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amended, as set forth in detail in the appendix. This amendment would permit the Commission to dispense with the hearing in any case where, after notifying all parties in interest and considering their views, the Commission determines that such a hearing is not necessary in the public interest. The new language proposed is patterned after language now in sections 220 (i) and 309 (a) of the act and the amendment of August 2, 1949, to section 5 (2) (b) of the Interstate Commerce Act.

In the Communications Act Amendments, 1952, Congress rewrote section 409 (a) of the act so as to provide that adjudicatory hearings should be conducted only by the Commission or by one or more examiners. This had the effect of forbidding the hearing of adjudicatory matters by a single member of the Commission. With section 409 (a) so rewritten, it was necessary to make certain amendments to section 410 (a) to bring it into conformity with the new language of section 409 (a). In amending section 410 (a), Congress provided that certain questions might continue to be referred to a joint board, composed of a member or members, selected from each of the States affected. In stating the jurisdiction and powers conferred upon such a joint board, it was stated in the amendment adopted that any such board should have all the jurisdictions and powers conferred by law upon the Commission, whereas the language replaced gave these joint boards only the same powers as possessed by a single member of the Commission when designated by the ('ommission to hold a hearing. It would seem that the new delegation of jurisdiction and powers is undesirably broad.

In any event, with the wording of section 410 (a) inserted by the Communications Act Amendments, 1952, it does not seem likely that the Commission would ever find it desirable to refer any matter to a joint board. It is believed that if the second sentence of section 410 (a) were changed to give joint boards the same jurisdiction that is now conferred on an examiner, it would be more nearly what Congress must have intended and would make the section more usable to the Commission in the administration of the act.

The consideration of these amendments by the House will be greatly appreciated. The Commission will be most happy to furnish any additional information that may be desired by the House of Representatives or by any committee to which this material is referred. The Bureau of the Budget has advised the Commission that it has no objection to the submission of this letter. By direction of the Commission :

GEORGE C. MCCONNAUGHEY, Chairman.

A BILL To amend sections 212, 219 (a), (221 (a), and 410 (a) of the Communications

Act of 1934, as amended, submitted by the Federal Communications Commission (Language of existing Act to be deleted is enclosed in black brackets] new language is

italicized] Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 212 of the Communications Act of 1934, as amended, is amended to read as follows:

“SEC. 212. After sixty days from the enactment of this Act 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: 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 one of the tuo or more carriers directly or indirectly owns more than 50 per centum of the stock of the other or others, or that 50 per centum or more of the stock of all such carriers is directly or indirectly owned by the same person. After this section takes effect it shall be unlawful for any officer or director of any [such] carrier subject to this Act to receive for his own benefit, directly or indirectly, any money or thing of value in respect of negotiation, hypothecation, or sale of any securities issued or to be issued by such carrier, or to share in any of the proceeds thereof, or to participate in the making or paying of any dividends of such carriers from any funds properly included in capital account.”

SEC. 2. Section 219 of the Communications Act of 1934, as amended, is amended by inserting at the beginning of the second sentence of subsection (a) the words “Except as otherwise required by the Commission” so that the section will read :

“SEC. 219. (a) The Commission is authorized to require annual reports under oath from all carriers subject to this Act, and from persons directly or indirectly controlling or controlled by, or under direct or indirect common control with, any such carrier, to prescribe the manner in which such reports shall be made, and to require from such persons specific answers to all questions upon which the Commission may need information. Except as otherwise required by the Commission, such annual reports shall show in detail the amount of capital stock issued, the amount and privileges of each class of stock, the amounts paid therefor, and the manner of payment for the same; the dividends paid and the surplus fund, if any; the number of stockholders (and the names of the thirty largest holders of each class of stock and the amount held by each); the funded and floating debts and the interest paid thereon; the cost and value of the carrier's property, franchises, and equipments; the number of employees and the salaries paid each class; the names of all officers and directors, and the amount of salary, bonus, and all other compensation paid to each; the amounts expended for improvements each year, how expended, and the character of such improvements; the earnings and receipts from each branch of business and from all sources; the operating and other expenses; the balances of profit and loss; and a complete exhibit of the financial operations of the carrier each year, including an annual balance sheet. Such reports shall also contain such information in relation to charges or regulations concerning charges, or agreements, arrangements, or contracts affecting the same, as the Commission may require."

