The CHAIRMAN. I think I might truthfully say that I am responsible for the provision in the law that broadcasters are not common carriers.

Mr. ARNOUX. For which we thank you, sir.

The CHAIRMAN. That was put in 20 years or more ago. There have been a lot of changes since then.

Mr. ARNOUX. I know you have heard enough about the first amendment, so I will not even mention it. But if it becomes a common carrier, you are directing and definitely controlling broadcasting, with all of the implications that that trend brings you into. And I hope that that will be avoided.

The CHAIRMAN. As I have said, I think we are verging in that direction. It is not anything that I am enthusiastic about. But that is the trend, in my belief.

Mr. ARNOUX. I hope that in writing the law, you can turn the wheel a little bit, and we can verge the other way. I think the verge is in the wrong direction.

Senator MAGNUSON. Do you think there should be any suggestion by the Government as to the rates charged on the radio?

Mr. ARNOUX. Very definitely not. I think that in a system of free enterprise which radio now is, competition will take care of that.

Senator MAGNUSON. In other words, because there is more competition coming into the field?

Mr. ARNOUX. There is plenty of competition. In our area we have eight stations and one newspaper. I assert that there is no fear of monopoly, at least in our area, and that is increasingly becoming prevalent in every community of the country of any size.

Senator MAGNUSON. In other words, the old days of making a hundred percent on your investment may be considered over with.

Mr. ARNOUX. Yes, sir. In reference to section 15 (c) of the bill, again I find myself in full accord, not only with Chairman Denny, but with a number of other speakers. I will just add my word to it: That I feel that that section should be amended or rewritten to prevent such groups as the Grange and the Farmers Union, the PAC, the parentteachers, and any others who have a stake in an election from being permitted to buy time.

This particular section 15 (c) prohibits them from doing so. And again and again in our local elections we have had such groups desiring to buy time and have sold them time. In fact, we feel they have a right to the air. I feel very deeply that it is the duty of a radio station to make these facilities as fully available as possible in political questions. And I cannot speak for other stations, but we unhesitatingly cancel commercial programs, and many of them, during an election, to bring that about.

I would like to suggest that you make it as liberal as possible in permitting groups who have an interest in an election to have time on the air. There is one point there that I think should be in the law, and that is that the amendment should also include that a legally qualified candidate, or a legally qualified political party must be legally qualified in the State in which the station is located. Now, that does not seem important, but it often becomes very important, because the State laws vary very greatly. In our own particular State, if two

people form a political party, they can become legally recognized. Other States have much more difficult and complex forms of recognition. I do not think that the station should be compelled to observe legality in New York State when it is not legal in Virginia. That is just a point, but I think that it would be helpful.

I feel that section 16 (d) of the bill is too vague, because it gives each different view a right to buy time. We have had cases down in Norfolk where there were five or six or seven or eight different views on a rather complex political question, such as the sewage disposal commission. It might require the station to completely dislocate its program structure, and for a period of quite a number of weeks have nothing but political talks, if the situation was hot enough. Now, frankly, I have made an objection, and I am not entirely sure of the method of overcoming it. But I think it needs study. Because you can have eight or nine different views on a complex political question that is not affecting a candidacy. That I would suggest you look into. It would certainly result in an overbalance of your program, and an annoyance to your listeners.

Then again, in reference to section 15 (e) of the bill, which is the restriction as to political broadcasts so that none can be given on either the day of the election, or the day before the election, I am diametrically opposed to that part of the amendment that prohibits political broadcasts the day before the election. That is the time when the interest is highest. It is the time when the political broadcasts are most appropriate. And it often happens, since elections are usually on Tuesday, and neither candidates nor stations go in for speeches on Sunday, in an interesting election your last message from a candidate to the voters would be on the previous Saturday, 3 days before the election. I don't think that is practical, and I would like to suggest to you gentlemen that you review that particular portion of the bill. Also, I think it is discriminatory, because Senator White can have a public meeting the night before the election and speak, and it gives the billboards, the newspapers, and any group the privilege of reaching the voters the day before the election, but denies it to radio. I think that should be looked into.

One thing that touches my heart very closely is section 15 (g) of the bill, because I have had personally so much trouble in trying to act as Solomon, and saw the baby in half in elections, and get an even division. I think that equal opportunity in its relation to time should be spelled out much more precisely. I think perhaps you could designate segments of the broadcast day which follow industry practice. By that I mean that if one candidate is given time at 7:30 at night, the other candidate can receive equal opportunity between 6 and 11 at night, when the audience is about the same. In the morning between 8 and 12, and in the afternoon between 12 and 6, that same principle can be applied. And during the broadcast week before the election, if you give a candidate time on Monday, equivalent time on Wednesday would be equal. Now, you may feel that that is not important, but we have had that come up again and again. I would like to see these things spelled out as far as political candidates are concerned, if possible.

