Hon. JOHN L. MCCLELLAN, FEDERAL COMMUNICATIONS COMMISSION, Chairman, Committee on Government Operations, DEAR CHAIRMAN MCCLELLAN: You have requested that the Commission submit its views concerning the effect of the first proviso in section 1 of plan No. 2 of 1961 on the Commission's operations. At the present time every hearing in an adjudicatory case must be conducted by the Commission or by one or more examiners (sec. 409 (a) of the Communications Act of 1934, as amended). Where the act requires a hearing in rulemaking proceedings (e.g., secs. 303 (f), 204, 205 of the Communications Act), the provisions of 7(a) of the Administrative Procedure Act would be applicable, and the hearing could be conducted by one or more members of the Commission, as well as by the Commission or an examiner. The first sentence of section 1 of the plan would change existing law by removing the restriction in 409 (a) and permitting the Commission in adjudicatory cases to assign one or more Commissioners to conduct the hearing. While the first sentence also permits delegation of any function to employee or employee boards, the proviso, that section 7(a) of the Administrative Procedure Act remain applicable, establishes that the function of conducting a hearing could not be assigned to employees. I hope the foregoing fully answers your inquiry. I will, of course, be glad to supply any further information. Sincerely yours, NEWTON N. MINOW, Chairman. The CHAIRMAN. Did you have any further comment which you are authorized to make on their behalf? Mr. CAHILL. No, sir; I do not have any. The CHAIRMAN. Very good. Of course, the Commissioners understand, I assume, that during the course of the hearings if any Senator desires, or if the committee desires to interrogate them after having read their statements, they will be subject to call for that purpose. Mr. GELLER. They wish to make clear that they will be available and will be glad to come down to answer any questions at any time. The CHAIRMAN. All right. Senator JAVITS. Mr. Chairman, may I ask if this particular plan had a hearing before the Senate Commerce Committee? Mr. GELLER. Yes. It had a hearing before the Senate Interstate and Foreign Commerce Committee. Senator JAVITS. Is that record available? Mr. GELLER. I believe it is. Senator JAVITS. Thank you very much. Mr. Chairman, can we do the same with the record of this hearing as we did in the record of the hearing before the Banking and Currency Committee on the Securities and Exchange Commission? The CHAIRMAN. Oh, yes. The Senate Commerce Committee held hearings on it. The hearings before the Commerce Committee of the Senate may be made a part of this record as an exhibit to the testimony that is already taken, and we will determine later whether we will print it or just let it be part of the record of the hearings in its present form. I understand that the House Committee on Government Operations has already reported out favorably a resolution of disapproval. I do not believe the House has voted on it yet. Mr. GELLER. No, sir. it has not. Mr. CAHILL. No, sir. The CHAIRMAN. But the House committee did report a resolution of disapproval. Mr. CAHILL. That is right, sir. Mr. GELLER. House Report No. 446. The CHAIRMAN. Very good. Mr. GELLER. One final point, Mr. Chairman: The hearings before the Senate Commerce Committee have not yet been corrected, but will be corrected very shortly, in a day or two. The CHAIRMAN. Whenever they are finalized. Very good. Thank you, gentlemen. Mr. CAHILL. Thank you. The CHAIRMAN. At this point in the record, communications from interested persons and organizations relative to plan No. 2 will be inserted, including those referred to this committee by the Senators indicated, for insertion in this record. (The material referred to is as follows:) STATEMENT ON REORGANIZATION PLAN No. 2 FILED WITH THE COMMITTEE ON GOVERNMENT OPERATIONS, U.S. SENATE, BY GOV. LEROY COLLINS, PRESIDENT, NATIONAL ASSOCIATION OF BROADCASTERS Mr. Chairman, my name is LeRoy Collins. I am president of the National Association of Broadcasters. Our principal offices are here in Washington, and our membership consists of 1,755 AM radio, 587 FM radio and 373 television stations, in addition to the 4 national radio networks and the 2 national television networks. This represents a substantial majority of the Nation's broadcasters. The ultimate goal and purpose of Reorganization Plan No. 2-which is to increase the efficiency of the Federal Communications Commission-is laudable. As I understand it, the broad pattern of change, as contemplated by plan No. 2, can be stated as follows: (1) It removes the now-vested right of appeal to the full Commission in adjudicatory cases. Apparently it also is intended that the now-vested right to review by the Commission in nonadjudicatory cases similarly will be abolished. (2) It transfers to the Chairman the function, heretofore reserved to the full Commission, of assigning personnel, including Commissioners, to the performance of various duties. (3) It abolishes the Office of Opinion and Review, which was created by the Communications Act Amendments of 1952. How to deal with these matters has concerned the Congress, the Commission, and the regulated industries for many years. While changes in procedures through Executive orders have in certain instances proved feasible, by no means is this always the case. In my view, and I believe in the judgment of the overwhelming majority of broadcasters throughout the