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that problem, but I do state by way of explanation the reason why the Commission has continued so many important stations in the hands of the networks and will state my own views as to why we have done it.
In this statement here I should say that, of course, each instance where I have departed, Mr. Chairman, from the written statement, I am on my own. There has been no opportunity to review my extemporaneous remarks with my colleagues, and the written statement I have presented represents their views, and the extemporaneous interjections are my own and I take responsibility for them. Section 20
This section would add a new section 334 to the bill which would incorporate the prohibitions against obscene, indecent, or profane language now found in section 326 of the act, and add a new provision that no person shall knowingly make or publish a false accusation or charge against any person. We have no objection to this provision. Section 21 (S. 814, p. 949; H. R. 5497, pp. 878–879)
This section adds a provision to the act allowing the Commission to make declaratory orders after notice and hearing in any case of actual controversy arising under the act or the Commission's rules and regulations. There is no objection to giving the Commission the power to issue declaratory orders or judgments, where as is provided in this section the power to issue such orders is discretionary, and the agency can thus limit the use of the device to proper cases and cannot be imposed upon by persons seeking such rulings for dilatory purposes.
However, it should be pointed out that this section is not necessary to empower the Commission to issue declaratory orders as it already has such authority by the terms of section 5 (d) of the Administrative Procedure Act and, pursuant to that section, the Commission has amended its rules and regulations so as to make provisions for declaratory judgments. Section 22 (8.814, pp. 94.5–946; H. R.5497, pp. 811–877)
This section would amend the appeal provisions contained in section 402 of the Communications Act. In general the changes proposed are substantially the same as the corresponding provisions in S. 814 and H. R. 5497. These provisions were carefully analyzed by the Commission and extensive testimony concerning the implications of those sections were given at that time. The Commission adheres to the views made at the earlier time and I will not burden the committee by repeating them.
There is one fact, however, that I should like to call to the committee's attention in considering section 22. As you will note, section 402 provides for a dual method of review. Under section 402 (a) a proceeding is brought in a special statutory three-judge district court in accordance with the provisions of the Urgent Deficiencies Act. Under section 402 (b) an appeal is taken to the United States Court of Appeals for the District of Columbia. The special statutory threejudge procedure under the Urgent Deficiencies Act has been a matter of concern to both district and circuit justices since it disrupts the work of both courts. Accordingly, in 1942 the Conference of Senior Circuit Justices appointed a committee for the purpose of studying the whole matter and making a report to Congress. The committee held extensive conferences with all the interested agencies and prepared a recommended bill, which was submitted to Congress. This bill was introduced in the House in January of this year. It is H. R. 1470. Under that bill the dual method of reviewing Commission orders is abolished.
Appeals from all Commission orders are to the appropriate circuit court of appeals. Hearings on this bill have already been held by a subcommittee of the House Judiciary Committee. It might therefore be desirable to withhold action at this time with respect to amending section 402 until after the Judiciary Committee has had an opportunity to report on its bill. Many of the points covered in section 22 are covered by H. R. 1470.
If the committee desires to proceed at this time with a revision of section 402 the Commission would like to recommend that in addition to the material already contained in the earlier hearings the committee should consider the advisability of abolishing the dual methods of appeals which is now contained in section 402 of the Communications Act. The Commission agrees with the findings of the Conference of the Senior Circuit Justices that the procedure prescribed by the Urgent Deficiencies Act is inconvenient both for the litigants and the courts.
If the committee agrees with this suggestion, it is recommended that section 402 (a) and (b) be deleted and subsequent subsections renumbered and that a new section 402 (a) be adopted reading as follows:
An appeal may be taken, in the manner hereinafter provided, to enjoin, set aside, annul or suspend any order of the Commission under this Act. Such appeal may be filed either in the circuit court of appeals for the circuit wherein the appellant resides or in the United States Court of Appeals for the District of Columbia. Section 23 (S. 814, pp. 620, 947–948; H. R. 5497, pp. 794–795)
This section makes three important changes in section 405 of the act governing petitions for rehearing. It extends the time for filing petitions for rehearing from 20 to 30 days. This is satisfactory. It provides that the filing of petitions for rehearing shall operate as an automatic stay of the Commission's order, except where the order is necessary for the maintenance of existing service. Finally, it provides that a petition for rehearing need not be a condition precedent to judicial review except where a person seeking review was not previously a party to the Commission proceedings or relies on questions of fact or law on which the Commission has not been afforded a previous opportunity to pass.
