communication services. These activities generate for the Commission an everincreasing volume of new and revised tariff filings and applications for authorizations to construct and operate radio and wire facilities. To keep our backlog in these areas from growing to unmanageable and intolerable proportions, requires that we continually devote added manpower to these matters.

However, many of the most significant regulatory activities generated by these developments in the industry cannot be measured by applications or tariff filings. Thus, for example, conditions in the domestic telegraph industry compelled us to institute an investigation for the purpose of ascertaining the future requirements for message telegraph service in the United States and the ability of Western Union to satisfy that requirement. These proceedings, which are well underway, involve an intensive examination of the competitive relationship between Western Union and the Bell System in light of the charge that the Bell System has engaged in selective pricing policies to the detriment of Western Union.

In the field of domestic telephone rate regulation, we face a task which is now of staggering proportions and which continues to expand. The American public now pays more than $2 billion in charges for the more than 1.2 billion domestic telephone calls it makes annually. We are charged with the responsibility of taking those steps which will assure to the public interstate telephone rates that are fair and just. We must examine the carrier's interstate operating costs, depreciation, investment, and earnings. We must examine the rates charged different classes of users to insure that there is fair and nondiscriminatory treatment. As we have stated on a number of occasions in the last several years, we are not satisfied with the level of regulatory effort we have been able to maintain in this area. We need to devote additional effort to it if the public is to have the assurance of reasonable and just treatment which the law requires. The communications satellite program is now well along. The Communications Satellite Corp. is established and on the threshold of a major financing program. It is also negotiating for the launching of an early satellite capability having the prospect of limited commercial service in 1965. The developments in this field bring into play the many new regulatory responsibilities assigned to the Commission by the Communications Satellite Act of 1962. For example, we have recently promulgated regulations designed to insure the maintenance of effective competition in the procurement of equipment and services required for the satellite system and its ground stations. The development of governmental policy with respect to future international participation in the global satellite system contemplated by the Satellite Act has required the Commission to devote substantial time and personnel to this important planning program. As the satellite system approaches the stage at which it will be furnishing commercial service, the Commission will, of course, also have numerous ratemaking and related responsibilities to fulfill-all of this, of course, in a relatively new and uncharted field of regulation.

The advent of satellites as a means of international communication has also underscored a need for a careful reexamination of the existing international common carrier industry to determine whether that industry, as now constructed and operated, is fully compatible with the realization of the national communications policy objectives enunciated in both the Communications Act and the Satellite Act. This also involves the evaluation of proposals recently made by responsible industry spokesmen in favor of various kinds of mergers in the international common carrier field. This will be a major 1965 activity which will be conducted in cooperation with other interested Government agencies and we hope will culminate in a useful report with recommendations to the Congress from the executive branch.

The increase of 23 employees included in this budget for common carrier activities is a continuation of the 4-year program initiated in fiscal 1964 to bring the staff to a level that will more adequately support a continuing program of effective common carrier regulation.

In common with the electronic industry as a whole our safety and special radio services have had, and are continuing to have, a phenomenal growth. To illustrate this growth let me quote a few figures. In 1956 we had a total of 339,000 authorized stations and received some 170,000 applications during the year. The present-day total of stations is over 14 million, and applications are currently being received at a rate which will reach the 600,000 mark in 1964 and 616,000 in 1965.

Through the safety and special radio services which encompass all of the non-Government uses of radio for which a license is required, except broadcasting and common carrier operations, some 45 different communications services are provided, all of which play an indispensable part in the many activities making up our present-day civilization. Radio communication, navigational, and control devices are an integral part of air, land, and water transportation systems. Industrial operations, manufacturing, and public safety communications systems are finding new uses for radio every day.

As the number of authorizations and applications increase, the regulatory and enforcement problems also increase. Of particular concern is the fact that the demand for mobile communications systems in many areas has filled the limited spectrum space available. Ways and means to accommodate the increasing numbers must be found. This now constitutes one of the principal problems facing the Commission, and we are hard pressed to solve it.

The impact of the growth of these services is not felt in the Safety Bureau alone but the workload of the Field Engineering Bureau grows just about proportionately. During 1963 the Field Bureau issued over 300,000 operator licenses, issued approximately 17,000 interim ship station licenses, processed 25,000 applications for antenna markings and lightings, inspected over 1,600 broadcast stations, 8,000 other than broadcast stations, and received over 40,000 interference complaints.

