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in several States with differing laws on licensee liability. We, therefore, believe that it would be desirable to place specific language in the Federal statute making clear that, since licensees have been denied censorship powers over section 315 programs by the Congress, they are exempted from liability in any court (local, State, or Federal) because of any defamatory statement made by a legally qualified candidate for public office in such a broadcast. By so doing licensees will be assured of a protection to which they would seem reasonably entitled in the absence of any power to censor or to control what is said and, at the same time, the substantial legal question with respect to the present existence of any licensee immunity for libelous or slanderous statements in political broadcasts will be put to rest. The Commission believes that if Congress as a matter of national policy has authority to insulate broadcast utterances of legally qualified political candidates from any station censorship, it has equally the authority to preclude licensees from any liability for actions they are thus required to take or refrain from taking.

The Commission also deems it reasonable and necessary that the immunity be extended, as it has been in H. R. 4814, to agents and employees of a licensee since such employees or agents of the licensee have the same need as the licensee for the protection. It also believes that the words "willfully, knowingly, and with intent to defame” appearing in the last line of the bill are appropriate to indicate the degree of participation in a libelous political broadcast that will deprive a licensee or its employees of the immunity granted. Participation in the defamatory statement or broadcast willfully, knowingly, and with intent to defame clearly makes the licensee or its employee a party to the utterance of the libel or slander and clearly renders meaningless the fact that the licensee has no right to censor the candidate's speech. Participation in the broadcast to any less definite extent, since inevitably the licensee and its employees participate in all broadcasts to some degree, would not seem to warrant deprivation of the immunity granted.

The Commission, therefore, favors the enactment of H. R. 4814.

SEPARATE STATEMENT OF COMMISSIONER JOIN C. DOERFER

Although I concur with most of the comments of my colleagues on the Federal Communications Commission respecting H. R. 4814, a bill to amend section 315 of the Communications Act so as to prohibit liability from being imposed upon a licensee because of defamatory statements made in a broadcast by a political candidate unless such licensee participates in such broadcasts with intent to defame, I would suggest that there be inserted the word "wantonly” in line 8 on page 2, so as to read "wantonly, willfully, knowingly, and with intent to defame."

The word "wantonly” would permit a sovereign State to impose civil liability for a licensee who conducts his potlical programing in a manner to show utter disregard for the name and reputation of political opponents or others. In other words, civil liability should be permitted to attach to such conduct of a licensee as would warrant the Federal Communications Commission in revoking his license for failure of a slight degree of care in programing political speeches.

Many responsible licensees although not required to, do request examination of a proposed draft. Because of his experience, it would be quite feasible for a licensee to point out to an inexperienced political candidate or a vicious one that derogatory statements impunging crime or moral turpitude to a political opponent or others may be libelous if not true. If after such advice the poltical candidate persists, then the licensee would not be liable. He has exercised that slight degree of care which will balance the reputation of a man and his family with our cherished principles of free speech. Even in cases of an extemporaneous speech, a responsible manager would briefly review with a poltical candidate the candidate's responsibility and personal liability in the event he persisted in uttering or publishing statements which are patently libelous or slanderous. By the word "patently," I mean that which is so obvious as to leave little room for doubt. It would not encompass any statements about which there may be some doubt, even a slight one, in the field of facts or in law.

In this delicate field of Federal and State relations, the Federal Government should not permit a licensee to escape civil liability for such gross negligence as would warrant the Federal Communications Commission's revoking his license.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D. C., May 17, 1955. Hon. J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in reply to your letter of March 15, 1955, re sting the views of the Bureau of the Budget on H. R. 4814, a bill to amend section 315 of the Communications Act of 1934 so as to prohibit liability from being imposed upon a licensee because of defamatory statements made in a broadcast by a political candidate unless such licensee participates in such broadcast with intent to define. This office would have no objection to the enactment of this measure. Sincerely yours,

HAROLD PEARSON, Assistant Director.

