record and include a statement of (1) findings and conclusions, as well as the reasons or basis therefor, upon all the material issues of fact, law, or discretion presented on the record; and (2) the appropriate rule, order, sanction, relief, or denial thereof." It should be noted that S. 1333, section 24, requires "a full statement in writing of all the relevant facts" but does not require findings of fact. However, section 8 (b) of the Administrative Procedure Act requires "findings and conclusions, as well as the reasons or basis therefor." Again, the two quoted sections differ in that said section 24 uses the words "all the relevant facts," while said section 8 (b) uses the words "material issues of fact, low, or discretion presented on the record." The result of this difference in language is, at the best, ambiguity and confusion and, at the worst, a retreat from the principles of the Administrative Procedure Act by a narrowing of the right of appeal. Therefore, I suggest that section 24 of S. 1333 be deleted and section 8 (b) of the Administrative Procedure Act be substituted. I believe it is clear from the foregoing illustrations that in order to assure the rights guaranteed by the Administrative Procedure Act and to avoid possible ambiguity and consequent confusion those sections in S. 1333, dealing with the subject matter covered by the Administrative Procedure Act, should conform to that act. Conformance can be achieved in either of two ways, by amending the specific sections of S. 1333, or by adding a simple additional provision to S. 1333 to be identified as section 26, as follows: "Nothing in this Act shall be construed to be in derogation of any right secured to any person under the provisions of the Administrative Procedure Act." Since the passage of the Administrative Procedure Act, the question has been raised whether or not section 5 (c) thereof requiring the separation of functions in administrative agencies, applies to the Federal Communications Commission in respect to its action on applications for licenses. That section provides, in part, as follows: "This subsection shall not apply in determining applications for initial licenses * * *"" The legislative history of this part of section 5 (c) of the Administratice Procedure Act makes it clear that the exception was not intended to be invoked by an agency where to invoke it would preclude fair procedure. In the Senate committee report, Legislative History, Senate Document 218 (pp. 203, 204), it was stated as follows: * * The exemption of applications for initial licenses frees from the requirements of the subsection such matters as the granting of certificates of convenience and necessity which are of indefinite duration, upon the theory that in most licensing cases the original application may be much like rule making There are, however, some instances of either kind of case which tend to be accusatory in form and involve sharply controverted factual issues. Agencies should not apply the exceptions to such cases, because they are not to be interpreted as precluding fair procedure where it is required." Again, in the House report, Senate Document 248 (p. 262), it was stated as follows: * * "The exemption of applications for initial licenses frees from the requirements of the section such matters as the granting of certificates of convenience and necessity, upon the theory that in most licensing cases the original application may be much like rule making *. There are, however, some instances of either kind of case which tend to be accusatory in form and involve sharply controverted factual issues, to which agencies should not apply the exceptions because they are not to be interpreted as precluing fair procedure where it is required." In view of this, it is clear that the licensing function of the Federal Communications Commission is the very type of procedure which was not intended to be excepted from the basic rules of adjudication set forth in section 5 of the Administrative Procedure Act. Proceedings on applications for licenses for radio broadcast stations invariably "tend to be accusatory in form and involve sharply controverted factual issues." Therefore, I suggest, that to secure certainty of procedure, the following subsection be added to section 5 of S. 1333 at the end thereof as subsection (k): "In every case required by this Act to be determined on the record after opportunity for hearing the same officers who preside at the reception of evidence shall make the recommended decision or initial decision except where such officers become unavailable to the Commission. Save to the extent required for the disposition of ex parte matters as authorized by law, no such officer shall consult any person or party on any fact in issue unless upon notice and opportunity for all parties to participate; nor shall such officer be responsible to or subject to the supervision or direction of any officer, employee, or agent engaged in the performance of investigative or prosecuting functions for the Commission. No officer, employee, or agent engaged in the perforance of investigative or prosecuting functions for the Commission in any case shall, in that or a factually related case, participate or advise in the decision, recommended decision, or Commission review except as witness or counsel in public proceedings: And provided further, That the Commission shall not employ any attorneys or other persons for the purpose of reviewing transcripts of hearings