on the other division. Because then the Commission would really be handicapped in participating in such conferences.

The CHAIRMAN. I can see some objections to a mandatory set-up, but it seems to me there are great advantages. I am groping around for some alternative suggestion.

Mr. DENNY. Well, I think this: I think that if we thought we had the final answer as to what is the best way of dividing the Commission, then it would perhaps be desirable to write it into the law.

I know, Senator, that section 5 does not represent your final views on the matter at all. You stated when you introduced this bill, that you were putting these points out to provide a concrete basis for discussion, and that is the basis on which I am approaching it, and that is why I am spending so much time discussing this.

The CHAIRMAN. We have had a somewhat checkered career with respect to this make-up of the divisions. We have authorized the Commission to break down into divisions, and they have undertaken to do it. They functioned that way for a while, and then they abandoned it.

Now, through the process of the years, you have reached the point where you look with favor upon some sort of a division break-down.. And somewhere along the line I think we can find a common ground. Mr. DENNY. I think we can, Senator. Because there certainly is something in this business of dividing up and specializing that has merit. And the thing that appeals to me most is that it does supply the opportunity for real leadership in each of these fields.

Now, let me point, for example, to give you a concrete case, to Commissioner Webster, whom you know.

Commissioner Webster has spent his entire life in the safety and special services field. He is, I think the committee will agree, the Nation's outstanding expert in maritime radio matters, or certainly one of the outstanding experts.

The CHAIRMAN. I personally have known of his work for at least 20 years, and I would give him almost any sort of a certificate he asked for.

Mr. DENNY. And in my view, it would be a crime to take Commissioner Webster and put him into a situation where every day he would have to spend three-quarters of his time puzzling out broadcast cases. One of the reasons, I am confident, that motivated the President in putting Commissioner Webster on the Commission was his oustanding record in the safety service field, and the recognition that we had no one on the Commission in that field.

Now, a division system would at least put us in a position where you could insure that he could devote his time on the Commission 100 percent to the type of work on which he has spent his life.

The CHAIRMAN. Commodore Webster has rendered a service over the last 20 or 25 years that is very little appreciated by the general public, or even perhaps by those in the legislative bodies. You cannot get in any controversy with me over Mr. Webster's qualifications.

Mr. DENNY. No; I was seeking to get agreement with you. I was using this really as a point, Senator White, to support your view that some type of division system is desirable. And what I was saying was this: That I would hate to see it so arranged at the Commission that

Commissioner Webster would have to spend 75 percent of his time on broadcast matters or on telephone matters. His working day ought to be devoted to those matters on which he has spent his life, and those matters where he is an expert-those matters which so badly need attention. He ought to be helping the police chiefs and the shipowners and the itinerant aircraft pilot and dealing with such matters as aids to aviation navigation and aids to marine navigation, and he ought not to have to become engrossed in day-to-day matters of broadcasts.

But if you have the Commission acting day to day on such matters, he inevitably will be so engrossed. Otherwise he will not be in a position to cast intelligent votes on controversial matters which come before him.

You see, I have come across to the other side of the fence now, and am arguing the case in favor of divisions.

But I do want to come back again, Senator, to this point: That I think if we are to have mandatory legislation on divisions, we have got to be awfully sure that we have got the right formula.

I do not feel that the formula proposed for discussion in section 5 is the right formula. I think perhaps in the course of these hearings a better formula can be worked out. If it can, perhaps that could be put in on a mandatory basis.

I do feel that if the Commission would use the division system under the present permissive legislation, we would have a better situation, because from time to time the emphasis is bound to change. At the moment the emphasis is broadcasting.

I think in 2 years the emphasis is going to be safety and special services. Because the broadcasting backlog is going to be cleaned up. There is going to be increased emphasis on aviation radio, ship radio, radar, and those other new devices that are going to require the maximum amount of the Commission's time.

Under a permissive system the Commission would reorganize to meet the needs of the moment. Under a permissive system the Commission could organize in a way so as to permit Commissioners Jett and Webster and myself to attend to our duties at the international conferences, and still the other work would go on.

