program, or any connection with the telephone stations. What would you enable the program to contribute to our foundation? I would have to roll against that. I mean, it just seems completely divorced from any connection with the commission, too. No, I feel, I would.

It's a university station that I already know, asking that question, I would say, no, don't do it. No, no. This is too far from your own production. I don't know. I would have been back and picked up the first point, this gentleman made about the, as I recall, you said it's a replay of the film of a football game, or the taking football game. I think, I don't argue very strongly, that you shouldn't do that. How does it say it's an argument? I don't think it should be very long an argument. Then it's been a case of this type. Do you remember Bob? Let me show you what I brought in my name, who, uh, are like being there, but now I'll be here. Use of my name. There has been, uh, a couple of things I think, so we had been, uh, in the end of the conversation, you see, uh, in the end of the conversation.

Is there this one? Uh, this, this is a question about a specific case, which has a character, which gave us all, uh, to put it in, uh, modern terms, greater concern, and, uh, staff and the putter practice committee, uh, took some action to, uh, to remove the cause of concern, and I'm happy to say that that, uh, practice is not now being followed, but, uh, correctness of armors, and, uh, we trust that it's, uh, not going to be followed anywhere else, because, while probably the point of view, is, as council says, artierable, uh, uh, it is, uh, one of those things, it started life, and it's cycling to ride. And, uh,

well, I thought the question actually explained the issue, uh, but I overheard how I'm sorry. Uh, there was a case of a station issuing, uh, a sheet of paper, a brochure, uh, offering to, uh, provide companies, provide time on the air, for companies' name, and direct associations, with given programs, at given prices. A rate of time. Uh, no, not a rate of time. But, uh, a list, if, uh, a list of specific programs really is different from a rate of time. But, in any amount of this practice, uh, it seems to border very closely, uh, uh,

danger area, and, uh, I would feel that, this is definitely not something which should, which we should encourage, anyway, I know, uh, honours are hard to come by, I hope they're not, uh, that might come by. Can I just, uh, answer some of the questions there? Yes. I was, uh, wiped out, so I said, I started out with, uh, a little presentation by saying, we're not policy makers, and we're not trying to make policy. Uh, I think it's quite evident, from, uh, just what my, or the, the, the, the island area of town, and, uh, if anybody, uh, at the moment, would want, they policy, and, uh, at least from this side, the, uh, uh, that's the purpose of the committee to, uh, to get, uh,

information, and believe me, we need, uh, because I don't know of all the practices for this session to be engaged. I have, uh, let me see if you two are, please section, Oh sure, Well let me just follow that up. I have a mention of the discussions we have had at the

time of the commission itself because there have been positions emanated for example by various lawyers on the commission, including lawyers and general counsel problems. I would rather not give them any currency, but the second reason that you may just freeze that opinion at the future. I think that you need to remember you have a lot of commercial license and you do not sell

that. We do programming for schools because as part of the license that we were chartered to do is part of a job that we did. We don't sell any time that is good. We never sold any time that we find out a lot of new proposals. Neither do we propose as far as the committee is concerned, sit down and write up a long hold of theories and new signals. We think that what exists now on the paper and perfectly adequate to serve as God not us do us. If any of you need any advice you knew at the game that's what we were here for. Any of us, any of our own

experiences, we're telling the places where other people have gotten trouble, stay out of it and remember you don't sell time, you are not in for much. If you don't write great cards, sit there. I think you're a brilliant talk of life, a lot of fun. I don't know if there is. Well, I think it's not an underwriting question, yeah. We'll talk to you about it, but don't take the groups time. I don't think of that to any of the considerations. I think all of the considerations

should flow from the rule and from the station's general policy on the solicitation and whether or not there actually was a program produced, and those are the elements of concern. You like really want to know that. I also put on a program how you produce that for yourself like that. In the current year of the program, you're the licensee judge, this is the fifth program around the community, there's no objection. I think the thing to remember about this is that you are running your own station, you are setting up your own program service. You, I really never case to meet you in a way like that. What I do is go to somebody. I put a program that I will help you get on the air and I go to somebody and I try to get some underwriting. I think there's a big difference in who's

operating at the place, you or somebody else. It's your program service. I've been reminded of one of them here by the power of the beat that we are way behind, and this is something we can talk about a long time, and this is something we can be glad to have your individual questions about passing along to the staff here, and we'll do our best to feel any end of everything that's caused to you, but remember one thing, you're in a commercial educational television station that's packed like that. Thank you, Mark. We will now move on to the schedule that remind you that you can't expect us a discreetly-written survey form, which will come to you and ask you what program practices are in your station. We need to know. We will keep you advised that many will work through us in the next cloud. We are now getting back on to the program,

and the next line of them, our agenda is the ARB report that does the moment of this. They've come right on up here, Mr. Ritway, and others will be passing on. We have a very special small set of information to give you about ratings, where research bureau, research, for this purpose, I'd like to introduce a very great report on Mr. Rupert Ritway, the American Research Bureau, Mr. Ritway. Thank you, Mr. Marcus, ladies and gentlemen of the National Association of Registration and Broadcasts. Discussing audience engagement with a group of educated and broadcasts doesn't seem like

the value of ratings to a group of proudly learned to associate them with commercial pursuits of mass bodies. But on second thought, our real audience that you have as much need for audience information as a commercial station, and perhaps even more. Your initial audience is pretty easy to account of course. However, you do not have to provide cost per thousand as much to advertise. You have a mission. Your mission is to offer an attractive educational alternative to commercial entertainment program. You want to help the people who wish to continue their education throughout their lives. You want to extend the reach of science and the fine arts from the classroom and the museum to these television home itself. And here's the key point. Most of you have very limited resources

