CSG Policy

RESOLUTION PUBLIC SESSION
BOARD OF DIRECTORS
CORPORATION FOR PUBLIC BROADCASTING
WASHINGTON, D.C.

Monday, December 9, 2019

unanimously

WHEREAS,

Under the provisions of the Public Broadcasting Act, CPB makes grants to eligible public radio stations in a manner intended to provide for the needs and requirements of stations so that they may serve their local communities and audiences; and

WHEREAS,

The Community Service Grant (CSG) program is the primary mechanism for CPB to provide this financial support to local stations; and

WHEREAS,

CPB management has consulted with a panel of radio station representatives regarding changes to CSG policy and invited and received comment directly from public radio stations as part of this consultation process; and

WHEREAS,

The panel of station representatives has made a series of recommendations to CPB management, which have been reviewed by management, shared with the public radio system for further comment, and significantly informed management’s recommendations to the CPB Board.

NOW, THEREFORE, BE IT RESOLVED THAT

The CPB Board of Directors hereby adopts CPB management’s recommendations for changes to radio CSG policy as outlined in the attached.

Recommendation 1

Organize grantees by Coverage Area Population (CAP) as follows:

CAP Category

1

2

3

4

5

6

 

CAP Range

 

< 20K

 

20K-100K

100K-

300K

 

300K-1M

 

1M-3M

 

> 3M

Recommendation 2

Align base grants with CAP categories and change all base grants proportionately with the CPB appropriation. Base grants would be distributed as follows:

CAP Category

1

2

3

4

5

6

 

CAP Range

 

< 20K

 

20K-100K

100K-300K

 

300K-1M

 

1M-3M

 

> 3M

Base Grants

$90,000

$85,000

$75,000

$60,000

$50,000

$35,000

Recommendation 3

Align minimum NFFS amounts with CAP categories. Grantees must meet the following minimum requirements for NFFS raised in any given fiscal year to maintain eligibility:

CAP Category

1

2

3

4

5

6

CAP Range

< 20K

20K to

<100K

100K to

<300K

300K to

<1M

1M to

<3M

> 3M

Minimum NFFS

$250,000

$275,000

$300,000

$300,000

$400,000

$500,000

Minimum NFFS (minority or rural)

 

$250,000

 

$250,000

 

$275,000

 

$275,000

 

$300,000

 

$400,000

Minimum NFFS (minority + rural)

 

$100,000

 

$100,000

 

$100,000

 

$100,000

 

$100,000

 

$100,000

Sole service grantees have no minimum NFFS requirement. All other grantees must meet the minimum direct NFFS requirement, which is half the amount of their minimum NFFS requirement.

Recommendation 4

Align minimum staffing with CAP categories. Grantees must meet the following minimum requirements for staffing in any given fiscal year to maintain eligibility:

CAP Category

1

2

3

4

5

6

CAP Range

< 20K

20K to

<100K

100K to

<300K

300K to <1M

1M to <3M

> 3M

Minimum Staff

2FT

2FT

2FT

3

(min. 2FT)

4

(min. 2FT)

4

(min. 2FT)

Minority grantees may count full-time equivalents (FTEs) toward the FT employee staffing requirement. Sole service grantees have no minimum staffing requirement.

Recommendation 5

Tier NFFS for incentive grant calculations. Use 90% of all NFFS reported up to $300,000; 100% of all NFFS reported from $300,000 up to $15 million; and 80% of all NFFS reported above $15 million to calculate incentive grants.

Extend incentive grants to all grantees in the CSG program.

Lower the multiplier on NFFS for minority grantees from 1.5 to 1.25 on NFFS up to $5 million.

Recommendation 6

Extend the probationary period for grantees that fail to meet eligibility requirements from two years to three years.

Recommendation 7

Institute a new method for reporting indirect administrative support (IAS) as NFFS:

  1. Derive a rate by dividing the licensee’s indirect costs by its direct costs;
  2. Apply the rate to a base amount consisting of the station’s net direct expenses (add physical plant support, if applicable, computed using CPB’s current instructions and subtract payments made by the station to its licensee for direct services).

