[inaudible conversations] .. mr. butler, welcome to the communicators. >> guest: thank you very much. >> host: how do you define a public television station? >> guest: defined by the public broadcasting act of 1967 as a

noncommercial. educational television station with obligations under the law and fcc regulations to provide educational, cultural, and informational services to the communities that we serve, and we serve virtually every american, through 170 licenseees operating 360 television stations. >> host: how are you funded. >> guest: we're funded -- it's a little bit complex. the corporation for public broadcasting has foundation grants, called community service grants, for each station, and that funds an average of 15% of our -- the station budgets, but the further away from the big cities you get, the more rural you get, the percentage of the cpb grant can get up to 40 or 50 or even a larger percentage than that. so, that this base grant. and on the basis of that we have

about a six-to-one ratio for private donations, from corporations and foundations, state governments and viewers like you. so, for every dollar of federal funding invested, we generate another six dollars in nonfederal activity. >> host: if a station can't raise money privately, how, then, does -- does it go off the air or does. >> guest: well, the cpb grant will be a -- it's a sliding formula. the larger stations need less. the cpb grant is less of a factor than it is in more rural stations. but we have a universal service requirement under the public broadcasting act, and we provide

service to everybody whether they're an economic winner or not. so we serve native american reservations and more rural areas, and we go every and serve everybody for free. >> host: does the federal government have any other role in your programming decision besides the funding the corporation for public broadcasting? >> . no in. no in fact there's a fire wall established for the corporation for public broadcast, which prohibits the federal government from being involved in programming decisions. so cpb provide the grants and local stations, together with pbs, our national programming service, make all of the programming decisions independently of the government. >> host: also want to introduce kamala lane of communications daily, our guest reporter. >> the cpb allocation comes down

to a dollar and some change per u.s. citizen. that's not a huge percentage of the federal budget. however why is that such a big deal considering you do have other sources of funding? >> guest: well, it's the foundational grant that makes possible everything else that we do. it's the platform on which we base all of our local program, all of our educational services, all of our homeland security and public safety services, and other things that we do for veterans affairs and soing for and so on, in our various communities. it's that foundation grant from the cpb that makes all the rest of this possible, and it makes the other funding possible as well. we can leverage the federal grant to obtain all this other funding from state governments and corporations and foundations, and individuals.

and the general accounting office, the government accountability office, have determined this federal grant is essential to the operation of our system. nobody in the foundation world in the corporate world, wants to pay for our lights and tower and so forth. they wont to devote their investments to programming and community services. so the federal investment is literally the foundation that the -- the platform on which everything else we do rests. >> i know over the years, including recently, that allocation does become threatened, and if that allocation is zeroed out, can you give us an idea how public tv will be changed. will it just go away? >> guest: well, it will be severely damaged. the first stations that would be

affected most severely are the rural stations, the places where we go where nobody else goes, and then the problem is that because we have a system in which boston supports bozeman and nebraska supports new york because we're sharing revenues and programming ideas ideas and programming services. but when the system breaks down because the smaller stations can't operate, then the bigger stations in boston and new york and washington and so forth, won't have the distribution system that makes their programming possible and makes the service work for all americans. so, it's really important to have this federal contribution, small as it is in the grand scheme of thing -- >> we are 100n't of 1% of the

federal but. compared to great britain, they spend $83 per citizen for public broadcasting. japan spends $64 per citizen on public broadcasting. we spend $1.35. >> host: so, mr. butler, with the threat of sequester or the new budget that is coming up for this year, how does that affect your member stations. >> guest: well, the sequester will reduce our grant by about 5%, which roughly equates to $22 million or so, which will be distributed among the various licensees and stations i have described, and so we have in fact taken about a 13% cut in our overall federal funding over the last two years, and if the entire federal government had sustained the cuts that we had sustained, the budget would be