In reference to section 17-and my time is almost up- of the act, that is a public question subject to vote. The word "substance" is

too vague, I feel. If it is meant that you cannot delete the text of a speaker on a controversial question once you have agreed to broadcast the program, other than taking out libel or slander, or defamatory remarks, or indecent language, then I would suggest that you substitute the word "context" which will limit the broadcasting station solely to taking out libel or slander. This section further puts a very grave burden on the licensee, in that he must decide what is libel or slander, and so forth. If he decides in conflict with the speaker and this applies to candidates' talks too-he may be faced with a complaint to the FCC that it was not slander and it was not libel, and he had no right to take it out. That goes to the Commission.. The Commission, in turn, finds itself faced with making a judicial decision as to whether the items did indeed constitute libel, slander, or the like. I think the Commission would not like to find itself in that position. I think the practical result of this section, as written will tend to diminish the broadcasting of public questions, rather than increase it, because of the risk the broadcaster takes. And my suggestion is that you exempt the broadcaster from damages for slander and libel and so forth, if you carry out the provisions of this amendment as it is written.

If this is not done, the licensee should be given a specific right to cut the speaker off the air if he departs from his prepared speech after it has been cleared for slander and libel. It has often happened that a speaker has submitted his talk, and in the middle of the talk he departs from it and utters remarks that have caused damage suits to stations. I believe it is only equitable that the station should be protected from such a danger if not permitted to censor the remarks.

That concludes my testimony, unless you have some questions.
The CHAIRMAN. We thank you very much.

Mr. ARNOUX. Thank you, gentlemen.

(Mr. Arnoux's complete statement is as follows :)

STATEMENT OF CAMPBELL ARNOUX, PRESIDENT AND GENERAL MANAGER, RADIO STATION

WTAR, NORFOLK, VA.

My name is Campbell Arnoux. I am the president and general manager of radio station WTAR, Norfolk, Va. I am also a member of the board of directors of the National Association of Broadcasters.

In reference to section 8 (j) of the bill which amends subsection (j) of section 303 of the act; such amendment provides that uniform systems of financial reports may be required from the licensee of each station doing a particular type of broadcasting, which reports shall disclose the financial statements of any such radio organizations; and which further provides that this information may be used by the Commission on its order "in any proceeding before the Commission." This bill seeks to prohibit the Commission from regulating the business management of any radio station or to fix or regulate rates charged by any station. The filing of such detailed financial reports is, therefore, unnecessary. Stations are not common carriers, and this detailed information of a confidential financial nature is not within the scope or province of the Commission. Further, the amendment gives the right of the Commission to make such information public in any hearing or proceeding of any kind before the Commission, which could act to the damage of the station and the advantage of its competitors in many instances.

The bill, on the contrary, should carry a provision prohibiting the Commission from inquiring into the financial affairs of licensees, or requiring regular financial reports, as contemplated in the amendment; and stipulate that only such financial information be furnished as is necessary to convince the Commission, in the case of an applicant, that it is financially qualified to carry out the terms of the license

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sought; or, at renewal time, to review the financial condition of the licensee to the extent that it may determine if it is still financially sound and able to discharge its obligations under the terms of its license. Any further information of this character is unnecessary and against the spirit and provisions of section 16 of the bill limiting the Commission's powers in regard to regulation of the business of the licensee. Further, a provision should be written into the bill requiring the Commission to keep all such information, as may be necessary to it to determine financial responsibility in the case of a grant or a renewal, confidential at all times.

In connection with section 9, subsection (b) of section 307 of the act, which is :amended by section 9, subsection (b) of the bill, the final clause of the amendment, which reads "giving effect in each such instance to the needs and requirements thereof," should be eliminated and the words "consistent with standards of good engineering practice" be substituted therefor.

As it now reads, this last clause transfers the matter of station grants to a quasi common-carrier status and brings into the Commission's decision, factors of competition. The Commission would have to decide whether the grant would be proper to eliminate a condition of monopoly, or, on the converse, whether it should be denied because to grant same would create too much competition from an economic standpoint. Other sections of the bill do not give the Commission such powers. It would tend to regulate the business of broadcasting in any given community and to regulate the business of broadcasting is to invoke the powers of censorship through the pocketbook-which can be just as effective as any other type of censorship.

In reference to section 15 (c) of the bill, which amends section 315 of the act, this amendment prohibits sale of time to individual citizens who wish to speak for or against the candidacy of an applicant for public office unless such individual is approved in writing as the spokesman or representative of a candidate. It also would act to prohibit the sale of time for the same purpose to organizations such as the Grange, the Farmers' Union, the PAC, or any other organization of citizens who have a stake in an election but are neither the representative of a candidate nor a recognized political party. These persons and individuals, under the general safeguards governing political campaigns, should not be denied a right to the air.

This amendment should also be rewritten to define a legally qualified candidate or a political party as one which is legally qualified in the State in which the station is located.

