works in key cities. Yet, under the proposed amendment the networks would have to dispose of many of their existing stations, while one person would be permitted to own a station in every city in New England.

Commissioner Jett has asked me to file a separate statement of his views with respect to section 19, which is quoted in full in my statement and is as follows:

SEPARATE STATEMENT OF COMMISSIONER JETT WITH RESPECT TO SECTION 19

I regret that due to my attendance at the World Telecommunications Conference I could not be present to present my views in person. I do believe, however that Chairman Denny has prepared an excellent statement and I am glad to be able to join with him on all points except in regard to section 19. The second part of the multiple-ownership provision beginning near the bottom of page 29 of S. 1333 may well prove to be one of the most controversial matters to be dealt with by the committee. A logical argument can be made against any limitation of ownership under our free competitive system. On the other hand a good argument can be made in favor of placing some restrictions in the law to make certain that broadcasting does not fall into the hands of a few people and thereby become a potential and powerful mouthpiece to subvert our democratic system. I am disposed to support the latter, provided the law is carefully worded to take care of special situations, such as network-owned stations. Accordingly, while I do not go along with the 25-percent rule I do feel that a provision based on coverage of listeners comes closer to solving this problem than any other formula.

While I have no specific substitute to offer at this time for the 25-percent provision I should like to suggest that the Committee investigate other possibilities in respect to the ownership of stations. In conducting any study ample weight should be given to the following factors:

(1) The present ownership situation as related to population served. I do not believe that any undue concentration of control now exists since there is an abundance of competition today in all of the principal cities.

(2) Ownership of multiple stations, including one in a community or area which does not receive primary service from other stations. In a recent case

the Commission found that the public interest would best be served by making. a grant in favor of an applicant who did not own any station rather than grant a fourth station in the State to the competing applicant.

(3) Geographical distribution. In my dissenting opinion in the KQW transfer case I pointed out that it may prove to be far worse to grant a specified number of stations to one person to provide service in a concentrated region than to grant the same or a larger number on the basis of wide geographical distribution.

(4) Engineering considerations should not be overlooked since it is a wellknown fact that the lower frequencies in the standard broadcast band provide greater coverage for a given amount of power than the higher frequencies. For example, a 5-kilowatt station operating on 550 kilocycles and located in an area of good soil conductivity will provide service over a radius of 238 miles. However, a station similarly situated which employs 750 kilowatts and operates on 1,600 kilocycles will provide primary service out to only 210 miles. Thus, by the mere accident of being assigned a low frequency, the licensee is given a competitive advantage over those who must use higher frequencies in his locality.

Reverting to the 25-percent provision, it is true that the population when figured on this basis represents about 33,000,000 people, and if this provision is not changed some lecensees would be required to divest themselves of stations they now own. This would undoubtedly work a hardship on the public, as well as licensees. I have in mind the high operating costs of networks, for example, and the fact that income derived from network-owned stations helps to maintain a high standard of network-program service. Moreover, since network-owned stations are located in large population centers and operate competitive for Nation-wide or regional audiences, some special provision should be worked out to take care of such cases. It is important to bear in mind in this connection that no person may own more than one station in each of these populous centers; therefore, while the total population served by network-owned stations may greatly exceed the 25-percent figure, there is positive assurance that each such licensee will have many competitors in the key outlets. This factor, if carefully

evaluated, may justify the exceptions I recommended for network-owned stations. If population coverage is used as a basis with exceptions for network-owned stations it would not follow that the Commission is required to grant licenses up to the limits specified in the law. The present wording requires the Commission to "make and maintain a fair and equitable distribution of radio broadcast facilities as between various applicants therefore when such action can be taken consistent with the requirements of section 307 and the equities of existing licensees." Moreover, while the proviso sets a ceiling it would be incumbent upon the Commission to consider the equities in each case and apply the statutory standard of public interest, convenience, or necessity. Accordingly, there need not be any fear that this or any future Commission will embark upon a wholesale licensing policy to applicants desiring a multiplicity of stations. Indeed, there is no provision in the present law or any rule of the Commission which prevents the granting of licenses to a single person to serve all of the population with any number of stations that may be desired. But the Commission has wisely decided to limit the ownership of stations in order to provide for the greatest possible diversification of ownership. That is not to say that I agree with a fixed arbitrary limit, such as a maximum of six FM stations to one person, or five television stations, or the implied policy of six standard stations. I am opposed to any restriction which specifies a particular ceiling for the reasons given above, and in particular, the fact that engineering considerations may make it desirable to permit more stations to be owned in certain power and frequency categories than in the lower portion of the band.

