was available to do the job, so someone else from the outside came in and did it. So your example would not have had a thing in the world to do with the progress of the art.

Mr. MILLER. Maybe that is the answer.

Senator MCFARLAND. Outside capital goes into a place when and where the local people cannot do the job. Someone comes in and says, here is an opportunity for me to put my money in and do this job.

Mr. MILLER. Is that the only case? Is there not sometimes bitter competition between the local people and someone who comes in from the outside? I would not ask you the question, because you do not answer questions, but I think that is frequently the case.

Senator MCFARLAND. I will answer the question. Certainly, but here we are granting a monopoly to a licensee. You have to choose. If it was free territory and we could allow all who desired to come in, why, that would be fine. But if we are going to grant a monopoly, the local man comes nearer knowing what the people want and need and is more deserving of having the monopoly under the public inter

est test.

Mr. MILLER. We discovered there is not much of a monopoly where, in Tucson, they have granted five licenses in that community. I make no objection to it. I think they ought to grant as many as there are frequencies, and to as many as are qualified to ask for them. At the present time we have an international situation in which we are demanding the lifting of the iron curtain. We are demanding respect for freedom of communications without limitation. I suggest that to be consistent we should be most anxious to protect to the uttermost limit the guarantees of our own first amendment. This is certainly no time to be breaking down the guarantees of freedom of speech and press and other forms of communication. Thank you.

The CHAIRMAN. Thank you, Mr. Miller.

Mr. MILLER. Thank you.

The CHAIRMAN. We have here communications from 13 other people who would like to be heard this afternoon, and we have less than approximately 45 minutes to give to them. I am going to suggest, since I believe 5 of these persons desiring to appear are also members of the NAB organization, and to express the hope that they will file. their briefs, and, unless there is something very particular and special in what they filed which they want to amplify a bit, that they rest on their briefs, because we are moving much more slowly than I had anticipated.

The first on the list following Judge Miller is Mr. Petty.

STATEMENT OF DON PETTY, GENERAL COUNSEL, NATIONAL ASSOCIATION OF BROADCASTERS, WASHINGTON, D. C.

Mr. PETTY. I am going to discuss the appellate sections. I have prepared a statement which I filed last night. I think I can go through it very fast, and there may be some points which you may want to ask questions about. I will highlight them and will be glad to answer any questions.

The CHAIRMAN. I think with due regard to all that want to be heard, unless you have some statement that you want to make in amplification of the brief, I think you better file your brief.

Mr. PETTY. I would like to have the brief made a part of the record, if I may.

The CHAIRMAN. It will be inserted in the record.

Mr. PETTY. I will point out three very short points in about 3 minutes.

The CHAIRMAN. Very well.

Mr. PETTY. This does not include questioning, however. I will hold myself to that time. If you will read my brief, that is all I want. I would like to point out three things.

The CHAIRMAN. Identify yourself.

Mr. PETTY. My name is Don Petty. I am general counsel of the National Association of Broadcasters.

In the first place, this bill, S. 1333, însofar as it relates to the appellate procedural sections, is going in the correct direction in my opinion. I like very much the ideas of the cease-and-desist order principles which have been placed in the bill.

However, I would like to point out that this proposed bill limits and restricts rights granted to citizens by the Administrative Procedures Act passed by Congress in 1946. Let me give you one example.

Under the declaratory-order section of S. 1333, the section which was being discussed yesterday, the granting of relief would be permissive only. It is limited in that it does not include uncertainties; and, unless the words "sound discretion" as used in the Administrative Procedures Act are included in this section, issuance of declaratory orders would be permissive only with the Commission. I have fully discussed this subject, as well as other inconsistencies between S. 1333 and the Administrative Procedures Act, in my written statement.

I would like to call your attention particularly to the subjects of renewals and revocations, which I have discussed in my written statement. Concerning revocations, as the proposed bill is written, the Commission would first issue a cease-and-desist order under certain circumstances, and then it would have the power to revoke for, among other things, the violation of the cease-and-desist order. In my written statement I suggested that the Commission use a cease-and-desist-order method, but I go further. In the event they want to institute an action for revocation, then the Commission would recommend that revocation to the United States District Attorney in and for the district in which the broadcaster is located. Thus, the United States district attorney, rather than the Commission, would be in charge of revocation proceedings.

The CHAIRMAN. Would you file that suggestion in draft form for our consideration?

Mr. PETTY. I have already prepared the suggested draft, and it is included in my statement filed with you.

