reated by the nature of broadcasting and the frequency-allotment rogram that was imposed to police the use of the Nation's airwaves. ATV uses cable, not the Nation's radio airwaves, thus it takes nothing rom the Nation's natural resources of available radio frequencies. s only use of radio frequencies is incidental in the service it buys om microwave common carriers.

TV signals are broadcast for public viewing. CATV provides a ception facility. The Nation's viewers receive many more signals ith it than they can without it.

This is the capability that certain broadcasters fear. They love have more viewers have access to their signals, but they do not want eir viewers to have access to other signals.

They fear that this capability on the part of the viewing public ay reduce the value of their monopolistic poistions. In fact, the ost horrible prospect of all is that it might free all of their captive ewers and force broadcasters to compete against each other for the blic attention, strictly on the merits of the program material they

fer.

They fear that local stations may be forced to maintain dominance their markets by virtue of the fact that they are the local station ad provide local news, local sports, local advertising, and local educaonal and public affairs presentations. Few broadcasters have had hold their viewers strictly on the merits of what they have to offer. hose who have, know it can be done, and I know this from experience. For the first 10 years of the past 15 years while CATV was developg its concept and earning public acceptance, the Federal Communitions Commission largely ignored this seedling revolution in levision reception technology; in fact, as the record shows, the Comisson looked in depth at the subject back in the late fifties, said it xed what it saw and saw no reason or legal basis for attempting to ntrol or curtail the growth of this new industry.

Shortly thereafter, however, the hue and cry of alarmed broadsters who feared the erosion of their monopolistic position, seemed capture the imagination of the FCC, particularly at the staff level d they began, through manipulation of the control vested in them er the Nation's microwave common carrier operations, to tamper ith and impede the growth of CATV facilities.

This process was challenged and resulted in the obscure and nebuus doctrine set forth by the courts in the Carter Mountain case. In this case, the Commission successfully maintained that threated economic impact of an improved CATV would result in the deise of a small TV station. No impact was ever proven. An invesgation now of the present circumstances existing with the parties volved would lead any reasonable man to conclude that the threat is completely imaginary.

This case provided a rather tenuous springboard from which the mmission has gone upward and onward into, first, a set of purely bitrary rules governing the use of microwave service by CATV cusmers, and then its first and second reports and orders circumscribg the operation of the CATV industry and its future growth. It would appear that the Commission has acquired its alleged owledge, wisdom and expertise in this field largely through the ocess of osmosis.

It has not created a CATV bureau within its structure, nor has it sought funds for this purpose.

It has conducted no inquiry with its own personnel into the facts relating to CATV and its impact, if any, on broadcasting. It has apparently not even used information available to it from its own files and confidential records.

It has not conducted evidentiary hearings to get testimony under oath and face to face discussion with knowledgeable people in this field.

It has merely invited comments. This has resulted in an outpouring of a mass of paper, most of it from people who know nothing about CATV. These comments contain volumes of false accusations, suppositions, false premises leading to false conclusions and result ir. nothing of any real value or meaning. The most commonly used word in them is "If."

Few of the Commissioners and their staff have ever viewed more than one CATV operation, and this one only briefly. They cannot really understand the basic nature of CATV or its relationship to the public.

From this background of ignorance and bad information the Commission has now come forth with rules for the construction and operation of CATV facilities.

It is our opinion that it is the intent of the Commission staff to use these rules, not to constructively promote the benefits that expanded CATV operaions can provide to the public (the Commission has never done anything constructive toward CATV), but rather to choke off any future growth of the industry and to harass the existing operations.

It proposes to fence off 90 percent of the Nation's TV homes, beyond the reach of CATV facilities while it ponders two peculiar questions.

It is obvious from the text of their second report and order that the Commission has already decided that further growth of CATV will inhibit the future development of new UHF broadcast facilities in the Nation's major cities. They have also, in the same document through a reasoning process not understandable by any normal person I have yet to encounter, determined that CATV will eventually result in pay TV systems in our major cities.