which to accomplish this. Now, short as a catch, it may seem like a very good argument against buying any kind of data. I'm not going to recommend you buy it yet. But let me ask you, can you afford to raise money on programs that are not being watched? You have an objective. You have a target audience in mind. You have amount of money to accomplish the objective. Clearly, you need to know if you are reaching the group you have chosen to reach. The student, without the student, there can be no education. And without the audience, and a bit of cultural interest, as meaning, in short, is the money you do have doing what it should be doing for the community. And if not, how can you change the pictures from that ability? One answer to that question, why isn't it

adequate audience information? Let us take a look at the National Picture Editor's stand now. There are nearly 55 million television homeless and all the 55,000 of them watched television at least once a week. The average family used 41 hours of television a week. That's a national toll for more than 2 billion, two hundred and thirty million hours in front of our collective TV set. The networking circulation of education stations is four million, eight hundred, eight three thousand, nine hundred TV homes. That's about nine percent of the total. The average family watching TV watches TV for 1.4 hours every week. That's more than six million seven hundred thousand hours. The top educational station in

the country is WNDT, New York, which has a net-weekly circulation of one million seven hundred plus thousand. And the average daily circulation of four hundred and fifty-one thousand eight hundred homes. Chicago, Philadelphia, and Boston are all strong. Each having net-weekly circulation of approaching four hundred thousand homes. These figures are of course a bunch of the markets in which they're located. Only nine of the top 30 TV stations in the country have a net-weekly circulation of over one hundred thousand homes. Of that thirty only four are UHS. But encouragingly amount of those UHS are willing pretty well. That would be an EDH hardware, for example. If the thirteen ETC market in terms of audience size gets twenty-first, it's twenty-second, the TV market was scheduled. WTAA here in Washington is twenty-first among the ETCs

and the packet being UHS station and the eleven TV markets mainly EDHF. Another encouraging side is the wide distribution of ETC. Looking at them back showing the counties with actual viewing of five percent or more net-weekly circulation of regular viewing to ETC station, we'll be able to supply them a lot of times in prison in many areas of the country. Educational television is widely dispersed and at present in most sections of the U.S. That's the picture. ETC is still weak in comparison to commercial TV, but it has gotten a good start and has a good base upon which to build. We have ARD, believe that it will grow, into an important force in America and we would like to help. A while ago, I may have said a lot of

trying to steal you audience information. Well, that's not quite true, but I would like to show you on audience information. We know that a station manager trying to find net-week payroll has little time for people who want to merchandise, show him merchandise, that he just can't afford to be without him. There comes a time we just can't afford to be with, is it? So, through ARD's ETC program, we make several of our most valuable products available to educational stations, absolutely free of charge. For participants, we see ARD National and local market reports on a regular scale and specialty reports of interest as they are public. Not many of you have made already received this information. ARD's television market report lists only commercial stations, but you can use them to gain an insight into the makeup of the audience

and its doing habits. Why waste your best programs in competition with the most popular commercial shows? Are there viewing gaps in the local audience? In the French Curious, when your town would appreciate an alternative to commercial television, is the post-11 p.m. audience margined up to warrant your going past although it's the end of silence? At what times of the day, the most people in a given age sex group tend to watch television? Anters to questions such as these can be found in the local market report. Anters are just as useful to you as they are before commercial subscribers. There are some special items and boards within the viewing habits and distribution of the audience throughout the nation. We published them for our own information and for the industry in general. When some of these credits contain information about potential news to EGD,

it is sent to the participants in the EGD program. The ARD TV National Report deals with national reports programming and contains more detailed demographic information. That's the basic EGD effect and it's completely free of charge with no strange effects. We'd like to think of you having a prosperous future ahead, so it's entirely to our advantage to help you get there as soon as possible. It's our hope once you are richly involved, stocking, and established, you will have become so through audience research and will then be ready to buy a lot more. But if you're troubled with excess money now, we'll be happy to help you out. Participants in the EGD program are required as clients, which entitles them to purchase special tabulations at a rate which is great. The special tabs could give your audience a 15 minute chance

or if I guess about any time period, you may be fine. Or you may want to analyze the people who watch the EGD because they can be very different and may not watch the popular commercial program. ARD's special studies are as custom-parent as a well-taired student. They can't be designed to show you anything about your audience that is attainable to a survey research. Raining all the way for audience attitudes to the reception characteristics of your station. Proper use of these tools can greatly enhance the future of your station. Or what about the youthful future? Well, I don't want to be trapped in making any predictions. But let's take a look at some of the many directions EGD could go. Underwriting might become an important and more common. If so, the underwriter would want to know what he was ready to perform in the service

or not to the community. A question has easily answered by a survey research. Community stations might begin to support, begin to be state support, on community phrases. And the city council would want to know what you know about your audience. Federal studies might be key to demonstrate the level of performance. And of course, come by the time even the university may have to appeal to an outside authority for a proof of its service to the academic and general public. Rating and all audience attention are very useful tools for everyone to use. But, like all tools, they are only as good or as bad as they use to which the other question. Much of the information in this little space and other facts are imposed in the classroom. If we can be of any help, just give me a phone call.

Thank you very much. We wish we had time for questions Mr. Ridwin. I would appreciate it to you for this. Those of you who have no research costs, certainly appreciate the amount of material you give us. Thank you very much. If you do have questions, you can feel free to see the screen with the letter. ARB is located just outside of Washington. If you have the tale of questions, I'm sure they'll be delighted to talk to you. Tonight, tomorrow, or maybe you can make a call. We'll now proceed continuing with the agenda. We're delighted to get back a chance to have a quick report from John Bison. On the utility tax program, there is a particular we set. We had time to say a good deal. So, Ray and John, no, we must have a quick report from you. I think we're going to have a bigger development to listen carefully to what they have to say.