Beginning with fiscal year 2020 annual financial reporting to CPB, grantees submitting an annual financial report (AFR) to CPB must use this method to report IAS as NFFS. Two exceptions would be provided: (1) State grantees, as approved by CPB, that do not have access to a sufficiently discrete financial statement may use a grantee-developed method; (2) Grantees that submit financial summary report (FSRs) will use a grantee-developed method. For stations that experience a significant reduction in IAS as a result of this policy change, CPB will allow for a phasing-in of the new method.

Recommendation 8

Phase-in new elements of the program over three years as follows:

Year 1 (FY 2021)

Implement:

  • CAP categories
  • New base grants; all base grant amounts change proportionately with the CPB appropriation
  • New NFFS minimums
  • New staffing minimums
  • New IAS calculation method introduced and compared to current method; current calculation methods determine IAS
  • New probationary periods
  • Incentive grants to all grantees
  • Tiering of NFFS as follows:

NFFS Tier

NFFS Range

Percent of Qualifying NFFS

A

< $300K

90%

B

$300K to <15M

100%

C

≥$15M

100%

 

Year 2 (FY 2022)

Implement:

  • Use of new calculation method to determine IAS
  • Tiering of NFFS as follows:

 

 

NFFS Tier

NFFS Range

Percent of Qualifying NFFS

A

< $300K

90%

B

$300K to <15M

100%

C

≥$15M

90%

Year 3 (FY 2023)

Implement:

  • Tiering of NFFS as follows:

NFFS Tier

NFFS Range

Percent of Qualifying NFFS

A

< $300K

90%

B

$300K to <15M

100%

C

≥$15M

80%

 

Resolution Date: 
Monday, December 9, 2019

RESOLUTION

PUBLIC SESSION

BOARD OF DIRECTORS

CORPORATION FOR PUBLIC BROADCASTING

WASHINGTON, D.C.

Monday, September 23, 2019

unanimously

 

WHEREAS,

Under the provisions of the Public Broadcasting Act, CPB makes grants to eligible public television stations in a manner intended to provide for the needs and requirements of stations so that they may serve their local communities and audiences; and

WHEREAS,

The Community Service Grant (CSG) program is the primary mechanism for CPB to provide this financial support to local stations; and

WHEREAS,

CPB management has consulted with a panel of television station representatives regarding changes to CSG policy and invited and received comment directly from public television stations as part of this consultation process; and

WHEREAS,

The panel of station representatives has made a series of recommendations to CPB management, which have been reviewed by management, shared with the public television system for further comment, and significantly informed management’s recommendations to the CPB Board.

NOW, THEREFORE, BE IT RESOLVED THAT

The CPB Board of Directors hereby adopts CPB management’s recommendations for changes to television CSG policy as outlined in the attached.

Recommendation 1

Increase the base grant by calculating it as 0.12% of CPB’s federal appropriation.  

Recommendation 2

Implement tiering of Non-Federal Financial Support (NFFS) to calculate the incentive grant portion of the CSG:

  • Apply the incentive rate of return (IRR) to 100% of a grantee’s NFFS for each dollar up to $3 million.
  • Apply the IRR to 92.5% of a grantee’s NFFS for each dollar over $3 million but less than $20 million.
  • Apply the IRR to 95% of a grantee’s NFFS for each dollar of $20 million or more.

Recommendation 3

Limit future NFFS growth disparity by adding three incentive grant calculation mechanisms for grantees reporting NFFS of $20 million or more:   

  1. Hold the grantee’s year-over-year NFFS increase to a percentage no greater than the system’s average year-over-year NFFS increase;
  2. Where the grantee has a year-over-year increase, but the public television system does not, calculate its grant by using an amount that does not exceed the NFFS used to calculate its prior year’s grant;
  3. Allow large grantees, whose NFFS can fluctuate considerably, to carry forward NFFS funds over multiple years to smooth their NFFS growth over time. The allocation of NFFS earned in the first year – but not entirely used to calculate their first-year grant – can count towards their NFFS totals for the following year (i.e., a two-year allocation) or the following two years (i.e., a three-year allocation).