DEPARTMENT OF JUSTICE,
OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, March 24, 1955.
Hon. J. PERCY PRIEST,
Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. DEAR MR. CHAIRMAN : This is in response to your request for the views of the Department of Justice concerning the bill (H. R. 4814) to amend section 315 of the Communications Act of 1934 so as to prohibit liability from being imposed upon a licensee because of defamatory statements made in a broadcast by a political candidate unless such licensee participates in such broadcast with intent to defame.

The bill has been examined, but since the subject matter thereof is not related to any of the activities of the Department of Justice, we would prefer not to offer any comment concerning it. Sincerely,

WILLIAM P. ROGERS, Deputy Attorney General.

[H. R. 4939, 84th Cong., 1st sess.) A BILL To amend sections 212, 219 (a), 221 (a), and 410 (a) of the Communications Act

of 1934

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That (a) the first sentence of section 212 of the Communications Act of 1934 is amended by inserting immediately before the period at the end thereof the following: Provided, That the Commission may authorize any person to hold the position of officer or director in more than one such carrier, without regard to the requirements of this section, where it has found that one of the carriers of which he is an officer or director directly or indirectly owns more than 50 per centum of the stock of each of the other carriers of which he is an officer or director, or that 50 per centum of the stock of each such carrier is directly or indirectly owned by the same person”.

(b) The second sentence of such section is amended by striking out “any such carrier” and inserting in lieu thereof “any carrier subject to this Act."

SEC. 2. The second sentence of subsection (a) of section 219 of the Communications Act of 1934 is amended by striking out “Such” and inserting in lieu thereof “Except as otherwise required by the Commission, such.”

SEC. 3. (a) The first sentence of subsection (a) of section 221 of the Communications Act of 1934 is amended (1) by striking out “fix a time and place for a public hearing upon such application and shall thereupon” and (2) by inserting immediately before the period at the end thereof the following: “, and shall afford such parties a reasonable opportunity to submit comments on the proposal.”

(b) The second sentence of such subsection is amended by striking out “After such public hearing, if” and inserting in lieu thereof the following: “A public hearing shall be held in all cases unless the Commission determines that a hearing is not necessary in the public interest. If.”

76974-56-2

SEC. 4. Subsection (a) of section 410 of the Communications Act of 1934 is amended by inserting immediately after “conferred by law upon" the following: "an examiner provided for in section 11 of the Administrative Procedure Act, designated by.”

DEPARTMENT OF JUSTICE,
OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, May 24, 1955.
Hon. J. PERCY PRIEST,
Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. DEAR MB. CHAIRMAN: This is in response to your request for the views of the Department of Justice concerning the bill (H. R. 4939) to amend sections 212, 219 (a), 221 (a), and 410 (a) of the Communications Act of 1934.

Section 212 of the act provides, inter alia, “* * * it shall be unlawful for any person to hold the position of officer or director of more than one carrier subject to this Act, unless such holding shall have been authorized by order of the Commission, upon due showing in form and manner prescribed by the Commission, that neither public nor private interests will be adversely affected thereby." The bill would amend this section by adding at the end of the above-quoted provision the following proviso: Provided, That the Commission may authorize any person to hold the position of officer or director in more than one such carrier, without regard to the requirements of this section, where it has found that one of the carriers of which he is an officer or director directly or indirectly owns more than 50 per centum of the stock of each of the other carriers of which he is an officer or director, or that 50 per centum of the stock of each such carrier is directly or indirectly owned by the same person."

Section 219 (a) of the act presently authorizes the Commission to require the filing of annual reports by all carriers subject to the act. The section further requires that such reports “shall show in detail” a long list of specific types of information. The bill proposes to amend this section by inserting the words "Except as otherwise required by the Commission" so that the section will read "Except as otherwise required by the Commission, such annual reports shall show in detail * **.” The purpose of this proposed amendment is to make clear that the Commission has authority to specify the form of the annual reports for particular types of carriers so that such annual reports will reflect only information which the Commission needs in order to perform its regulatory function.