Senator MCFARLAND. Do you feel that generally speaking there is a need for legislation on communications?

Mr. PETTY. At the present time the Administrative Procedures Act sections apply, and there is no question about it. S. 1333 should

not limit any of the sections of the Administrative Procedures Act. Senator MCFARLAND. I do not mean necessarily just on procedural matters, but the whole field. Do you think there is need for legislation? Mr. PETTY. That is a hard question to answer. As far as the procedural and appellate sections are concerned, I would much prefer to see them tied into the Administrative Procedures Act closer than they are, and there is a very good reason for that. When the WhiteWheeler bill was first written, the Administrative Procedures Act was not in effect. That only came into effect last year. It is understandable that in S. 1333, many of the sections of which are pulled out of the White-Wheeler bill, that there would be inconsistency with the Administrative Procedures Act.

The CHAIRMAN. I think you have said something worth while there. Senator MCFARLAND. We are just talking about procedure. What I was wondering, however, do you think there is a general need for legislation in regard to, or amendments to, the communications act? Mr. PETTY. Personally, no.

Senator MCFARLAND. The point that I was trying to arrive at, Mr. Chairman is this. Judge Miller suggested that he would be willing to write a bill. I thought maybe if the broadcasters would write up the legislation they thought ought to be adopted, and submit the bill, while, as I said to Judge Miller, I did not want to say that I would sponsor the bill nor would I say in advance that I would sponsor legislation that the Federal Communications Commission would write, but if they would all submit the bills that they want, maybe we could make comparisons, and see just exactly what they do want, if anything.

Mr. PETTY. I believe that is a very good suggestion, and along the same line, at the time this S. 1333 was introduced, the chairman issued a statement concerning this hearing today. The suggestions which are being made here to you gentlemen today are not suggestions intended to be critical, but rather intended to be helpful, because in the statement you indicated that you did want suggestions presented to you here at this hearing. We would be very happy to work with you, and to work with Mr. Cooper and you, Mr. Chairman, in any way.

Senator MCFARLAND. I do not know that we need to have anyone work with us, except to give us the kind of a bill that you think ought to be adopted, and what ought to be in this law. Then, maybe, we can get something from the FCC.

Mr. PETTY. If I have more time than I had to prepare for this hearing, I would be glad to do it.

Senator MCFARLAND. If you do not think anything should be done, then you will not have to work. That is what I was trying to find out.

Mr. MILLER. I shall be very happy to see that our general counsel does prepare such a bill.

Senator MCFARLAND. He says we do not need one. You will be the one that has to prepare it.

Mr. PETTY. Oh, no, Senator. I'll be happy to prepare a bill.

I have discussed the matter of revocations briefly, and as I have said, I place that in the Federal court. In order to tie in the renewal section along with the revocation section, I have suggested that the

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renewal will, except for revocation proceedings, for all practical purposes, be automatic. The Commission would have to renew unless they commenced revocation proceedings at least 30 days prior to the termination of the license period. In other words, those two sections have been tied in together. It is a procedural change which throws. the subjects into the Federal court. Unless you have some questions, I think that is a very brief résumé of the principal points covered in my written statement on file.

The CHAIRMAN. Thank you very much.
Mr. PETTY. Thank you.

(The prepared statement is as follows:)

STATEMENT OF DON PETTY, GENERAL COUNSEL OF NATIONAL ASSOCIATION OF BROADCASTERS

My name is Don Petty. I am general counsel of the National Association of Broadcasters. appreciate the opportunity of appearing before you in connection with S. 1333.

I shall discuss the procedural and appellate sections of the proposed legislation.

S. 1333 AND THE ADMINISTRATIVE PROCEDURE ACT

The Administrative Procedure Act, which was enacted in 1946, was the culmination of more than 10 years of serious study given by Members of Congress to the problem of administrative law and procedure. The functions and operation of numerous Government agencies were objectively analyzed and studied. None was singled out for punishment. Through the Administrative Procedure Act Congress intended to protect the people of this country by insuring a government of law rather than of men.

In view of this, it is apparent that S. 1333 should guarantee every citizen, as a minimum, all of the rights guaranteed by the Administrative Procedure Act. However, a geneeral comparison of some sections of S. 1333 with the corresponding sections of the Administrative Procedure Act illustrates that to accomplish this result the provisions of the Administrative Procedure Act should be incorporated specifically in S. 1333.