It's about money. First, we introduce from Health Education Welfare, John Bison. I'd like to have four points while we're here. And then, Ray will go on from there and give you some background. All of you will ever see that we're available at some point. The program will just make clear our policy with regard to color. There will always occur to be some questions to whether they can take the color of utility to the program. It can be used for color. I know a number of people writing in and suggesting legislative changes against the inclusion of color, but there has never been a problem with regard to the inclusion of color of a quick report.

So, this, however, clarifies the situation and also clarifies the criteria to be used. Secondly, I want to follow your table in the program, one, two. At the attachment of brand under public light, four or seven, have you know the law, prevent the $1 million, because it should be distributed in the case taken to the more than one. I will regulate them to say that who will regard as the state location or the license location, or the secretary may get termed for good cause, then some other maker,

and maybe use this to clarify the kinds of measures that the secretary can use. We protect it within the next year, and we will be making attachments for a number of statements, which will include states other than the state of their studio location or their office or their business address. We expect to be doing better during this coming year. Now, the second point that I would like to cut down is the broad equipment of the speed of a brand approval, Ray will print a better sum of the sales statistics on that, but let me just say very quickly that it is our plan to make brand totally 10.10 and a half million dollars

prior to January, and that will lead for this distribution during the second half of the fiscal year, January, July, and something in the half of the six-minute dollar, and after July, for the next year, the thirty-two-minute dollar authorization will form the function of being appealing, and we will have in the area of three-minute dollars that can be distributed during fiscal 1967. What does that mean to operating a state?

Everyone knows that the act itself is the fund primary, to make use of the channel available to educate this means that our primary function is the activation of the new state. The fact that we are working to distribute this amount of money in the next two or three months means that the opportunities for existing states are better than they will ever be again. And they opportunity will decline during the second half of the fiscal year, and I think, although I have been able to make it otherwise, I personally, if I were in here, who would operate on the assumption that there are likely to be,

very few, perhaps, no fraction of existing states in the current fiscal 1967, is just that it is a hacker related to the available of the fund, and we can all be aware that we are planning to be coming here to hold a series of regional conferences in our APW regional conferences. This arrangement is now for the first quarter of calendar 1966, our whole conference is in the Charlottesville, Virginia, in Boston, Chicago, and San Francisco. During the second quarter, we will probably, while we plan, or not happening yet, we will probably hold conferences in the campus city, and with either Denver or Dallas.

We've held one regional conference on pilot basis in Atlanta. We brought together the information from the grant officers in over a dozen programs. I think the conference was very successful. We invited not only the EEV media people, but the second-maker in welfare and education in medical and nursing programs had a total of, I think, somewhere around 50 people there. These were people who had funds that they recommend, and who had services to be performed. The envelope is this ball report, and very good. Almost every state involved develop a relationship among their key decision makers in the state, so that they are holding state conferences on a continuing basis.

I continue to feel that perhaps a third of the operating intel of edge cable television broadcasts will come from the welfare and medical and community education or community program field, and will be outside formal edge cable. That's our hope that these countries will provide you with kind of information, but the kind of contact will be useful in developing these sources of program funds. And you've known in all of these the new programs that are being passed that the action plays of the program have their decision made with regard to the funds in that at the local and state level. It's only in the area of research and demonstration programs that federal government take on a ton of decision-making roles. Aside from that, these decision makers are made at the local level,

I believe, indigenous welfare and the local public health district officer. By bringing them together at the 80 W Headquarters, we hope to make your back easier, and the same benefit these programs are providing them with the services already in the state. One other point that I was to make was certainly a language-based family, and that is that we will be coming to the end of the role, as far as the economic and facility act is concerned in the next fiscal year. For that reason, we have under consideration now the possibility of commitment of the basic collective play. We have our working and receiving views by way of Captain Scott and Bill Harding.

As to your needs, we continue to solicit these views. If you want the legislation modified in any way or any adjustments or modifications, I think that we would appreciate the hearing from you. There are any questions on any of these points that have to be read through, and we would like to entertain you. It was my intention to offer a mild challenge to Don Tavener's enviable position as champion storyteller, but behind John Bystrom's back,

Chuck Mark was, let me know in a certain terms, I wasn't thinking more than five minutes, and that hardly leaves me time to tell the story. So we'll skip that. In a hope that I may have another opportunity sometime. You've already heard both from John Bystrom and from Scotty Fletcher, a few remarks which indicate that there never was a better time than now for getting into the ETV facilities program office approval applications for assistance under the ETV facilities act. I don't intend to push that point particularly, or editorialize any further than they've already done. What I have constitutes a brief status report which will give you the figures and some of the facts that backs it up and demonstrates that that isn't exactly a Cassandra type of pronouncement. I apologize for not having audio visual aids so that I could outline this for you.

I've got it organized in our rough outline form, so if any of you care to take down the figures, I think you'll be able to follow it. Item number one, the funds appropriated for grant purposes of fiscal 1966, amount to approximately $29 million. These are all kind of rounded off their approximate. The recommendations made by the commissioner to date total 72, let me just digress there for a moment to point out that with respect to the numbers or with respect to the total dollars so far, you'll find some difference between the 12 million that John and Scotty told you about and what I'm about to mention. The reason for that is that they're giving you the funds actually obligated so far. The figures that I use are based on the recommendations made by the commissioner which may not yet have been finally approved, or they will also include grants which have been finally approved

but which have not yet been obligated because we haven't received the necessary information back in the applicant. That is an attempt to explain why there's a slight difference in these figures. So thus far, there have been recommended by the commissioner 35 grants to activate new stations and 37 grants to expand existing stations. A total of 72 applications which obligate or have approved for obligation a total of 13,852,000 dollars. Therefore, item three, the funds appropriated which remain available for obligation as of this date, amount to 15,148,000 dollars. Now, as against those funds remaining available for obligation, we have to consider the pending applications.

