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Mr. HESELTON. Roughly, how many cases are there of the type that you are describing, where that has been one of the factors!

Mr. BAKER. I would have to look up the number, but the one I gave you is the example, the Fort Wayne case, in which the newspaper factor was not considered significant. That was because the other applicant also had a number of radio stations. Mr. HESELTON. May I ask one final question? It is my understand

ту ing that the Department of Justice filed a rather extended brief or statement in opposition to the bills, and the Bureau of the Budget a rather limited one. Are they to be witnesses, or is anyone representing them to be witnesses, in support of their statements?

Mr. Harris. There has been no suggestion heretofore that the Department of Justice come up. I am sure they would be available should the committee want them.

With reference to the Bureau of the Budget, it would be a very rare thing to have it come up. It will be the purpose of the committee, of course, to go into this matter as fully as it feels necessary. We are looking forward to hearing our esteemed colleagues and members of the committee, Mr. Beamer and Mr. Heselton, who will present testimony at a later date. May I inquire here, Mr. Baker, about something! You may not

? recall, but Mr. Webster would. This matter came up in 1951, I believe. Mr. Priest, the chairman of this commitee now, offered the amendment which was sponsored by the American Newspaper Association, I believe.

Was there an attempt or some consideration given, about that time or prior to that time, by the Commission in establishing a rule or promulgating a regulation with reference to the newspaper applicants?

Mr. WEBSTER. I don't recall anything happening around 1951. Mr. HARRIS. Was there something prior to that time?

Mr. WEBSTER. I have heard rumors of what might have happened earlier than that, before I became a Commissioner. But that is history that I am not too familiar with. The Commission, as you recall, did hold hearings sometime before 1947, when I became a Commissioner, but what came out of that I am not familiar with. I would have to refresh my memory on it.

But I don't recall anything that has happened

Mr. HARRIS. A record of that hearing of 1951 would show what the facts were. But as I recall, and I may be wrong, I have a vague recollection of the fact that the Commission had attempted to promulgate some rule or regulation with reference to newspaper applicants, and that is what brought on efforts in connection with the MacFarland amendments to incorporate this provision in the law. And I raise that merely to try to refresh my memory on it, in view of the language in the report just referred to again by Mr. Beamer, in which the Conference Committee said they did not believe that the Commission was authorized under the law to promulgate such rules and regulations.

Mr. WEBSTER. Mr. Chairman, I might remind you that if has been pointed out to me that in one of these statements this sentence appears. And it refer's back to the dates I was speaking of.

In 1944, after extensive hearings, the Commission determined that no rules should be adopted which would act as a bar to newspapers becoming the licensere

of radio stations.

If I am not mistaken, that series of events around that time is responsible for the discussion.

Mr. Harris. I think the Commission felt it had authority under the law to initiate such a rule, and then later, as referred to in the conference report they felt they did not have the authority. So I do feel that perhaps the matter should be cleared up one way or the other as a matter of law. If they do not have the authority and the Commission so thinks, we ought to know about it.

Do you wish to express an opinion as to whether or not the Commission does have such authority, Mr. Baker?

Mr. BAKER. I don't think the Commission has the authority to put an absolute bar against anyone. I think the only thing it can do is demonstrate on each record how the particular facts with respect to that person and all of the ramifications of that person's activities affect the public interest.

Mr. Harris. Now, that leads to another question. I may be misinformed, and that is the reason I want to inquire about it.

Did not the Commission, in the Sacramento case, hold that they were not to be given a license because they were newspapers?

Mr. BAKER. Ï think you are talking about the McClatchy case, sir, which involved Sacramento. And in that instance, as I have already mentioned to Congressman Heselton, the Commission found certain factors in which Telecasting was superior to McClatchy; that the final determining factor was that a preference because of the lack of any other connection with mass media justified the grant to Telecasting under those circumstances. In other words, where all other things were somewhat equal, that is, certain things were in favor of Telecasting and certain things in favor of McClatchy resulted in a relative balance, and the only factor left that had not been taken into account was that McClatchy owned a great number of newspapers in the area and Telecasting did not, and the Commission concluded that under those circumstances the diversification policy justified the grant to Telecasting

Mr. HARRIS. Then the circuit court just a few days ago upheld the action of the Commission; the circuit court of appeals.