I submit that there is not one iota of proof that either of these conclusions has any validity. The broadcasters who support these conclusions do so with tongue in cheek. They shed their crocodile tears over UHF development, but their true concern is the dilution of their monopolistic positions.

Many of them have already made plans to enter pay TV via broadcasting over the very UHF stations that CATV is supposed to endanger.

It is my firm belief that if the Congress does not act in protection of the public interest to define what CATV is and the Commission's responsibility in the public interest to allow it to develop, that if the Commission's current position and direction is left unchanged, that the CATV industry has had the garrote placed around its throat which will be gradually tightened until the life's breath is gone. For surely an industry which has lost its capacity to grow cannot survive.

To allow this to happen would be unthinkable. We have great confidence that Congressional wisdom will prevail. We support and we urge your support of the NCTA recommendations. An aroused public would certainly demand that their freedom of reception be protected.

Assume that someone had invented a TV receiver which would allow its owner to receive signals broadcast from any place in the United States. I am sure that the public would think this was great and that such a device would be in great demand. Would you consider seriously a proposal that we outlaw the manufacture and distribution of such a device? I think not.

But that is what you are essentially being asked to do by the FCC today.

Finally, I would like to direct a few brief remarks to the matter of State public utility regulation of community antennas. In section 331 (c) of the Commission's proposed bill, it is suggested that Congress make clear that its legislation is not intended to preclude State regulation except to the extent of direct conflict with the Communications Act or regulations promulgated thereunder.

In his testimony the Chairman of the Commission went on to say that he felt that community antennas have many of the attributes of public utilities and that the FCC did not intend to interfere with State regulation of those aspects of CATV.

Omitting for the moment, the complete failure of the Chairman to indicate any factual conditions or abuses which would justify subjecting the community antenna industry to public utility type regulation, it is discouraging to find either the Commission or its Chairman in effect soliciting State regulation of the services of community antennas. It is discouraging because I would like to believe that the Commission sincerely intends to promote the orderly development of CATV as a component of our national television service and that it is genuinely concerned about protecting the public interest in CATV as well as in the healthy operation of broadcast stations.

However, it is incomprehensible to me that the Commission really believes that the receiving public would be benefited by a dual system of regulation with the Federal Communications Commission acting on the one hand, and 50 States, each with its own pattern of regulation, regulating on the other hand.

The line between public utility regulation and nonutility regulation cannot be that finely drawn. The regulation contemplates service regulation as well. Moreover, rate regulation, which is inherent in public utility regulation, is so directly involved in and related to service, that they cannot be separated.

It seems obvious, under the circumstances, that conflicting policies and objectives, as between the several States and the commission, are inevitable, as a hodgepodge of differing regulatory patterns from State to State.

If television reception is to be regulated by Government, it should be by a single agency empowered both to establish uniform standards and policies with respect to both transmission and reception. The public is entitled to protection against the confusion and uncertainties which would surely flow from such a regulatory scheme as that pro

posed by the Commission. Unlike telephone service, to which the chairman referred, as an example of joint regulations by both the Federal Communications Commission and the State commissions, there is no logical division between local or intrastate CATV service and interstate CATV service, to provide a rational basis for joint regulation or a dividing line betwen the two jurisdictions.

It is my understanding that Congress concentrated control over communications in the Federal Communications Commission for the purpose of achieving a uniform national communications service with an equitable distribution of frequencies, facilities, and services among the several States.

Broadcasting is useless without reception. It is wholly illogical on the one hand to establish responsibility for regulation of broadcast transmission in a Federal agency charged with achieving overall public interest in television and authorize on the other hand 50 independent legislative or regulatory bodies to regulate reception.

If reception must be regulated at all, it seems elementary that such regulation should be entirely by the Federal agency charged with achieving the public interest in television.

