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RELUCTANCE TO DECENTRALIZE FROM WASHINGTON, D.C.

Geological feels that this would be a serious interruption to their program, to their relations with the scientific community. They are largely decentralized now. They have about 1,700 people at Denver right now, about 2,200 here in Washington. The choices are clear, either complete decentralization out of Washington or out into the metropolitan area away from the downtown area, or within the District of Columbia. This is being reviewed by the Bureau. We had a long discussion on it last week, but no one wants to leave Washington. Everyone likes to be right here and for years and years and years, far predating I guess the time I was born discussions were going on as to who was going out-nobody wants to go. Sooner or later somebody is going to have to make the decision that A, B, C, and D), this is where you are going to go, and get the job done, but there is going to be no voluntary movement in my opinion.

Senator MAGNUSON. Some of them after they get settled where they are going, they are kind of glad they left.

Mr. BOUTIN. Yes. With the cost of living in this area

Senator MAGNUSON. Better living conditions, but it is getting them up and doing it. There is the problem. It is a human problem. People have their roots, families, schools. It isn't just a bunch of numbers.

Mr. BOUTIN. Oh, no. A very difficult problem.
Senator MAGNUSON. Off the record.
(Discussion off the record.)
Senator MAGNUSON. On the record.

HEARING AFTER PASSAGE OF HOUSE BILL

It is understood that we will recess the hearing now. Then when the House passes the bill, we will be back for a hearing, and then we can discuss more specific items, and we will know a little more where we stand on this, but we had to get these general hearings out of the way. I think it will save us a lot of time. Congressman Thomas, by the way, said that he is all through with his hearings, and he will have the bill ready I think by May 10.

Mr. BOUTIN. Excellent.
Senator MAGNUSON. That is his plan.
Senator ALLOTT. You mean to report it?

Senator MAGNUSON. Report it to the House by May 10, and so we can expect the latter part of the-from the middle of May on to the first of June that we can get back at these agencies that we have.

Mr. Boutin. Of course, nothing would please me any more, Mr. Chairman, if the House report is sufficient to meet our minimum requirements, that we wouldn't even have to bother you again.

Senator MAGNUSON. We might pass the bill ahead of the House, and then they can talk about it.

Thank you.
Federal Communications tomorrow, 8:30.

(Whereupon, at 10:08 a.m., Tuesday, April 21, 1964, the subcommittee recessed, to reconvene at 8:30 a.m., Wednesday, April 22, 1964.)

INDEPENDENT OFFICES APPROPRIATIONS FOR 1965

WEDNESDAY, APRIL 22, 1964

U.S. SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met pursuant to recess at 8:40 a.m. in room S-128, U.S. Capitol Building, Hon. Warren G. Magnuson (chairman) presiding

Present: Senators Magnuson, Monroney, Saltonstall, Young, and Allott.

FEDERAL COMMUNICATIONS COMMISSION

STATEMENT BY E. WILLIAM HENRY, CHAIRMAN; ACCOMPANIED

BY ROSEL H. HYDE, COMMISSIONER; ROBERT T. BARTLEY, COMMISSIONER; KENNETH A. COX, COMMISSIONER; LEE LOEVINGER, COMMISSIONER; HENRY GELLER, GENERAL COUNSEL; GERARD M. CAHILL, ASSOCIATE GENERAL COUNSEL; JAMES B. SHERIDAN, CHIEF, BROADCAST BUREAU; WALLACE E. JOHNSON, ASSISTANT CHIEF, BROADCAST BUREAU; JAMES E. BARR, CHIEF, SAFETY AND SPECIAL RADIO SERVICES BUREAU; BERNARD STRASSBURG, CHIEF, COMMON CARRIER BUREAU; FRANK M. KRATOKVIL, DEPUTY CHIEF, FIELD ENGINEERING BUREAU; CURTIS B. PLUMMER, EXECUTIVE DIRECTOR; AND RICHARD F. SOLAN, CHIEF BUDGET OFFICER

STATEMENT OF THE CHAIRMAN OF THE COMMISSION

Senator MONRONEY (temporarily presiding). The Subcommittee on Independent Offices will be in session. We will start with your statement, Mr. Chairman.

