Mr. LISHMAN. When you interviewed Mr. Saran, did you also show him your identification card?

Mr. KELLY. Yes, I did and so did Mr. Kane in my presence and wrote down the address at the Rayburn Office Building for him to forward communications to us.

Mr. LISHMAN. Did you receive communications from Northwestern University directed to you in room 2323, Rayburn House Office Building?

Mr. KELLY. That is right, sir.

Mr. LISHMAN. And also specifying that you were on the Special Subcommittee on Investigations of the House Commerce Committee? Mr. KELLY. That is correct.

Mr.LISHMAN. And we have those in the files?

Mr. KELLY. Those are in the files in room 2323.

The CHAIRMAN. Are there any further questions of these two gentlemen?

We will pursue some questions.

Mr. BROWN. Mr. Chairman, I have lost the thread of my questions. I would like to make one observation, and that is that it seems to me that television to some extent has a logistical problem with reference to news coverage in that—and you correct me if I am wrong in this impression—it is a little bit more difficult for television, combining both picture coverage of an event and sound coverage at one and the same time, to do the same kind of job that is done either by radio, where only sound is required, or by magazines and newspapers where neither immediate sound nor immediate pictures are required.

Mr. HYDE. This is certainly true.

Mr. BROWN. Therefore, it seems to me that it might be possible to set up some kind of standards relating to the nature of television coverage of news events and relating to the documentary kind of thing that is done peculiarly in the television field.

Perhaps I should say peculiarly in the television and radio field because we used to frequently hear radio documentaries, and I don't know whether this is an area for the National Association of Broadcasters to get into and try to establish their self-regulation or whether it would be an area for the FCC to set out some broad guidelines, but it seems to me that it is possible.

Would you concur that there is a possibility here that something could be laid out?

Mr. HYDE. I would think that because of the reasons you have cited that some special attention ought to be given. Perhaps there ought to be some guidelines by the industry. I think the idea ought to have some further thought. I do. I believe that many individual stations have probably set out rules for the behavior of their own particular operators, but perhaps an overall study of it ought to be made.

Mr. BROWN. If we are relating this in the hearing on the "pot party at a university" to violence, and I think from what I have been advised the program in question was not only not violent but pretty dull, but if we are relating it to violence, I would like to observe that I see no sanctity in the hour that violence is shown. It seems to me that violence after 11 o'clock is just as violent as violence before 11 o'clock, and the fact that it is shown to an adult audience presumably because of the hour doesn't make a lot of difference.

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In our society it seems that most of the violence that we seem to be shocked by has been performed not by children, but by adults who, whether they were influenced as children or adults, nevertheless didn't get around to exercising violence until they reached adulthood, so that I am not sure that the hour either for violence or for programs that some might consider in bad taste is a significant factor.

The CHAIRMAN. Mr. Dingell has one more question.

Mr. DINGELL. Mr. Chairman, you are familiar with section 509 (a) prohibited practices in the case of contests of intellectual knowledge, intellectual skill, or change. Am I to believe that this provision provides adequate authority to allow the Commission to take appropriate steps to handle not only contests, matters of intellectual knowledge, skill, or chance, and to handle also the question of rigged newscasts, staged pot parties, and so forth?

Mr. HYDE. I believe that the general test of public interest would suffice to prohibit the practicing of fraud upon the public in any of these forms.

Mr. DINGELL. What section is that in?

Mr. HYDE. The general test on licensing of a station is public interest, convenience, and necessity, and I think it is section 309 or 308, and 317 for renewal of licenses.

Mr. DINGELL. It is also 315, is it not?

Mr. HYDE. Yes, it is. Section 315, of course, is usually invoked in connection with equal time.

Mr. DINGELL. Now, I don't want to intrude into the other matters on which there might be proceedings before the Commission, but I would like now to ask you to tell us what is your annual budget?

Mr. HYDE. For last year as I recall, and I would like to have the opportunity to check it, it was $19,100,000 with the possibility of another $70,000 supplemental.

Mr. DINGELL. This is budgeted to handle

Mr. HYDE. Our entire operation.

Mr. DINGELL (continuing). The whole Commission, but to administer licensees that have a gross income on the order of several billions of dollars?

Mr. HYDE. Oh, yes. The ratio of our budget to the capital investment, even the income of the communications services that we regulate or license our budget is just de minimis against such figures.

Mr. DINGELL. Well, a single licensee of yours in a good television license has an annual income far in excess of your budget, does he not? Mr. HYDE. They might very well have a gross in the area of our budget. This is a matter that could be checked. I would be a little surprised if their net would approach our budget.

Mr. DINGELL. Their gross?

Mr. HYDE. But their gross I am satisfied would.

Mr. DINGELL. If you recall, I have been very, very critical of the Commission over the years, Mr. Chairman, and I would be deceiving neither you nor anyone if I were to make that statement. I have been much troubled about your budgetary problems, and I am well satisfied that you are not being given the budget to do the job.

The fact that you indicated this morning that you couldn't send investigators over the country to look into this matter again confirms that you are not given the funds to do the job that Congress has instructed you to do.

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 41⁄2 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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