The management survey report of Booz, Allen & Hamilton was critical of the Commission for not giving more attention to its enforcement problems and to the growth in interference complaints. In consequence, a material increase in personnel for the Field Engineering Bureau was recomended by the survey team. Although we are attempting in our budget to meet the principal objectives of the BAH recommendation, a number of increases previously scheduled are being further postponed.

In total we are asking for an increase of 31 for the Field Engineering Bureau for fiscal 1965. Of this number 24 are related to "enforcement" work and 7 to "monitoring." The increase under "enforcement" is intended to bolster our efforts to get compliance with the Commission's licensing requirements and to handle the ever-increasing number of interference complaints. An indication of the seriousness of this problem is that an estimated 50 percent of the cur rent cases are not being investigated because of lack of sufficient staff.

An increase of only seven is requested for "monitoring." It is in this area particularly that we are postponing the implementation of the BAH recommendation to increase staff. The small increase requested is intended primarily to augment surveillance in those areas where the most serious disregard for the Commission's regulations exist.

In conclusion, Mr. Chairman, let me repeat that we fully realize the dimensions of the overall budgetary problem which the Federal Government faces. We have limited our requests for increased appropriations to areas of the most pressing need. We believe that the request now before you represents a sound and conservative judgment of the resources which we will need in fiscal 1965 if we are to carry out effectively the duties which the Congress has assigned to us.

ESTIMATES AND INCREASES, 1965

Mr. HENRY. All right. Thank you. We have four other Commissioners with us this morning. Beginning on my right, Commissioner Cox, Commissioner Loevinger, Commissioner Hyde, and on my left, Commissioner Bartley. We also have several members of the staff with us. Generally speaking they are the heads of our bureaus and offices.

SUMMARY OF REQUEST

Our estimate for fiscal 1965 calls for $16,610,000, which is an in-. crease of $1,010,000 over the preceding year. Of that increase of $1 million which we are asking for, roughly half of it is unavoidable and would be necessary even if no increase in staff was being requested. This is made up of pay increases due to legislation made effective January 5, 1964, which will cover a full 12-month period in 1965,

instead of 6 months of 1964. That accounts for a $270,050 increase. Periodic step increases which are required by law account for $110,000.

Senator ALLOTT. Will you go a little slower? What was the first one?

Mr. HENRY. $270,050.

Senator ALLOTT. You have it in your statement.

Mr. HENRY. Yes; $110,000 for periodic step increases effective at various dates in fiscal 1964 but which will be annualized for a full 12month period in fiscal 1965; $115,000 for the same type of increases which become effective in fiscal 1965, and retirement, life insurance, and health benefits which go along with those raises; $37,128, or a total of $532,178, which will be more or less automatic.

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 we feel that notwithstanding our efforts in this regard there is urgent need for the increased appropriations that we are now requesting.

FEE SCHEDULE

Before getting into a detailed discussion of our budget for this year, I want to bring the committee up to date on a couple of matters. One is our fee schedule.

Last year we voted to institute a fee schedule for the filing of applications with the Commission. This has had a history-it has gone into court and is still there. We had petitions to reconsider it. We made some changes in the schedule as originally proposed. But the end result is that as of last March 17, about a month ago, the schedule of fees did go into effect, and we are now collecting approximately $12,000 a day or $3,120,000 a year under this schedule.

Senator YOUNG. Mr. Chairman, could I ask a question at that point! Are these new or increased fees?

Mr. HENRY. These are new fees. This is a new fee schedule which we approved sometime late in 1963.

Senator YOUNG. Such as what?

AMOUNT OF VARIOUS FEES

Mr. HENRY. Well, they are fees for the filing of all types of applications with the Commission. For television stations, there is a $100 fee. For a radio station there is a $50 fee.

Senator YOUNG. There were no fees before?

Mr. HENRY. There were no fees at all before, and the fees apply on down into the citizen's mobile radio. Telephone companies have to file these for their applications.

Senator MONRONEY. What are the fees on the mobile operations? Mr. HENRY. $10.

Senator MONRONEY. This is for the individual.

Mr. HENRY. This is for the-well, the individual company or whoever the applicant is.

Senator MONRONEY. You mean the company that has 100 or 200 subscribers only pays $10?

Mr. HENRY. Well, it depends on the

Senator MONRONEY. I mean now, is this a communications company or is it a business that has a—that has one system, one outlet for its own people?