Mr. BAKER. That is correct.

Mr. HARRIS. In other words, it held that in view of all other circumstances up to that point, this became a determining factor as to which one would get it.

Mr. BAKER. That is correct.

Mr. HARRIS. And which in effect means that you gave it to the other one; that is, you gave it to Telecasting, because the other applicant was a newspaper.

Mr. BAKER. We gave it to Telecasting, because Telecasting had no other interest in competing media of mass communications, where McClatchy did.

Mr. HARRIS. Actually, then, the language in the conference report that was just read is not the law; is it?

Mr. BAKER. No, sir. There is a difference between saying that something has a weight to be given to it, and saying that this is a factor which is an absolute bar.

Mr. HARRIS. I realize that there is a very fine distinction, but you get the same result. And I don't want the Congress to be laboring under the impression stated in the conference report—which to me should be prevailing legislative history in this matter—and later on have the Commission saying just the contrary, that they did have the authority. I think it is misleading to a lot of people. I am saying that merely from the standpoint of trying to clarify the law so that everyone will know what it is. It is a highly technical situation. But I was interested in it from the standpoint of clarifying the law. That is the reason I brought it up. And I believe that the action of the Commission has not been in accord with the position taken in the conference report.

Mr. BAKER. Well, all I can say to that, Congressman Harris, is that the Commission before this time claimed it was not discriminating; that it was taking into account these factors. It had done so in a case that had gone to the Supreme Court.

Mr. HARRIS. Way back yonder, according to the record the Commission felt it did have that authority and endeavored to promulgate certain rules and regulations to put it into effect, leading to this 1952 action. And other action has been taken since then. There seems to me to be a conflict. The committee will have to go into that a little further.

Mr. ROGERS. Did I understand you to say that the decision was made from the standpoint of trying to prevent one medium of communication from trying to get complete domination over the entire area, rather than because one applicant happened to be a newspaper ?

Mr. BAKER. The diversification policy is that and a little more. The Commission has concluded and stated its diversification policy to be: All other things being equal, the public interest is better served by having as many and diverse parties having access and control of media of mass communication as possible. All other things being equal, the public interest is better served by having diversification of control.

Therefore, it is not necessarily approaching the point of monopoly. Of course, if the Commission got to the place where the question was whether there would be a monopoly by granting a license, I am certain the provisions with respect to the antitrust law would control. But this is a matter of providing a variety of sources of information by diversifying. That is the policy which the Commission says is not a discrimination.

Mr. ROGERS. Your position is that the Commission is looking at it from the standpoint of preventing any danger of monopoly being created.

Mr. BAKER. And to create a diversification, which means different sources of ideas being made available to the public, rather than concentrating the dissemination of ideas in the hands of a few.

Mr. ROGERS. Now, is it also your position that ownership of a newspaper does not give them any priority rights insofar as an application is concerned ?

Mr. BAKER. It is the Commission's position that when a man owns a newspaper he assumes both the assets and the deficits. He takes the handicaps as well as the advantages. A newspaper owner obtains preferences, and because of the very factors of his more intimate knowledge perhaps, of the community, those are also weighed. But if those are all balanced out by other factors, this last point is also a matter which the Commission has felt it had to weigh. It has weighed it. And that has been felt to be justified clear up to the Supreme Court.

Mr. ROGERS. Now, just one more short question in a hypothetical sit

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uation. Suppose you had a small company or an individual that owned a newspaper in a community that was to be served by a radio station. An application was made for a license by 2 people, and the newspaper was 1 applicant and the second party was another applicant. Now, because the community to be served was being served by the newspaper and would be served by the same radio station, I gather from your remarks that the application of the second party would probably be granted.

Mr. BAKER. Only providing that on the other matters which the second party actually had to demonstrate his qualifications on: knowledge of the community, appreciation of the community's needs; such qualifications would meet the newspaper's.

Mr. ROGERS. I assumed that; yes.

Mr. BAKER. Assuming they were equal, it has been true in general that the party that had no other connection with mass media of communication was preferred.

Mr. HARRIS. Mr. Hale has a question.

Mr. Hale. Does this doctrine of diversification mean that there is always a presumption against the newspaper applicant which may be rebutted?

