services and prescribing new rates, should also have the power to authorize necessary changes in the industry's structure. However, the provisions of the antitrust laws and certain sections of the Communications Act of 1934, prohibited this kind of restructuring. Therefore, the study made legislative recommendations. Specific proposals to implement these recommendations, however, were never, never forthcoming.

On August 14, 1967, President Johnson appointed a task force of distinguished Government officials to make a comprehensive study of communications policy. In his message to Congress, the President stated that the United States must review its past activities in this field and formulate a national communications policy. Accordingly, the task force was charged with examining a number of major questions affecting this policy.

The report and recommendations of this task force were submitted to President Johnson, but administrations changed before it was released. Subsequently, it was released by the present administration.

On March 2, 1966, the FCC instituted a notice of inquiry into the establishment of domestic communication satellite facilities by nonGovernment entities. I have repeatedly urged the Commission not to procrastinate in reaching a decision on this matter because the American people in the long run would be the losers.

In 1967, the Commission informed the committee that it was withholding disposition of the domestic satellite question pending the comprehensive report of the Presidential Task Force on Communications Policy. The Commission finally announced that it was on the verge of resolving the issue in that proceeding early in 1969, but in July of that year the present administration requested the Commission to withhold its action until it had completed its own study of the matter. The administration's study and recommendations were submitted to the Commission 6 months later.

Then on March 20, 1970, the Commission issued a report and order and a notice of proposed rulemaking in the proceeding it initiated on March 2, 1966. Despite the fact that applications to establish and operate domestic communications satellite facilities may be submitted for the Commission consideration pursuant to that report and order, the Commission has stated that as yet it is unable to determine what type of domestic satellite program could best be developed.

Many authorities contend that we are no closer to a resolution of this issue than we were in 1966. Whether or not this is so, the fact remains that a domestic satellite system is still some time away and the American people are not receiving the full benefit of this dynamic technology.

Most recently, on June 10, 1970, the Commission instituted a notice. of inquiry into the policy to be followed in future licensing of facilities for overseas communications. Heretofore, the Commission has licensed overseas communications facilities on an ad hoc basis.

I have purposely set out in some detail the history of this committee's attempts to urge the interested agencies of Government to adopt an overall communications policy because it is apparent to me that their failure to do so has contributed significantly to many of the problems and uncertainties that we now face in the field of communications.

Lack of such a policy has, for example, raised serious questions whether the Commission's present ad hoc licensing of overseas communications facilities is conducive to efficient planning by the carriers. There is uncertainty as to how overseas surface communications facilities and satellite facilities can best be integrated to form a balanced communications system. The using public suffers as a consequence, and government users have stressed that reliability of this service is vital in time of crisis.

Legitimate questions have been raised as to whether the present division of ownership of overseas surface record communication facilities continues to be in the public interest. Divided ownership has resulted in the construction and maintenance of expensive, duplication of communication facilities which increase operating costs and result in higher rates for the user.

Moreover, our Nation-I want to emphasize this our Nation is in a relatively poor bargaining position on communications matters with foreign counterparts since we do not speak with a single voice. In this connection, I have repeatedly urged that this country not give away its birthright during the course of the current negotiations of the Plenipotentiary Conference on Definitive Arrangements for the International Telecommunications Satellite Consortium.

I have talked with Mr. Scranton on this: I have talked with Leonard Marks on this, and I am going to talk to Ambassador Washburn and to you on this.

And, finally, as I noted previously, we are not fully utilizing the benefits of satellite technology in view of our failure to formulate and implement a domestic satellite program.

Now, Dr. Whitehead, I think you are one of the most brilliant young person who has come to Government in a long- long time. I have had formal and informal talks with you. I think you know this business. I think you know your problems. And I think that you are one man that can do something about it provided that your recommendations receive the approbation and the attention of the President. You can make a thousand recommendations to the President, but unless these recommendations are studied and unless intense attention is given to them and a decision is made all your efforts will be a futile exercise.

