First and foremost, the Commission has decreed that all CATV systems which are operating and providing service to the public on or before February 15, 1966, may continue on the same basis after that date. This grandfathering of existing systems is to be permitted without findings that the existing CATV services would not inhibit UHF development and without findings that the establishment of additional CATV services after that date would have an obviously adverse effect upon the Commission's goals.

The Commission merely stated "A line must be drawn as to 'grandfathering' and we believe it appropriate to do so upon the basis of operation on the date of the public notice." I think it is fair to say that the Commission had no idea of what CATV systems were in operation prior to that date or how many more systems could possibly have been inagurated after that date in the large markets and where there had been a significant start toward the establishment of such systems.

It is perfectly clear from reading the Commission's "Report and Order" that it did not rely upon specific facts concerning the extent of CATV development on February 15, 1966. It seems inconceivable to me that a responsible Government agency could base decisions regarding the future of a significant industry on less than a detailed and wide-ranging inquiry into the facts. The failure to conduct this kind of governmental sanction totally ignores the interest of the public as well as the equities of private parties.

The Commission appears to have legislated with a heavy hand, It has arbitrarily decreed that systems in operation on or before February 15 shall receive the benefits of having completed their systems before the Commission asserted its jurisdiction, while those which may have been incomplete but with substantial construction started on February 15, shall not be permitted to provide the full service that it needed. In practical effect, this decision may mean for many systems, such as the system of Akron Telerama, Inc., that their investment has been substantially impaired and that they will not be able to fulfill their obligations to the local community as outlined in the proposal made to local franchising authorities more than a year ago.

We urge upon the members of the committee their consideration of an amendment to the pending Commission bill that would require the Commission to give decisional effect to the expenditure of substantial sums of money by CATV systems prior to February 15, 1966, and where there has been, by any test or standard, substantial construction.

In this connection, we would also certainly urge that an expenditure of over $200,000, such as in the case of Akron, would clearly qualify the system for Commission approval to carry distant signals. We do not think it is necessary for the Congress to legislate specifically what level of expenditure or degree of construction should qualify a system for Commission approval. This should depend upon a number of factors, including the size of the community to be served and the effect which the possible completion of the system may have upon the achievement of the Commission's goals.

In any event, we would urge upon the committee that in a situation such as Akron's where, I have been informed, there has been a total

commitment of some $800,000, a cash outlay of $200,000, and a substantial start towards completion of cnstruction prior to Febraury 15, 1966, that the system and our city should be given the same equitable grandfathering rights as the cities where early construction has occurred.

Secondly, I would urge upon the committee consideration of amendments to the Commission's legislation which would do away with the concept that distant signals may not be transmitted over a CATV system which is located within the grade A contour of television stations assigned to the top 100 markets.

Instead, where the CATV system is to be located in a community outside the top 100 markets and the main post office of the community in which it is to be located is at least 25 miles from the main post office of the community that is within the top 100 markets, then there should be absolutely no prohibition upon the number or type of signals carried on the CATV system. I believe that this type of an amendment would provide a more realistic measuring stick for achievement of the Commission's goals than the use of the grade A contour concept.

It is clear from the varying antenna heights and power of stations throughout the country that the grade A contour of a television station may extend as little as 15 miles or as much as 45 miles. Where there is a substantial difference between a contour of two television stations, each located in different markets, there would appear to be no reasonable relationship between use of the contour and the goal of protecting potential new UHF stations.

Should a CATV system 35 miles from Cleveland not be permitted to carry distant signals because it is located within the grade A contour of the Cleveland stations, while another CATV system also 35 miles from a major market should be totally free to carry whatever signals it chooses because it is not within the grade A contour of lower powered television stations assigned to a major market?

To achieve its goals of protecting UHF stations in Cleveland, for instance, the Commission should relate its distant signal rule to the geographical distance between the CATV system and the major city. This will permit an equitable administration of the rule and preclude discrimination between different systems based solely on the fortuitous circumstances that the grade A contour of a major market station is less or more due to its particular antenna height and power.