land, prudence and soundness require that remedial action in the present situation be developed through direct legislation by the Congress. The Communications Act is a complex and comprehensive document-providing for not only vast administrative functions but, more important, for quasilegislative and quasi-judicial functions as well. Plan No. 2 affects all these functions. It contemplates changes in the FCC, involving deeply the public interest as well as private interests. The Chairman and other members of the FCC are required to wear many different hats-I personally think too many. But, be that as it may, the range of their duties should be fixed by law, and should not be subject to enlargement or contraction by Executive order and congressional passive indulgence. As the Congress is so aware, communications have a vital affect upon the social, political, and economic life of the American people. This has resulted in great interest in electronic transmission by every Congress of the United States since the days of Marconi. To guide the growth of this important facet of our life, the Congress, since 1912, has adopted numerous legislative proposals. For example, we have had the radio law of 1912, the Radio Act of 1927, the Communications Act of 1934, the extensive procedural amendments of 1952, and the recent procedural and substantive changes of 1960. Each of these statutes was designed to resolve new problems in this dynamic industry. Each was the subject of lengthy hearings before the legislative committees prior to enactment. Broadcasters believe that Congress should give like study and analysis to the problems pointed up by plan No. 2. This would develop full knowledge of all the facts with ample opportunity for debate and amendment. This is the course we feel should produce the best ultimate action. There are two ways of approaching needed reform in the regulatory field. One way is to try to do a repair job by Executive order on the existing structures, seeking to shore up shortcomings short of a fundamental revision of the agency's basic functions. While some structural changes are contemplated in plan No. 2, essentially it is well within the area of patchwork change. The other way is to take an entirely fresh look at the agency and—through congressional hearings and legislation-rebuild the basic structure and functions of the agency in a way designed to enable it best to meet the proper regulatory requirements of a changed and changing industry. For example, under such an approach ways may be found to deal effectively with the growing concern over the possible need for more clearly delineating and separating the purely judicial functions of the FCC from its administrative functions. We feel that both the executive department and the Congress as well as broadcasters and the public generally-would be better served by such a broad approach. We would hope that this course is the one which will be followed, and we stand ready to work with both branches of the Federal Government in developing a plan of reorganization along lines which will assure a more efficient and orderly conduct of the complex functions of the Federal Communications Commission. I submit, Mr. Chairman, that Reorganization Plan No. 2 should be rejected by the Congress and not allowed to become operative. THE FEDERAL TRIAL EXAMINERS CONFERENCE, Senator JOHN L. MCCLELLAN, Chairman, Government Operations Committee, MY DEAR SENATOR: Enclosed you will find correspondence directed to Senator Pastore and Congressman Oren Harris relating to the reorganization plans currently before your honorable committee. The Federal Trial Examiners Conference is opposed to section 1 of the reorganization plans, insofar as they may be interpreted, to permit an agency chairman to interpose an employee review board between an examiner and the agency in any case requiring a hearing on the ground that such intermediate review would lengthen the administrative process contrary to the purpose of the reorganization plans. Thank you for your consideration of this matter. EDGAR BUTTLE, President. THE FEDERAL TRIAL EXAMINERS CONFERENCE, Senator JOHN O. PASTORE, MY DEAR SENATOR: On behalf of the Federal Trial Examiners Conference, a professional organization which includes hearing examiners in every regulatory agency and department conducting quasi-judicial proceedings under the Administrative Procedure Act, I should like respectfully to call your attention to a latent ambiguity in section 1 of the President's Reorganization Plan No. 2 (1961) relating to the Federal Communications Commission which we understand will be considered at a hearing before your honorable subcommittee on May 23, 1961. Section 1 provides in part as follows: "Authority to delegate.