But I think you are quite right that unless we use the permissive system then you have got to come around to a mandatory system.

The CHAIRMAN. I think there are some advantages in a mandatory system, even if it is not the best formula that could be worked out. There are advantages which you cannot find in the uncertainties of a purely permissive set-up, which may change from day to day.

Mr. DENNY. If we pursue the mandatory division idea, I think, then, that major attention has got to be given, as you are seeking to do, to the question of getting the right formula. I think there are really very valid objections to the formula provided in section 5, as I have outlined them: only two divisions, only three men on each division, and a chairman who is really a ceremonial figurehead, and not really a participating member in the Commission activities. Those are the three objections, as we see them.

Now, I think another formula could be worked out. It might involve increasing the size of the Commission, in order to provide the proper number of divisions, and in order to provide for divisions of more than three men.

Senator, we shall be very glad to supply this draft of the order that you have asked for, and shall be most happy to endeavor to work with the committee in working out the details for the proper formula.

If the committee's final judgment is that it would prefer a mandatory system to the permissive one, then I would certainly like to work with the committee in trying to get the proper formula for the mandatory commission.

The CHAIRMAN. Speaking as one member of the committee, I would like very much to help you.

Senator JOHNSON. May I ask just one question, Mr. Chairman? The CHAIRMAN. Senator Johnson.

Senator JOHNSON. Mr. Denny, what is to keep you from not only preparing this formula, but putting it into effect immediately, and not waiting for any legislation?

Mr. DENNY. One thing, Senator: The Telecommunications Conference is now in progress. We are halfway into an international radio conference at Atlantic City, where we have 68 nations participating. I am Chairman of the United States delegation to that Conference, and since the United States is the host nation, I am also Chairman of the Conference. So I must be in Atlantic City almost full time.

Commissioner Webster is heading up the work of the United States delegation on the operating regulations work in Atlantic City, that having been his field, as Senator White and I pointed out, for some 25 years.

Commissioner Jett, having been the United States allocation-offrequencies expert at Cairo where he served under the chairmanship of Senator White, who was Chairman of the United States delegation, must also be in Atlantic City in connection with the allocation of frequencies work. That leaves four members in Washington, and there just really isn't any practical way to set up a division system at

this time.

Senator JOHNSON. How long will that condition persist?

Mr. DENNY. That condition will persist until September 15 at least. The first conference has really just gotten under way, and I don't see how it can possibly end until August 15. The second begins July 1 and is bound to run until August 15. The third conference on high-frequency broadcasting begins on August 15, and if we get through by September 15, we will have moved at whirlwind speed.

Senator JOHNSON. Is there any reason why you could not make such a plan effective October 1?

Mr. DENNY. On my part, I am willing to sit down with the Commission in order to indicate our good faith. I came on the stand and told the committee today that I think there is merit in the division system. I have told you I speak for the Commission. I would be willing to sit down and join with the Commission in an order effective October 1, trying it out on a trial basis.

I would want to put in that order that it was an order for 3 or for 6 months. I would want a definite time limit, whatever would be agreed to be a fair trial period. I would want the order to expire at the end of that period with the understanding that it would be reappraised 30 days before the expiration date to see how it works.

I would say this also, Senator Johnson: The statement I have read, as I say, reflects everybody's views, but of course there are different shades of opinion that go to add up these views. And I know

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that two members of the Commission, Commissioners Wakefield and Walker, feel so strongly that we should have a division system, that it would be their view that unless the Commission adopted it voluntarily, they would urge that a mandatory provision be put into the law. They feel that way because they have had great experience in common-carrier matters, and they feel that greater leadership could be supplied in that field. I agree with them on that.

I do think though-and I think they agree with me on this—that there are very valid objections to the present formula in section 5. In other words, I think their position would be: Let us keep the present permissive provision, if possible, but let's use it. If we are not willing to use it, then let's ask for a mandatory provision, so that we will use it. But in seeking a mandatory formula, let's attempt to work out a better formula than section 5.

