I made reference to a CATV system having the position of a local or neighborhood newspaper to do local interest things. Local events. I must stress once again if I may, Mr. Rooney, that these are incidental to the reception service that is being performed over that antenna.

Mr. ROONEY. In other words, the industry itself is not really concerned about originating its own programs?

Mr. BEISSWENGER. No, sir. There are in some specific areas, but I am talking of the industry as a whole.

Mr. ROONEY. I have no further questions, Mr. Chairman. Thank

you.

The CHAIRMAN. Mr. Mackay.

Mr. MACKAY. Thank you, Mr. Chairman.

Mr. Beisswenger, does your cooperation counsel agree with what appears to be the majority view of the FCC that they have jurisdiction conferred on them under the Communications Act of 1934 to regulate CATV!

Mr. BEISSWENGER. May I ask Mr. Matthews, who is our counsel? Mr. MATTHEWs. Congressman Mackay, we will be filing a brief in behalf of the Jerrold Corp., essentially making the point which we have made on our behalf in the past, that whether or not they do have jurisdiction, they should defer to the Congress of the United States in that connection. That has actually been the position of the Jerrold company consistently over the last several years.

Mr. MACKAY. Are you just saying they ought to come up here to find out if they have jurisdiction?

Mr. MATTHEWS. That is right. That is what the Communications Act of 1934 came from.

Mr. MACKAY. In some of the material I have accumulated in my office, I have heard comments of Associated Maximum Service Telecasters, Inc., attachment A. I was interested to see that they took the position that they did not have jurisdiction. It is a rather interesting question whether or not you come to a legislative body to find out what the law means.

Mr. MATTHEWS. It is an interesting question. I might add that Jerrolds incorporated verbatim in its brief in docket 15971 the dissenting opinion of Commissioner Loevinger.

Mr. MACKAY. Do I understand you are going to file a statement that you are not taking a position here today whether or not it does or does not have jurisdiction over CATV?

Mr. MATTHEWS. We agree with Commissioner Loevinger's opinion. No one could have done a better job than Commission Loevinger did. We think it is immaterial, though, because we think in any event the Congress of the United States would be the first one that sets the

Mr. MACKAY. Aren't you really saying that the Congress ought to confer limited jurisdiction on the FCC to regulate to the extent you are suggesting here?

Mr. MATTHEWS. It might be a confirmation of jurisdiction. That is one way to put it.

Mr. MACKAY. I don't understand Mr. Beisswenger's testimony that he is in favor of no regulation of CATV.

Mr. MATTHEWS. I don't believe Mr. Beisswenger said that. I think the statement will reflect the fact that it is the position of the Jerrold

Corp. that the continued healthy growth of both industries realisically in his age of regulations requires certain limited guidelines from the Congress.

Mr. MACKAY. As I understood your testimony-I am in complete accord that the FCC should have come to the Congress first and should not have taken the kind of position that it did here, that it was almost a contempt of Congress for it to proceed in this fashion. But leaving that matter aside, as I understand, we have the leader here in the CATV industry who is really proposing limited regulation of the industry as being in the public interest.

Mr. MATTHEWs. Yes, you can say that.

Mr. MACKAY. It is not the position that if you are going to do something, this is what you ought to do.

Mr. BEISSWENGER. Yes, this has been our position for a good period of time. It has been the position of our national organization that they would have to have in the public interest, to have sensible guidelines laid down but not the kind of thing we got from the FCC in the second order report. Unless these points are set down by the Congress to clearly delineate how far the FCC can go, then we are going to be right back into the grease again.

Mr. MACKAY. In the statement of section 1 of the Communications Act it states that the Commission was established for the purpose of, among other things, regulating interstate and foreign commerce, communications by wire and radio, so as to make available, so far as possible, to all people of the United States, rapid wire and communications service.

It would be of help to me if your counsel would examine the other purposes of the act and see if one or the other of the purposes of the act or any construction of the act would give weight to the argument that you ought to protect the broadcaster because that was the main thrust of Mr. Main's testimony this morning.

Mr. MATTHEWS. It is my opinion that the Communications Act of 1934 did not confer that type of protection jurisdiction on any Federal agency including the FCC.

Mr. MACKAY. I always understood that the act was to prevent chaos in the assignment of frequency so that you could get clear reception by the American people.