$500 billion smaller than now. so we feel like we have made a significant contribution to deficit reduction and retiring the federal debt within our own context, and the sequester will be a further 5% reduction in our funding, and it hurts but we understand we have to be contributors to the solution, and so we have saluted smartly and taken our medicine with everybody else. but it will hurt. >> host: what about when it comes to the point mitt romney was making in the campaign. i love big bird but i'm going to cut your funding. because of the budget crisis that the u.s. and the deficit the u.s. is currently facing. >> guest: well, governor romney was just -- he had his facts wrong, if i can put it bluntly. sesame street receives next to

no federal funding to begin with. they have been remarkably successful in generating private funding, and going global and so forth. so, it's not a matter of the federal government sustaining sesame street. what the federal government does is to sustain the distribution system over which sesame street can reach every american home, and that includes the 90 million -- 90 million -- preschool students we have been able to get ready to learn over the last 40 years. many of them are from inner cities and rural america and so forth. but getting them ready with language skills and math skills that sesame street imparts, that has made a real difference in getting kids ready for success in school and in life. and so it's not a matter of putting corn flake commercials on sesame street. that's not the point at all.

the point is having the federal investment that makes the services like that available to everybody. >> host: but what about the commercial success of a sesame street, where they're marketing products and licensing out things and making a profit? where does that money go? >> guest: all of that money goes right back into programming, which is why a federal investment directly into sesame street is a fairly small number now, because sesame street has been so successful in these licensing and other business enterprises. but all of that money goes back into programming. sesame workshop is a nonprofit enterprise, and so all of the money they make from anyplace goes back into their programming and their services. >> host: kamala lane. >> host: on programming, how does public television keep itself solvent in a world where people can have access to hundreds of channels? is there a pcb subscriber or

stream content online. >> guest: that's an interesting question and we get that a lot in our conversations on capitol hill. do we need to provide a federal investment for one television service as opposed to all the others available. the difference with us is that we are education oriented. we're providing the works of ken burns and the great performances and american experience and nova. we have more science student watching nova on any given wednesday night than are watching -- in any size classroom in america. all of them combined. so we are totally dedicated to education mission, and we take our programming and put it through a process through pbs learning media, under which digital learning objects are created that are curriculum-based and standards-based, and the

teaching tools we create with our own programming for use in k through 12 classrooms, 28,000 home school students, and others, is an educational enterprise that is not duplicated anywhere in the commercial world. so that's the principle distinction. we're in the education business and nobody else is. >> how are public tv stations keeping themselves somewhat insulated from the significant effects of sequester? how are these programs and that education mission still able to remain intact? >> guest: well, as i say, it will hurt but it's 5%, and we think that we can make the adjustments we need to make. what that means in practice is there will be less local programming available for the next year or so while we're under this sequester. and this local programming is all about local history, local culture, local issues, whether

at it integration issues in nashville, tennessee, or senior citizens issues in minnesota or veterans issues in connecticut, job training programs in nevada, vegas pbs is the largest job trainer in the entire state of nevada nature contract with the hospitality industry out there, and so these kinds of services will be curtailed by the sequester. we hope that things will get back to normal a bit once the sequester is completed, but this will hurt, and the quantity of our service will be deem minimum issued. we don't think the quality will but we won't be able to produce as much in programming and community service in this condition as we otherwise would be able to do. >> how well would you say that public broadcasting is doing to keep up with how viewers access content on digital products?

>> guest: well, we have a good success story here. pbs.org is the most heavily trafficked internet site on the nonprofit side. it's the biggest.org" --".org"" in the country, and when pbs contracts for programming it contracts for use across 16 platforms. 16 internet and other kinds of distribution platforms, and so we're mobile, we're on the internet, we're on television, we're in the the classroom, and we're serving people where they are, and giving them this valuable programming in the format that they most want to use it. >> host: you're watching c-span's communicators program. our guest this week is patrick butler, the president and ceo of