Mr. Henry. All right, Mr. Chairman. Would you prefer that I put my statement into the record and then just talk generally about this?

Senator MONRONEY. I believe that would be advisable and spotlight the statement as you go along. It will be considered completely in the record, and you may highlight the various things you want to.

(The statement referred to follows:)

Good morning, Mr. Chairman and members of the committee.

Our estimate calls for $16,610,000 or an increase of $1,010,000 over the appropriation approved by the Congress for the current year. A considerable 31-706-64pt. 1-19

287

portion of this increase is unavoidable and would be necessary even if no increase in staff was being requested. For instance:

(1) The pay increases due to legislation made effective Jan. 5, 1964, will cover a full 12-month period in fiscal year 1965 instead of 6 months and cost an additional—— $270,050

(2) Periodic step increases required by law, which become effective at various dates in fiscal year 1964, will all have to be annualized

for a full 12-month period in fiscal year 1965 and cost--------- 110,000 (3) Periodic step increases required by law to become effective in fiscal year 1965 will result in new costs in fiscal 1965 of ----- 115,000 (4) Benefits to accompany these increased costs (retirement, life insurance, health plans) --- 37,128 Total costs 532, 178

Thus, $532,178 of the $1,010,000 will be necessary just to retain our present staff. The major staff increases proposed in this budget as will be described later, are for our common carrier and field engineering activities. In developing our budgetary requirements we have followed the wishes of the President to hold estimates of money and manpower to absolute minimums. We have applied a most stringent policy in the face of mounting workloads in many areas of the Commission's work. It is our intention to do everything we can in the way of improving procedures, making better utilization of manpower, and eliminating low-priority and nonessential operations, but notwithstanding our efforts in this regard, there is urgent need for increased appropriations. Before getting into a discussion of our budget request, I would like to bring you up to date on our fee schedule. When we were here last year we told you that we had under consideration a proposed schedule of fees to be charged for filing applications for various types of licenses. Since that time the Commission approved a fee schedule and set January 1, 1964, as the effective date. In the interval between our approving the fee schedule and the January 1, 1964, effective date, action was taken by a group of Commission licensees to have the Commission's action stayed and on December 31, 1963, the U.S. Court of Appeals for the Seventh Circuit issued a 60-day stay of the Commission's order. Subsequently, following oral argument in Chicago, the court of appeals denied a motion for interlocutory injunction pending disposition of the joint petition for review which was brought to set aside the Commission's action in adopting the fee schedule. The order of the court also dissolved the 60-day temporary restraining order it had imposed on December 31, 1963. In its order the court directed that all funds collected prior to final disposition of the petition for review be held aside in a deposit fund account and provisions made for the Commission to return to the appropriate payers any fees which are found to be invalid by the court. On February 14, 1964, the Commission considered the action of the court and issued a public notice that its schedule of fees would become effective on March 17, 1964. We are now collecting approximately $12,000 a day or about $3,120,000 a year under this schedule. The case is scheduled to be argued in the Chicago colort next Monday. Next I would like to say a few words about another significant development since we last met with you. This deals with our data processing program. On October 22, 1963, our Univac III computer was delivered to the Commission's office for installation, and on November 15, 1963, turned over to the Commission for a 30-day acceptance test. I am pleased to report that it was put to use immediately in testing out computer programs that were being developed during the past year and in converting FCC records from a variety of forms to magnetic tape. On February 10, 1964, just over 2 months ago, we began the electronic processing of citizens radio applications and the printing of licenses. We put on a crash program to have the approximate 45,000 applications we had on hand in this service pushed through the computer to get us out from under the backlog. The pressures in this area have already eased up considerably. Early in March the computer took over the processing of amateur applications and the printing of these licenses. We are now in pretty good shape in this service, too. Also, on about February 20 we “computerized” the processing of applications for our antenna survey function; that is the checking of proposed antennas as air navigation hazards.