I am certainly no advocate of monopoly of the broadcast facilities of the country.

The CHAIRMAN. May I interrupt you? It is now almost half past twelve. I wonder if we should take a recess at this time. Are you about through?

Mr. DENNY. I have only about a page and a half or so. done in 5 or 10 minutes.

The CHAIRMAN. Proceed, then.

I can be

Mr. DENNY. I was saying that I am not an advocate of monopoly of the broadcast facilities. I have given serious consideration to the question of how many stations these large networks ought to own. It does seem to me that they do have a great deal of power in the stations that they now own. Truly they have even more power through the affiliation contracts. However, by and large, I think they are doing a good job. I think that the power that has been placed in these national networks has been well placed. I think that by and large it is in good hands.

I think this: that the economics of network broadcasting are such that if we are to have network broadcasting in the United States as we know it today they have to have enough stations in order financially to support a network. They do not make money on their network operations. They lose money on those. Where they make money is from the management of the stations that they own.

If the 25-percent rule went into effect and the networks were required to divest themselves of all but, say, two of their stations, I think that there then would be a serious question as to whether we would continue to enjoy the type of network broadcast service that we have today. I think that is something that the Committee does want seriously to consider. I am conscious that we do have great power concentrated in these networks, but I am satisfied that it is not too much power for what we get in return. To change the rule and to change the economic conditions under which they have developed these networks might do violence to our present system. I know that they will deal with that fully, and I know they are very adequate to deal with

that problem, but I do state by way of explanation the reason why the Commission has continued so many important stations in the hands of the networks and will state my own views as to why we have done it.

In this statement here I should say that, of course, each instance where I have departed, Mr. Chairman, from the written statement, I am on my own. There has been no opportunity to review my extemporaneous remarks with my colleagues, and the written statement I have presented represents their views, and the extemporaneous interjections are my own and I take responsibility for them.

Section 20

This section would add a new section 334 to the bill which would incorporate the prohibitions against obscene, indecent, or profane language now found in section 326 of the act, and add a new provision that no person shall knowingly make or publish a false accusation or charge against any person. We have no objection to this provision. Section 21 (S. 814, p. 949; H. R. 5497, pp. 878–879)

This section adds a provision to the act allowing the Commission to make declaratory orders after notice and hearing in any case of actual controversy arising under the act or the Commission's rules and regulations. There is no objection to giving the Commission the power to issue declaratory orders or judgments, where as is provided in this section the power to issue such orders is discretionary, and the agency can thus limit the use of the device to proper cases and cannot be imposed upon by persons seeking such rulings for dilatory purposes.

However, it should be pointed out that this section is not necessary to empower the Commission to issue declaratory orders as it already has such authority by the terms of section 5 (d) of the Administrative Procedure Act and, pursuant to that section, the Commission has amended its rules and regulations so as to make provisions for declaratory judgments.

Section 22 (S. 814, pp. 945-946; H. R. 5497, pp. 811-877)

This section would amend the appeal provisions contained in section 402 of the Communications Act. In general the changes proposed are substantially the same as the corresponding provisions in S. 814 and H. R. 5497. These provisions were carefully analyzed by the Commission and extensive testimony concerning the implications of those sections were given at that time. The Commission adheres to the views made at the earlier time and I will not burden the committee by repeating them.

like to call to the comAs you will note, section Under section 402 (a) a three-judge district court

There is one fact, however, that I should mittee's attention in considering section 22. 402 provides for a dual method of review. proceeding is brought in a special statutory in accordance with the provisions of the Urgent Deficiencies Act. Under section 402 (b) an appeal is taken to the United States Court of Appeals for the District of Columbia. The special statutory threejudge procedure under the Urgent Deficiencies Act has been a matter of concern to both district and circuit justices since it disrupts the work of both courts. Accordingly, in 1942 the Conference of Senior Circuit Justices appointed a committee for the purpose of studying the whole matter and making a report to Congress. The committee

held extensive conferences with all the interested agencies and prepared a recommended bill, which was submitted to Congress. This bill was introduced in the House in January of this year. It is H. R. 1470. Under that bill the dual method of reviewing Commission orders is abolished."

Appeals from all Commission orders are to the appropriate circuit court of appeals. Hearings on this bill have already been held by a subcommittee of the House Judiciary Committee. It might therefore be desirable to withhold action at this time with respect to amending section 402 until after the Judiciary Committee has had an opportunity to report on its bill. Many of the points covered in section 22 are covered by H. R. 1470.

