Mr. HYDE. I very much appreciate this interest.

Mr. DINGELL. I would like you to give your comments about your ability to review or scrutinize license renewals, your funds to allocate spectrum, and your funds to scrutinize matters of this sort.

I suspect you will probably want to submit that in some appropriate form by letter rather than by response at this time. I would like to hear your comment.

Mr. HYDE. I would wish very much to have your permission to submit a statement. Recently we appeared before the Senate Committee on Appropriations to ask for a reconsideration of the allowance that was made by the House. In this particular presentation we asked for restoration of a half a million dollars. If we get that, we will barely have adequate resources to maintain our present operation. This would give us no additional muscle to meet the ever-increasing problems that we have to deal with.

Mr. DINGELL. How many licensees do you have in the broadcast area and how many in the mobile area?

Mr. HYDE. I used the figure of 7,000 in my statement here, which is a pretty good, fairly accurate statement of broadcast licenses. In the mobile services it would be

Mr. Cox. In the order of almost 2 million licensees and almost 42 million transmitters.

Mr. DINGELL. Could you give this committee an idea of what would be an adequate budget for you and the Commission to adequately regulate? Could you get that to us?

The CHAIRMAN. Would you submit it for the record?

Mr. HYDE. Yes.

Mr. DINGELL. And break it down as much as you could by your areas of responsibility.

Mr. BROWN. Is it appropriate also to ask Mr. Bartley to submit a breakdown of the budget of his proposals?

I would be happy to see it along with what Mr. Hyde might submit. (The information requested follows:)

ADDITIONAL STATEMENT BY CHAIRMAN ROSEL H. HYDE

INTRODUCTION

I appreciate this opportunity to outline for the Committee the budgetary requirements of the Federal Communications Commission. Needless to say, the Commission is in unanimous agreement that the financial resources which have been provided our agency over the years have been inadequate when measured against the magnitude of the responsibilities borne by the Commission. We believe, most strongly, that the responsibilities placed upon the Commission by the Congress are second to none with regard to the future growth and development of the communications systems of the nation. During recent years, the rapid advances in communications science and technology have increased the complexity and scope of the problems before the Commission in almost geometric proportions. Moreover, the economic significance of our telecommunications systems has been estimated to be in excess of twenty billion dollars a year. The total significance of telecommunications to our society, economy, and overall national welfare is, of course, much greater than any monetary measure. It would not be overstating the case, in my view, to say that our communications system is the "lifeblood of the nation." The daily lives of literally every man, woman and child in our nation, as well as the social, economic and political progress of the country are dependent upon the exchange of information and ideas through our various media of communication. Consequently, it is of the utmost importance that the regulatory agency, mandated by Congress to

assure the proper growth and development of our nationwide communications system, be supported by the necessary appropriation to carry out its responsibilities effectively.

OVERALL BUDGETARY REQUIREMENTS

It is in this context that I wish now to address myself to your inquiry concerning the amount of funds which are necessary to operate the Federal Communications Commission. We have made certain reviews and analyses which, although limited in scope because of the amount of time available, represent our best judgment as to magnitude and emphasis. We are convinced that an annual appropriation of at least 45 to 50 million dollars is required to operate this agency in a manner commensurate with the responsibilities of these times. Although this amount might appear large, we believe that it may be overly modest. We, of course, do not anticipate that this level could be achieved in one or two years. However, it is our conviction that an appropriation in the order of 45 to 50 million dollars should be achieved within the span of about five years in order for this agency to discharge its duties more fully and effectively.

In the past decade, the work of the Commission in processing applications, in granting licenses, and in similar day-to-day functions has been considered of paramount importance and, indeed, we agree that these are some of the very basic functions of the Commission which must be performed to the best of our ability. However, certain of our responsibilities, such as those in the vital areas of rule making, long-range planning, and adequate enforcement and research, have suffered by not receiving sufficient financial resources. We believe that the new developments in communications technology, when considered against the economic and social impact which communications has upon the nation, require that the Commission be provided with a capability for planning ahead so as to assure that the public will reap the maximum benefits from advances in communications science and technology. To do this requires adequate staff for planning, research and rule making.

In addition to these vital functions, which are necessary to forecast and harness new developments in communications, another critical area of the Commission's responsibility is its enforcement program. This area, too, has been necessarily limited in its effectiveness due to the scarcity of funds available to us. It can be said most pointedly that all the research projects and planning and rule making functions, which are designed to achieve greater benefits and more efficient utilization of the frequency spectrum, would have their significance severely impaired if the Commission lacked the enforcement capability to assure that the frequency spectrum is used properly. We can help to accomplish this by having an adequate field monitoring and enforcement staff to protect the value of the radio frequency spectrum and to insure its maximum efficient use.

The Commission has been accused of not asking for an appropriation in keeping with its mounting workloads. We do not consider this a fair or accurate allegation. It is true that, despite the tremendous increase in both the complexity and volume of Commission workloads, our staff for FY-1968 will be only about 10 man-years above our staff of 10 years ago. However, as an illustration, let me show you what has happened to our original budget estimates for FY-1969.