SEC. 3. Section 221 (a) of the Communications Act of 1934, as amended, is amended to read as follows:

"SEC. 221. (a) Upon application of one or more telephone companies for authority to consolidate their properties or a part thereof into a single company, or for authority for one or more such companies to acquire the whole or any part of the property of another telephone company or other telephone companies or the control thereof by the purchase of securities or by lease or in any other like manner, when such consolidated company would be subject to this Act, the Commission shall [fix a time and place for a public hearing upon such application and shall thereupon] give reasonable notice in writing to the Governor of each of the States in which the physical property affected, or any part thereof, is situated, and to the State commission having jurisdiction over telephone companies, and to such other persons as it may deem advisable, and shall afford such parties a reasonable opportunity to submit comments on the proposal. [After such public hearing,] A public hearing shall be held in all cases unless the Commission determines that a hearing is not necessary in the public interest. [if] If the Commission finds that the proposed consolidation, acquisition, or control will be of advantage to the persons to whom service is to be rendered and in the public interest, it shall certify to that effect; and thereupon any Act or Acts of Congress making the proposed transaction unlawful shall not apply. Nothing in this subsection shall be construed as in anywise limiting or restricting the powers of the several States to control and regulate telephone companies.”

SEC. 4. Section 410 (a) of the Communication Act of 1934, as amended, is amended by inserting before the words “the Commission” in the second sentence of the section the words “an examiner provided for in section 11 of the Administrative Procedure Act, designated by” so that the section will read as follows:

“SEC. 410. (a) Except as provided in section 409, the Commission may refer any matter arising in the administration of this Act to a joint board to be composed of a member, or of an equal number of members, as determined by the Commission, from each of the States in which the wire or radio communication affected by or involved in the proceeding takes place or is proposed. For purposes of acting upon such matter any such board shall have all the jurisdiction and powers conferred by law upon an examiner provided for in section 11 of the Administrative Procedure Act, des ed by the Commission, and shall be subject to the same duties and obligations. The action of a joint board shall have such force and effect and its proceedings shall be conducted in such manner as the Commission shall by regulations prescribe. The joint board member or members for each State shall be nominated by the State commission of the State or by the Governor there is no State commission, and appointed by the Federal Communications Commission. The Commission shall have discretion to reject any nominee. Joint board members shall receive such allowances for expenses as the Commission shall provide."

STATEMENT ON BEHALF OF THE FEDERAL COMMUNICATIONS COMMISSION BEFORE

THE SUBCOMMITTEE ON TRANSPORTATION AND COMMUNICATIONS OF THE HOUSE INTERSTATE AND FOREIGN COMMERCE COMMITTEE ON H. R. 4939 RELATING TO THE COMMISSION'S REGULATORY AUTHORITY OVER COMMUNICATIONS COMMON CARRIERS

H. R. 4939 contains four amendments to the Communications Act which have been proposed by the Commission and which relate to our regulation of common carriers—the companies furnishing interstate and foreign communication service for hire by telephone and telegraph. These proposals represent a part of the Commission's continuing program to simplify the act and Commission regulations thereunder by eliminating nonessential procedural steps and to devote the time and effort thereby saved to more effective regulation in the fields where it is needed. The four amendments proposed are to sections 212, 219 (a), 221 (a) and 410 (a) of the Communications Act, respectively.

Section 212 relates to authority for a person to hold the position of officer or director of more than one carrier. This section now makes it unlawful for any person to hold the position of officer or director in more than one carrier subject to the act unless such holding shall have been authorized by order of the Commission upon due showing that neither public nor private interests will be adversely affected thereby. This provision is designed to prevent any abuses that might stem from interlocking directorates and in my opinion it is a highly desirable authority in the regulation of public utilities.

