rejected. Petitioner will have an opportunity to comment on the proposals set forth in this report. Therefore, the petition is hereby denied and the representation is hereby rejected.

DISCUSSION AND CONCLUSIONS

This rulemaking has been initiated to reexamine the exemptions from Federal economic regulation contained in sections 203(b)(8) and 202(c) of the Interstate Commerce Act. More specifically we are concerned with the following statutory language: "a zone adjacent to and commercially a part of any *** municipality" [203(b)(8)] and "within terminal areas" [202(c)]. The use of this type of language implies that the respective exemptions are limited to a geographic area. As noted in the initial section of this report, a population-mileage formula was devised in the mid-1940's to describe the extent of 203(b)(8) commercial zones which exist about municipalities, Commercial Zones, supra, 46 M.C.C. at 692. Subsequently, it was determined that the limits of a motor carrier's or freight forwarder's terminal area should be coextensive with the commercial zone limits of that municipality, Commercial Zones, supra, 54 M.C.C. at 63-66. Thus the geographic scope of both the 203(b)(8) and 202(c) exemptions is usually determined by reference to the population-mileage formula."

Our initial inquiry is directed at whether the present populationmileage formula accurately describes the area of business and industrial activity existing about modern-day cities. In such a proceeding, the issue of public need and shipper requirements are not relevant. This is a factual determination, which must be made solely on the basis of our analysis of relevant economic and demographic data. A review of that data reveals a definite trend of increasing suburban commercial and residential activity. The population levels for central cities are generally stable or declining slightly, while outlying areas are experiencing rising populations. There is a distinct disparity in the annual relative rates of city and suburban growth (see Appendix C). Statistics relating to SMSA's gathered by the United States Bureau of the Census also exemplify the movement to the suburbs:

As previously indicated, interested persons may petition this Commission to individually consider and describe the limits of a commercial zone of a particular city. It is sometimes mistakenly assumed that individual determinations have been made with respect to large metropolitan cities only. This is not true. Such determinations have been necessary at cities of all sizes, such as Warren, Ohio, Lake Charles, La., and Pueblo, Colo., as well as cities like Chicago, Pittsburgh, and Washington, D.C.

The data presented by Penjerdel and DOT relating to the Philadelphia area further reflect the general movement of population and business establishments from the city to the suburbs. Any utilization of selected statistics can be criticized either as too limited to support valid conclusions or as biased because chosen to bolster a particular thesis. While we agree that decisions should be based upon the maximum information possible and that statistics should be carefully scrutinized to eliminate biased results, we believe that a fair and impartial appraisal of the economic evidence submitted in this proceeding amply supports our conclusions concerning the realignment of the location of business and industrial activity.

The key issue with regard to commercial zone regulation is whether there is a sufficient nexus between the central city and the economic activity of outlying areas to suggest that they are commercially unified. Opponents of the proposed expansion of current commercial zone limits agree that trade and industrial activity is accelerating in suburban areas; however, they argue that this activity is independent of central city commerce. Those favoring expansion point out that many factors have caused the shift in economic activity from the central city to the suburbs-availability and expense of land, need for new and larger facilities, urban congestion-and these reasons indicate that suburban activity is a necessary and inevitable outgrowth of the center city. It does appear that there is an evolving location pattern for metropolitan economic activity. The central city remains the home of administrative, financial, and service functions, activities which are compatible with multi-storied environments in concentrated urban centers. Manufacturing and wholesale and retail trade, prime users of transportation services, are shifting to suburban locations, where land is available for single-story industrial plant technology. Shippers state that while central city headquarters are maintained in some cases, new facilities for manufacture and warehousing are built in outlying areas. Improved communication and transportation networks. facilitate coordination of business activity between office and plant locations. Consequently, it must be recognized that modern technology permits a greater degree of commercial integration. between city and suburb.

Some parties contend that the present population-mileage formula is adequate to meet the changing circumstances of urban development. As the population increases so does the mileage

radius. This argument fails to recognize a critical defect in the present formula as applied to contemporary urban areas. The present formula does not take account of the varying characteristics of cities with populations in excess of 100,000. When the population-mileage formula was devised in the mid-1940's, it was felt that the formula would have little impact on cities with populations of 500,000 or more:

According to the 1940 census, there are only 5 municipalities in the United States with populations over 1,000,000; 9 with populations 500,000 to 1,000,000; 23 with populations 250,000 to 500,000; and 55 with populations 100,000 to 250,000. Of the 5 municipalities with populations of 1,000,000 or more, Detroit is the only one the commercial zone of which has not already been determined and, as above indicated, individual consideration as to it will be provided for. Of the 9 having populations of 500,000 to 1,000,000, 3 have already had their commercial zones determined, and individual consideration has been requested with respect to 3 others. It thus appears that our findings herein will apply to no municipality having a population in excess of 1,000,000, and to only 3 having populations in excess of 500,000. (Emphasis added.) Commercial Zones, supra, 46 M.C.C. at 691.

Bureau of Census figures for 1970 reveal the following breakdown of cities over 100,000:

The striking proliferation of the number of cities having populations of more than 100,000 is in itself indicative of the need to adjust the present formula.

The need for adjustment is not limited to the large population centers. The evidence submitted also displays a concomitant expansion of industrial and business activity about smaller communities. While the migration to the suburbs from large cities has been dictated in great measure by the unavailability of land in the central city, land-use planning efforts have produced a similar pattern at many less developed cities. In particular, the Mississippi experience described in an earlier section of this report reflects this effort to channel industrial development to outlying suburban areas. Shipper and motor carrier testimony concerning the location of industrial parks indicates that this is a developmental pattern common to cities in other States as well.