And I'd like to do that sort of in an A and a B category because we have two types of pending applications. The first, I'm calling approval pending applications. There are five which will be recommended in the near future. In other words, they are currently in transmittal. They have begun the labyrinthine way from our office through the various office until it gets over to John's office. These amount to $996,000. Five of those, there are 16 more which in our opinion will be approval but processing has been delayed until we get additional information of one kind or another from the applicant. These request a total of $3,908,000. This means that there are pending 21, approval applications, capable of being approved in fiscal 66.

They request federal funds amounting to $4,905,000. Therefore, the funds which have been appropriated through fiscal 66, June 30th of next year, exceed the approval of pending applications requests by approximately $10,242,000. Now, we have another category of pending applications which are not approval. They will show up in our paper figures as reflecting need but they are currently inactive, and it is highly dubious at least that they might be approved within fiscal 66. There are, for example, six in which the funds requested, exceed the statutory limitation of $1 million. Those six request $1,323,000 in federal assistance. There are in addition 12 applications in which the applicants are unable

to provide the matching fund assurances apparently for a substantial period to come. Those 12 request a total of $2,284,000. So, when I talk about a total of $10,200,000, which are not spoken for, so to speak, you have to take into consideration that at least among those 12 applications there is a chance of a miracle that somehow the matching funds will be found to make those approval applications at this point in time it seems highly dubious. These 18 applications actually on file represented in paper figures which have been accepted for filing, in fact, do represent needs, obviously. They do represent funds requested. At this point in time, we cannot consider them as active applications. In addition, there have been two applications returned at the request of the applicant,

which request a total of about $650,000, $660,000. What this boils down to is that we have received then a total of 113 applications which have been accepted for filing. Now, let me just summarize that. Appropriations to date $29 million, obligations or approvals to date $13,852,000, remaining available for obligation $15,148,000. The total approvable applications which are pending, amount to approximately five minutes for $1,905,000. The conclusion, I think, is fairly obvious and needs no further editorialization on my part. In order to utilize fully the funds which have been appropriated in fiscal 66, we will need to receive approvable applications,

which request somewhere in the neighborhood of $10 million. Thank you, gentlemen. One more quick comment. We have initiated a new policy with regard to application, long-held applications incidentally, and I think I should call it your attention, because some of you may have submitted applications in a period prior to the last six months, but we are reviewing the available applications on a regular basis, those which have, which we are unable to close in a period of six months. We are returning, not prior to this. They can, the applicants can resubmit a receiving new file number,

but they may resubmit. We have our returning something over a half dozen of these applications. Thus far, on November 15, we'll be returning undoubtedly additional applications, but it is our plan to keep current, and for those of you who do have applications in, we do provide you with a 30-day warning. Thank you, John. I hope we can not have any questions at this point, so we can try and get you out in a little later than six o'clock. We promise 545, we're going to try and make it. You have been sent memos bringing you up to date on the entire history of the Facilities Act applications within the last month. These figures have been given you were updated there. I'll give you again the definition that has been given to you,

and I hope you heard it. If you want expansion grant dollars, you better move fast. You've got not many more months to get these kinds of dollars. Another point that may have surfed by you, what John was saying about a difference in standards about station transmitted locations, he said they may use different criteria than taking just the location of the station as the state in which the money's flow from. What he's saying is that they may very well take money from an adjacent state if the coverage area of the proposed station goes into the adjacent state. So look for some interstate theory and be prepared. I don't know which end, most of you were on on this, but it is a definite possibility. That's what he was trying to say, and he won't say it, because they haven't arrived at that yet. But I'm telling you, it's a definite possibility. We have said so in various moments and speeches, and it is quite likely.

I don't know whether it was John left, but I just want to add my congratulations on an Atlanta conference. It was very helpful to those who were there. I really believe. Moving right along now, we have a brief announcement, and that's just about what we have time for from Ed Morris on the TV Academy. And I should add that there's going to be a first grade session on public relations tomorrow, and nobody can overlook public relations. 10-15 in the morning in the Baltimore room, and the chairman is Ed Morris. So I think that might not have been marked down for you, definite attendance tomorrow. But here's Ed Morris with remarks on the TV Academy. You don't even need to sit down, because it won't take that long. I'm a vice president of the National Academy, and I was successful this year in getting educational television included in the National Emmy Awards. Most of you who are producing stations have received information from the National Academy telling you that they want you to make your nominations. You will be judged as a craft group this time.

I felt it was better than trying to compete with green acres. So you're in a craft group, and you have a good fighting chance. There will be your own nominations, and there will be a blue ribbon panel, which I've been asked to recommend to the National Academy Awards Committee. So this year we have a good chance to be represented, and I hope that all of you participate, because somebody's going to get an Emmy, and I hope to God. I know who it is. Thank you. Oh, Chuck asked me to say a word about local participation. I'll only say this to you. There are nine cities in which there is an Academy chapter. I think it's very important. It's been very important for us in Chicago to be participating in the National Academy. If you have an Academy chapter in your city, for God's sake, get active in it. It'll be worth money to you. It'll be worth a lot of things to you. Be sure to be active. If you're in a city that's big enough to sustain a chapter, and you don't have one organized one,

because it'll work to your advantage. Ask the boys from Los Angeles or New York about this. Thank you. I should add that WETA took a new tech this year and televised live of the awards ceremonies, and it has meant a great deal to them and a great deal to the local Academy. To do that event this past fall, and I think all credit to them, and it's a good suggestion to any of you locally. Now, we have two very important points coming up in the hands of our attorney, and tax matters, Mr. Ruben Clark. When we're covering you, we're introduced to... He was introduced to you a little earlier. He's going to speak to two points. One is not on the agenda, but he will speak to it. He's going to be very briefly, but again, you better listen closely. And if there's any doubt about whether you can still listen closely, the coffee is still there. There must be water someplace. Help yourself take a stretch, but keep listening. He's going to talk about business ownership for ETV, and he's going to talk about permissible or non-permissible lobbying. Ruben Clark.

