mulgated by the Commission and write them with practically no change into the language of the section.

Mr. STANTON. I appreciate that, sir, and if we cannot have the adoption of our position that we prefer not to have anything in the bill regarding business regulation, then I would prefer to have it in the act, rather than in the hands of the FCC. Although I cannot share your feeling about the first part of my position, I go along with you 100 percent on the second part.

The CHAIRMAN. I understand perfectly well that some of these radio interests want what they want when they want it.

Mr. STANTON. Well, that is the American method of operating. We have an objective, and we certainly try our best to achieve it, and if in the democratic process we are thrown for a loss, we take it in good grace and try again.

The CHAIRMAN. Let me make this confession of faith. I would like myself to see a very definite limitation, if it could be drafted, upon the authority of Government over our people. But I just happen to believe that in connection with radio, we have got to go much farther in the regulatory field than we have heretofore gone.

I said this a couple of days ago, that hour by hour and day by day and month by month, we are heading along a course which is going to bring us pretty near to the condition we were in in 1926, or we are going to have fastened on us a degree of commission regulation which I do not like. That is just an aside, and you do not have to incorporate it in your remarks.

Mr. STANTON. Well, I could not sit in this hall, sir, the last several days, without recognizing that as your position in this situation. I would be less than frank if I did not tell you how I feel about it. We came here to be as helpful as we can be.

The CHAIRMAN. I want you to be.

Mr. STANTON. I know you want the attitude of the broadcasters, and I am trying to give you exactly how we feel about it. I must make an aside of my own here, if I may, and that is that while I was not in broadcasting in 1926, I do not believe, as I read the history of what went on, that the chaos that has been described grew out of the Jack of program or business control, but rather out of the technical difficulties of jumping frequencies and indiscriminate changes in power and operating schedules and so forth. I certainly want no misunderstanding on my position regarding regulation so far as technical operations are concerned. It is the nature of the beast that it requires that. But when you get into the field of thought, then I differ with you. I am not addressing myself specifically to you, Senator White, because I know that there are others that feel the way you do, and apparently members of your committee share that opinion. But I feel that in all fairness, I must make my point very clear to you. I go along with you 100 percent on regulation of the technical station apparatus.

The CHAIRMAN. I do not attempt to restrict you, and I want you to have complete freedom of speech.

Mr. STANTON. Thank you very much. I know that. In that way, we at least will have the benefit of adequate discussion of specific rules before they are adopted and will not be subject to sudden and unexpected changes from time to time.

We, of course, hope that the committee will agree with our strong belief that special regulation of the business practices of broadcasting is unnecessary and undesirable. In particular, however, I would like to comment on one provision of the bill's network rules. This is the proposed section 333 (a) (4) which would prohibit affiliation contracts in which so-called option periods of the stations given to the networks total "more than 2 hours in any consecutive 3-hour period." This provision is more restrictive than the existing FCC rules on the subject. To my knowledge, there has been no demand for this change from independently owned affiliated stations. In fact in 1943 during the consideration of an amendment to S. 814 incorporating such a change, a committee of the National Association of Broadcasters, representing the individual, independent, and affiliated stations in the United States registered its opposition to such a provision. The most obvious and substantial effect of such a 2 out of 3 hour rule would be the difficulties imposed on the sale of more than 2 hours of prime evening time to network advertisers. A strong and adequate schedule of popular network commercial programs is not only advantageous to affiliated stations in producing substantial revenue, but also contributes to the over-all popularity of the station because of the strong listener appeal which such programs command.

The CHAIRMAN. May I interrupt you again just for an observation with respect to the time option period. That was not original with me or any other member of the committee who had a part in the drafting of this bill. That idea was suggested, I think, by radio affiliates during the hearings that was had before this or the predecessor of this committee some 3 years ago.

Mr. STANTON. I am not familiar with that testimony, and I have not been able to find anybody who is familiar with it. But if it were true at the time that previous hearings were held, I do not believe it is fair to say that it is true today. At least I found nobody of the opinion among the affiliates that this is something that would appeal to them. Senator MAGNUSON. You share the same opinion of the previous witness, who testified from the Detroit station; is that correct?

Mr. STANTON. That is correct. Mr. Bannister stated it from the other side of the desk or the other side of the operation from the station's point of view.

Senator MAGNUSON. You are stating the same premise.

Mr. STANTON. Looking at it from the other end. In addition, of course, this restriction would tend to impair the financial strength of networks, with a consequent general impairment in the quality of Nation-wide broadcasting.

The proposed new section 333 (c) (2) purports to limit the number of broadcast stations owned or controlled by a single licensee to a number which would provide primary service to no more than 25 percent of the population of the continental United States. This is a unique attempt to limit the expansion of broadcasters in the broadcasting field. In my opinion, it is unwise and detrimental to the welfare of broadcasting.

This is a point, by way, that Mr. Denny mentioned in his testimony Tuesday. As Senator White has pointed out, present rules of the FCC have arbitrarily limited the number of FM and television stations which may be owned by a single licensee. In FM, the limit is set at six stations, and in television the limit is set at five. Further, the

FCC has, as a practical matter, frozen the number of standard broadcast stations which may be owned by the larger broadcast companies. There is no other field-industrial, utility, or otherwise that I know of in which the Government has set a fixed ceiling on the size of an enterprise.. Even the Public Utility Holding Company Act, providing specific antitrust legislation in the utility field, does not set arbitrary limits in terms of units, size, or population. In the newspaper and magazine field there has been no attempt by Congress or any Government agency to restrict growth by an arbitrary standard. It is difficult to understand why broadcasting should be singled out for special legislation of this unique type.

