NOMINATIONS-JUNE

TUESDAY, JUNE 29, 1976

U.S. SENATE,

COMMITTEE ON COMMERCE,

Washington, D.C.

The committee met at 9:30 a.m. in room 5110, Dirksen Senate Office Building, Hon. John O. Pastore presiding.

OPENING STATEMENT BY SENATOR PASTORE

Senator PASTORE. This hearing will come to order. I have talked to Senator Howard Baker, and he will be here very shortly. I don't think there is any reason to hold up the hearing.

Today we will consider the nomination of Thomas J. Houser to be the Director of the Office of Telecommunications Policy (OTP). The OTP was created to advise the President and to represent the views of the executive branch on matters of national and international telecommunications policy. It was envisioned as a vehicle for establishing a partnership between the White House and the Congress in the development of an overall telecommunications policy for the Nation in order to insure that the American public will receive maximum and timely benefits from available technology.

The OTP's effectiveness in this intended role is, of necessity, dependent upon the attention and support it receives from the White House. In this regard, the office has been without an appointed Director for some 21 months now. During this period the OTP has been very fortunate, in my judgment, in having the able and competent leadership of its Acting Director, Mr. John Eger. However, such leadership is, indeed, no substitute for a Director who is appointed by the President and confirmed by the Senate.

It is, therefore, the committee's pleasure to welcome the President's nominee, Thomas J. Houser.

We are further honored this morning in having with us our illustrious colleague, and dear friend, Senator Percy, of Illinois, who will introduce the nominee.

STATEMENT OF HON. CHARLES. H. PERCY, U.S. SENATOR

FROM ILLINOIS

Senator PERCY. Thank you very much Chairman Pastore, members of the staff.

This is the third time I have had the distinct pleasure of presenting Tom Houser, my longstanding friend, to a committee of the Senate. He is now nominated by the President to be Director of the OTP.

I have known Tom Houser for a decade and a half and can speak with considerable personal knowledge of his experience and qualifications.

I wish to state with enthusiasm that Tom Houser is a distinguished and experienced public servant, whose leadership ability and background in the communications field will serve him well in the position for which he is being considered.

As you already know, Mr. Houser has had a distinguished legal career with one of our great railroads, and more than a decade ago I went to him and asked him to give up his career and help me launch a political career.

After considerable thought, he did resign from the railroad, Burlington, and devoted himself to getting me started in politics, for which I shall be everlastingly grateful. On occasion, I wonder about the decision, but for the most part I would say this has been for me a tremendously satisfying life and I hope that that contribution that he made has helped bring him into public life.

He served as Deputy Director of the Peace Corps, and served there with great distinction. He served as an FCC Commissioner; he served as a member of the FCC Advisory Council on Cable Television.

Since the OTP is the executive agency responsible for overall supervision of national communications matters, his tenure with the FCC on two occasions is of particular significance.

There is another aspect to be considered as well. During a time when public opinion about Washington is low and citizens' feelings about waste, inefficiency, and incompetence are running high, it is more important than ever for us to choose with great care the appointed top officials responsible for working with important national issues and areas of increasing public concern.

It is in this respect that Tom Houser will be able to draw upon his many fine personal qualities, not only to perform his professional assignments, but also to play a part in restoring confidence in Government.

In order to come to Washington, he leaves a recently completed home and a position with one of Chicago's prestigious law firms.

He is a decent, hardworking man, who is an expert at bringing together people of opposing viewpoints. I think he is an extraordinary administrator. Many lawyers are brilliant, able lawyers, but are not noted administrators, and I have seen Tom Houser in four different administrative capacities perform extraordinarily well. He has a way of motivating people, he can bring them into the act and make them feel that their role is an important role. He has a way of leading without driving, and he leads, I think, through inspiration. He sets an example by his own work pace, which is a prodigious one.

He is a man of integrity, openminded and fair. In sum, he will bring to this position attributes that merit confidence and respect—and he will get the job done.

Mr. Chairman, I appreciate this opportunity to express my own respect and admiration for Tom Houser, to endorse his nomination as Director of the OTP, and to urge the committee to act expeditiously to put him to work for the benefit of the Nation.

Senator PASTORE. Thank you very, very much.

We have, Mr. Houser, your biographical background, and I will ask that this be placed in the record at this juncture.

[The biographical sketch follows:]

BIOGRAPHICAL SKETCH OF THOMAS J. HOUSER

Address: 15214 Kishwaukee Valley Road, Woodstock, Illinois 60098.