Recommendation 4

Allow grantees to meet the $800,000 minimum NFFS eligibility requirement with either a three-year average NFFS of at least $800,000 (computed on the three most recent years of NFFS) or a current year NFFS of at least $800,000.If a grantee does not meet the $800,000 minimum but is the primary or sole public television service provider for its coverage area population, CPB will assess its sustainability and ability to provide a viable, sustainable service. If CPB determines that a grantee satisfies these criteria, it will be eligible for a CSG during the applicable grant period. Grantees that do not meet the NFFS minimum and do not satisfy the alternative criteria will become ineligible for a CSG and be permanently removed from the CSG program.

Recommendation 5

Institute a new method for reporting indirect administrative support (IAS) as NFFS:

  1. Derive a rate by dividing the licensee’s indirect costs by its direct costs;
  2. Apply the rate to a base amount consisting of the station’s net direct expenses (add physical plant support, if applicable, computed using CPB’s current instructions and subtract payments made by the station to its licensee for direct services).

Beginning with fiscal year 2020 annual financial reporting to CPB, grantees submitting an annual financial report (AFR) to CPB must use this method to report IAS as NFFS. Two exceptions would be provided: (1) State grantees, as approved by CPB, that do not have access to a sufficiently discrete financial statement may use a grantee-developed method; (2) Grantees that submit financial summary report (FSRs) will use a grantee-developed method. For stations that experience a significant reduction in IAS as a result of this policy change, CPB will allow for a phasing-in of the new method.

Recommendation 6

Leave the current policy regarding base grants for merged entities in place for a one-year period. Direct CPB management to research and quantify the optimal amount of time that merged entities need to continue receiving base grants at a pre-merger level, and report back to the CPB Board with its findings and recommendations.

Recommendation 7

Update the Healthy Network Initiative grant program to provide funds to eligible grantees that have strategically improved their use of their station’s data to better serve their audiences and to gain operational efficiencies. Annually fund the grant program with $1 million. Sunset the current Healthy Network Initiative programs by the end of fiscal year 2020. Return unused funds to the incentive grant pool. To qualify for the proposed new Healthy Network Initiative grant, CPB would require a grantee to complete a qualifying station data audit and implement at least two of the audit’s strategic data improvement recommendations, such as  expanding capacity for data collection, storage, and analysis; the acquisition and deployment of new data software systems; and the integration of data base systems to create efficiencies.

Resolution Date: 
Tuesday, September 24, 2019

RESOLUTION

PUBLIC SESSION

BOARD OF DIRECTORS

CORPORATION FOR PUBLIC BROADCASTING

WASHINGTON, DC

Monday, April 4, 2016

unanimously

 

WHEREAS,

Under the provisions of the Public Broadcasting Act, CPB makes grants to eligible public television stations in a manner intended to provide for the needs and requirements of stations so that they may serve their local communities and audiences; and

WHEREAS,

The Community Service Grant (CSG) program is the primary mechanism for CPB to provide this financial support to local stations; and

WHEREAS,

CPB management has consulted with a panel of television station representatives regarding changes to CSG policy and invited and received comment directly from public television stations as part of this consultation process; and

WHEREAS,

The panel of station representatives has made a series of recommendations to CPB management, which have been reviewed by management, shared with the public television system for further comment, and now are recommended by management to the CPB Board.

NOW, THEREFORE, BE IT RESOLVED THAT

The CPB Board of Directors hereby adopts CPB management’s recommendations for changes to television CSG policy as outlined in the attached.

 

CPB Management’s Recommendations for

TV Community Service Grant Policy

  1. Support Universal Service

Panel Recommendation

Establish a Universal Service Support grant and eliminate the following: the small station bonus, the $55 million base grant cap, and the Local Service Grant.

CPB Management Recommendation

Establish a Universal Service Support Grant in an amount equivalent to two percent of the CPB appropriation ($8.9 million in FY 2017) and eliminate the following: the Local Service Grant Program ($3 million in FY 2016), the small station bonus ($245,000 in
FY 2016), and the $55 million eligibility cap.

