V. THE RESPONSE OF CONGRESS On March 19, 1973, six weeks after the hearings had been held, Senator Thomas McIntyre, chairman of the Subcommittee on Government Regulation, introduced Senate Resolution 83, directing the Federal Communications Commission to revise, examine, and delete if necessary obsolete and redundant reporting requirements which burdened the entire broadcasting industry; the Commission was also directed to give special attention to the problems of small market licensees. In his introduction, Senator McIntyre noted the precarious position of radio broadcasters throughout the United States: in 1971, half of those reporting losses were characterized as small broadcasters.3 He also revealed that during the same fiscal year 40 percent of small television broadcasters were also in a loss situation.32 Senator Alan Bible of Nevada, chairman of the full Senate Select Committee on Small Business, joined Senator McIntyre as co-sponsor of the resolution. In his floor remarks, the former noted: The evidence indicates that the Commission's failure to distinguish between small stations and large stations is forcing small broadcasters out of business because of this excessively unfair paperwork burden. These steps will enable small broadcasters to do a better job of serving their audience. And they will also give the small broadcaster a chance to make his station a more productive business enterprise.33 A. Conclusions VI. SUMMARY 31 The hearings held by the Subcommittee on Government Regulation reveal small market broadcasters as a group to be in serious financial trouble across the country; figures were released by the subcommittee showing that a substantial percentage of these operations serving small markets are plagued by persistent financial deficits. In order to restore their ability to serve their communities and to function as profitable small businesses, substantial remedial action must be taken both by the Federal Communications Commission and by the Congress of the United States. B. Committee Findings 1. Small broadcasters are in precarious condition due to persistent operating losses of a large percentage of this segment of the communications industry. The hearings reveal that the burden of paperwork requirements imposed by the Federal Communications Commission has substantially contributed to the situation through the disproportionately large expenditure of staff work time, legal and managerial assistance, and material supplies such as duplicating and postage which is required of small broadcasters. 2. The committee further finds that many of the paperwork requirements of the Federal Communications Commission, devised U.S. Congress. Congressional Record. Volume 119, number 42, March 19, 1973, p. 5061. with the larger broadcast licensee in mind, are particularly burdensome to the small broadcasters, due to the fact that the latter lack the extensive staff and secretarial resources needed to discharge the reporting burden. In addition, the F.C.C. criteria for Community Ascertainment Programs may be inapplicable to the conditions of the market in which a number of the small broadcasters operate. 3. The continued and accelerated decline of small market broadcasting licensees would have a detrimental effect on the quality of life in the many communities served by this segment of the broadcasting industry. Therefore, the committee finds that in the national interest and in the more direct interest of the communities served, the viability of small broadcasters would be encouraged by removing, so far as possible, unnecessary, inapplicable and redundant paperwork requirements imposed by the Federal Government. A. Legislation VII. COMMITTEE RECOMMENDATIONS In view of the findings determined by the committee, the following action by Congress is recommended. 1. The Senate Committee on Commerce should begin proceedings designed to bring Senate Resolution 83, described above, to the floor for consideration and passage as soon as possible. 2. The Congress should consider enactment of legislation directing the Federal Communications Commission to extend the current license term for broadcasters from the current three years to five years. B. Federal Communications Commission Based on the hearings, the committee recommends that the Federal Communications Commission undertake the following actions. 1. The Federal Communications Commission should consider the establishment of an Advisory Committee on Small Market Broadcasters. The first purpose of this group would be to state more precisely the criteria by which small broadcasters and small broadcast markets are defined, thus eliminating some of the present confusion. The ultimate purpose of the group should be to provide a permanent representation for the concerns of the small broadcaster within the Commission. In recognition of this function, the Advisory Committee should include strong representation from small broadcasters, as well as members from the industry as a whole and from the Commission itself. 2. The committee recommends that the F.C.C. develop and adopt a shortened broadcasting license renewal form which fits the criteria developed by the Advisory Committee on Small Market Broadcasters. This form should require only such information as is absolutely necessary to the Commission's mandated purpose of regulation. 3. The committee recommends that the F.C.C. develop regulations whereby on meeting certain criteria, small broadcasters could complete a simplified version of the Community Ascertainment Programs. Such criteria might include a statistical determination of commonality of age, interest, ethnic origin or the like within the community as well as the station's past performance in the Community Ascertainment area. Small broadcasters located in communities of a certain size might be allowed to submit the simplified forms upon proof of the absence of any inquiry or protest on behalf of any community organizations or perhaps upon presentation of written statements of designated community leaders. The committee recommends that the F.C.C. thoroughly investigate these types of possibilities in an attempt to enhance the manner in which the licensee serves the community and at the same time allow the community to impact the programming of the various licensees without any undue paperwork burden. STATEMENT OF SENATOR EDWARD J. GURNEY Because I was unable to actively participate in all of the Subcommittee on Government Regulation's hearings dealing with the Paperwork Burden and its effect upon the small broker dealers and small broadcasters as covered by this report, I must reserve judgment as to the conclusions and recommendations contained therein. STATEMENT OF SENATOR WILLIAM V. ROTH, JR. Because I was not a member of the Select Committee on Small Business during the period covered by this report, I reserve judgment at this time as to the conclusions and recommendations contained therein. However, I fully share the Committee's commitment to improving the climate for small business, so important to our economy. APPENDIXES APPENDIXES TO PART I (SMALL BROKER-DEALERS) APPENDIX A [From the Congressional Record, Vol. 11, No. 140, Sept. 24, 1973] STATEMENT OF SENATOR THOMAS J. MCINTYRE INTRODUCING SENATE RESOLUTION 173 SENATE RESOLUTION 173-SUBMISSION OF A RESOLUTION TO REDUCE THE PAPERWORK BURDEN ON SMALL SECURITIES BROKERS (Referred to the Committee on Banking, Housing and Urban Affairs.) Mr. MCINTYRE. Mr. President, 1 submit for appropriate reference a Senate resolution directing the Securities and Exchange Commission to immediately begin an examination of its rules and regulations and make such amendments as may be appropriate in order to reduce unnecessary and duplicative paperwork on small broker-dealers. The resolution also directs the Securities and Exchange Commission and the various securities industry self-regulatory bodies to continue a review of the position of small broker-dealers to insure their continued participation in the securities markets of the United States. Independent broker-dealers play a unique and essential role in our economy. Historically, they have engaged in the marketing of securities to individual small investors. They provide local and regional securities facilities in many areas of the country not served by large New York City firms. They raise capital for small businessmen who, because of their size, are often ignored by the Wall Street giants. The Subcommittee on Government Regulation of the Senate Select Committee on Small Business held hearings into the Federal paperwork burden on small broker-dealers on July 12 and 23, 1973, and compiled a sizeable record. This showed that small brokerdealers are suffering extreme hardships imposed by the paperwork and reporting requirements of the Securities and Exchange Commission, the National Association of Securities Dealers, and other self-regulatory organizations. As a result of nearly 40 years' regulation by the Securities and Exchange Commission and self-regulatory organizations, certain overlapping and duplicative reporting requirements have come into existence. Today, in 1973, it is clear that they pose an unnecessary burden on the small broker-dealer who is subject to them. The problem is significantly stated by two small broker-dealers in Wisconsin and New Jersey. From Wisconsin, a small broker-dealer writes: |