REVIEW OF FEDERAL COMMUNICATIONS COMMISSION ACTIVITIES-1969 THURSDAY, MARCH 6, 1969 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COMMUNICATIONS AND POWER, Washington, D.C. The committee met at 10 a.m., pursuant to notice, in room 2123, Rayburn House Office Building, Hon. Torbert H. Macdonald (chairman of the subcommittee) presiding. Mr. MACDONALD. The committee will be in order. This morning the Subcommittee on Communications and Power has before it the Chairman, members, and key staff members of the Federal Communications Commission. It is our purpose to hear from the Commission of its jurisdiction and activities. Of particular interest to us will be the major actions taken by the FCC since the adjournment sine die of the 90th Congress. This would include the proposal of sweeping rules and a notice of inquiry with respect to community antenna television systems; the authorization of over-the-air pay television on a nationwide basis; a proposal to ban cigarette advertising on radio and television; and the undertaking of a study of ownership patterns in the broadcasting industry with particular attention being given to the ownership of broadcasting stations by conglomerates. The Presidential Task Force on Communications Policy which was established in 1967 has also made its report in which I understand it makes major policy recommendations in the field of communications. As far as I know, Mr. Chairman, that report has not been made available to us here on the committee, and I know I, for one, have certainly not seen it. I understand you were a member of the task force and we would be interested in learning if you can tell us when we can expect to have the task force report. In addition, I think it would be helpful to be informed of the status of the fairness doctrine, of the meeting now taking place at the State Department of the International Communications Satellite Consortium, of rulemaking proceedings involving broadcast station ownership, or problems arising under section 317 (the equal time provisions) of the Communications Act during the November elections, of the investigation now underway of the Bell System's rates, and on steps being taken to solve the congestion in the land mobile radio. services. Also we would be pleased to have a status report on public broadcasting, a subject in which the committee is much interested, as I know the Commission is. If you can do all of that, Mr. Chairman, in a day, you deserve several kinds of awards. We have been looking forward to these meetings which I am sure will be plural, for many of the matters will be taken up later in depth, but if you could hit some of the highlights of our outline I am sure the subcommittee would be very interested. We welcome you here today, Chairman Hyde. STATEMENT OF HON. ROSEL H. HYDE, CHAIRMAN, FEDERAL Mr. HYDE. Mr. Chairman, I am pleased to appear today with my colleagues to review with this subcommittee recent activities of the Commission in significant areas of our responsibility. The field of communications is one where technological progress continually presents new problems and new challenges. Many of our activities attract widespread public attention. Many other receive less public attention although they are equally significant in their longrange effects. Since communications cover so wide an area, and our areas of responsibility and activity are therefore far reaching, I will attempt to outline only the highlights of our activities. I will refer particularly to those activities which we have been advised are of immediate interest to the subcommittee. I will leave supplementary details for any questions you may have. If you wish to have any further material, we will of course be happy to submit it. With me today are the other members of the Commission: Robert T. Bartley, Robert E. Lee, Kenneth A. Cox, James J. Wadsworth, Nicholas Johnson, and H. Rex Lee. Also present are key members of the staff-the Executive Director, Max D. Paglin; our General Counsel, Henry Geller; the Deputy Chief Engineer, Raymond E. Spence, Jr.; the Chief of the Broadcast Bureau, George S. Smith; the Chief of the Common Carrier Bureau, Bernard Strassburg; the Chief of the Field Engineering Bureau, Curtis B. Plummer; the Chief of the Safety and Special Radio Services Bureau, James E. Barr: the Chairman of the Review Board, Donald J. Berkemeyer; the Chief, Office of Opinions and Review, Leonidas P. B. Emerson; and the Chief of the CATV Task Force, Sol Schildhause. As an appendix to my statement, we are submitting an organization chart of the Commission, showing the various component units of the Commission, the key personnel in each unit, and the number of employees assigned to each unit. In further explanation of the Commission's organization, we have attached to the chart a brief statement of the functions of each of the major units in the Commission. (See p. 72.) With those preliminaries covered, I would like to begin by summarizing the status of the principal policy issues confronting the Commission in the communications common carrier field and to describe briefly how these issues are being treated. As you know, advances in communications and related technologies are having a most significant impact upon the common carrier industry. They affect the structure and economics of the industry and, of course, the entire market for communications services. Consequently, the Commission and the carriers are engaged in a searching reexamination of every tariff offering in the domestic field. The role of competition in the industry is being reassessed. New entities are seeking entry into the field of public communications services. Interconnection policies and practices are undergoing radical changes. We are confronted