However, the all-embracing language of this section makes it applicable to dual holdings within an integrated communications system under common ownership and control, as well as to interlocking relations between separate systems or companies to which the section must have been primarily intended to apply. Nearly all the applications we receive under section 212 are from officers or directors of one company of a commonly owned or controlled system. Our experience has been that the dual holding of positions under these circumstances produces no adverse effect upon either public or private interests and we therefore feel that this is a detail of carrier management which can and should be left to the carrier itself. The unnecessary filing and processing of applications of this kind merely adds to the work of the carriers and this Commission. Our proposed amendment is designed to give the Commission discretion to eliminate such applications from persons who hold positions as officer or director in more than one carrier where such carriers are affiliated, within the terms of the amended section.

The need for an amendment of section 219 (a) of the act arises partly out of an apparent ambiguity in 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 lesser degree of annual information is necessary.

The first sentence of section 219 (a) gives the Commission discretionary authority to require common carriers to submit annual reports of financial, statistical, and other information. The second sentence is inconsistent, however, because it speaks in mandatory terms and prescribes a long list of data which shall be included in such annual reports. The material listed in this section is desirable in the comprehensive annual reports required from large carriers and undoubtedly would be continued in future reports from those carriers. On the other hand, such complete information ordinarily is not necessary in reports from smaller specialized carriers and furnishing it imposes a substantial unnecessary burden on them. Our proposed amendment would make clear that the Commission has authority to tailor the annual reports required from particular types of carriers to the peculiar needs of the Commission with respect to each service and type of carrier. This would give the Commission just as much authority as it now has and at the same time would provide for the necessary flexibility in reporting requirements.

It is now 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. Our proposal is that this mandatory hearing requirement be eased, since many of the applications are of such minor significance that hearings are not justified. This is particularly true since in most of these cases all conceivable parties in interest are actively supporting the transaction. A provision similar to the one we are proposing was placed in the Interstate Commerce Commission Act in 1949 and has been successful in saving the time of both the Commission and its regulated carriers.

The amendment to section 221 (a) as it now reads would permit the Commission to dispense with the hearing in any case where the Commission determines that a hearing is not necessary in the public interest. However, the United States Independent Telephone Association, as the representative of most of the independent telephone companies in this country, has voiced two objections to the amendment as now proposed : (1) that the public might not receive adequate notice of an application, and (2) that the Commission might decide that a public hearing is not necessary in some cases even though an association of telephone companies or a telephone company other than the applicant might request a hearing and raise questions as to whether a proposed transaction would serve the public interest. The Subcommittee on Communications of the Senate Interstate and Foreign Commerce Committee, in hearings before that subcommittee in June 1955 requested this Commission to consider broadening the proposed language to assure also that a hearing would be held if requested by a State or local regulatory authority. While we believe the public interest would be adequately protected by the Commission's administration of this section as the amendment now reads, we have worked with the Senate subcommittee and the association to arrive at a further revision which appears to be acceptable to them. The proposed further revision of section 221 (a) would specify that the Commission shall (1) give general public notice of all applications received, and (2) hold a hearing in every case if requested by a telephone company, an association of telephone companies, a State commission, or a local governmental authority. Accordingly, the Commission has advised the Senate subcommittee that it has no objection to the further proposed revision, with section 221 (a) to read as follows (new matter is italicized and matter to be omitted is in black brackets) :

"SEC. 221. (a) Upon application of one or more telephone companies for authority to consolidate their properties or a part thereof into a single company, or for authority for one or more such companies to acquire the whole or any part of the property of another telephone company or other telephone companies or the control thereof by the purchase of securities or by lease or in any other like manner, when such consolidated company would be subject to this Act, the Commission shall [fix a time and place for a public hearing upon such application and shall thereupon] give general public notice and shall give reasonable notice in writing to the Governor of each of the States in which the physical property affected, or any part thereof, is situated, and to the State commission having jurisdiction over telephone companies, and to such other persons as it may deem advisable. A public hearing shall be held in all cases where a request therefor is made by a telephone company, an association of telephone companies, a State Commission, or a local governmental authority. [After such public hearing.) If the Commission finds that the proposed consolidation, acquisition, or control will be of advantage to the persons to whom service is to be rendered and in the public interest, it shall certify to that effect; and thereupon any Act or Acts of Congress making the proposed transaction unlawful shall not apply. Nothing in this subsection shall be construed as in anywise limiting or restricting the powers of the several States to control and regulate telephone companies."