If the committee desires to proceed at this time with a revision of section 402 the Commission would like to recommend that in addition to the material already contained in the earlier hearings the committee should consider the advisability of abolishing the dual methods of appeals which is now contained in section 402 of the Communications Act. The Commission agrees with the findings of the Conference of the Serior Circuit Justices that the procedure prescribed by the Urgent Deficiencies Act is inconvenient both for the litigants and the courts.

If the committee agrees with this suggestion, it is recommended that section 402 (a) and (b) be deleted and subsequent subsections renumbered and that a new section 402 (a) be adopted reading as follows:

An appeal may be taken, in the manner hereinafter provided, to enjoin, set aside, annul or suspend any order of the Commission under this Act, Such appeal may be filed either in the circuit court of appeals for the circuit wherein the appellant resides or in the United States Court of Appeals for the District of Columbia.

Section 23 (S. 814, pp. 620, 947–948; H. R. 5497, pp. 794–795)

This section makes three important changes in section 405 of the act governing petitions for rehearing. It extends the time for filing petitions for rehearing from 20 to 30 days. This is satisfactory. It provides that the filing of petitions for rehearing shall operate as an automatic stay of the Commission's order, except where the order is necessary for the maintenance of existing service. Finally, it provides that a petition for rehearing need not be a condition precedent to judicial review except where a person seeking review was not previously a party to the Commission proceedings or relies on questions of fact or law on which the Commission has not been afforded a previous opportunity to pass.

In our testimony on similar provisions in S. 814 and H. R. 5497, we have opposed the provision for an automatic stay on the grounds that it would encourage the filing of dilatory petitions for rehearing. We still believe that a better procedure is that contained in the present provision in section 405 which leaves it to the Commission's discretion as to whether the effective date of Commission action should be stayed pending disposition of a petition for rehearing. However, in view of the fact that most applicants for new or improved facilities do not proceed with construction until after the petition for rehearing has been finally disposed of, we do not believe that the enactment of the provision will, in practice, result in injury to interested persons. With respect to the requirement concerning the filing of a petition.

for rehearing as a prerequisite to appeal, the subject matter has been covered by express provision in section 10 (c) of the Administrative Procedure Act. There is, therefore, no useful purpose to be served by legislating on the same subject in section 405 of the Communications Act.

Section 24 (S. 814, pp. 948-949; H. R. 5497, pp. 792-793)

This section would amend section 409 of the Communications Act so as to require that the person conducting a hearing should prepare and file an intermediate report concerning the disposition of the case in question. A similar provision was contained in both S. 814 and H. R. 5497, and we commented at length on it in our earlier testimony. The only matter I would like to add at the present time is that since the conclusion of hearings held on the bills referred to, Congress has enacted the Administrative Procedure Act which regulates in great detail for all agencies the manner in which hearings are to be held, the person who is to conduct the hearing, the type of report to be filed, et cetera.

Pursuant to this act the Commission has amended its rules and regulations so as to provide for an intermediate report to be filed by the hearing officer conducting the hearings. I can therefore see no useful purpose to be served by legislating on the same subject in section 409.

Section 25 (S. 814, pp. 77, 81–83; H. R. 5497, pp. 925–929, 932–934)

This section would add a new section 418 to the act prohibiting the Commission from taking any action which may result in discrimination between persons based on race, religious, or political affiliation, or kind of occupation or business association. One of the principal purposes of this section, according to the statement accompanying the introduction of the bill, is to prevent the Commission from adopting a policy which would deny newspapers the right to own radio stations. I do not think I have to testify at length to this committee concerning the Commission's viewpoint on this matter. This is a question which has had wide publicity in recent years, and the Commission's position is well known. As you are aware, we held extensive hearings in 1943 and 1944 on the entire subject of newspaper ownership of radio stations and came to the conclusion that this was a subject on which no blanket rule of any sort was appropriate, that newspapers should not be prohibited from becoming licensees, but rather that the fact of newspaper ownership or control should be taken into account, along with all other factors, in passing on applications on a case-to-case basis. Moreover, we believe that newspaper ownership per se is not necessarily a good or bad thing but must be considered in the light of all the surrounding circumstances. Thus, where there are two equally qualified applicants for a station serving a community and one of the two is the sole newspaper in the town, it may be advisable and in the public interest to grant the radio station license to the non-newspaper. We believe that this policy is designed to prevent a local monopoly of the principal media of mass communications or at least it encourages a diversity of an ownership of such media.

Thus, to the extent that this section would merely deprive the Commission of power to prohibit radio-station ownership by newspapers or any other group, it merely represents present practice. From a