Well, Jeff, you're going to leave two extremely broad areas to come in about five minutes each. And I suppose the best I can do is try to flag some problem areas for you. The first thing to remember, it seems to me, in the question of the sanctions that federal law may apply to TV educational stations if they wander too far afield into business activity, is that they are basically exempt organizations. That is, they are described in the internal revenue code in the same fashion the charitable organizations have described. And they are organized under certain requirements, which are most important in determining how far you can go into business. Now, the first thing to note is an exempt educational organization has a certain statutory framework.

And that is, to be exempt, and the exemption has two consequences, the first is your profits are not taxed, and the second is that the contributions to you are deductible. There's some very important statutory language which you can't get too far away from, and that is that an educational TV organization, like Notre Dame or Yale or a hospital or anything or anyone else, must be organized and operated exclusively for educational purposes, and that no part of the net earnings can adhere to the benefit of any private individual. Now, this language is very broad, and one applied to a specific factual situation can resolve them from them. For example, let me give you an example of how it can happen. I had a client some years ago who was a stockbroker, who set up a family foundation, and he met all the rules. He did it quite correctly,

and the foundation was giving money away to charity. However, he could not quite avoid the temptation of taking the assets of this foundation and buying and selling on a very rapid basis. In other words, the foundation was trading. The IRS moved in very quickly to say, you were not organized and operated exclusively for charitable purposes. You've become a trader. You've gone into the business of trading, and therefore you have lost your exempt status, much to his surprise. So there is a basic strategy here that you've got to bear in mind, but the code is not quite this inflexible in terms of business operations. In fact, the law recognizes that an educational TV station, like any other charity, can in fact acquire a business and use its profits if it's willing to have those profits taxed. A good example of this would be an educational TV station

buying a spaghetti factory, operating it as a division of its activities, and using the profits from the spaghetti factory. The law says you can do this, if you're willing to have the profits taxed as what is called unrelated taxable income. This immediately raises a question. How far can you go in this spaghetti business and still be an educational exempt TV organization? There is no answer to this. All we can say is that clearly, you cannot primarily get into this spaghetti business. You can't primarily get into this spaghetti business, and where the percentage test lies, no one knows. I would say it lies as a practical rule of thumb, somewhere well below the 50 percent more. Now, the law defunding what is unrelated taxable business income has certain important exceptions.

Such income as dividends, rents, and royalties are accepted so that you can hold a portfolio of securities. You can acquire real property, and I have passive rental income, and you can lease out, say, rerun rights or something like that, and have this character of income without it falling into the category of unrelated business income. With the regulations in the case of educational areas, don't give us some guidance as to what is and is not unrelated business income in the case of educational organizations, but I must say I find a certain ambiguity when you speak about educational TV. For example, the regulations fall out very clearly and agricultural school can operate a wheat farm, and the profits from the sale of wheat will not be unrelated business income,

as long as the wheat farm is a part of the college and is designed to train wheat farmers. Similarly, the operations of Goodwill Industries, where you actually, the purpose of the organization is to employ a handicapped people who manufacture secondhand who rehabilitate secondhand goods and so on, the income is still serenaded to the educational or to the charitable purpose in that case, that there is no problem of unrelated business income. But in the case of an educational TV station, I would call your attention to the current regulations which I find particularly ambiguous. They read that a university radio station or press is considered a related trade or business if operated primarily as an integral part of the educational program in the university. But it's considered an unrelated trade or business if operated instantaneously the same manner as a commercial radio station or publishing house. Well, after commercial radio station,

the case of the university can be deemed to be unrelated to the educational purposes of the university. What about a commercial radio station run by an educational TV nonprofit corporation where that's its only activity? Well, I don't know where the line forms between an educational TV and commission TV in terms of the criterion that the tax law is trying to arrive at. Maybe as I go on, but then it will be a little more bad. Well, it does seem to me that there is some ambiguity there as to how far in terms of the extent to which educational TV can eight or follow commercial practices without coming afire of certain concepts which currently exist in the tax structure today. Also, there are a couple of other problems that I think that possibly educational television stations

must look at and connect with what constitutes unrelated business income. The present time internal revenue service is wrestling with its rules with respect to advertising in the case of exempt organizations. This would be the advertising in the case of the National Geographic of the American Medical Association General and signs indicate that the service may hold that advertising income in the case of journals is underrated taxable business income. This may have some application in the long run to educational TV. If educational TV to any extent uses spun paid sponsors for the underwriting of programs. And here I would note that the problem may be exacerbated in the long run by the competitive aspects of this kind of operation.