With regard to the proposed amendment to section 410 (a) of the act, in the Communications Act Amendments of 1952, Congress rewrote section 409 (a) of the act so as to provide that adjudicatory hearings should be conducted only by the Commission or by one or more examiners. This had the effect of forbidding the hearing of adjudicatory matters by a single member of the Commission. With section 409 (a) so rewritten it was necessary to make certain amendments to section 410 (a) to bring it into conformity with the new language of section 409 (a). In amending section 410 (a) Congress provided that certain questions might continue to be referred to a joint board composed of a member, or members, selected from each of the States affected. In delineating the jurisdiction and powers conferred upon such joint boards, they were given all the jurisdiction and powers conferred by law upon the Commission whereas the language replaced gave these joint boards only the same powers as possessed by a single member of the Commission when designated by the Commission to hold a hearing. It would seem that the new delegation of jurisdiction and powers is undesirably broad.

In any event, with the wording of section 410 (a) inserted by the Communications Act Amendments, 1952, it does not seem likely that the Commission would ever find it desirable to refer any matter to a joint board. It is believed that if the second sentence of section 410 (a) were changed to give joint boards the same jurisdiction that is now conferred on an examiner, it would be more nearly what Congress must have intended and would make the section more useable to the Commission in the administration of the act.

[H. R. 5613, 84th Cong., 1st sess. ] A BILL To amend the Communications Act of 1934 to provide for monetary forfeitures

in the case of violations of the Federal Communications Commission's rules and regulations relating to radio stations other than broadcast stations

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 503 of the Communications Act of 1934 is amended (1) by inserting at the end of the center heading the following: “AND VIOLATIONS OF RULES AND REGULATIONS”, (2) by inserting “(a)" after "SEC. 503,", and (3) by adding at the end thereof the following new subsection :

“(b) Any person who violates any rule or regulation made by the Commission under this Act to govern any radio station, except licensed radio stations in the broadcast services, and the licensee of any such radio station at which such violation occurs, shall, in addition to any other penalty prescribed by law, forfeit to the United States the sum of $100."

SEC. 2. Section 504 (b) of such Act is amended by inserting “, section 503 (b)," after “title III".

DEPARTMENT OF JUSTICE,
OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, June 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. 5613) to amend the Communications Act of 1934 to provide for monetary forfeiture in the case of violations of the Federal Communications Commission's rules and regulations relating to radio stations other than broadcast stations.

The bill would redesignate the present section 503 of the Communications Act (47 U. S. C. 151 et seq.) as 503 (a) and add a new subsection 503 (b), which would impose a forfeiture (civil penalty) of $100 on any person who violates any rule or regulation issued by the Federal Communications Commission pursuant to the authority of the Communications Act which rule or regulation is made applicable to any radio station not engaged in the broadcasting services. The violation would also be imputed to the licensee of such station. Section 504 (b) of the act would be amended to provide for the remission or mitigation of the penalty that would be provided in section 503 (b), and the dismissal of any pending suit to recover such forfeiture.

The sanctions provided by existing law for the above-indicated violations are (1) administrative action by the Commission looking toward the revocation (not suspension) of, or refusal to renew, a license if the licensee is an offender, and (2) criminal prosecution.

Whether the bill should be enacted involves a question of policy concerning which the Department of Justice prefers not to make any 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., May 23, 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 April 20, 1955, requesting the views of this Office with respect to H. R. 5613, a bill to amend the

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