Initial staff meetings leading to the preparation of our FY-1969 budget estimates were held early in March 1967; over 15 months before the start of fiscal 1969. These meetings were followed by much additional staff work, as well as a number of reviews before the full commission. This exhaustive review culminated in budget estimates amounting to slightly below $26 million dollars. This estimate compares with an appropriation of $19,170,000 for FY-1968.

Although we concluded that our needs for FY 1969 would be near $26 million, this estimate has been reduced through the normal budgetary procedures and the House has recommended an appropriation of only $19,750,000, which will not even cover all of our unavoidable operating increases. Thus, we will have, in effect, a further budget reduction. Also, this $19,750,000 figure may well be reduced further as a result of the reductions required by the Revenue and Expenditure Control Act of 1968 (Public Law 90-364). Should this occur, it will, of course, necessitate additional program curtailments at a time when the technology of the communications industry is expanding at an explosive rate, and when the Commission's responsibilities and problems are growing even more complex.

Your Committee is well aware of the critical importance of our programs to the national economy and the public at large. Although the Commission's budget is relatively modest, in comparison with other government agencies, the consequences of our efforts, as mentioned previously, have great significance in the national economy and welfare. We are hopeful, therefore, that we will not be required to suffer any further reductions and that relief will be provided in some manner.

The table shown below is being provided in response to your request that I provide a breakdown of our budget estimates into the Commission's various areas of responsibility. This table shows the distribution of our original estimates for FY 1969 compared with appropriations for FY 1968.

You have also asked for my comments with respect to our ability to handle, with the limited resources available to us, the very vital responsibility of allocating the radio spectrum. In this connection I would like to state that frequency allocation problems cannot be solved without massive effort. However, operating within present budgetary limitations, the Commission can only devote a minimum of manpower and money to this area. Meanwhile there is a continuing increase in numbers of licensees, services and complexity.

In order to allocate and assign frequencies more effectively, one of the most critical and urgent needs of the Commission is for a greatly expanded data base. The Commission, in carrying out its responsibility of licensing all non-Federal government stations, has already amassed a sizable body of data. It would seem logical to use this as a base, updating the present material, adding to it to expand its scope, and maintaining it. This would provide a central file of information, augmented and screened continually, as a primary source for anyone requiring these data. It would give the prospective licensee a single, easily available source of data needed for technical studies supporting his application. Commission engineers would no longer have to search for scattered sources to supply data required for research. The regulatory bureaus would have ready access to data needed to reach a decision or support a ruling. Industry and systems planners would obtain their data from one central source instead of conducting expensive, time wasting searches for the information they need. The greatest cost of this project would be the initial combining and integrating all the necessary data. This phase would take approximately five years to accomplish at a cost of at least $10,000,000. The annual cost of constant updating would be much less. The most basic problem seems to be the sheer bulk involved, coupled with limited resources to capitalize on the newly emerging opportunities of data storage and retrieval.

In the past, the Commission has been forced to make allocation decisions partly on the basis of anticipated needs as asserted by proponents at hearings and partly on staff estimates. Little has been done to follow up on the actual usage of channels. Recent probing of non-broadcast service in selected areas of high anticipated usage has indicated that actual heavy use is generally concentrated on rather few frequencies, with large areas of the spectrum assigned by the Commission having very light usage or lying fallow.

In order to utilize more fully the non-broadcast part of the spectrum, the Commission needs the basic data regarding actual usage both on a frequency and geographical basis, as well as an expert staff acquainted with practices and procedures used in communications which affect channel loading. Some limited

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usage data has been obtained in our spectrum occupancy recording program, but this has been severely limited by insufficient personnel and equipment.

Expansion of this program would involve studies of communication practices and procedures affecting channel loading, possibility of higher channel utilization by use of directional antenna and cross-polarization, possibility of using geography to increase channel availability, and "trunking" or other means to provide availability of service to services having critical but occasional requirements. Principal consideration should be given to studies of the channel utilization within several of the largest metropolitan areas of the U.S. where the need for expanded usage of the spectrum is most urgent. The cost of establishing necessary facilities in one such metropolitan center for the first year, including rental of space, utilities, purchase of equipment and personal services would be in excess of $300,000. We are presently engaged in a contract for a study of the land mobile service in New York and Detroit which will give an improved understanding of the problem.

LABORATORY FACILITIES AND PERSONNEL

The Commission's laboratory facilities and personnel are inadequate to provide a technical basis for solution of present and foreseeable communication problems. In order to provide the Commission with technical information needed in its regulation of present day communications, and to place the Commission in a position to plan for greatly expanded communication needs of the future, expanded laboratory facilities are needed. The present facilities and personnel are minute in comparison with those of other agencies and with foreign groups having similar responsibilities. There should be a planned expansion program resulting in tripling laboratory facilities and personnel over a 3-year period. This would involve construction of additional facilities, purchase of new equipment and enlargement of staff at a cost totaling approximately $2,000,000.