It's my understanding that this is not, in fact, much of a major source of income to educational TV stations today knows it likely to be so. But in terms of the concept that we're dealing with and in terms of the rigidity of some of these definitions that the tax law uses, it seems to be it's well to flag this problem today. Now there are a couple of other things that need to be flagged that seems to me in the case of, in the case of educational TV stations and the tax system. You must bear in mind that the code includes certain very stringent sanctions which may apply to given transactions which are applicable across the board to exempt organizations, including educational TV stations. For example, you cannot rent out space for longer than five years

if you use borrowed money to construct the quarters without having the rental income otherwise tax exempt suddenly becoming under Section 514 of the Internal Revenue Code so-called business lease income. I say this because this is the kind of specific trap that looks in the code that means that when you come to examining, to examining potential for business transactions there may be somewhat out of the ordinary. As you expand, as you create new buildings and as you feel you may want to rent some of these borrow money and then rent some of the space out until you have a chance to use it yourself. There are tracks that look in the code which will warrant consulting with your attorney about to make sure that you're not going off into one of these possible sanction areas. I would, there are others as well

which I would, I really don't have the time to fly. But there are other specific sanctions which apply to given transactions which apply to such matters as accumulation of income for investment policy. There are specific sanctions under the code. For example, you've got to be careful how you invest your portfolio. You cannot go into speculative investments. If you go into speculative investments, you may in fact jeopardize your basic exemption because of the fact, because of one of these specific sanctions written into the code. So I would simply, in haste, conclude with saying that basically educational TV in the business area are faced with the general sanctions, the general statutory restriction which exists governing all exempt organizations which I mentioned. And these specific statutory sanctions

applicable to given transactions and actions which like any other exempt organization, educational TV must carefully bear in mind. And it is important it seems to me to bear in mind, particularly at this point of time, because we are decidedly in the state of flux in the law. The Patron Report of last year, the Treasury Report on Private Conditions both indicate that there is going to be or probably is likely to be some new legislation that's going to be applicable to exempt organizations, to many exempt organizations, possibly to educational TV, in a way that may further restrict the capacity of educational stations to conduct their affairs, substantially like other business organizations. I would go on to briefly to say a few words about the also important restrictions in the internal revenue code

on lobbying activities. A basic problem here is the fact that we have some very tight rules enunciated in the law and enunciated by the courts, which if really applied to the real world would be unworkable. But the structures are there. The language is there. And the structures in the language I'll try to outline in a minute and a half and simply say, and I'm calling your attention to the law because it is there and because given some factual circumstances, there is always the possibility that these structures might be applied. Although in the real world that we live in, many of these structures are clearly unworkable. But the law basically has a twofold approach to the restrictions on lobbying. And the first is that there are three statutory grounds.

Let me flag these three statutory grounds by which an educational TV station, an exempt organization, may lose its exemption because of political or legislative activity. And this is applicable across the board to exempt organizations and there is no exclusion for educational TV. The first is it must be organized and operated exclusively for educational purposes. I'll just point it that out. The second is a substantial port of its activities. Cannot consist of carrying on propaganda. Or get this otherwise attempting to influence legislation. Or the organization cannot participate in a intervene in any political campaign on behalf of any candidate. Now, you will note that the exclusively for educational purposes means that the organization must be both organized and operated.

Now the organized test is a pretty formal one. And I gather you're all okay. Because it simply means that your formal papers have been cooperation must put certain structures on what you can and cannot do. If it doesn't do it, you're not organized. But if you draw your papers correctly and say you can't do these things, then you're all right. This is a so-called organizational test. It is a test that has heard some more exempt organizations through sheer carelessness and not drawing their papers correctly. The more significant test is that no matter how effectively you're organized, year by year, the service will look to your activities to see whether or not you are regarded as an action organization. Now, there are three types of action organizations. First, if in any given year, more than a substantial part of your activities are attempting to influence legislation by propaganda or otherwise, your leisure exemption,

or if you intervene in political campaigns, or if you advocate or campaign for main objectives which can be contained only through legislative action. The real problem, the crucial problem, is the substantial part of your activities cannot be attempting to influence legislation. No. The service spells out very specifically what is attempting to influence legislation. And this includes such things, is contacting members of a legislative body for the purpose of proposing, supporting, or opposing legislation. Or urging the public to contact members of a legislative body for the purpose of proposing, supporting or opposing legislation, or advocating the adoption or rejection of legislation. And legislation includes action by Congress, any state, legislature, any council, local council, a similar government body, and so forth.

Well, my time is up. All I can say, and after this, the point of these structures is to conclude by saying that from this point on, there are no real guidelines. All you can say, all you can say is that, what is substantial is something that will handle and still be determined. The best thing that one can do is really to use one's head to have as far as possible to have individuals interested in educational TV doing a lobbying for you, as far as you can. Secondly, whenever you have a, you are called upon to appear before a legislative body, if possible, seek out an invitation to appear and appear by command. I can't tell you more than this, but the structures are there. And within these structures, someday, somebody like the

League of Women Booners, who have lost their exemption, we thank you very much. It's tired. Come on up the next program. We don't look here. It's awfully hard to get all these things across to you, but all you know that you can answer out of this is for evidence that you get a lawyer before you even cross the street. And this is not a bad idea as far as all this activity is concerned, because he's not talking about idle threats. You lose a tax exemption, and fellow you might as well give up the transmitter. So be careful. Listen to these things. Get a lawyer. Now let's go on, and we're very happy to talk, or to have you hear from two guys representing the second-most important mandate, given that the Washington Conference, Scottie has already talked about it, and this is the creation of the ETS program service. We raised about a half a million dollars this year since Austin,

and we're delighted at this point to have you hear a very brief report from Otto Schleif and from Dave Leonard. They will tell you what is the next step and you will enjoy it. Otto? Thank you, Chuck. One of the nice things happened all afternoon is when I was asked to come up here. I had a chance to stand up. It really feels good. We're going to be quite brief in making our report to you, yet we do want to fill you in. What has happened since last March in Boston, when the ETS program service committee was appointed, and we've got busy almost immediately there to set up some rough outline of what was to be done, as far as establishing a program service for the ETS, and as you know, reports that have already been given today, Scottie and Chuck have been very, very busy, securing grants for us, and getting into the case on almost half a million dollars that will operate our program service.