Current Policy

The Local Service Grant supports 48 stations with NFFS of less than $2 million that serve populations of 2.5 million or fewer. It is awarded in inverse proportion to small stations’ NFFS - the smaller the station’s NFFS, the larger its grant. The small station bonus evenly distributes a pool of funds among 39 stations with NFFS of less than $2 million that are not in multi-provider markets. This pool of funds is derived from stations earning more than $55M NFFS that do not receive a base grant, per policy. The base grants of those stations are redirected instead to the small station bonus pool. Today, only one grantee earns more than $55 million and the base grant ($245,000) it would have otherwise received is the pool for the small station bonus.

Context for Decision

The Panel wanted to provide support for rural service; however, it recognized that the current grant programs supporting smaller stations were not achieving the desired outcome. Because the Local Service Grant is calculated in inverse proportion to a station’s NFFS it has the potential effect of demotivating smaller stations from increasing their community revenue. The Small Station bonus is no longer a viable program since only one station in the system has NFFS in excess of $55 million.

The Universal Service Support Grant is comprised of two components: 1) a rural grant, in which a station will receive additional grant support in proportion to the percentage of audience it serves that is rural as determined by US Census data; and 2) a small market grant, in which stations whose total non-duplicated and non-rural population served is less than one million will receive additional grant support proportional to the size of its population.  

  1. Phase Out Program Differentiation Incentive

Panel Recommendation

Phase out the Program Differentiation Incentive (PDI) over four years; and review the one base grant per multi-provider market (MPM) policy after the spectrum auction

The panel recommends CPB phase out PDI over four years so that in 2021, MPM stations will no longer receive an incentive. Because the spectrum auction has the potential to significantly change the composition of the pool of MPM stations, after the auction CPB will revisit the policy that limits multi-provider markets to a single base grant.

CPB Management Recommendation

CPB management agrees with the phase out of the Program Differentiation Incentive (PDI) over four years and the need to review the one base grant per multi-provider market (MPM) policy after the spectrum auction.

Current Policy

The PDI was established in 2001 several years after the one base grant per market policy was implemented. It was intended to incentivize program differentiation among smaller stations in multi-provider markets.

Context for Decision

Most of the differentiation that exists among MPM stations is the result of time-shifting programs. In today’s multi-channel on-demand environment, time-shifting the same programs has become irrelevant. PDI also unfairly favors some stations over others in the same market. Stations with the largest budget in a market are not eligible for a PDI. In some cases, the PDI gives a station a larger CSG than the identified largest station. In other instances, stations are receiving a larger CSG than they would if they still received a full base grant.
 

III     Diversity

           

Panel Recommendation

Adopt the Historically Black Colleges and Universities (HBCU) and Native service diversity elements used by the Radio CSG to qualify MPM stations for a full base grant, and explore other service criteria that CPB could use to encourage and support truly diverse service.

           

CPB Management Recommendation

CPB management agrees with adopting the HBCU and Native service diversity elements used by the Radio CSG to qualify MPM stations for a full base grant; and explore other service criteria that CPB could use to encourage and support truly diverse service.

           

Current Policy

            None

Context for Decision

The PDI grant is not achieving the desired effect. Examining the PDI policy prompted the panel to consider steps that could be taken to encourage greater diversity of service in public television. The panel considered current public radio CSG policy. While there is currently only one TV station licensed to an HBCU, and none to Native service stations, the panel felt this recommendation was worth adopting in television. More importantly, the panel considered specific audience metrics made available by new technologies that could lead to measurable service goals by stations. They encouraged CPB staff to pursue this inquiry.

  1. Establish a CSG Program to Support Efficiency, Sustainability, and

Station Capacity

 

Panel Recommendation

The panel recommends establishing a CSG grant program to (1) support collaborations by stations that join multi-station master control hubs, and (2) reward stations for major consolidations under one executive management.

CPB Management Recommendation  

Management recommends allocating $5 million per year from the CSG pool to establish a CSG grant program to (1) support collaborations by stations that join multi-station master control hubs, and (2) reward stations for major consolidations under one executive management.

Current Policy

The 2010 TV CSG Review resulted in the creation of two CSG Collaboration programs: (1) the Merger & Consolidation Program, and (2) the Collaborative Bandwidth Optimization Program. Eighteen million dollars was set aside for four years for these programs, which expired in FY 2016.