FREQUENCY ALLOCATION IN LAND MOBILE SERVICES

The use of land mobile radio is increasing rapidly as more and more businesses find its use essential to more efficient operation and increased profits. The result is increasing competition between this rapidly growing service and other services, especially TV. This presents a complex problem of allocating available frequencies in a manner that will permit equitable use and maximum expansion potential for all the services concerned. This involves (a) the susceptibility to interference of wired distribution systems; (b) the feasibility of operating land mobile stations in the 1,000 MHz region; and (c) channel sharing with TV. The first of these problems could be completed in approximately six months, the other two would take approximately two years each at a cost of $50,000 per year. No additional personnel would be required. Work that could not be handled by present personnel would be contracted out.

In the area of system performance, we are usually unable to make sufficiently thorough studies of competing systems in order to select the one which gives optimum spectrum utilization or performance. Similarly, we are not in a position to take the initiative in stimulating technological improvements leading to better spectrum utilization. For example, much of the congestion in the land mobile service in densely populated areas is caused by a type of interference known as "intermodulation". Although this congestion leads to demands for additional frequency space, it could be relieved to a considerable degree by techniques to reduce "intermodulation" pollution of the existing land mobile bands, and of any new bands which may be allocated. Only by increased appropriations and staffing can the FCC deal adequately with these circumstances which cause inefficient utilization of frequency allocations. Greatly augmented systems development activity by the FCC is essential to a substantial improvement in spectrum utilization.

A very substantial increase in engineering staff would be necessary to deal adequately with problems which, under present conditions, must be treated superficially. For maximum spectrum utilization, it is necessary to examine critically the bandwidth requirements of every user or licensee or new kind of proposed radio service. Yet, with present staffing this is impossible.

Antenna research is essential to all-over frequency allocation. This involves research into methods of measurement of transmitting antennas, correlating the information obtained with existing survey data, and employing proper surveying

procedures. The result would be the resolving of presently undiscovered causes of measurement error in data used as a basis for developing propagation curves. Maximum utilization of available spectrum space is in direct ratio to the accuracy of the curves employed. The cost of such a project is estimated at $250,000 the first year and $100,000 per year for succeeding years.

The foregoing estimates will give you an approximation of the additional resources we feel are necessary to do an adequate job in the field of frequency management.

REQUIREMENTS FOR ENFORCEMENT BY FIELD ENGINEERING STAFF

Another area of vital concern to us, and to which we are unable to devote sufficient resources, is the enforcement function carried on by our Field Engineering Bureau. This Bureau provides an enforcement service which protects the multibillion dollar public investment in radio communications. This investment consists not only of the vast quantities of equipment and facilities devoted to communications but includes, as well, the infinite value of the scarce radio frequency spectrum. The latter will lose its value if frequencies allocated within its boundaries cannot be effectively used because of congestion and disruptive radio interference. This situation is in fact occurring and we know that the value of many frequencies assigned for public safety, health, local governments and industrial usages is being diluted by increasing congestion in the spectrum generated in large measure by improper operations. The more the radio spectrum is used, the more important is the rigid observance of Commission rules and regulations. Otherwise, spectrum pollution will occur, producing unnecessary waste of this vital national resource. Rules and regulations are meaningful only when they are followed. In order to obtain acceptable levels of conformance to its rules, the Commission has maintained an enforcement function in the Field Engineering Bureau.

Without adequate regulation the legitimate users of radio communications (be it public safety as in Marine, Aviation, Police and Fire, business and industrial as in Trucking, Railroads, Taxi Cabs or commercial enterprises or broadcasting as in Radio and Television), all will become vulnerable and be plagued by increasing communications interference which will progress with inevitable certainty from noticeable to annoying to destructive.

Adequate enforcement of the usage of the radio spectrum is directly proportional to adequate manpower. Enforcement is a hard, unglamorous, oftentimes thankless task which can be accomplished only through the continuing diligent application of manpower in sufficient quantity to produce the desired control in the areas concerned.

The workload of the Field Engineering Bureau is directly related to the number of authorized stations and transmitters. The following chart portrays graphically how much more rapidly the number of stations and transmitters has increased than the staff of the Field Engineering Bureau which has responsibility for the field enforcement activities of the Commission.

A few examples which serve to illustrate how the shortage of manpower is depriving the user-public of services to which it is entitled are as follows:

(1) Small business men have an important need for radio communications. The cost of equipment available in the Citizens Radio Service (CB) makes its use economically feasible to many small business men who otherwise would be excluded from the use of radio communications. Many have attempted to use CB radio for business purposes and have lost both their equipment investment and their communications capabilities because of radio interference generated by the widespread, uncontrolled violations of rules in the CB service. Making funds available for this Commission in sufficient quantity to provide adequate radio enforcement would constitute a vital public service of significant economic importance.

(2) Only seven percent of the stations in the land mobile services (excluding Citizens Radio stations) are inspected during the five-year license period. This relatively low inspection rate encourages technical and operational communications violations which spawn radio interference.

(3) The Commission annually receives about 28,000 complaints of interference to television reception. The priority of other work assignments together with the lack of available manpower prevents many of these cases from receiving attention for a year or more. Meanwhile, these persons, along with many who do not complain, simply suffer the degraded service to the detriment of not