—(a) In addition to its existing authority, the Federal Communications Commission, hereinafter referred to as the 'Commission', shall have the authority to delegate, by published order or rule, any of its functions to a division of the Commission, an individual Commissioner, a hearing examiner, or an employee or employee board, including functions with respect to hearing, determining, ordering, certifying, reporting or otherwise acting as to any work, business, or matter; provided, however, that nothing herein contained shall be deemed to supersede the provisions of section 7 (a) of the Administrative Procedure Act (60 Stat. 241), as amended." [Italic supplied.] Section 2 vests the above authority in the Chairman of the Commission. Read together these two provisions would appear to authorize the Chairman to delegate the function of "determining" or "ordering" to "an employee or employee board" so as to interpose between the hearing examiner and the Commission an unnecessary, costly, and time-consuming intermediate review which would have the effect of unduly lengthening total processing and increasing its cost and complexity rather than shortening and simplifying proceedings and thereby reducing litigation expense which was one of the primary purposes for which the reorganization plan was designed. Thus, although in section 3 the plan proposes to abolish the functions of the review staff, nevertheless the way has been left open for assignment of a review function to individual employees or an employee board. In reaching this conclusion we have not overlooked the proviso which states "that nothing herein contained shall be deemed to supersede the provisions of section 7(a) of the Administrative Procedure Act." However, a careful reading of section 7(a) indicates that it pertains only to the hearing process, not to the process of "ordering" or "determining." Thus, the proviso as drafted, merely insures that no one except duly qualified hearing examiners, the Commission itself, one of its members, or a statutory employee board may hear a proceeding. There is no similar prohibition against a nonstatutory or statutory employee board "determining" or "ordering" a final decision in a proceeding in which a hearing has previously been held by a hearing examiner. We assume that the reorganization plan was designed to implement the recommendation made in the President's special message on regulatory agencies, submitted to the Congress on April 13, 1961, which stated in part as follows: "The remedy is a far wider range of delegations to smaller panels of agency members, or to agency employee boards, and to give their decisions and those of the hearing examiners a considerable degree of finality, conserving the full agency membership for issues of true moment." We have no doubt that it was intended and contemplated by both the President's message and the implementing reorganization plan that the delegation of functions to agency employee boards should occur only in areas where there is no statutory requirement for a hearing before a hearing examiner, as provided in the Administrative Procedure Act. However, the proposed reorganization plan, as presently drawn, is not so limited. In view of the foregoing there appears to be a vital need for clarifying this matter at the forthcoming hearing on May 23 before your subcommittee. It is respectfully requested that this letter be made a part of the record of the forthcoming hearing. If our organization can be of any assistance to your subcommittee in connection with its consideration of this matter, we will be happy to oblige. Thank you for your consideration of this matter. Sincerely yours, HENRY S. Saнм, President. MAY 26, 1961. Re legislation to supersede Federal Communications Commission Reorganization Plan No. 2 of 1961. Congressman OREN HARRIS, Chairman, House Interstate and Foreign Commerce Committee, MY DEAR CONGRESSMAN: The conference has become concerned over a provision common in all the reorganization plans submitted by the administration to the Congress which would appear to permit an agency chairman to interpose between the examiner and the agency in a case requiring a hearing an intermediate review procedure by an employee board. To that end a copy of the enclosed letter to Senator Pastore was forwarded to Senator Dawson of the House Government Operations Committee and became a part of the record of the hearings before that committee at pages 189-190. We had asked Chairman Dawson to have the matter clarified at the hearings on May 18 and 19. However, a review of the transcript thereof indicates that at least the present Chairman of the FCC is under the impression that it would be permissible under Reorganization Plan No. 2 to establish such an intermediate review procedure. At page 167 the Chairman testified as follows: "Where the Commission grants the petition for discretionary review, exeeptions will be permitted, either to the employee board, the division of commissioners, or the full Commission. (See sec. 8(b) of the Administrative Procedure Act, 5 U.S.C. 1007(b).)" [Italic supplied.] Again at page 168 the following appears: "Under the plan, the Commission would undoubtedly have heard the argument in the first case, the Springfield, Ill., deintermixture proceeding, since the proceeding involved important and unusual policy and factual matters. But in the next case, the question whether the ship station's license of a shrimp boat should be revoked, did not involve any novel question whatever. Certainly an employee board could have disposed of the factual issues raised. And, just as clearly, a division of the Commission, or perhaps an employee board, could have dealt with the two following cases involving routine issues as to applications for standard broadcast facilities. Indeed, the time of the full Commission was essentially wasted in case No. 3 because the voluntary dismissal of one of the competing applications a month after the argument rendered the comparative issues moot. "If either the panels or the board erred, such error could be corrected by the Commission on petition for discretionary review. I think this example day, which would be multiplied many times in view of the roughly 50 cases in which |