General O'Connell never met the President once after he was sworn in in all the time that he was his communications adviser.

Now I know, Dr. Whitehead, all these issues are very complex and they are not going to be resolved overnight, and they are not going to be resolved by one agency.

Our spectrum today is a mass of confusion. We have attained primacy in communication satellites. We have primacy on the international level thus far, provided we don't negotiate away our birthright. We have not developed a domestic satellite system. This is going to be your job, and I repeat again, I don't know of any man who could do it better; and I want to welcome you here, I want to congratulate the President for appointing you.

As a matter of fact, I am the chairman of the Subcommittee on Independent Offices Funding, and when a request was made for the Electromagnetic Compatibility Facility I raised the question as to whether or not the new Director was familiar with it and how he felt

about it. As a matter of fact, the House knocked it out of the budget$906,000. My committee restored it in the budget. We are going to go to conference on it next week. I would like to have a little memorandum from you as to what you feel about it, how important you think it is, and how you are going to use it, and the immediacy for having the money now. I would like to have that when I go to conference next week.

What attitude the House is going to take I don't know. I think they decided the question is a matter for legislation. I think the Budget Bureau was consulted and they said they didn't think that was necessary, it could be done under the funding process.

Be that as it may, I am going to take it back for further consultation to the conferees of the House, hopefully that we can do something about it. But I would like to be fortified with a memorandum from you.

Now here you are, Dr. Whitehead, you have been in the White House for some time advising the President in this important area. You have listened to my very long statement, and I regret that I had to indulge your patience so much. I would like to have your comments.

STATEMENT OF DR. CLAY T. WHITEHEAD

Dr. WHITEHEAD. Thank you very much, sir. I think that we in the White House can agree with most of the objectives that you set forward in your statement. We feel very concerned, as you do, about the importance of this area, about the impact on the industry and on our society and our broader economy of the results of not having a telecommunications policy.

I am not sure that even a person who lived up to some of the kind words I have heard here this morning could do this job justice. I have been very impressed by the complexities of the problems. But I am hopeful that we can make some progress.

This is an extremely dynamic and innovative field. It is extremely broad in its impact, as I just mentioned. We will certainly do everything we can to come up with a telecommunications policy.

I think it is important to realize, though, as I am sure you do, that in such a fast-moving field, in a field with such a broad impact, that it is not feasible to sit down and come up with a piece of paper that says this is our policy. What we will be trying to do, therefore, is to spend as much time developing a policy process that can respond to the changes in the economy, in the industry, and society, so that we can deal with the issues as they arise, so that the Government can take a sensible position, and so that the industry can then go forward and make available to the public the benefits that we have all been talking about.

I recognize particularly your concern about the international communications area. I think that is extremely important. I think the impact of international communications will grow, grow at an extremely rapid rate. It is already important to us in this country. It concerns how we talk to other people of the world, how they perceive us, how we perceive them. It is certainly a very important thing in

these times.

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We will do everything we can to see that that area develops in a cooperative spirit with other nations, but making certain that the United States' inetersts are well represented.

Finally, I would like to comment on your concern about the spectrum. We think this is an extremely important area. There are tremendous sums of money invested in this country based on certain spectrum allocations. That cannot be changed lightly. But we must have a sensible spectrum allocation plan and policy. We must see to it that the spectrum is used efficiently and effectively and is used for those things that are most valuable to the country.

There are a number of people who speak of the spectrum crisis. I don't share the opinion that we have reached a crisis in this country. We have reached a point, though, of serious concern. We have to find new ways of allocating spectrum, or we in fact will have a true crisis on our hands.

As you know, Mr. Chairman, there was considerable talk when you were considering this reorganization that we should merge the spectrum management of the Federal Government and the FCC spectrum management for civilian use. We considered that possibility and decided it was not necessary, that a cooperative spirit between the FCC and the executive branch along with new techniques, new procedures, would be not only adequate, but would for some time be the best procedure.