We agree with Senator White that so important a matter should not be left to decisions made by administrative edict. However, the proposed new section 333 (c) (2), which, instead of placing a ceiling in terms of number of units, purports to limit the number of broadcast stations owned or controlled by a single licensee, is equally arbitrary.

If broadcasting were monopoly-ridden, presumably there would be a host of accompanying evils which would invite special attention by Congress. To my knowledge, there is no bill of particulars of monopoly evils in broadcasting for the simple reason that there is no monopoly.

Senator MAGNUSON. Of course, it is all right to talk about what has happened and what is happening now; but after all, Congress has to legislate for what it thinks is going to happen in the future. And I want to get you clear. Do you think there should be no limitation on the ownership of radio stations in a given geographical area, within the hands of one person?

Mr. STANTON. That is correct. I think that the normal antitrust provisions should prevail if there is monopoly.

Seantor MAGNUSON. They do not prevail and they will not. They could not prevail. They do not prevail as to newspapers. The monopoly of newspapers in given geographical areas is not a good thing. I would not want to see the same thing happen to radio. There are many areas in this country where the morning and evening newspapers and the radio station are owned by one person; that means complete control over the medium of expression in the entire community. I know of four or five places.

I think it is wise that this Congress do what it can to prevent in the future any such thing. If this competition is going to continue, although now in most communities where there are six stations there are probably six owners, and as competition continues and some station gets bad, one man will start to buy them up. There are two or three people in the country starting to buy up radio stations, and then pretty soon we will get into the same monopolistic situation in a geographical area that now exists in the newspaper field.

That is what Congress, I think, should devote itself to prevent in radio. I do not think it is healthy for radio.

Mr. STANTON. I agree that it not healthy. I would much prefer the competition. I am not addressing myself now to competition within a concentrated geographic area but, rather, I am talking about the broad country-wide situation.

Senator MAGNUSON. Representing a network, you have to consider that?

Mr. STANTON. That is correct. We now own 7 stations, and in one of those markets where we own a station I believe there are 23 stations in competition. If you take the other 8 markets in the aggregate, I believe the number is around 71 competitors against our 6 in the other markets. I think that is anything but monopoly so far as those areas are concerned.

Senator MAGNUSON. I think right now that radio is not in anywhere near that condition, but when we pass bills here, they are going to be in effect and we determine policy for many years ahead. I can see easily how radio could get into that condition just like the newspapers. Thirty, forty, fifty years ago newspapers were competitive, but you can take on two hands right now and find the newspapers in this country controlled by 10 people or 10 organizations which are serving, probably, half of the population in circulation. That was well pointed out by a recent book written by Mr. Ernst. I think it would be very unhealthy to allow radio to drift into that condition.

Mr. STANTON. You have no such condition prevailing in radio. Senator MAGNUSON. Right now you have not, but I can see that situation developing in a community where there are three or four stations and one of them faces financial difficulty and the other two merge, and they buy the third one, and there is monopoly.

In many cases, they own the newspaper, too. I think there has to be some restrictive legislation:

Mr. STANTON. I do not know.

Senator MAGNUSON. Nation-wide, I do not know. That is a technical problem, too, for you people in the networks. You have to have these, what you call key stations; is that correct?

Mr. STANTON. Yes; that is correct.

Senator MAGNUSON. You have to have them, but we are legislating against the possibility of things that we think might happen.

Mr. STANTON. I appreciate that. I am not a lawyer, of course, and I was not aware of that fact that the Department of Justice was helpless to prosecute in the case of monopoly in the field of the press. In the AP case, the Department of Justice and the antitrust provisions came into play.

Senator MAGNUSON. They do not have the legal authority to take care of this situation. They have not been adequate insofar as certain geographical areas are concerned, where newspapers, or where one organization or one person completely owns all of the newspapers. The American weeklies have no chance; the country papers are gone.

I do not want to see the small radio stations swallowed up either. If you have a lot of money, and you offer a man a decent price, you can buy. Everything has a market if you pay a good enough price for it, and there have been such prices. If the FCC had not put some restrictions on this, we were drifting into that about 5 years ago. We were getting into a position where one man would own two or three stations in an area. We were getting into the position where the newspapers would own all of the stations.

I think the monopoly rule has been a wise provision. I do not disagree with you that maybe the language limiting ownership should be different, or our method of approach different, but I hope that both the networks and radio itself take the position that there should be some restriction on a man owning two stations in the same town or the same geographical area, or owning a big chain of stations whereby

a monopoly might be created. You will end up in more radio regulation than you might be in right now.

Mr. STANTON. I want to make it clear that I am not asking for two or more stations to be owned by a single person serving the same community.

Senator MAGNUSON. I understand, but I want it clear that it would be very bad to adopt that policy.

Mr. STANTON. I would like to come back to the remark you just made about the inadequacies of the antitrust laws for getting at this problem, and ask if it would not be possible to consider the antitrust situation rather than to consider this as a specific industry and single it out for this.

Senator MAGNUSON. I would much rather put it in the Communications Act than attempt to cover it by antitrust laws.

Mr. STANTON. If I may, I will develop the rest of this point. I am perfectly happy to have had your question. In order to get a fuller perspective, it is appropriate to compare broadcasting with some of the other American industries. Immediately it becomes apparent that broadcasting is not "big business." For example, the entire broadcasting industry's volume in 1946 was substantially less than that of some single companies in other fields, a few of which are shown on the following chart.

CHART 1.-Volume of sales-Entire broadcasting industry and individual com

panies in other fields

Mr. STANTON. Just as the broadcasting industry is not big business compared with other industries, the individual broadcasting com