1. Section 21 of S. 1333 relates to declaratory orders. I assume that it was intended to incorporate the section as subsection (e) due to the fact that the existing subsection (d) of 401 of the Communications Act is not repealed.

Section 21 of S. 1333 grants the Commission the right to issue a declaratory order only "in a case of actual controversy." On the other hand, under section 5 (d) of the Administrative Procedure Act the Commission is authorized to grant a declaratory order "to terminate a controversy or remove uncertainty." The need for the use of declaratory orders by administrative agencies to remove uncertainty is widely recognized. In the final report of the Attorney General's Committee on Administrative Procedure (pp. 30, 31) it is stated:

"In yet another respect there is room for developing predictability in the administrative process, without in the least weakening its ability to adopt itself to new needs or further experience * * * But the declaratory judgment attainable through the courts is not the answer to uncertainties which are present in the realm of administrative law. The time is ripe for introducing into administration itself an instrument similarly devised, to achieve similar results in the administrative field. The perils of unanticipated sanctions and liabilities may be as great in the one area as in the other. They should be reduced or eliminated. A major step in that direction would be the establishment of procedures by which an individual who proposed to pursue a course which might involve him in dispute with an administrative agency might obtain from that agency, in the latter's discretion, a binding declaration concerning the consequences of his proposed action."

Section 5 (d) of the Administrative Procedure Act recognized that need and established for administrative agencies the same basic principles that govern

declaratory judgments in the courts.

See report No. 752 of Senator Pat McCarran, from the Committee on the Judiciary, relating to the Administrative Procedure Act, Senate Document 248, p. 204.

In addition, under section 21 of S. 1333 the issuance of the declaratory order is entirely permissive, wihle under the Administrative Procedure Act section 5 (d), issuance is required by the Commission in the exercise of its sound discretion. The language of section 5 (d) of the Administrative Procedure Act is to be preferred because it forces the Commission to act or refuse to act according to the well-established legal standard of sound discretion. Whether or not the discretion exercised is in fact and law sound is reviewable, as it should be, in court.

2. Section 22 (g) of S. 1333 relating to review by the court on appeal provides that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall appear clearly that the findings of the Commission are arbitrary or capricious. And section 22 (f) provides that the record upon appeal shall contain such information and material as the court may by rule prescribe.

However, section 10 (e) of the Administrative Procedure Act, relating to the scope of review provides, in part, as follows:

"(e) SCOPE OF REVIEW.-So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to consti-tutional right, power, privilege, or immunity; (3) in excess of statutory juris-diction, authority, or limitations, or short or statutory right; (4) without ob-servance of procedure required by law; (5) unsupported by substantial evidence in any case subject to the requirements of sections 7 and 8 or otherwise reviewed on the record of an agency hearing provided by statute; In making

the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party, and due account shall be taken of the rule of prejudicial error."

It is self-evident that section 10 (e) of the Administrative Procedure Act provides a much broader and more effective review of Commission action. In view of the virtually unanimous support of the principles of the Administrative Procedure Act, I see no reason for narrowing those principles here.

In addition, S. 1333 leaves the content of the record on appeal to be determined by the court. But section 10 (e) specifically prescribes the contents, thereby establishing rights and assuring uniformity.

It is clear from a comparison of the two sections and the statement of Senator White on the introduction of S. 1333 that section 22, subsection (g) is intended to restate existing law found in section 402 (e) of the Communications Act of 1934, as amended, and that it does not take into consideration section 10 (e) of the Administrative Procedure Act. In my opinion, in considering this subject, section 10 (e) of the Administrative Procedure Act should be followed.

3. Section 24 deals with hearings before the Commission and, according to the statement of Senator White on the introduction of the bill, is designed to make definite and certain the procedure to be followed by the Commission where a hearing is required.

Again, this subject is covered by section 8 (b) of the Administrative Procedure Act. Although apparently S. 1333, section 24, was intended to clarify the hearing procedure before the Commission when compared with Administrative Procedure Act, section 8 (b), many ambiguities and uncertainties are apparent due to the use of different language and different treatment of the subject in the two sections.

For instance, section 24, of S. 1333 at page 40, lines 15 through 18, provides: "Any final decision, order, or requirement shall be accompanied by a full statement in writing of all the relevant facts upon each issue submitted for hearing as well as conclusions of law upon those facts."

On the other hand, section 8 (b) of the Administrative Procedure Act, dealing with the same subject matter, provides in part as follows: "All decisions (including initial, recommended, or tentative decisions) shall become a part of the