and/or preparing drafts of opinions and/or findings of fact except that any legal assistants assigned separately to any Commission member may for such Commission member review such transcripts and prepare such drafts. No examiner's report shall be reviewed either before or after its publication by any person other than a member of the Commission or his legal assistant, and no examiner shall advise or consult with the Commission, with respect to exceptions taken to his findings, rulings, or recommendations." This section would remove all existing doubt and make complete the seperation of the adjudicatory and the investigatory and prosecuting functions contemplated by the Administrative Procedure Act. RENEWAL OF LICENSES Section 10 of S. 1333 provides for amendment of section 307 (d) of the Communications Act of 1934, as amended, which relates to renewal of licenses. In this connection, at the outset I quote Chief Justice Groner of the United States Court of Appeals, speaking of the identity of the interest of the public and the broadcaster in the renewal of a broadcasting license: "The installation and maintenance of broadcasting stations involve a very considerable expense. Where a broadcasting station has been constructed and maitained in good faith, it is in the interests of the public and common justice to the owner of the station that its status should not be injuriously affected, except for compelling reasons (Chicago Fed. of Labor v. Fed. Radio Comm., 59 App. D. C. 333, 41 F. (2d) 422)" (Journal Co. v. Federal Radio Commission, 48 F. (2d) 461, 463). To secure the "interests of the public" and achieve "common justice to the owner of a station" and at the same time to stay within the framework established by Congress in the Communications Act of 1934, as amended, I suggest the following procedural amendment to S. 1333: "SEC. 10. Subsection (d) of section 307 of such Act is amended by striking out the word 'may' where it appears in the last sentence thereof and substituting the word 'shall' therefor; by striking out the following by striking out from said subsection the following language appearing in the last sentence thereof: ', but action of the Commission with reference to the granting of such application for the renewal of a license shall be limited to and governed by the same considerations and practice which affect the granting of original applications.'; by inserting a period after the word 'licenses' preceding such language, and by inserting the following sentence at the end of said subsection: When application is made for renewal of license which cannot be disposed of by the Commission under the provisions of section 309 (a) hereof, the Commission shall employ the procedure specified in section 309 (b) hereof and pending hearing and final decision pursuant thereto shall continue such license in effect: substituting the following therefor: "unless, upon the receipt of such application, the Commission forthwith requests and there is forthwith instituted an action for revocation, as provided in section 312 hereof: Provided, however, That pending the grant of such application by the Commission and/or the final judgment in such action, including the final judgment on appeal, if an appeal is taken, the prior license shall continue in full force and effect.' [Legend: Language italicized, suggested addition; language lined out to be eliminated.] Such a procedural change would meet a long-felt need in the broadcasting industry. It would provide that security necessary in the conduct of any business requiring the substantial capital investments required to permit the proper development of broadcasting. It would also insure sound planning, sound operation and, consequently, better service to the public. The theory upon which my proposed section is based is not new. Under the patent and copyright acts exclusive rights are granted for 17 and 28 years, respectively. Congress has always recognized that such exclusive rights are neces sary to bring forth those inventions and intellectual creations without which our society would not exist as we know it. REVOCATION OF LICENSES Section 13 of S. 1333 would amend section 312 of the Communications Act of 1934, as amended, relating to revocations. I agree that the present revocation section should be amended. However, I go further than S. 1333, section 14, and suggest that the plan for revocation be completely revamped. Accordingly, I propose that that portion of section 14 of S. 1333, amending section 312 (a), be deleted, and the following substituted therefor: "SEC. 312. (a) Upon request of the Commission it shall be the duty of the district attorney of the United States in and for the district in which a station is located or is proposed to be located to institute in the United States District Court in and for said district and to prosecute under the direction of the Attorney General of the United States a civil action for the revocation of a construction permit or station license. In any such proceeding the court, in the exercise of its sound judicial discretion, may revoke a construction permit or a station license because of conditions which would have warranted the Commission in refusing to grant a license on an original application, or for violation of or failure to observe the terms and conditions of any cease and desist order issued by the Commission pursuant to subsection (d) hereof: Provided, however, That no such action shall be instituted and no such revocation shall