Mr. BEISSWENGER. Yes, sir, and the mandate of Congress to the FCC was to get the maximum amount of communication media for the people.

Mr. MATTHEWS. In 1952, and even before, on setting up its television allocation policy, one of the top priorities which the Commission gave to television and which was confirmed by the Congress was the priority of providing the maximum amount of television service to the people of the United States. I want to be candid with you, that is not the first priority. The first priority is that everyone get at least one television signal.

Mr. MACKAY. I would like to ask whether or not physically you know of any CATV system that is actually wired across a State line, CATV in interstate commerce in that physical sense.

Mr. BEISSWENGER. I don't know of any across a State line, not offhand. Maybe one of my colleagues might know of one-yes.

Mr. MACKAY. I think you touched on this but I would like you to comment on it again: What is the distance that would be the longest distance that your wire would go from the big transmiter to the consumer?

Mr. BEISSWENGER. A big antenna?

Mr. MACKAY. Yes, where you pick up your receiving signal.

Mr. BEISSWENGER. A receiving antenna to the home of the consumer? Mr. MACKAY. Yes.

Mr. BEISSWENGER. It is limitless.

Mr. MACKAY. Physically do you know what extremity would be right now based on present installation?

Mr. BEISSWENGER. This goes to the construction of the system. As far as putting amplifiers in cascade where you can run them straight down 1 cable a certain distance, you can put 50 amplifiers in cascade and that will take you out 40 miles, 35 miles. However, you can go way beyond that because you can add amplification. If you take away the economics of the situation I can transport signals over a cable a tremendous distance.

Mr. MACKAY. I notice you used the term "transported," not the term "transmitted."

Mr. BEISSWENGER. Yes, sir, we don't transmit, we transport signals that come off the receiving antenna.

Mr. MACKAY. Will you distinguish between transmit and transport? Mr. BEISSWENGER. Transport-I don't know whether I can. The derivative "port" is to carry and we carry, and transmit to my mind, is to emit and send out. That is the way I would differentiate between those words.

Mr. MACKAY. I would like to direct your attention to page 5 of your testimony. I would like you to amplify each of those five points, at the bottom.

Mr. BEISSWENGER. If I had my druthers as a businessman, just talking right out, no regulation of any kind, a sort of gray area to move in because you could do all kinds of things, but that is not a realistic way of life in this day and age, I am afraid, we agree to these points because so much attention was put on these by the Commission and they say these are the most important things they need.

You must protect local stations. Of course we will protect local stations. We love to carry local stations. Two, the local station so carried should be entitled to simultaneous nonduplication. We will help them. We will not duplicate their signals coming in from a more distant area.

Mr. MACKAY. Illustrate that with a specific program.

Mr. BEISSWENGER. You know, I had a happy thought as the testimony went the last couple of days. I thought if we were to give protection to Bonanza it would solve this whole problem because everybody is talking about Bonanza. If you have a station in Philadelphia, let us say, which is showing a certain program and you have that same program coming in from a more distant city which is carried on your system, you would not show that at the time the local broadcaster had his picture on the air.

Mr. MACKAY. Now, will you comment on No. 3.

Mr. BEISSWENGER. No. 3, no CATV service should be utilized for pay television system without congressional or Commission approval.

62-610-66- -20

I put this in here specifically to shoot down the bugaboo that CATT puts you right into the pay TV business. That does not even happen to be true technically. It is not true economically. There are many reasons why it is not true.

Mr. MACKAY. You just prohibit pay TV?

Mr. BEISSWENGER. Do away with it, get it out of there.

Mr. MACKAY. Will you give a simple definition of what you mean by pay TV in this context?

Mr. BEISSWENGER. Pay television is one in which you originate and sell programs for a fee. Now this could involve program by program or it could even involve a fixed fee kind of thing. I have never seen any of the latter. But at the moment the only people who are in the pay TV business are the broadcasters, not the cable people.

Mr. MACKAY. No. 4?

Mr. BEISSWENGER. No. 4

Mr. MACKAY. You have really altered your position on No. 4. I think you have already said there should be some restriction.

Mr. BEISSWENGER. Reasonable restriction.

Mr. MACKAY. Particularly in the area of politics and free competition of ideas?

Mr. BEISSWENGER. Yes, sir.