Mr. BAKER. Mr. Congressman, I hate to deal in presumptions, simply because they create problems. I think the fact is that it is a factor to be weighed. It can be outweighed, but it definitely does have certain handicaps to a party.

Mr. HALE. You say it is a question of burden of proof?

Mr. BAKER. The burden of proof in the Communications Act is always upon an applicant. In a comparative hearing, the burden of proof goes upon the party alleging a specific thing. In other words, if nobody raises the question of whether or not the newspaper ownership shall be a handicap in a particular case between two parties, mainly because maybe both of them have certain newspaper interests, there would be no burden of proof on either one. If one of them insisted that he should be preferred because the other has newspapers, the burden of proof in that situation is upon the party urging:

Mr. HALE. That is to say, a newspaper applicant would still have the burden of proof vis-a-vis a nonnewspaper applicant.

Mr. BAKER. That is correct.

Mr. HALE. Well, suppose you have a newspaper applicant in a given town and no other applicant in that town. Are there instances where a license has been withheld simply because the applicant was a newspaper!

Mr. BAKER. In my search of the records of the Communications Commission there has been no instance in which a newspaper applicant has been disqualified, except one, and that one involved a direct violation of the antitrust laws. It was not just because someone owned a newspaper, but they had engaged in practices as a newspaperthe Mansfield Journal case which we cited—which were directly viola-tive of the antitrust laws.

Mr. HALE. You mean that they had been convicted of a violation?

Mr. BAKER. They were not convicted prior to the Commission's decision, but they were convicted subsequent to it on the basic facts: which the Commission found disqualified them.

The case I mentioned to Congressman Heselton, in which the Commission specifically refused to find that newspaper ownership disquali-

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fied the party, in Clarksburg, is one which comes to mind, to demonstrate that the Commission has never found that newspaper ownership in and of itself is a bar.

Mr. HARRIS. Mr. Heselton, did you have another question?

Mr. HESELTON. I would like to have the record show, Mr. Chairman, that the examiner in the McClatchy case apparently devoted some 48 days to the hearings. And I want to include in connection with your question and the answer you received, this sentence. This sentence is from the opinion of the Commission:

We conclude that under these circumstances the superiority that McClatchy has demonstrated with respect to certain factors does not outweigh the comparative advantages of the Telecasters, because of its freedom from ties with newspaper, radio, and other television interests in Sacramento as well as throughout the Central Valley. May I say

do not have any interest in the McClatchy petition. Mr. HARRIS. I don't want to belabor this issue too long, and in fact we have already taken too much time, but it is highly important.

Directly involved is a case in Pennsylvania that has been brought to our attention rather forcibly, I might say. That is the AllentownEaston case. I think that has been to the court about 2 or 3 times, hasn't it?

Mr. BAKER. Yes, sir. It has been before the Commission twice, in front of the court of appeals 4 times, and to the Supreme Court once. I might say, I argued to the Supreme Court on it, so I know something about the case.

Mr. HARRIS. Well, isn't it still being kicked around?

Mr. BAKER. The present status of that case is that the court of appeals on remand from the Supreme Court sustained the Commission's decision. It also, by an en banc order, refused to reconsider its decision affirming the Commission, and at present there is pending a request for stay of that mandate, so that Allentown may have time to determine whether it wishes to try to go back to the Supreme Court again, sir.

Mr. HARRIS. I am not too famaliar with it, except that I have had some information submitted.

Are there some matters in connection with that that would make it properly advisable to not discuss it at this point ?

Mr. BAKER. Well, as you know, the law prevents me from discussing it when it gets back to the Commission. I have never felt any hesitancy about discussing a case that is before the courts.

Mr. HARRIS. Mr. Walter wrote a letter to the Commission presenting certain questions.

Mr. BAKER. Yes, he has.
Mr. HARRIS. Has that been given attention?

Mr. BAKER. That has been given some attention, and there are matters in it which I think need further investigation, and I would suggest in order to get the truth that we not discuss matters that need investigation.

Mr. HARRIS. I realize that is true and desirable. I can ask you this. Is the Commission giving attention to the question which Mr. Walter brought to their attention?

Mr. BAKER. They certainly are, sir.

Mr. HARRIS. And they are going to take such action as is necessary to get the facts ?

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