be ordered on the basis of any act of the construction permittee or station licensee done more than three years prior to the date of the institution of such action, or done prior to the date the application for the permit or license which is the subject of the action was filed, whichever is earlier. "(b) In any such action the rules of procedure and evidence applicable to other civil actions in the United States district courts shall be applied. "(c) The parties to any such action shall have the same right of appeal or review as is provided by law in respect of other decrees and judgments of said court." The revocation of a license is death to a radio broadcaster. Consequently, the fundamental principles of our law require that this extreme penalty be inflicted in the first instance only by a court in the community in which he operates, and reviewed on appeal by a court in his general area. Only the people in any community are familiar with its needs. Only they are able to balance the extent to which a broadcaster performs his duty to serve those needs against the alleged grounds for revocation of his license. Why, then, should the termination of his business, representing his time and money and effort in serving his public, be in the power of men who are strangers to his operation and to the needs of that public? Furthermore, in the constant threat of revocation by the licensing agency lurks a twofold danger. First, it serves to discourage the investment of substantial capital and to attract the great ability necessary to give the best in broadcast service. Second, it enables the Commission to exercise arbitrary regulatory power without fear of effective 'challenge. Few broadcasters dare risk their licenses by contesting regulations or orders, no matter how doubtful their legality may be. In addition, not to be overlooked is the great saving in time and money to licensees who must defend themselves in revocation proceedings, as well as to the Government. Finally, it cannot be said that this suggested procedure will hamper the Commission in the proper performance of its regulatory function, for S. 1333, section 14 (b), gives the Commission authority to issue cease and desist orders. This is a sound method of enforcing compliance by licensees with the Communications Act of 1934, as amended. Its effectiveness is demonstrated by its successful use in other regulatory statutes, as, for example, the Federal Trade Commission Act. COMMISSION HEARINGS Section 12 of S. 1333 would amend section 309, Communications Act of 1934, as amended, relating to hearings on applications for licenses. From subsection (b) at line 23 I would strike the words "economically or.' The Supreme Court has established, in FCC v. Sanders Brothers (309 U. S. 470), that economic injury to an existing station is not a proper issue before the Com mission in the determination of whether to grant or withhold a radio broadcast license. As was there said, "If such economic loss were a valid reason for refusing a license this would mean that the Commission's function is to grant a monopoly in the field of broadcasting." Again, "Congress intended to leave competition in the business of broadcasting where it found it, to permit a licensee who was not interfering electrically with other broadcasters to survive or succumb according to his ability to make his programs attractive to the public." I believe firmly in this principle. To permit those alleging economic injury, without more, to contest the grant of applications is not only to violate this principle but is to complicate and burden both the Commission and the participants in hearings. In addition to this suggested change in section 12 of S. 1333, I would also add a new paragraph to the end of subsection (b) substantially as follows: "In the event there are two or more applications for station licenses, the granting of more than one of which would result in the violation of the regulations of the Commission made pursuant to section 303 (f) hereof, and the Commission determines that the grant of more applications than are permitted under said regulations would except for those said regulations serve the public interest, convenience or necessity substantially equally, it shall make its grants on the basis of the order of the priority of their filing." Where competing applicants are equal in all respects, but their simultaneous operation would result in prohibited interference, this section would require the Commission to grant the license to the applicant who first filed his application. It appears to me that such a procedure offers a practical answer to the question often asked by the Commission: How can the Commission choose between otherwise qualified applicants if it cannot consider their prospective programs? Furthermore, it would reduce the possibility of the filing of applications in bad faith for purposes of delay. The seriousness of this problem was recognized by the United States Court of Appeals in Colonial Broadcasters v. FCC (105 F. (2d) 781, 783), where the court said: * it is neither fair nor reasonable, [to put an applicant] in hodgepodge with later applicants whose records are not made at the time his application is heard. For to do so would encourage 'strike' applications and would replace a fixed and easily applied standard with one of unlimited individual discretion, and this, we think, should be avoided." APPLICATIONS The fundamental necessity for a clear recognition by the Congress that the