Mr. HENRY. Well, there are separate categories. The one I was speaking of was the individual applicant, noncommunications company. I think, however

Senator MONRONEY. That is $10, you say?

Mr. HENRY. Yes. But I think the other-it is also $10 in the common carrier field. But mostly-most of the common carriers are likewise small businesses.

Senator MONRONEY. Some of them, like A.T. & T., your telephone companies are engaging in that rather strongly.

Mr. HENRY. They are.

Senator MONRONEY. And their fee would be $10!
Mr. HENRY. $10; most of the fees are

COMPLAINTS FROM SMALL PLANE OPERATORS

Senator MONRONEY. Of course, the thing that I hear most about from my constituents is the small private plane operator who has been urged to buy not one radio but perhaps two, sometimes three, for his machine, and then it gets pretty stiff when he has to pay $30 for his license for his 5-year period on the three sets that he carries on the plane.

Mr. HENRY. We have had a good number of comments on that. Senator MONRONEY. Isn't this where you get more objections than in any other field?

Mr. HENRY. We have had a good number from the aviation people, yes, but again we thought that the fee was nominal. It breaks down to no more than $2 a year per license.

Senator MONRONEY. Well, however, if the plane is sold, then that goes with the plane and the man that buys has to pay another license. If he had only one set it might be not so bad at $10 but almost all have two sets in there for standby, some, three, and that makes it rather

expensive.

Mr. HENRY. Well, it does add to the cost, no question about that, but again we saw no way rationally or equitably to eliminate it.

CHARGE FOR ONE-AND-A-HALF SYSTEM PLANE

Senator ALLOTT. Could I ask this quesiton on that item! A lot of our small private planes carry what is ordinary called a one-and-ahalf system now which is one of the best ones of two or three brands, carries 30 channels, crystal controlled receiver. 90 to 100 transmitter, plus another receiver which is tunable on a separate basis to the varione zarigational facilities for a coupler with a localizer.

Now, this is all one unit. What would be charged for this? You really are only concerned there with the transmission facilities, aren't Mr. HENRY. Yes. On air raft!

PRIVATE AIRCRAFT LICENSE FEE

Senator ALLOTT. I am talking about private aircraft generally.
Mr. HENRY. Yes. $10.

Senator ALLOTT. $10.

Mr. HENRY. For the license period which is 5 years.

Senator ALLOTT. Now, the cost of a standard make radio of this size, of the type I have been describing, runs about, runs approximately $1,500, and maybe a little more than this, plus installation. So that when you talk about a $10 fee, you are talking about a $10 fee against an installation cost of approximately $1,600 or $1,700 depending upon how good a bargainer the purchaser is.

BLANKET LICENSES

I have never felt that these were excessive, but I know that you have had a lot of objections, but could you not meet this objection and the one that the Senator from Oklahoma brings up where people actually have two complete systems in their planes, and very few people have more than two, in the private planes, at least, by a simple modification that if they were both contained in the same plane, you could cover them under one application?

Mr. HENRY. Senator, I think that is the case. Mr. Barr, would you comment on that? Is that correct? Can we

Mr. BARR. Yes. They give a blanket license for multiple transmitters if the applications are all made at the same time. If they come in with separate applications, there will be a separate fee, though.

Senator ALLOTT. So if I had a plane and had two complete systems, then it would cost me just $10 license fee.

Mr. HENRY. If you applied at the same time.

Senator ALLOTT. If I applied at the same time. Thank you.

Senator MONRONEY. If they are applied for separately, then it would be separate.

Mr. HENRY. It would be imposed separately.

Senator MONRONEY. In buying a new plane, then, you would have to buy these two at the same time.

Mr. HENRY. Yes.

Senator MONRONEY. This is completely independent, not—within the same plane, is that right?

Mr. HENRY. That is right.

Senator MONRONEY. Longwave, shortwave.

ANNUAL FEE REVENUE

Senator YOUNG. How much additional money will this bring in in a year?

Mr. HENRY. At the rate it is now going it is $12,000 a day of $3,120,000 a year, less what it costs us, and we estimate around $75,000 a year cost of collection.

Senator YOUNG. And you could use these funds without-
Mr. HENRY. No. They go into the general Treasury.
Senator YOUNG. Have to be reappropriated.

Mr. HENRY. Yes.

Senator MAGNUSON (now presiding). General receipts.