In our testimony on similar provisions in S. 814 and H. R. 5497, have opposed the provision for an automatic stay on the grounds that it would encourage the filing of dilatory petitions for rehearing. We still believe that a better procedure is that contained in the present provision in section 405 which leaves it to the Commission's discretion as to whether the effective date of Commission action should be stayed pending disposition of a petition for rehearing. However, in view of the fact that most applicants for new or improved facilities do not proceed with construction until after the petition for rehearing has been finally disposed of, we do not believe that the enactment of the provision will, in practice, result in injury to interested persons.
With respect to the requirement concerning the filing of a petition
for rehearing as a prerequisite to appeal, the subject matter has been covered by express provision in section 10 (c) of the Administrative Procedure Act. There is, therefore, no useful purpose to be served by legislating on the same subject in section 405 of the Communications Act. Section 24 (S. 814, pp. 948–949; H. R. 5497, pp. 792–793)
This section would amend section 409 of the Communications Act so as to require that the person conducting a hearing should prepare and file an intermediate report concerning the disposition of the case in question. A similar provision was contained in both S. 814 and H. R. 5497, and we commented at length on it in our earlier testimony.
The only matter I would like to add at the present time is that since the conclusion of hearings held on the bills referred to, Congress has enacted the Administrative Procedure Act which regulates in great detail for all agencies the manner in which hearings are to be held, the person who is to conduct the hearing, the type of report to be filed, et cetera.
Pursuant to this act the Commission has amended its rules and regulations so as to provide for an intermediate report to be filed by the hearing officer conducting the hearings. I can therefore see no useful purpose to be served by legislating on the same subject in section 409. Section 25 (S. 814, pp. 77, 81-83; H. R. 5497, pp. 925-929, 932–934)
This section would add a new section 418 to the act prohibiting the Commission from taking any action which may result in discrimination between persons based on race, religious, or political affiliation, or kind of occupation or business association. One of the principal purposes of this section, according to the statement accompanying the introduction of the bill, is to prevent the Commission from adopting a policy which would deny newspapers the right to own radio stations.
I do not think I have to testify at length to this committee concerning the Commission's viewpoint on this matter. This is a question which has had wide publicity in recent years, and the Commission's position is well known. As you are aware, we held extensive hearings in 1943 and 1944 on the entire subject of newspaper ownership of radio stations and came to the conclusion that this was a subject on which no blanket rule of any sort was appropriate, that newspapers should not be prohibited from becoming licensees, but rather that the fact of newspaper ownership or control should be taken into account, along with all other factors, in passing on applications on a case-to-case basis. Moreover, we believe that newspaper ownership per se is not necessarily a good or bad thing but must be considered in the light of all the surrounding circumstances. Thus, where there are two equally qualified applicants for a station serving a community and one of the two is the sole newspaper in the town, it may be advisable and in the public interest to grant the radio station license to the non-newspaper. We believe that this policy is designed to prevent a local monopoly of the principal media of mass communications or at least it encourages a diversity of an ownership of such media.
Thus, to the extent that this section would merely deprive the Commission of power to prohibit radio-station ownership by newspapers or any other group, it merely represents present practice. From a careful reading of the section, it is my opinion that the section means only that. However, if one of its purposes is to prevent the Commission from considering as one factor any aspect of an applicant's business which may be a reasonable basis for determining that the grant of a license to that particular applicant would be more or less preferable than the grant to a competing applicant, I believe that the section may be seriously detrimental to the Commission's ability to carry out its responsibility to grant licenses to applicants who are best able to serve the public interest.
Before concluding, I should like to return for a moment to section 19 dealing with multiple ownership. I do not think we have by any means devised a perfect rule when we say that one person shall not own more than six FM stations and shall not own more than five television stations. It is a tentative rule at the moment. Anyone who comes in and shows good reasons for changing it, up or down, will be given consideration.