with resolving rivalries for the privilege of exploiting the benefits of new technologies such as satellite communications. DOMESTIC SATELLITES As you are aware, we deferred reaching any policy decisions in our domestic satellite inquiry pending conclusion of the work of the President's Task Force on Communications Policy. Among other things, the task force was directed to formulate recommendations on the ownership and use of satellites for domestic communications. Now that the task force has completed its studies, we are prepared to proceed with our inquiry. Two weeks ago, the General Electric Co. submitted for our consideration certain recommendations as to how satellite communication should be applied to domestic communication. The recommended plan differed materially from proposals that have been made by others in the inquiry. We regarded it of sufficient importance to invite public comment. We have set a firm deadline of April 14 for such comments and intend to reach a decision soon thereafter. Mr. MACDONALD. May I interrupt at this point? It might be helpful, if the members have questions, that we hold questions at the present time inasmuch as we have so much to cover, but on this particular matter you state that GE submitted certain recommendations. Could you contrast their recommendations with that of others that you have had? Mr. HYDE. I would like to make a few comments about the work in this area, responding to your earlier request for information regarding the report of the President's Task Force on Communications. As you have indicated, we did participate in those studies in this manner: Although the task force was composed of representatives of the executive agencies, in fact it was chaired by Assistant Secretary Rostow, but I was an ex officio member. This permitted me as a chairman of an independent agency to have immediate liaison with them and to participate in deliberations without subjecting my independent status to the voting of the committee. Our staff likewise participated in discussions and in my judgment. was very helpful in providing information to the task force. So, we are conversant with their deliberations, notwithstanding the fact that the report which was submitted to the Chief Executive has not been released. Mr. MACDONALD. What has happened to it? Mr. HYDE. It is under examination, I am told, in the executive department. Mr. MACDONALD. That covers a multitude of-I won't say sinsMr. HYDE. It is my understanding that the Chairman of the task force, which was Mr. Rostow, transmitted the report to the President. This would be President L. B. Johnson and I presume it would have been transmitted from his administration to the new administration. Mr. VAN DEERLIN. If the chairman would yield, could you give us a date that that transmittal took place? Mr. HYDE. I believe it was in November but I can get the date for you. I can give you the precise date. There was a letter of transmittal. In the interest of accuracy I will check on that, but I believe it was in November. It might have been December. (The following information was submitted for the record:) The date of the letter of transmittal of the President's Task Force Report on Telecommunications was December 7, 1968. Mr. HYDE. You asked me about the material submitted in our domestic satellite inquiry. This background might be of interest to you. We learned by consultations of staff with the General Electric Co. that they had developed some new ideas about possible applications of satellite technology. They indicated to our staff that they thought they might become a petitioner to offer some plan of operation. As their studies continued they finally determined that they would not become a petitioner looking toward entry into the business of communications themselves, but they thought that the information they had developed could be helpful to the FCC to the making of an appropriate decision in this area. Consequently, on this basis they submitted a file of very interesting information to the Commission for consideration in the inquiry which we had undertaken. This, of course, was after the date of submission of materials under our original notice. But we thought the information was significant enough to bring it into the docket, to give public attention to the filing and to invite interested parties to comment on this filing, and that is what I have referred to. Mr. MACDONALD. My time is running out. My original question was in what manner does it differ, or is that a state secret? Mr. HYDE. The principal new feature would be the possibility of many ground stations beyond those contemplated by other plans. In other words, this looked toward the establishment of a system in which you would have ground stations available at much lower costs than earlier information had indicated and a much more general use of satellites for domestic purposes. That is a very generalized statement of it but perhaps that is what you wanted. You mentioned our investigation of A.T. & T. rates and practices. A.T. & T. RATE INVESTIGATION In 1967 we completed, in record time, the first phase of our comprehensive investigation of the Bell System's rates for its interstate services. In that phase, we determined a proper interstate rate base and rate of return. These determinations resulted in a rate reduction of $120 million annually. That reduction, by the way, is about six times the Commission's budget for fiscal year 1969. We are now in the latter stages of the second phase of that investigation. In this phase, it is our objective to formulate ratemaking principles and factors by which to establish the overall price levels for each of the separate classes of interstate services. Thus, in these hearings we are reexam |