Section 221 (a) of the act, which the bill proposes to amend, presently provides that the Commission must hold public hearings upon all applications for authority to consolidate telephone properties or for authority for one telephone company to acquire the property or control of another. The bill would amend this sectin so as to dispense with the necessity of a public hearing in cases where “the Commission determines that a [public] hearing is not necessary in the public interest." The purpose of this proposed change, it is understood, is to ease the mandatory public hearing requirement since many of the applications received by the Commission are of minor significance which may not warrant the holding of such public hearings.

The bill also proposes to amend section 410 (a) of the act, the effect of which would be to limit the jurisdiction and powers of certain joint boards to which the Commission, under this section, is authorized to refer certain matters. The authority of such joint boards would, under the amendment proposed by the bill, be equal to that possessed by an examiner rather than, as presently provided in the act, equal to that of the Commission. The effect of this proposed change would probably make the section more usable to the Commission in the administration of the act since the Commission presently does not find it desirable to refer matters to a joint board because of the broad powers of such boards.

Whether the bill should be enacted involves a question of policy concerning which this Department prefers to make no recommendation.

The Bureau of the Budget has advised that there is no objection to the submission of this report. Sincerely,

WILLIAM P. ROGERS, Deputy Attorney General.

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET,

Washington, D. C., April 21, 1955. Hon J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: This is in reply to your letter of March 18, 1955, requesting the views of the Bureau of the Budget with respect to H. R. 4939, a bill to amend sections 212, 219 (a), 221 (a), and 410 (a) of the Communications Act of 1934.

The Bureau of the Budget would have no objection to the enactment of this measure. Sincerely yours,

HAROLD PEARSON,

Assistant Director.

FEDERAL COMMUNICATIONS COMMISSION,

Washington, D. C., March 30, 1955. Hon J. PERCY PRIEST, Chairman, Committee on Interstate and Foreign Commerce,

House of Representatives, Washington, D. O. DEAR CONGRESSMAN PRIEST: I have received your letter of March 18, 1955, in which bill H. R. 4939 was enclosed. This bill is in full accordance with the legislation which we proposed in our letters to the Vice President and Speaker, dated February 28, 1955.

The Commission will greatly appreciate your committee giving early consideration to this bill. Sincerely yours,

GEORGE C. McCONNAUGHEY, Chairman.

FEDERAL COMMUNICATIONS COMMISSION,

Washington D. C., February 28, 1955. Hon. SAM RAYBURN, Speaker of the House of Representatives,

Washington, D. C. DEAR MR. SPEAKER: The Federal Communications Commission wishes to recommend for the consideration of the House of Representatives four amendments to the Communications Act of 1934, as amended, relating to its regulatory authority over communications common carriers, enactment of which, it is believed, will substantially relieve the administrative burdens of such regulations on both the Commission and the carriers subject to its jurisdiction without in any way detracting from the essential regulatory authority of the Commission. These amendments are to sections 212, 219 (a), 221 (a) and 410 (a) of the act, respectively. A draft bill incorporating each of the amendments is attached.

Section 212 of the Communications Act presently makes it unlawful for any person to hold the position of officer or director of more than one carrier subject to the act, unless the dual holding is first authorized by Commission order upon a showing, in a manner to be prescribed by the Commission, that neither public nor private interests will be adversely affected thereby. An objective of Congress in enacting this requirement—the prevention of the exercise of indirect control over ostensibly competing carriers through such "interlocking directorates"—is, we believe, clearly salutary. But the all-embracing language of the section makes it applicable to dual holdings within an integrated communications system under common ownership and control as well as to interlocking relations between the competitive systems to which the section must have been primarily intended to apply. The result has been that in recent years the Commission has been called upon to consider a substantial number of requests by officers or directors of one company of a commonly owned and controlled system, such as the Bell System of the American Telephone & Telegraph Co., to serve as well in a similar capacity with respect to another company within the system. The Commission has felt that in such situations, where the dual holding cannot have any effect upon the ultimate control or management policy of either of the companies, the determination as to whether a particular individual can best serve the interests of the system by concentrating his efforts in one of the constituent companies or by making his talents available to more than one is a