Context for Decision

The panel acknowledged that the current Merger/Collaboration program, while it led to a few significant successes, had not generated adequate interest or number of proposals and should not be continued in its current form. However the panel felt strongly that, given the general media landscape, the lingering effects of the recession, the loss of PTFP funding, and the uncertainty of the pending spectrum auction, this area warrants CSG support.

V.      Retain the Minimum NFFS Eligibility Requirement of $800,000

Panel Recommendation

Retain the minimum NFFS eligibility criteria of $800,000 (three-year average) and provide waivers as necessary that give grantees three years to meet the minimum requirement either on their own or in consolidation or collaboration with another grantee, where together they meet the minimum requirement.

CPB Management Recommendation

Retain the minimum NFFS eligibility criteria of $800,000 (three-year average) and provide waivers as necessary that give grantees three years to meet the minimum requirement either on their own or in consolidation or collaboration with another grantee, where together they meet the minimum requirement.

Current Policy

Grantees must meet the minimum NFFS requirement of $800,000 (three-year average). One-year waivers are provided to eligible stations.

Context for Decision

Panelists concluded that NFFS is a reasonable bellwether for a station’s financial well-being. They also wanted to give struggling stations every opportunity to improve their financial situation and encouraged CPB staff to be more pro-active in seeking solutions to ensure continued service to communities at risk.

  1. CSG Advance

Panel Recommendation

Eliminate the CSG Advance program.

CPB Management Recommendation

Eliminate the CSG Advance Program.

Current Policy

The CSG Advance Program is annually funded with approximately $2.1 million and provides interest-free loans to stations in financial distress. CSG Advance funds that are unused are returned to the CSG pool the following year.

Context for Decision

This program is not being used.

  1. Support Station Compliance

Panel Recommendation

Require at least one grantee staff member, certified by the station to be actively involved in ensuring CSG compliance, to annually complete a minimum of one free CPB-sponsored training session.

CPB Management Recommendation

Require grantees to annually complete at least one CPB-sponsored training session.

Current Policy

No required training policy.

Context for Decision

It is important for grantees to comply with the terms and conditions of their grant awards, including the Communications Act, CPB’s annual reporting requirements and other requirements of the General Provisions and Eligibility Criteria. Annual training will support compliance. The panel felt that CPB could play a stronger role in ensuring that stations were fully informed about the process of compliance.
 

  1. Simplify Transparency Requirements

Panel Recommendation

Update Transparency Requirements to require stations to post to their websites: 

  • A list of station senior/executive management (names and titles) and contact information;
  • A list of the members of its board of directors; and
  • A list of the members of its Community Advisory Board (CAB) (for stations that maintain a CAB either by requirement or by choice).

 

CPB Management Recommendation

Update Transparency Requirements to require stations to post to their websites: 

  • A list of station senior/executive management (names and titles) and contact information;
  • A list of the members of its board of directors;
  • A list of the members of its CAB(for stations that maintain a CAB either by requirement or by choice); and
  • Financial reports submitted to CPB as required by communication act – audited or unaudited financial statements and Annual Financial Reports (AFR) or Financial Summary Report (FSR) (added by CPB Management).

Current Policy

Stations must post nine items on their websites to meet CPB’s transparency requirements.

Context for Decision

Both CPB and the panelists reaffirm that CSG recipient stations must operate in a transparent manner, in terms of station management and financial operations, but recognize that CPB’s requirements for posting information exceed what is required by the Communications Act or are redundant to other disclosure requirements. The Panel recommended simplifying CPB’s transparency requirements.


 

  1. Revise Station Eligibility Requirements

Panel Recommendation

The Panel recommends revising the definition of licensee to require the licensee to operate a full-power noncommercial educational station. CPB management will accomplish the panel’s objective by revising the CSG eligibility requirements pertaining to station operations.

CPB Management Recommendation

Revise station eligibility requirements to ensure that licensees that receive a CSG actually operate their stations as a full-power noncommercial educational television station.

Current Policy

Stations must have a license to operate a full-power noncommercial educational television station.

Context for Decision

In allowing channel sharing among stations, the FCC is also allowing stations with full-power licenses to channel share with low-power operators and still retain their full-power license. CPB should clarify its eligibility criteria to specifically articulate that if a station is authorized to operate a full-power station but is not doing so, it is not eligible to receive a CSG.