I seem to be having the same trouble the last speaker had with too much voice, and Mike could close. I'm serving all that interview. I've been waiting all afternoon for this big chance. Oh. Don't blow it. Right. The Scottie and Chuck have secured a home for the service on the campus at Indiana University, and everything seems to be progressing in great shape. We have a director for the service, and that took a good deal of time and screening, trying to find just the right man for this particular job. Speak to that just another moment from now. We do have him, and that's another hurdle that we had crossed. The committee in addition has looked over on paper at any rate, a full layout of titles from NET, programs that we did get on paper to look at, and some negotiations still have to be taken care of on that,

but we have at least sent a recommended list to Dave Leonard so that he can look this over and in turn make further negotiations on the basis of that. And on Friday night last week, the entire program committee came into Washington and set ground and did a good deal of deliberation over what shall be the policy for this organization. How shall we work it? How will programs be sent out to stations? How will we acquire programs? What kind of programs shall we acquire? Things of this kind. And the report that you have on your desk today is a result of that. And I should say that Dave Leonard worked very, very hard to get that together, and through the thrashing out process that we had on Friday night, we did manage to get it, put into conditions so that you can have a chance to read, and we'll talk more about that just a little bit later too. So you have many new graph copies of those today. Then on Saturday, we went over to station WTA and we spent the entire day over there screening some 24 television programs

that came in, which are representative of series that we thought would be good programs perhaps to distribute on a national basis. These are programs that Dave had solicited from many of you, all of you certainly were not notified of these, but the programs did come in. It was very good about sending them to us, and we did lower eyeballs, or about ready to pop out at the end of the day. We did look at all of these programs, and evaluated them very carefully, and selected some tin titles, which we think tentatively, at least will make good offerings for the ETS program service. This represents about 120 programs. As you know, we're only going to be able to make about 300 programs available in the first year of operation. That's what the operation calls for. So we're going to plan to meet again, probably in January, the entire committee will meet again, and do some further screening to provide the other titles and to make up our minds very definitely of what is to be set up. So that's about where we stand.

Tonight, we're very proud to be able to offer you at eight o'clock an opportunity in the dover room to come down and look at programs that we selected because we'd like to have you see some of those shows too. We think some of them are mighty good. They're the kinds of things that you will want, and this is the kind of service that we want always to bring to you. What is educational television program service with one of the big questions that we debate? We know a few things about it at this point. We know it's to be a cooperative exchange service. We know that it's purposes to fill a gap between NCSCT and NET, and Great Plains Regional Library, and these other sources. And that's a big operation. We don't want to duplicate what other sources and supply are unable to do. We do want to realize, of course, that this grant that we have, well, it sounds like a tremendous sum of money, is going to have to stretch over a period of about six years. And this organization has been pledged to operate in the black. So we can't accomplish miracles in the first year or two of our operation.

We hope to do that a little later on. I think we've accomplished one great thing. And that is in the acquiring of Dave Leonard, beyond our staff, to do the big job of director. I don't think he needs a great deal of introduction. We do know that he has worked in educational television for a long time. He has been a program manager. He's been a producer. He's been a teacher. He has worked at the networking level, and he really knows this stuff on this matter of distribution. And we call him the white tornado, I think, because since he moved into Bloomington on October 4th, things have really been flying out there, and a tremendous amount of work done. This guy's a real organizer, and I'm very happy to turn the rest of this over to him right day. Thank you, Otto, for the kind words, and for saying most of what I had to say. Which is all right. The sheet, which has just been coming around, is page 5 of the policies and procedures statement. I got four duplicated, and then I finally got around

to reading it and discovered the page 5 had been left out. So you can add that to the list, and be in better shape than you were. And if you didn't get one, there's still some floating around someplace, and you'll find them. These will also be sent out to the stations, as soon as I get back from Washington, so that the stations you aren't here, or the people who are here, that forget to hand them on to the people who ought to have them, will presumably get them. We will be making meetings to program managers and to public relations people in each station regularly. I really only have two or three things that I can say. One is about programs of missions. We did send out on a nice blue form, suggesting that stations should submit programs. I don't have a stack of these available tonight, for anyone else who wants to join the club, and proposed programs for the ETS Program Service. I expect that following this convention, and people becoming aware that the program service

does exist now, that there will be a number of submissions coming in. This does lead me to the other point, and that is that the program service does exist, the money's in the bank, I'm on the job, the secretary on the job, I got a telephone, and an address, and an office, and a borrowed desk, and a rented typewriter, and we're in business. We also have a stack of programs, some of which are all, all but duplicated and ready to go. These will be sent into Bloomington, following the convention, and the first offerings of the ETS Program Service should be available for programming around the first of December. These won't be very many in number, but they'll be growing moment by moment, or week by week, however, we can work it out as other programs yet cleared, duplicated, and available. The one other big point is that all of this

will be gone into some detail, and with all the specificity that anyone can desire tonight, starting at 8 o'clock, in the dover room, we'll also show samples of some of the series, which we have picked, and we're going to attempt to have. So with... What did I go through here? Can I name the programs to be shown tonight? Yeah, I can. Let's see. One, two, three, four, five, six, seven... Let's see, there are programs from seven series, and from the last series, which is the ETS, Readers Digest Foundation Award Series. We have, on hand, the last time I looked two programs, and there's supposed to be some more somewhere flying around in the air, or landed on the ground, or someplace, and we can get them by 8 o'clock tonight. We'll also be able to show those. See you tonight. I hope. Watch your foot. Thank you. I hope you heard,