In standard broadcasting we have not been able to reduce the limitation to any specific number at all, because a 50-kilowatt station on a low frequency is a lot different operation than a 250-kilowatt station on FM frequency. Technically, in FM the perforance on one frequency is exactly the same as the performance on another frequency. In FM, of course, you have the difference of an FM station in New York and an FM station in a city the size of Albuquerque. I do not think it is possible to devise any perfect rule. I do respectfully suggest that the present rules of six and five are, as I see it, greater insurance against monopoly than the 25-percent rule which would permit one person to own a station in every one of the 20 out of the 22 States west of the Mississippi.
Senator MAGNUSON. Why have you not put Mutual in?
Mr. DENNY. It is a different kind of an operation. Mutual does not itself own any stations, Senator Magnuson. Mutual is, in large part, owned by WOR, at New York, and by WGN, the Chicago Tribune station, and by the Don Lee Broadcasting Co. Those individual companies have their own stations, but Mutual itself does not own any stations. Am I right, Mr. Kobak?
Mr. KOBAK. That is right. There are seven stockholders who own stations. Mr. DENNY. I do not have them all in
Mr. DENNY. There is no specific rule in standard broadcasting because we have been unable to devise any.
Senator CAPEHART. What is to keep the next Commission from saying that they must divest themselves down to two stations, instead of six FM, or your present standard in AM?
Mr. DENNY. Well, if the Commission could make a record that would justify that I suppose that it would be legally possible. This Commission recently in its network regulations and in its own multipleownership regulation did require people to divest themselves of stations.
Senator CAPEHART. Do you feel that the Commission is better qualified to name the number of stations that might be owned by any individual, rather than by Congress by law?
Mr. DENNY. I think it is a changing situation. I think that from time to time it ought to be reviewed. I think that the best situation would be to give the Commission the power and for Congress, just as it is at the moment, to review the policies of the Commission. I am a strong believer in administrative agencies reporting regularly and frequently to the legislative committees of Congress and having informal discussions as to what the agency's policies are and as to what is going on at the agency,
Senator CAPEHART. You are not fearful of the Commission later coming along and ordering further divestment or asking a man who owns six stations or five stations to divest himself of three of them?
Mr. DENNY. Congress and the courts will insure against arbitrary action at any time by any future Commission or by this Commission.
Senator MAGNUSON. You have done that. You have asked people to divest themselves of stations?
Mr. Denny. I have stated that we have asked people to divest themselves of stations in two situations. We had 33 instances were one man owned two stations in the same city, and we promulgated a rule that they could not do it. That rule is now proposed to be written into the statute and no one ever even challenged that rule.
The CHAIRMAN. I am compelled to leave at the moment. I will ask Senator Capehart to preside during the balance of this morning's session, and I suggest that when we recess it will be until 2:30 this afternoon. The two witnesses who are scheduled to appear are Mr. Jameson, connected with the Federal Communications Commission Bar Association, and Judge Roberson, who is chairman of the Bar Association's legislative committee. If you do not conclude this morning, we can conclude with you this afternoon.
Mr. DENNY. If I could finish this morning, could I be excused? So that I can get back to the conference in Atlantic City, and then I will be glad to come down at any time the committee desires.
The CHAIRMAN. Yes.
Senator JOHNSON. In that connection, I may want to propose an amendment to this pending measure and I should like to submit it to you and along with that some questions to elicit your opinion on your position with respect to it.
Mr. DENNY. I shall be most happy to work with you, Senator, in any way.
Senator CAPEHART. Are there any further questions?
Senator MAGNUSON. Let me ask one question before Mr. Denny gets away. I think that you have made an intelligent analysis of this bill. The Commission has, probably, looked at it very carefully, but if you were to be asked the specific question: Do you believe any further legislation is necessary than what you now have, is there any need for this bill, or certain sections of it, or any section, what would be the answer of the Commission?
Mr. DENNY. Certain sections of this bill, as the Commission indicates, it supports. If Congress is going to give attention to this subject we think that certain of these sections ought to be enacted.