first amendment guarantees free speech to radio broadcasters has been made clear by other witnesses. As section 308 (b) of the Communications Act of 1934 now reads the Commission is authorized to procure information concerning applicants' "character" and “other qualifications" and "the purposes for which the station is to be used" and "such other information as it may require." The Commission construes these terms as being sufficiently broad to justify it in delving into practically anything. Consequently in order to prevent the circumvention of the mandate of the Constitution and the will of the Congress this section must be amended. I suggest that section 308 (b) of the Communications Act of 1934, as amended, be amended as follows: "(b) All such applications shall set forth such facts as the Commission by regulation may prescribe as to the citizenship, character, and financial, and technical, and other qualifications of the applicant to operate the station; the ownership and location of the proposed station and of the stations, if any, with which it is proposed to communicate; the frequencies and the power desired to be used; the hours of the day or other periods of time during which it is proposed to operate the station; the purposes for which the station is to be used; and such other information as it may require. and the class of station proposed by the applicant, as determined under section 303 (a) hereof. The Commission, at any time after the filing of such original application and during the term of any such license, may require from an applicant or licensee further written statments of fact concerning the matters set forth in this subsection to enable it to determine whether such original application should be granted or denied or such license revoked whether revocation of such license should be requested, as provided by section 312 hereof. Such application and/or such statement of fact shall be signed by the applicant and/or licensee under oath or affirmation." [Legend: Language italicized, suggested addition; language lined out to be eliminated.] DEFINITIONS Sections 2 and 3 of S. 1333 amend section 3 of the Communications Act of 1934, as amended, with respect to definitions. I have the following specific suggestions with respect to these: Section 2 amending section 3 (0) of the Communications Act of 1934, as amended, should be stricken, so that there will be no doubt that the dissemination of radio communications intended to be received by the public indirectly, as for instance, by the employment of auxiliary and relay stations will not be subject to regulation under the common carrier provisions of the act. No amendment to section 3 (o) of the Communications Act is needed because it accomplished the desired result. I suggest that section 2 of S. 1333 amending section 3 (p) of the Communications Act of 1934, as amended, be amended as follows: "(p) "Network broadcasting' or 'chain broadcasting' means the simultaneous or delayed broadcasting on a single broadcast band of identical programs by two or more connected stations however connected." [Legend: Language italicized, suggested addition; language lined out to be eliminated.] The purpose of this suggested amendment is to make possible the rapid development of new broadcasting, such as FM, by permitting established stations to broadcast, as they now do, on both bands simulatenously without subjecting themselves to regulation as being engaged in chain broadcasting. In addition, there is no apparent reason for possibly changing the established meaning of the word connected in its context in 3 (p) of the Communications Act. I suggest that section 3 of S. 1333 adding section (dd) to section 3 of the Communications Act of 1934, as amended, defining "network organization," be deleted. Besides being confusing in its application, it constitutes another restriction on the right of the licensee to freely contract in connecion with the operation of a broadcast station. Respectfully submitted. NATIONAL ASSOCIATION OF BROADCASTERS, The CHAIRMAN. We will next hear Mr. Willard. STATEMENT OF A. D. WILLARD, JR., EXECUTIVE VICE PRESIDENT, NATIONAL ASSOCIATION OF BROADCASTERS, WASHINGTON, D. C. Mr. WILLARD. My name is Arthur D. Willard, Jr. I am the executive vice president of the National Association of Broadcasters, representing 1,300 United States broadcasting stations and networks. I have had 20 years of sales, programing, and management experience in radio. Section 16 of this bill would amend section 326 of the Communications Act of 1934. This section 16 was, undoubtedly, intended to limit the powers of the Commission. It specifically prohibits the Commission from interfering with the business of the licensee and from affecting or controlling the substance of any material to be broadcast by any radio broadcast station. In these two particulars, the authors of the bill have apparently sought to protect the broadcasters from possible encroachments by the Federal Communications Commission. Indeed, NAB has long sought just such a definition of FCC's powers. The establishment and strict interpretation of these two principles would go a long way toward safeguarding freedom of speech by prohibiting both direct control of programs or indirect control through economic interference or economic sanctions. It is a source of great disappointment to broadcasters that the authors of the bill, having specifically shown every intent to remove the Commission from the control of the pro |