detail of carrier management which can and should be left to the discretion of the carrier itself. It has, accordingly, regularly issued orders approving such requests. It is believed, however, that in the interests of efficiency and avoidance of unnecessary effort by both the Commission and the carrier personnel involved, it would be advisable to amend section 212 to make possible elimination of unnecessary applications and Commission orders in such situations. This would be accomplished by amending section 212 to add the following proviso at the end of the first sentence: "Provided, That the Commission may authorize persons to hold the position of officer or director in more than one such carrier, without regard to the requirements of this section, where it has found that 1 of the 2 or more carriers directly or indirectly owns more than 50 percent of the stock of the other or others, or that 50 percent or more of the stock of all such carriers is directly or indirectly owned by the same person."

In addition, certain language changes will be required in the second sentence of the section, as revised, in view of the insertion of the new proviso. These are set out in full in the draft bill attached hereto.

The need for an amendment to section 219 (a) of the act arises partly out of an apparent ambiguity of the existing language and partly out of the development and growth of certain new types of limited or specialized common carriers in the communications field concerning the operation of which a somewhat lesser degree of annual information may be necessary in order to insure effective Commission regulation. The first sentence of this section presently authorizes the Commission to require the filing of annual reports by all carriers subject to the act, a provision taken over from the Interstate Commerce Act, as amended. However, the second sentence of the section, which was added at the time the Communications Act of 1934 was adopted, speaks in mandatory terms and provides that such annual reports "shall show in detail” a long list of specific types of information. The absolute nature of these requirements is, apparently, stressed by the language of the third and last sentence of the subsection which authorizes the Commission, by regulation, to require that additional information be contained in such annual reports. And while the legislative history relating to the section is by no means extensive, what there is tends to reinforce the interpretation of the section which would make mandatory the inclusion in any annual report required to be filed by the Commission of all of the detailed information specified in the second sentence of the section.

Experience in recent years, especially with respect to certain types of specialized common carriers which have been established in the mobile and maritime services, has indicated that some of the information required by the second sentence of the section is unnecessary and serves little or no regulatory function. Accordingly, this section should be amended to make clear that the Commission has authority to tailor the annual reports required from particlular types of carriers to the peculiar needs of the Commission with respect to each service and type of carrier. This would be accomplished by amending the second sentence of the section by inserting the words “Except as otherwise required by the Commission” at the beginning of the sentence so that it will read : “Except as otherwise required by the Commission, such annual reports shall show in detail ***.”

It is presently provided in section 221 (a) of the act that the Commission must hold public hearings upon all applications for authority to consolidate telephone properties or for authority for one telephone company to acquire the property of another or the control of another. It is believed that this mandatory hearing requirement should be eased, as many of the applications being received are of such minor significance that hearings are not justified. This is particularly true since in a large number of these cases all conceivable parties in interest are actively in favor of the merger. The Congress on August 2, 1949, made an amendment, similar to what the Commission is recommending, to section 5 (2) (b) of the Interstate Commerce Act by adding to a clause making public hearings mandatory in cases involving consolidations, mergers, and acquisitions of control of railroads a proviso that such hearings need not be held where the Commission “determines that a public hearing is not necessary in the public interest.” In its 66th annual report for the fiscal year ended October 31, 1952, the Interstate Commerce Commission, commenting upon the results of the amendment of August 2, 1949, stated that during the year under report it “found that public hearings were not necessary in 32 out of 35 proceedings under section 5 (2).” It is believed that similar savings in time-consuming procedures would be realized in the Federal Communications Commission if section 221 (a) were similarly

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