I think also that I can say with complete assurance that all members of the Commission would presently favor a trial of this in the fall. I think that Commissioner Durr, when we discussed this at the meeting, indicated that while as far as he could see at present, he would favor a trial of it in the fall, he is of the opinion that we do not know what is going to happen between now and fall, and we do not want to put ourselves in a position of having represented that we will do something, and then have a change in conditions occur which will make it impracticable for us to do it.

Se he would, I think, so qualify his statement.

But I think that generally I speak for the full Commission in saying that we are definitely persuaded that the Commission should, in the fall, after these conferences, undertake an experiment; I say experiment, but I mean that in the sense of an orderly, intelligent experiment in the division system, for a decent trial period, with a view to making an appraisal of how it works, and also with a view to finding out what the difficulties are with the formula that we adopt, with the thought in mind that under the permissive statute we could then refashion it and improve it.

Let me be sure now that I have covered everybody's views correctly. Does anybody want to add anything on that? Is that pretty ac

curate?

The Commissioners indicate I expressed their views with reasonable accuracy.

The CHAIRMAN. I think they have indicated great confidence in

you.

Senator MAGNUSON. Mr. Denny, is not this much true: That under the present framework of the Communications Act, it is perfectly possible, within the authority of the Commission, to do what this section makes mandatory to be done; you need no legislative changes to do it if the Commission saw fit so to do? Is that correct?

Mr. DENNY. Yes; that is correct, Senator Magnuson.

Section 6:

This section would amend section 4 (k) of the act to spell out in greater detail the material to be furnished annually in the Commission's report to Congress. The principal material, not now included in our reports, which would be required by this section, are the personnel histories of all new employees of the Commission and an itemized statement of cur expenditures, their sources and the authority. under which they are made.

There is no objection to this section from the Commission's point of view. We are anxious to supply Congress with any information it may desire. However, I would like to point out that most of the additional information which would be required by the new section 4(k) is already made available annually by the Commission to the House or Senate Appropriations Committees and is printed in the hearings conducted by those committees.

Section 7

Section 7 would amend section 303 (i) of the Communications Act. so as to provide that the Commission's authority to make special rules and regulations with respect to stations engaged in chain broadcasting would be limited to the physical and technical phases of regulation. The purpose of the changes is stated to be to limit the extent of the Supreme Court's decision in the so-called network case upholding the validity of the Commission's chain broadcasting regulations. It is intended to abolish the Commission's authority to issue regulations like the chain broadcasting regulations; the regulations themselves are, in most respects, to be written into the statute by section 19 of the bill.

At the outset, I should in candor, call your attention to the fact that while the proposed amendment would cast doubt on the Commission's authority to promulgate regulations of the type under discussion, it is by no means clear that the amendment would achieve the result of depriving the Commission of its authority to promulgate such regulations.

A reading of the Supreme Court's opinion in the network case shows that section 303 (i) was only one of the statutory provisions relied on by the court to sustain the Commission's regulations. Even without this provision there is a good liklihood that the regulations might have been sustained on the basis of the Commission's authority to promulgate rules and regulations which are necessary to carry out the provisions of the act.

One of the principal objectives of the act, as recognized by the Supreme Court, is the preservation of free competition in radio broadcasting. The basic purpose of the chain broadcasting regulations was to remove the fetters on free competition which were inherent in existing network practices.

On the merits, I believe it would be unfortunate if Congress did remove the commission authority in this field. It is not logical to assume that the Commission or Congress, having once legislated on these problems, will have necessarily done a perfect job.

Actual operation under the present rules or changing conditions may demonstrate need for amending or even repealing some of the provisions, or for the promulgation of new rules covering other aspects of chain broadcasting. In fact, the existing rules have been amended on several occasions by the Commission, since they were first adopted and the Commission has announced that it stands ready at any time to make necessary changes. Moreover, since the chain broadcasting rules apply to new services like FM and television, as well as standard broadcasting, it is not unlikely that experience will show that some modifications are necessary for either FM, television, or both. If the Commission were to be required to come to Congress for each of the changes as they become necessary, I am afraid that both the public