In connection with section 15 (d) of the bill, which amends section 315 of the act, this subsection as amended is to vague. There might be a large number of persons or organizations with varying shades of opinion in connection with a public measure to be voted on. How is it to be decided which pesron or organization shall give the "difference" view in the event that 50 such persons make application to do so? As written it could be interpreted that all who apply must be given equal opportunity to view their different views. This provision might well result in no discussion of the matter on the air as a defense measure on the part of the station to avoid excessive time being allotted, and putting the over-all program structure of the station badly out of balance to the detriment and annoyance of the listeners.

In reference to section 15 (e) of the bill, which amends section 315 of the act, there is no valid reason whatever why political broadcasts should not be made the day before an election. Interest in an election is highest the final day of the campaign; listeners are most receptive to political message at that time and they are most appropriate in the program structure. As most elections are on Tuesday, and since most stations do not sell time for political programs on Sunday-nor do candidates wish to buy time on Sunday-this amendment, in many instances, would mean that the last broadcasts of a political campaign would be 3 days before the election on the previous Saturday. It appears to this witnes that such a restriction is in violation of the rights of free speech, as it says, in effect, “you can talk on certain days but you cannot talk on one day." It also is discriminatory against broadcasting as on other method of reaching the public is so restricted; newspapers, public meetings, billboards, films, and the like being permitted under our laws to give political messages to the people on any day at any time.

In reference to section 15 (g) of the bill, which amends section 315 of the act, the wording of this amendment is too vague and general. The word "approximate" in reference to the time of the day or night is too general and hard to administer by the station. "Equal opportunity" in its relation to time should be spelled out more precisely, by stipulation segments of the broadcast day that

follow industry practice as to "equal time," such as time between the hours of 8 a. m. to 12 noon; 12 to 6 p. m. and 6 to 11 p. m., with the proviso that any equal segment of time within these time divisions be considered equal" from the standpoint of the amendment. It should also be provided that equal opportunity can be accorded by the station by alloting equal time as defined above on any day or night of the week of the campaign, with the exception of the final and last day of the campaign when the equality of time would have to be observed on the same day, within the same time division.

In reference to section 17, part 1 of title III of the act, which is amended by adding two new sections entitled "Discussion of Public or Political Questions," this section seems to be vaguely written and, therefore, subject to conflicting interpretation. What does the word "substance" mean? If it is meant that aside from giving the licensee the right to delete slander, libel, obscene, or indecent statements and the like, he cannot otherwise alter or change the text once he has agreed to broadcast such a talk or program, then the word "context" should be substituted for the word "substance."

These sections further put the burden of deciding what constitutes libel or slander, or the like, on the licensee. If he decides in conflict with the opinion of the person or organization seeking to broadcast the statements and he deletes same according to his, the licensee's, best judgment, then the licensee may find himself faced with a complaint to the Commission which, in turn, will find itself faced with making a judicial decision as to whether the items did indeed constitute libel, slander, or the like. At the least, the licensee, in agreeing to permit each such public or political question broadcast under the terms of these new sections, runs the hazard of a hearing before the Commission with its attendant expense, anxiety, and loss of prestige in his community. The practical result of these provisions, as previously written, will-in this witness' opinion— tend to diminish instead of increase the airing of public questions.

To accomplish the results sought by these new sections, safeguarding provisions should be written into the section saving the licensee harmless from libel and slander damages, exactly as is provided in the sections dealing with talks of candidates for political office.

If this is not done, then the licensee should be given the specific right to cut the speaker off the air if he departs from his prepared speech after it has been cleared for slander, libel, and the like by the station management. In the past

it has happened that a speaker, who had previously submitted a written copy of his talk that contained no statements that were illegal, suddenly, while broadcasting, departed therefrom and uttered slanderous and libelous statements. The station is then put into a difficult and dangerous position.

Either the licensee should be protected by statute from damages for libel, slander, and the like, or the station should be permitted by the bill to cut the speaker off the air if he departs from the written speech as submitted to the station in advance.

The CHAIRMAN. I find I must ask the indulgence of the respective witnesses, because of a change which I feel I must make in the program.

The two witnesses who were next in order were Mr. Lynch and Mr. Bannister. I understand they very courteously yielded to Mr. Woods, because of the special circumstances which obtained in Mr. Woods' case, and therefore he will be permitted to go on now, and will be followed by Mr. Bannister and Mr. Lynch. I am compelled to leave the meeting at this time, and I am asking Senator Capehart to take over.

Senator CAPEHART. All right, Mr. Woods. You may proceed in your own way.

STATEMENT OF MARK WOODS, PRESIDENT, AMERICAN

BROADCASTING CO., INC.

Mr. Woods. I thank you and Senator White for extending this courtesy and consideration to me. My statement is quite lengthy. Originally, I had planned to take as much time as I was allotted, which I believe was 20 minutes, and perhaps take a little more.