The adoption of a mileage concept can be clearly related to the effective range of UHF stations and therefore to the area within which UHF stations should be given protection from the competition of CATV systems. Let me illustrate by going again to the AkronCleveland situation. The effective area within which a UHF station will find viewers and economic support is not nearly as large as the area served by VHF stations.

A UHF station in Cleveland cannot expect and will not find much economic support of off-the-air viewing in the Akron area, 35 miles from Cleveland. Such a station necessarily must depend solely upon the Cleveland metropolitan area.

The presence or absence of an Akron CATV system will have no possible adverse effect upon the prospects of successful UHF opera

tion in Cleveland. On the contrary, the presence of a CATV system in Akron which will extend the range of the Cleveland UHF stations will be hindered or helped by CATV systems.

Instead, in defense of UHF at all costs, the Commission has apparently stumbled into a situation where UHF will be hurt by its procedures in certain cases and where investments made in good faith will be impaired or totally destroyed. This rule, as I have stated, although well intended to aid UHF development in Cleveland, will actually hinder such development.

Let me add parenthetically at this point that Akron is not one of the top 100 markets in the country. It is rather the 196th television market and the Commission has stated that it does not believe there is significant chance for local television service to be developed in such small markets.

It is for this reason that it has not proposed rules for the smaller markets similar to those proposed for the larger. Let me state that although there are unused UHF channels assigned to Akron, I do not believe that at the present time there are great prospects for the implementation of such channels and that unless CATV service is permitted in Akron on a meaningful basis, there will be little real opportunity for our citizens to obtain the diversified television service which is available to other areas.

My third and final criticism of the Commission's action relates to the unfair and inadequate notice which they have given to prospective CATV operators and investors. It is this notice which was issued on April 23, 1965, which the Commission uses to justify cutting off all CATV service that has not been commenced prior to February 15, 1966, even where there has been a substantial investment of time, money, and effort.

I would emphasize in this regard that the Commission's notice of April 23, 1965, consisted merely of a statement that the Commission might assert jurisdiction over all CATV systems and might, after it had considered the comments filed in response to the notice of inquiry of that date, propose further rules which would be applicable to nonmicrowave served CATV systems.

The Commission did, however, in its latest action, not propose rules and ask comment thereupon. In effect, its recent action has amounted to an unannounced freeze upon the completion of construction of new CATV systems without notice, without an opportunity for interested persons to comment, without congressional guidance or approval, and without consideration of the public interest.

It arbitrarily confers upon people who have been fortunate enough to complete their systems and commence service with a lifesaving grandfathering provision and asserts a heavy penalty upon those systems which are not so fortunate as to have completed construction.

Between these two groups, the Commission makes no distinction based upon the need of the public or the effect of the system upon the achievement of the Commission's goals. I feel this very closely resembles ex post facto legislation. We believe that the manner in which the Commission has proceeded is an appropriate subject of congressional concern.

I believe the Commission should be instructed that the notice that it now relies upon to prohibit the construction of new CATV systems is inadequate and that where substantial investments have been made in good faith and upon the approval, if not encouragement of local groups, that such investments in CATV systems should be permitted to go forward until the systems are completed, with the carriage of all television signals.

I wish to add one final note concerning the procedures which the Commission has established. You may well ask why is congressional concern necessary in these circumstances where the Commission has set up a procedure for hearings and requests for waiver of the rules. Let me state that I take no comfort in these procedures and we have no assurance that the Commission will not adhere strictly in these ad hoc proceedings to the substantive provisions of the rule as they now exist. Certainly, it is clear that the Commission has acted totally without congressional guidance or congressional standards.

