This paper, the second in a series exploring future options for public policy in the communications and information arenas, examines some of the issues underlying public broadcasting, primarily public television. It advances two reasons why quality local public television programming is scarce: funds for the original production of programming have always been limited, and national programming simply represents a more efficient use of funds; and the number of stations has grown, meaning that there are more stations making do with less money. However, it is noted that those public television stations that are committed to serving local community needs may have found the key to survival in generating the local support necessary to keep them in business. Six recommendations are offered for future policy in public broadcasting: (1) phase out federal funding of the Corporation for Public Broadcasting over a 2-year period to allow for the transfer of some of its functions to other institutions; (2) establish a national endowment for video and audio programming; (3) gradually eliminate federal funding through the authorizations/appropriations process; (4) establish a taxpayer check-off spectrum and/or fees, the revenues from which would go to the new endowment fund; (5) loosen restrictions on corporate underwriting; and (6) earmark the funds from the Public Telecommunications Facilities Program (PTFP) for expanding the reach of public television and radio programming through appropriate technology in areas not currently served. The paper concludes by suggesting that the goal of federal policy should be to target the federal subsidy to meet national needs that are not being met by the commercial marketplace. (DB)