  1. Continue 70/30 CSG Disbursement

Panel Recommendation

The Panel recommends the CPB Board reauthorize the 70/30 distribution of CSG funds – releasing 70 percent of the total grant in the first payment and 30 percent in the second payment.

CPB Management Recommendation

Maintain the disbursement schedule in which CPB releases 70 percent of the total CSG in stations’ first payment and 30 percent in their second payment on a going forward basis.

Current Policy

In recent years, CPB has been disbursing 70 percent of a station’s annual CSG in its first payment and 30 percent in the second payment.

Context for Decision

The 70/30 disbursement policy was set to expire at the conclusion of FY 2016. In attachment 4, you will find a detailed report regarding this recommendation. The panel felt that many stations, particularly smaller ones, were still struggling financially. The first CSG payment is particularly critical to these stations as summer is a difficult fundraising period, and PBS dues are payable in the fall. 

Resolution Date: 
Monday, April 4, 2016
7 in favor, 1 absent

WHEREAS,

Under the provisions of the Public Broadcasting Act, CPB makes grants to eligible public television and radio stations through the Community Service Grant (CSG) program in a manner intended to provide for the needs and requirements of stations so that they may serve their local communities and audiences; and

WHEREAS,

CPB management has undertaken a review of TV CSG policy in consultation with a TV CSG Review Panel of public television station representatives who have considered the implications of the Federal Communications Commission's (FCC) upcoming Broadcast Spectrum Incentive Auction; and

WHEREAS,

Public television licensees need to know how the relinquishment of some or all of a licensee's spectrum and the receipt of auction proceeds will affect their CSGs in order to make informed decisions about whether and how to participate in the auction;

WHEREAS,

CPB management, having considered the recommendations of the TV CSG Review Panel, has presented proposed policy changes to the CPB Board's Broadcast Spectrum Committee,

WHEREAS

The CPB Broadcast Spectrum Committee has considered and endorsed management's proposed changes with amendments and has presented them to the CPB Board of Directors;

NOW, THEREFORE, BE IT RESOLVED

That the Board of Directors approves the changes to CSG policy as outlined in the attached.

BE IT FURTHER RESOLVED

That the Board directs CPB management to takes steps to communicate the following statement regarding transparency to stations:

Public media licensees have an ethical obligation to their communities to conduct their activities in a transparent and accountable manner, consistent with legal and confidentiality obligations. Because public media licensees hold spectrum in trust for the public, CPB expects those whose planned participation in the Spectrum Auction would significantly reduce or terminate their level of service to their community to exercise transparency and to solicit public comment and recommendations as appropriate.

2015 TV CSG Policy Changes Related to the Broadcast Spectrum Auction as Adopted by the CPB Board of Directors on April 14, 2015

AUCTION REVENUE DOES NOT QUALIFY AS NFFS

Any revenues received by stations resulting from the Spectrum Auction, including interest and dividends earned on auction revenues, will not be eligible as NFFS.

AUCTION REVENUE AND THE CSG PROGRAM

No additional policy change is recommended. By restricting all auction revenue from NFFS eligibility, CPB is already taking important steps to ensure an equitable CSG policy.

MINIMUM TECHNICAL STANDARD FOR CSG ELIGIBILITY

In a channel sharing agreement between two public television stations, each CSG-eligible station will maintain its CSG eligibility. When a licensee has the right to use less than half of the capacity of the shared channel, its CSG may be adjusted.

In a channel sharing agreement between a public television station and a commercial station, the CSG-eligible station must have the right to use at least one-half of the total capacity of the shared channel.

In both cases the agreements may provide flexibility to allow stations to use more or less bandwidth at a given time, depending on the content being aired - a process called dynamic multiplexing - to optimize technical quality of all transmissions over the shared channel.

LICENSE RELINQUISHMENT AND RETURN OF CSG FUNDS

A grantee that relinquishes its license in the Spectrum Auction and ceases broadcast operations entirely will be required to return all CSG funds from any open grant period. The exceptions are in cases where two grantees merge, or where a licensee holds multiple stations and at least one of its stations is CSG-eligible and continues to broadcast.

Resolution Date: 
Tuesday, April 14, 2015