Mr. MACKAY. And then No. 5, you reject Commissioner Henry's statement that this is a public utility?

Mr. BEISSWENGER. Yes. People don't have to buy our services. The great majority of people in the United States do not have to buy our service. They can take signals right off the air and they can live with what they have. If they like that better they don't have to pay for the reception service. But most of them do.

Mr. MACKAY. Do you feel that Congress is being hindered in the consideration of this matter because there was not what you call an evidentiary hearing?

Mr. BEISSWENGER. Yes, sir.

Mr. MACKAY. Or a personal hearing in which you could present your arguments orally.

Mr. BEISSWENGER. I have never had any opportunity formally to talk to Chairman Henry like I am talking to you.

Mr. MACKAY. Do you think it would facilitate the resolution of the issues if this were done at this late hour?

Mr. BEISSWENGER. I am not so sure, honestly, at this late hour because in my opinion there is a very strong anti-CATV posture at the staff level in the Commission.

Mr. MACKAY. Do you feel that the suspension, assuming that Congress could do this and I am not sure that this could be done without act of Congress-do you feel that the suspension of these premptory orders would do injury to anyone?

Mr. BEISSWENGER. I have so testified. I think it is absolutely es sential. I don't want them to take-I don't even like to bring up the term "pay TV." The Constitution here has just been upheld by the Supreme Court of California and Pat Weaver won in his position out there in that referendum but they laid that wreath on his grave.

Mr. MACKAY. I meant specifically, addressing myself to the world order, the present regulatory action

Mr. BEISSWENGER. As was I, sir. Out there he was declared OK but that was 2 years later and his company lost some $20 to $25 million.

This whole industry is going to be seriously damaged from growing. It is going to cause disruption; it is going to make second-class viewers out of people in the big city. If you live in a big city you are never, never going to be allowed to have the quality and diversity of programing that we can give you if you happen to live in Logansport, Ind.

Mr. MACKAY. If this order were suspended and Congress took no action, do you see any injury that would result to the public or to industry or anyone?

Mr. BEISSWENGER. No, sir; I can't see any injury happening to anybody. I have heard about how the broadcasters are going to go out of business. I would like the FCC to bring in, in one of these evidentiary hearings, the record and see what kind of money the broadcasters are making. I am not against people making money because I am trying to do it every day for my company, but they are making fantastic returns on their investment.

As an industry, broadcasting has continued to increase its profits and it is a very strong and healthy business. And we are very happy because they are helpful to us.

Mr. MACKAY. Is it not true that CATV provides a means for grassroots reporting on political activities, that is, civic council type things not available through the large television station?

Mr. BEISSWENGER. Absolutely, sir.

Mr. MACKAY. Will you supply the mechanics of that if you were going to go to the city council in Decatur, in my town, will you explain the mechanics of how it would be done on the CATV system?

Mr. BEISSWENGER. Well, you would need a camera, a very simple inexpensive kind of pickup camera and some originating equipment in order to take a picture of what is happening in the city council room and show it on the system.

Mr. MACKAY. That is not transmitted?

Mr. BEISSWENGER. That is not transmitted. It never leaves this jacketed piece of cable. When you own that piece of cable up there in the area that is your own private spectrum, an infinite spectrum is encased inside that coaxial cable. You are not in the Government spectrum.

Mr. VAN DEERLIN. Will the gentleman yield for a moment?
Mr. MACKAY. I will yield the floor. Thank you very much.

Mr. VAN DEERLIN. In the interest of clarifying the testimony here, on page 4, Mr. Beisswenger has used the term "transmission" to describe CATV, and I think he might want to change that to "transportation."

Mr. BEISSWENGER. Yes, sir; I would appreciate that correction.
Mr. VAN DEERLIN. I am working for you all the time.

Mr. BEISSWENGER. I thank the Congressman.

The CHAIRMAN. Mr. Adams.

Mr. ADAMS. Mr. Beisswenger, I appreciate very much the directness of your testimony. Since you are such a direct man I would like to find which of the two sides of this issue you come down on in terms of whether or not you are a competitor to broadcasting. Now on page 4 at the bottom of your statement you start out by saying:

The Federal Communications Commission rests much of its arguments for this kind of drastic regulation on the need to protect television broadcasters.