the association of public television stations. oarages reporter is kamala lane. >> transition into a proceeding at the fcc that involves broadcast incentive auctions. i know the apps is heavily involved in that proceeding. out of any options that have been thrown out there can you give us an idea what are the options that public television stations have in terms of that proceeding? >> guest: we have created a spectrum opportunities task force at my association, to evaluate all of these opportunities and options on behalf of our public television station that includes offering spectrum in the auction itself. it includes channel sharing and spectrum leasing and other opportunities that may be available to a private transactions, and so we think that there are both

opportunities for greater efficiency in our system and for greater revenue opportunities in our system sponsoredded with the spectrum auction proceeding. and we think this is a ones once in a lifetime opportunity to get tile efficiencies and revenue opportunities we have been dreaming about for the last several years, actually accomplished over the next three or four or five years. >> host: has there been consideration of moving your channels to vhs. >> guest: some may be in position to do that. again, this is all going to be local decisions. the great thing about public television is that everything is locally owned, locally operated, and local stations make their own decisions about these things. but some will be interested in moving from a uhf to a vhf channel, some may be interested in come binning some of their

become office operations, the joint master control rooms and such, with other public television stations or perhaps some commercial television stations, and so being able to be entrepreneurial and opportunistic about these options available to us is the spirit in which we're approaching ther into spectrum auction issue. it may be that most of our stations don't have any impact at all through this except for the repacking that will probably affect virtually everybody in the television industry. commercial or public. but for those stations in the markets where spectrum auctions wilt be most important, they're considering all their options and will have some interesting conclusions to draw. >> host: patrick butler, can you explain the relationship between cpb and pbs and your membership?

>> guest: sure. the corporation for public broadcasting is a nonprofit corporation owned by the american people, which receives these federal appropriations every year, and then they distribute that appropriation through a well-defined formula. 71% of the fund goes to local television and radio, local public television and radio stations. about 5% goes to their general and administrative purposes, and the rest goes to special programming initiatives and distribution funds and so forth. so that's cpb. they're the purveyor of federal funds. pbs is the national programming service, the national distribution service. they do a lot of work with the local stations in terms of improving management and so forth. they're private. they're also private, and nonprofit, and the association

of public television stations is the organization for the licensees themselves, the people on the ground in hundreds of american communities who hold these licenses from the federal government and who provide all these local services, programming, and education, and other community services that we have described, and it's my honor to represent all of them here in washington. >> host: one more question before we turn back to cal mam lalanne. ken stern quoted as staying that perhaps npr would be better off without federal funding. whatting are your thoughts. >> guest: well, npr itself doesn't receive much direct federal funding. the local public radio stations receive a fair amount of federal funding, and some of that money goes to npr for the purchase of programming services. but the typical breakdown for a local radio, public radio station, is they'll produce 28%

of their own programming locally. they'll buy about 30% of their programming from npr and buy 42% or so from other public radio stations or other national programming services. and so, again, it's a local decision, and they can take as much or as little npr programming as they want. this is the opposite of a top-down business model. this is all bottom-up and they take what they want. >> host: kamala lane. >> seems like over the past several years public broadcasting has to go before congress and make a case for why the allocation should remain intact in recent years has your approach, your strategy in making your case, changed at all? >> guest: well, just in the two years i have been here we've been trying to focus on letting congress understand better that we are public service media, which means that not only do we

provide this high-quality programming on television, but that we are very actively engaged in the education enterprise in homeland security and other things in which a public investment is well justified. and the better we can tell that story and the stronger we can make that case, as we did during the public media summit in february, the more likely it is that congress will say, well, this is a worthwhile investment of federal funds, and that comports with the overwhelming majority of the american people who say that the federal investment in public broadcasting is the second best investment the federal government makes, after national defense alone. that's how much they appreciate what we do on air, online, and in the community. >> how are the stations, the member stations, going about

find gun -- finding new sources of funding. >> guest: we have a partnership among stations that has just gotten off the ground, and we have found that if every public television station could do as well as the top 20% of our public television stations do in terms of generating income from individual donors and foundations and corporations, we could generate an extra 200 mental -- $200 million a year in sponsorship revenue for our system. so we're in the process of going as far as we can possibly go with this initiative, and i think that will produce some very significant results. as i say, we have other entrepreneurial enterprises underway as well. we're doing a lot of fee-for-service kinds of work with the state of nebraska. we are their data managers.