I

We have no assurance that unless Congress makes manifest its interest in such a situation that regulatory approval for the proposed Telerama System in Akron, for example, will not be forthcoming. have spoken principally of the particular situation in Akron and I apologize if it has appeared that my appeal has been too narrow and too related to our own concerns.

I feel strongly, however, that the Akron situation is typical of the lack of consideration generally which the Commission has given to the hard details of this problem. We have dramatically illustrated in the case of Akron the inequity of the Commission's decision to cut off further CATV systems whose construction was not completed before February 15, 1966. We have dramatically illustrated the inapplicability of the Commission's grade A contour concept to its goals of protection of potential UHF stations in cities located many miles away and, of course, we have the point which is common to all systems that have commenced construction of the inadequate notice which the Commission appears to rely upon at this time.

For those of us in Akron who have been without any real choice of television service since development of the medium, this latest action of the Commission concerns me lest the citizens of Akron will again suffer as a result of some well intentioned, but misguided act.

When the VHF channels were allocated, our interest in such service was denied in favor of providing the Cleveland area with VHF television channels.

Now that UHF development has become important, we are told again that Akron's interest in a truly diversified source of television service must be sacrificed in favor of Cleveland UHF stations. I cannot believe that fairness requires us to assume a disadvantaged position once again.

More importantly, as I have explained, I cannot conceive of how the public interest can possibly be hurt by permitting us to receive, at long last, what has always been available to the great majority of our citizens.

I thank the committee for its attention.
(Data accompanying statement follows:)

APPENDIX A

Financial expenditures and commitments made by Akron Telerama, Inc., between September of 1964 and February of 1966

I. Summary of actual cash expenditures prior to Feb. 16, 1966:

Cash and Cognovit Notes actually paid over to Ohio Bell... $180, 000. 00
Cash deposited in escrow with the city of Akron to guar-
antee franchise taxes..

Cash paid in connection with purchase of tower equipment..
Miscellaneous cash expenditures for engineering, legal serv-
ices and the like..

Total__.

II. Summary of financial commitments which Akron Telerama, Inc.,
is obligated to fullfill:

10-year contract Ohio Bell Telephone to lease 125 miles at
$468 per year per mile__

Bond posted to guarantee performance to the city of Akron

(in addition to the $10,000 noted above).

Balance due on tower__

Balance due on 10 acres of industrial land....

Total___

Grand total expended and committed____.

Mr. SWEENY. Thank you, Mr. Chairman.

Mr. ROGERS of Texas. I have just one or two questions.

10, 000, 00 5, 350. 00

7,500. 00

202, 850.00

585, 000.00

50, 000, 00

13, 250.00

50, 000. 00

698, 250.00

901, 100. 00

I want to compliment Mr. Davis on coming here as a representative of one of the smaller governmental facilities or agencies in our overall government. How did you get your office, Mr. Davis?

Mr. DAVIS. I ran for election and I got the most votes.

Mr. ROGERS of Texas. Who cast those votes, Mr. Davis?

Mr. DAVIS. The registered voters in my district.

Mr. ROGERS of Texas. The people in Akron?

Mr. DAVIS. That is right.

Mr. ROGERS of Texas. Don't you think they elected you because they believed you would do what was right for them and you would

serve their best interests?

Mr. DAVIS. I would think so.

Mr. ROGERS of Texas. Do you not think that you folks there at that level know more about your problems as you pointed out in your statement here, than a Bureau or a Board in Washington, D.C.? Mr. DAVIS. Yes, not only me but the entire council of the city of Akron.

Mr. ROGERS of Texas. I want to compliment you on several of the statements. I think you have hit the problem right squarely but where you said on page 4, talking about the Federal Communications Commission, "The Commission appears to have legislated with a heavy hand."

The Constitution vests the legislative powers in their hands but I think you are exactly right in what you said.

Thank you very much.

The CHAIRMAN. Are there any further questions?

If not, we thank you very much.

A this time, we will hear from Mr. Frederick W. Ford, of the National Community Television Association, Inc.