Gladden Clear, his point that he arrived, or at his point, that he arrived on the job down there, October 4th, and lived in a motel for a week, until he bought a house, and moved, let's say, very rapidly. That was 28 days ago. You will see tonight a service beginning to me in big in 28 days, which is, to me, revolutionary. I was safely here in Washington, while they were out there working. The Program Committee, which did such a great job, by the way, consists of Bob Larson and Boston, Jim Case, Los Angeles, John Rice, San Francisco, Hill Berman of Athens, Georgia, Chris Donaldson, KTCA, KTCI. I appreciate your indulgence, having stayed here so long, and as much as I'm last up, and I get to watch my own clock, I would have to get out on time. Now, if there are things that we don't get done in this area, we can meet at some other time in place, and go over the point. The most important thing to remember, in terms of the legislation and grants, is that tomorrow, there will be a full-dressed, two-hour session with all of the experts in the Arlington Richmond Room,

at 10.15, and it will go until about 12.15, or until you get tired of asking questions. That's the place where you want to get these specific questions. I only want to throw a few things at you very quickly. In the first place on legislation, this has been a very, very big year, and next year, I don't think will be nearly so big. We hit the Elementary and Secondary Act, Humanities Arts Act, the Higher Education Act, Copyright, and a couple of other lesser bills that never did come up. Next year, you've already heard about Copyright, and you've already heard about Facilities Act. I urge you to read Senator Magnus and speech on the Facilities Act, look at what he is saying to you, which is to say that, do we really need an extension of the Facilities Act? Needless to say, we've already written the answer and distributed it, which is yes, and it's going to be up to you to work in terms of convincing everybody in your state and your area that this is the fact. I would want to throw out one large bouquet of roses to all of you,

in terms of the one crisis we had this year that you saw very quickly. We found out on Thursday, one week, not too many weeks ago, that the Senate did not approve an eight million dollar appropriation for the Facilities Act. On Friday, we wrote to you, and on Monday, you began to send back your responses, which were to keep to the point, do you really want more money for the Facilities Act, appropriated this year? We got 48 telegrams and 48 hours, and presented this in the form of a report to the Senate and House Committees the next day, and two days later, they restored the cut, for which you all, as I say, deserve a tremendous bouquet, because without your information, we could not have done a thing. I also pat on the back all of those who sat at the other end of telephones, and did some very strenuous work in the right places to get the right response. Now, so much for legislation. Next year, as I have got to recap again, Copyright and Facilities Act are coming along, and you've got to be aware of it on the national scene. On the grants area, this is the year when,

for the first time, a tremendous number of grants have been made to ETV stations. I say tremendous number, and it's up from zero, and this year we have about 12 that we've already reported to you, and I suspect there are about six more that have not been reported. All of this information has been passed along to you and the manager's memo, so I won't labor you with it, except to say to talk about the future, I might add that there are about a million dollars in grants have been given from 12 agencies to ETV stations this year to produce programs with federal money. This is the first year in which this has ever happened in this kind of quantity. It is at the point right now where federal dollars going into educational television programming, as well as the Facilities Act, is at the same level as the Ford Foundation dollars going in. And next year, it will skyrocket upward so that the federal government now looms and is here as the largest spender of dollars in educational television. You might as well get used to it. It's not bad. There are some things that you should anticipate coming up that you may not hear about

in any other place. A small business administration in about five weeks will send out to all of you, or repeat all, last time it was only half of you. This time it will be all of you. Notice for inquiry about bids for production. A small business administration intends to spend about 30 to 35,000 dollars on a contract information. I don't know much about, but they will describe it to you. Your first response is to say, yes, you're interested if you are. And you will find yourself in the interesting position of competing, one with the other. And this is an interesting arena to be in. If you think it's worth the production dollars, go right ahead. A station has such a grant from them this year. And it's producing. I just got to know. Very quickly, two others that are going to be up. Food and Drug Administration is, let me tell you those that are not. Forget economic opportunity. Forget the Food and Drug Administration. Nursing Administration has turned down to, but we think there's some other

obvious good places to turn. The place, however, where you're going to get the money this year is in the education legislation. Elementary and secondary education act. Titles one and three have lots of money, and you can get it. Higher Education Act, as money, particularly title six, is the new one in closed-circuit TV. The other titles have program dollars. You will have higher education institutions and stations that can work with higher education institutions can get that money. This is specific money to do a specific job. It's not money without strings attached. You have to find out what the act says. And we have put into your kits information that you have tomorrow is the time when you should come prepared to ask intelligent questions and get hopefully intelligent answers from the experts in the education legislation. We sent to you the DAVI magazine that has all of this stuff listed. And it's the best source available that we know of for all of the information built by Bill in here.

And go in, get the questions answered. One last point, this is the Bible information available on grants programs from health education and welfare. I might say that it's HEW that provides most of the grants, 99% of them, so far as ETV kinds of projects are concerned. Get a copy, it costs two and a half if you're interested in this kind of thing. I find out in Atlanta that most of the HEW agencies have never seen it. But you'll get it and you'll be all right. I'll put it, it's called grants in aid and other financial assistance programs. We can put it in a memo. This is a 64-65 edition. We'll send you the dope about it and where to get it. It's well worth the price. If you're interested in this business, and only the last admonition on this, you better be prepared to work pretty hard to get some money. You better do a good job. The boom is going to be off the rows next year. You're going to have to deliver. This year they were fascinated with their new toy. Next year they're going to sit down and watch what you produced. Thank you very much.

We appreciate it. If there are any other questions about anything, I will be happy to try and answer them. We'll reflect to you those who can. Thank you. No last word. Everybody's had too many last words.