Future goals for the conversion of application handling to the data processing system are: The marine service in October of this year, the aviation service in December, and the public safety and industrial services later in fiscal year 1965. We also plan to have the broadcast station and individual ownership files on magnetic tape for use by the Commission's staff by July 1. In addition, our programs for performing engineering computations for AM, FM, and TV facilities, such as radiation and service contour patterns and channel studies are also scheduled for late this fiscal year or early next year. Now back to the budget we are placing before you today for your consideration. The broadcast portion of this budget very clearly reflects the directive of the President to hold budgetary requirements to a minimum. We are requesting an increase of only two positions for broadcast activities. However, to handle the increasing workload, we are relying on greater use of automatic data processing, changes in Commission rules to facilitate processing, utilization of sampling techniques so that only a portion of renewal applications will be completely examined, and more selective participation of Broadcast Bureau counsel in hearing procedures. In this way we are planning to bring down our backlogs but we must have the staff requested to achieve these objectives. In fiscal 1965 we expect to lift the “freeze,” but we shall improve our allocation rules and have our computer assisting so that by the close of the year we expect to have the smallest backlog of AM applications for new and major changes in many years. Each year we have a growing number of authorized broadcast stations. In 1963 we had 6,199 and by the end of 1965 we expect to have issued authorizations for 701 additional stations for a total of 6,900. This steady yearly expansion affects our workload in many directions, resulting, for example, in a larger volume of renewals to be processed each year and in a larger volume of required compliance activities. To cope with the annual growth in renewal applications, we are devising new procedures to separate items which must be reviewed in all renewal applications (such as ownership and complaints) from other aspects (such as programing and commercial policies and practices) which we would examine for only a sample of the applications. An “in depth” examination of these latter items in a small percentage of the renewal applications may well prove to be both more effective and more economical of our very limited staff resources in renewal work. In the enforcement area, despite the increasing number of stations, we are proposing to maintain our Complaints and Compliance Staff at about the present level. This staff is more than fully occupied in handling the complaints which the Commission receives and which require correspondence with licensees and occasionally on-the-spot investigations. This procedure enables us to correct a number of significant violations of our rules, and such action will in time tend to bring about a general improvement in the level of compliance by all licensees. In addition to expecting a steady growth in broadcast stations, we must face each year's inevitable quota of tough, controversial, complex policy issues. The outlook for 1965 is that we will have our full quota of such problems. We will be engaged, for example, in revising our nationwide UHF allocations, providing additional assignments for both educational and commercial stations. This new allocation plan will shape the growth of television service over the next decade and longer. We will be concerned, too, with the proliferation of CATV operations and their effects on the development of healthy local broadcast stations. And we expect to be faced with petitions to permit subscription television to operate on a regular commercial basis. Also, we shall be examining our multiple-ownership rules to determine whether they are sufficient to deal with the increasing extent of multiple ownership, particularly in TV. Growing out of the network study which was authorized by Congress are a number of proposals before us to foster additional program sources and to increase the opportunities for UHF stations to obtain access to quality programing. Finally, in the first 4 months of 1965, I need hardly remind this committee, we shall be in an election year, and inevitably we shall have a peak of section 315 complaints to resolve equitably and with the least delay. In the light of all these activities, our budgetary request in the broadcast area is indeed minimal. In the area of common carrier regulation, the Commission's tasks continue to grow in volume and complexity. This, clearly, is the natural outgrowth of new and rapidly growing requirements for communications of all types. The industry has been enlarging and improving its plant and expanding its operations in order to satisfy this burgeoning public demand for more and better

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