I would suggest that the FCC might take a much more efficient and forthright approach to the alleged problem of controlling reception. If it were indeed in the public interest to deny the public the right to receive TV signals broadcast by a distant station-in order to protect the monopolistic position of a local station, then this might better be done by controlling the reception capability of the public's TV sets.

For example, if the people of San Diego are to be denied the right to view signals broadcast in Los Angeles, this cannot be done efficiently or effectively by eliminating CATV in San Diego. Thousands of homes in San Diego are equipped to receive Los Angeles signals without benefit of CATV service.

Therefore, the objective could only be accomplished by denying to the San Diego viewers the right to own sets equipped to receive Los Angeles frequencies. This, of course, would be as unreasonable as forbidding the sale on San Diego newstands of the Los Angeles papers.

Curtailment of the CATV growth will mean loss of employment of thousands in the CATV industry. It will mean a substantial loss by investors who have, in good faith, put up millions of dollars in capital to support this new concept in TV reception. But worst of all, and most important of all, it would mean that the public would lose access to untold new windows through which it might look further out on the wonders of this country in which we live.

I am confident that Congress will protect the public interest in this

matter.

Thank you very much for the opportunity to give you our views.
The CHAIRMAN. Thank you, Mr. Merrill. Are there any questions?
Mr. ROGERS of Texas. I will reserve my time, Mr. Chairman.
The CHAIRMAN. Mr. Younger.

Mr. YOUNGER. I do want to compliment Mr. Merrill for a very understandable presentation for a layman.

I was wondering how would a CATV get into an apartment house that is already built?

How is that handled?

Mr. MERRILL. It would depend to a large extent on the facilities that re already built. If they were compatible with the service being ered by the CATV it would simply be a matter of attaching the ATV drop line, carrying signals ordinarily available on the CATV stem, attaching that line to the line leading to the master antenna ich had been serving the apartment.

Mr. YOUNGER. They could just connect with the cable to the antenna d feed it into all the apartments the same as the master antenna that on the apartment.

Mr. MERRILL. Take out the antenna serving the apartment and ach that line to the CATV system.

Mr. YOUNGER. You would have to take the other antenna out?

Mr. MERRILL. You could not have both simultaneously. You could ve the other antenna there and switch back and forth.

Mr. YOUNGER. I was just wondering. I can see how they might build ew apartment and put the facilities in for a cable and use either one, t for buildings that were already erected I was wondering how that stem would fit in.

Thank you very much.

The CHAIRMAN. Mr. Friedel.

Mr. FRIEDEL. I am very much interested in your statement, Mr. errill. I have only one question to ask. You say on page 10, when u are speaking of the TV systems, many of them have already made ins to enter pay TV through broadcasting over the TV UHF stans that consider a TV is supposed to endanger. Do you have any oof of that or do you know of any specific cases where this will

ppen.

Mr. MERRILL. It is my understanding that the Kaiser people who ve several of the UHF stations have a petition on file for authority operate pay TV on part time or a full-time basis, and I am not sure ich, over some of these stations.

They are UHF stations. One I know particularly is in Los Angeles.
Mr. FRIEDEL. An application is already in for pay TV?
Mr. MERRILL. That is my understanding, sir.

Mr. FRIEDEL. Were you given a chance to appear before the FCC a hearing and reviewing all these remarks that you have made lay?

Mr. MERRILL. No; we have never had anything other than informal ferences with various members of the commission.

have never appeared as an individual nor representing the associan of which I am immediate past chairman before the full FCC. Mr. FRIEDEL. You met with some of the members of the FCC, not staff?

Mг. MERRILL. I have met with individual members of the FCC and staff.

Mr. FRIEDEL. That is all, Mr. Chairman.

The CHAIRMAN. Mr. Nelsen.

Ir. NELSEN. Thank you, Mr. Chairman.

wish to join my colleagues in thanking you for a very fine statent. I read part of your testimony prior to the hearing today. I ne in a little late today as I am sure you noticed. You have a TV adcasting station, which you own, do you not?