The President has said that the purpose of this reorganization is to make the executive branch a better partner in the policy dialog with the Congress, the FCC, the industry, and the public. That is the goal I seek for myself and for the office, and I am hopeful that we can make some decisions, make some changes that will be constructive and fulfill the objectives you have set forth.

Senator PASTORE. I want you to know, Mr. Whitehead, if you ever feel that you need the help of this committee, whether it be a matter of consultation or legislative help, that you are going to find us very willing and very obliging.

And you speak about partnership-my experience in Government has been that once an agency takes hold of something they are very reluctant to give it up, and I would hope that at some point someone in the White House will be strong enough to speak to the Defense Department to determine at what point all that they have preempted should remain preempted. After all, in the case of an emergency they can preempt the whole spectrum—you know that. Why they have to keep it in abeyance in the meantime in a growing economy, in the most progressive country in the world, merely on the ground that there may be an eventual need for this is something that has disturbed me for a long, long time.

Now if they need this and they can prove it, I say all well and good. But if they are just holding it in reserve because they have it and they don't want to let it go, there has got to be somebody strong enough to say "look here, we have the economy of this country to develop, too." Now you have submitted your financial statement. You have no financial interest in any corporation, business enterprise, or nonprofit or educational institution. You have no creditors excepting small indebtedness to run your home, and you have no financial interest in real property.

Dr. WHITEHEAD. Working your way through school is an expensive process.

Senator PASTORE. There is no question about your conflict of interest. There is none. And I want to congratulate you again.

Mr. Pearson.

Senator PEARSON. Mr. Chairman, I think you have covered most of the territory I wanted to cover. Perhaps I will ask Dr. Whitehead to comment somewhat further on the position of the reorganization plan which provides that the Secretary of Commerce will provide support for your office. I take it you will also have your own staff; is that right?

Dr. WHITEHEAD. That is correct.

Senator PEARSON. And the Commerce Department will have a staff of their own, too. Do you know the extent, nature, and size of those staff arrangements?

Dr. WHITEHEAD. That hasn't been worked out yet, Senator. It will be somewhat larger than the OTP staff, which is envisioned to grow to something like 30 professional positions in this fiscal year. There is some question as to how much of the Commerce Department's current activities in the radio area, communications area, should be transferred into the new organization, and that will have to be worked out.

Senator PEARSON. I also recall that the President in sending up his reorganization plan said that this executive office would not take away any of the prerogatives and functions of the FCC. I take it this comes within the partnership concept which you have articulated in connection with performance of your duties and responsibilities. Dr. WHITEHEAD. That's right, sir.

Senator PEARSON. I would like to make one final observation. Lines of authority and responsibility get pretty fuzzy sometimes, and I would hope that this arrangement would not pull apart the effort to develop a unified telecommunications policy by vesting the development of such a policy in conflicting agencies and staffs with adverse responsibilities. As the chairman has pointed out everything we do in Government now involves so many different departments.

So let me just close, Mr. Chairman, by also indicating that Senator Baker had to go to the Public Works Committee hearing at which Secretary Volpe is testifying. He wanted me to note the unavailability of his absence, congratulate you, and indicate to you his support for your confirmation.

Senator PASTORE. In the Federal Communications Bar Journal there was a critical article on Reorganization Plan No. 1, and it said certain of the tasks assigned to your office threatened improper political encroachment upon the independence of regulatory responsibility. I am going to ask that this article be placed in the record by reference.1 Are you ready to comment on that, Mr. Whitehead?

Dr. WHITEHEAD. I recall reading the article to which you refer, Senator, and I recognize the problems and sensitivities that are reflected there. We do not feel it is a matter of concern so long as we are aware of that area.

1 "Presidential Assault on Telecommunications," Spienack, Edwin B., Federal Communications Bar Journal, vol. XXIII, 1969.