(4) The Securities and Exchange Commission, within its current organizational structure, should establish the position of Small BrokerDealer Liaison Officer. The officer would function both as advisor and ombudsman, accurately reflecting the views and interests of the thousands of small securities dealers throughout the country. The Liaison Officer should be provided with whatever staff is sufficient to allow him to carry out his duties.

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PART II: SMALL BROADCASTER REQUIREMENTS

I. INTRODUCTION

In accordance with its ongoing investigation into the burden of Federal paperwork requirements and their effect on the small businessman, the Subcommittee on Government Regulation of the Senate Select Committee on Small Business, held hearings on February 6 and 7, 1973. The two sessions, conducted in Room 6226, Dirksen Senate Office Building, were presided over by Senator Thomas J. McIntyre, subcommittee chairman. Testimony was offered by a wide variety of witnesses including Senator Alan Bible, chairman of the full committee; Mr. Dean Burch, then chairman of the Federal Communications Commission; Mr. Grover C. Cobb, executive vice president for government relations of the National Association of Broadcasters, a private interest association which represents most commercial broadcasters; and others. Witnesses representing various small broadcasting firms also testified before the subcommittee, while a substantial number of exhibits were offered for inclusion in the record.

Senator McIntyre announced that the purpose of the hearings was to determine as accurately as possible the effect of the growing burden of Federal Communications Commission paperwork on the small broadcasters of America. He stated his intent to pursue two major issues closely: first, the current F.C.C. practice of requiring identical data from all broadcasters, without consideration of the firm's size or the nature of the market it serves; second, whether the supporting data required when filing for a triennial license renewal is necessary and justified for a small radio broadcaster.

The purpose of the small broadcaster part of this report, then, is to analyze the data presented in testimony made before the hearings and in exhibits offered for inclusion in the record, in order to determine the current status of the small broadcaster and to measure the effect on this vital portion of the industry of the reported increase of paperwork requirements established by the Federal Communications Commission. The report will offer specific recommendations designed to reduce the paperwork burden imposed on small broadcasters with the ultimate purpose of assuring the viability and survival of the industry.

II. CURRENT STATUS OF SMALL BROADCASTERS

A. The Composition of the Industry, the Communities It Serves, and the Nature of Its Services

In numbers alone, the small broadcaster occupies an important place in America's communications system. At the time the hearings were held, a total of 6,782 commercial radio licensees were operating in the United States, a number which has no doubt grown even larger in the time since the hearings were held.' Of the licensees, the Federal

1.S. Congress. Senate. Select Committee on Small Business. Subcommittee on Government Regulation. The Federal Paperwork Burden (Small Broadcaster Requirements) Hearings, Ninety third Congress, 1st Session, February 6 and 7, 1973. Washington, U.S. Government Printing Office, 1978. Part 3, 489 pp. Hereinafter, this document will be cited as FPB hearings, Part 3, p. 921.

Communications Commission estimated that 70 percent served small markets, that is, metropolitan areas of 25,000 or fewer population. This gives an approximate figure of 4,750 broadcasters fitting one of the major criteria for small broadcasters: the size of market served.2 Examples of specific market size were offered in testimony by several witnesses, and in statements submitted for inclusion in the record. Mr. Donald A. Thurston of Berkshire Broadcasting Company mentioned in his testimony the size of the urban areas served by his A.M. radio stations and one F.M. station: Great Barrington, Mass., population: 7,500; Orange, Mass., population: 6,200; and North Adams, Mass., population: 19,000.3 In addition to the size of the market served by most small broadcasters, another common characteristic was revealed in testimony: most small radio stations broadcast on a limited schedule when compared with those serving large metropolitan areas. Such schedules as 6 A.M. to local sunset or local sunrise to local sunset are not unusual.1

The quality of the services rendered by small broadcasters to their communities was particularly emphasized in both testimony and in written statements submitted to the committee. The close relationship between the small broadcaster and the community he serves was stated by Mr. Thurston in his testimony:

In markets that size, the community broadcaster is a very well known person and is subjected daily to the checks and balances of the general public, such as the business and professional community, civic and community groups and the local elected and appointed government officials whom he serves. The entertainment, information and businesss services provided by the community broadcaster are vital ingredients in today's life style. The small market broadcaster has to be in tune with his community or the community will not "tune in" to him.

For example, at one time, just a very few years ago, I was serving as president of the Chamber of Commerce, president of the area industrial development corporation, president of the Massachusetts Broadcasters Association; I was chairman of the stewardship and finance committee of the United Methodist Church, director of the North Adams United Fund, and carried out several other short term service efforts.

The commercial manager of WMNB in North Adams was president of the City Council and a member of the allimportant finance committee. He was very active in affairs of the Catholic Church, and a member of the School Board. The head of my accounting operation was president of the Business and Professional Women's Club. The program director of our F.M. facility was a director of the local Council of Arts.

2 Ibid.

When you wanted to find out what was going on in our market, you didn't go out of the radio station-you came

to it. I am not unique; there are thousands like me all across this great country.5

The pattern of commitment and wide ranging community service characterized by Mr. Thurston is borne out in various statements submitted to the subcommittee by concerned broadcasters in various parts of the country. Mrs. Lorraine Walker Levine indicated in her testimony that the station she operates, KCBN of Reno, Nevada, had engaged in such community service projects as sponsoring a Christmas party for two thousand needy local children each year, and organizing a disc-jockey basketball team which played local high schools in benefit exhibition games. Mrs. Levine stated that at the time she testified, the team had raised over $15,000, which had been donated to charitable causes. Another small broadcaster, the president of KOWL, South Lake Tahoe, Nevada, wrote to the subcommittee; his letter, among other matters, referred to the station's community work:

We serve our area and serve it well. A good majority of our programming is spent on public affairs and public service. As example, we turn two days a year over to the Lions and Kiwanis Clubs. All proceeds are then donated to their charities, and as much as $2,600 has been raised in one instance.

We provide a free community swap service, locate hundreds of animals thru (sic) our Pet Patrol, do local high school football and basketball, for two high schools in the area, and with few exceptions, due to high telephone line costs, are losers. But I feel it is still our obligation to our community."

B. The Current Financial Position of the Small Broadcaster

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Small broadcasters throughout the country are in serious financial difficulty. Many currently operate in persistent deficits, while some are threatened with the necessity of ending their service in the face of continued unprofitability. The figures for the industry as a whole are deceptive; according to the National Association of Broadcasters' financial study, the typical American radio station grossed $162,000 in 1971, and had a net profit of $10,500 before taxes. Figures presented to the subcommittee suggest that despite the industry average, small broadcasters are in serious trouble. In her testimony, Mrs. Levine stated that the eight radio broadcasters in the Reno metropolitan area reported total revenues of $1,156,000 in a recent year, and suffered a combined loss of $215,000. The unfavorable financial situation of many broadcasters in small metropolitan areas is borne out in figures supplied by F.C.C. Chairman Dean Burch. Exhibit F, provided by the F.C.C., reveals that of 102 non-metropolitan areas supporting three or more radio stations, fully 28 showed either losses or total broadcast income of less than $1,000; this accounts for 25 percent of the areas surveyed, which included such cities as Anchorage, Alaska, Rochester, Minnesota, and Plattsburg, New York.10