in south carolina we are contracting with the state to do some very specific educational services. kentucky educational television has a wonderful ged program they market around the country, and so there is a -- high school equivalency program. so there are lots of things like this, and vegas public -- pbs has a business arrangement with the hospitality industry under which they're train 10:00:00 commercial food service workers every year for the largest industry in nevada, and so that entrepreneurial spirit is alive and well in public television, and we're going to take it as far as it goes. >> host: just to follow up on kamala's question on congress and your enter axe you. recently gave an award to greg walledin, very influential

because of his comite preassignments. how much outreach there is to members. >> guest: we gave walden the sweared specifically for his work on the spectrum auction legislation, and he was a big supporter of the legislation and of public television's interest in the legislation. for example, the senate bill provided for a billion dollars in transition costs, mostly related to repacking once the auction is completed. and we have concluded that it wasn't nearly enough money to pay for all the transition cost that were going to be borne by both commercial and public television stations. so congressman walden was able to add another $750 million to that transition cost budget, which was a huge benefit to the public television station community, as well as ther some which will community.

-- as well as the commercial community. so we thought he was well-deserving of the award. he worked in a highly bipartisan way with anna eshoo of california and other colleagues in the house. this is a model for how good important legislation can be enacted in congress, and he took a very enlightened leadership role there and we were happy to give him our champion of public broadcasting award, as we gave it to the senator barbara mikulski, steadfast supporter of public television for her entire distinguished career here in washington. as for congress, we spend a lot of time talking with members of congress and their staff about what we're doing at the local level. we bring our station managers to washington as well as lay leaders, who are community letters who support -- community leaders who support our enterprise, and to tell them the

story about the community service we provide and we also ask members to come back to their stations in their local communities and see on the ground what it is we're doing, and the more they see, the bet they're like what we do. so we're encouraging more and more interaction, and the more we get, the better off we're going to be. >> many of your congessal champions of public broadcasting funding are democrats. do you see the issue of funding becoming more bipartisan? >> guest: yes, i do. we just had a great public media summit at the end of february, the last day of which our members found out across the capitol to meet with their senators and representatives, and what we found was that there is a bit of a sea change here in terms of the bipartisan support that we can now count on. for the last couple of years it's been very difficult for us, but we think we have turned a

page. as one senator told us, and so we're feeling that we're getting back to the tradition of bipartisan support that has been a hallmark of public television since president eisenhower first proposed educational television as a national solution to our science, technology, engineering and math challenge in the aftermath of the sputnik launch. so, president eisenhower, president ford, president reagan and many others -- barry goldwater got us the first grant for sesame street. there's a long tradition of bipartisanship in support of public television, and we think we're on the point restoring it pretty well. >> host: unfortunately we're out of time but just a little bit about our guest. patrick butler has worked for howard baker, who -- and he served as consultant to mr. baker when he was white house chief of staff to president reagan. served as the vice president of the rca corporation. vice president of times mirror, and was a speech writer for

president gerald ford. query -- very quickly, what's the important of a popular prom like downton abbey? >> guest: it energizes our support and our donor base. we have gotten a nice ride out of downton abbey in terms of being able to generate new dollars and additional donations from current donors and so forth, and the viewership has been extraordinary. and i was talking with some of the downton abbey cast, telling them that because of them everybody is taking a new look at public television and they're liking what they see. so the more they can look at downton abbey and see all the other good things we're doing and public television, the better off we up all are. >> host: patrick butler, and kamala lane. this is the community indicators on c-span2.