Date of birth: June 28, 1929.

Place of birth: Chicago, Ill.

Marital status: Married the former JoAnn Ochsenhirt.

Children: Deborah, 21; Deneen, 19; David, 15.

Education: Robert Fulton Grammar School, 1935-43; Lindblom High School, 1943-47; Michigan State University, 47-48; Hanover College, 1948-51, A.B. degree in Political Science; Advance School of International Studies, work on masters degree, degree not received, 1951-52; and Northwestern University School of Law, 1956-59, Juris Doctors of Law degree.

Employment record: Montgomery-Ward, Credit Analyst, Chicago, Illinois, 1952; United States Rubber Company, Management Trainee, Chicago, Illinois, 1953-54; Association of Western Railways, Legal Department, Chicago, Illinois, 1959-61; Burlington Northern Railroad Company, Legal Department, Chicago, Illinois, 1961-65; The Chicago office of Senator Charles Percy, Legal Counsel and Staff Supervisor, Chicago, Illinois, 1967-68; Liebman, Williams, Bennett, Baird and Minow, Of Counsel, Chicago, Illinois, 1968-69; and Sidley and Austin, partner, Chicago, Illinois, 1973-76.

Government experience: Deputy Director of Peace Corp., 1969-70; Commissioner, Federal Communications Commission, 1971; Public member, U.S.I.A. Inspection Team, Yugoslavia, October 1975; Lecture tour for the State Department, Eastern Europe, April-May 1976; Legal Counsel and Assistant Treasurer, National Minority Purchasing Council, 1973-76; and Advisory Council to the F.C.C. on Cable Television, 1973.

Memberships: Membership in the Chicago, Illinois and American Bar Associations; Member and Director of the Federal Bar Association in Chicago, Illinois; Member, Beta Theta Pi, fraternity in college; Member and legal counsel for the Chicago area Boy Scouts; National Vice Chairman for National Asthma Center; Area Chairman, National Cancer Campaign Member, Chicago Committee; Member, of the Economic Club of Chicago; Member, the Union League Club of Chicago; Member, Executive Club of Chicago; and Legal counsel and Director, of TRUST, an organization dealing with inter-city problems.

Political affiliations and activities: Republican Committeeman, Wheeling Township, Cook County, 1962-66; Chairman, Executive Committee of the Cook County Central Committee, 1964-66; Campaign Chairman, Percy for Governor Committee, 1964; Campaign Chairman, Percy for Senator Committee, 1966; Campaign Chairman, Illinois Committee to Reelect the President, 1972; Lecturer for the Republican National Committee, 1967-68; and Miscellaneous contributions to Republican and non-Republican candidates totaling no more than $500. Honors and Awards: Tuition scholarship to Hanover College, Hanover, Indiana; Tuition scholarship to Northwestern University School of Law, Evanston, Illinois; Recipient of American Legion Award as outstanding high school graduate; Recipient of the Alumni Award as an outstanding college graduate, Hanover College; and Recipient of the Hanover College Alumni Achievement Award, 1970. Published writings: The Fairness Doctrine, Notre Dame Law Journal, 1971; an article on the Fairness Doctrine, Business Review, March 1974; and numerous letters to the editors and various political commentaries which have appeared in the Chicago Press over the last 10 years.

Qualifications: I have observed government functions both as a private sector lawyer and as a government official and I believe this prospective is most helpful. As a former Commissioner of the Federal Communications Commission, I believe I have reasonable understanding of the scope of problems and potential of the telecommunications industry.

As a private sector lawyer, I have served a modest number of clients before the F.C.C.

Senator PASTORE. Right now, it is your turn.

STATEMENT OF THOMAS J. HOUSER

Mr. HOUSER. Senator, Mr. Chairman, I am very pleased to be before you this morning to have this opportunity to answer any questions that you or any other Senators may have.

I will state for the record that I did not seek this job; that the White House asked me to do it. I thought this job important enough, had enough potential to break my life, to take my family out of a lovely home and come here to do what I could.

Thank you, sir.

Senator PASTORE. At this point, I understand that the committee staff has submitted certain questions to you and that your answers have been received. I am going to ask that they be placed in the record.

[The questions and answers follow:]

QUESTIONS OF THE COMMITTEE AND THE ANSWERS THERETO

Question 1. The Office of Telecommunications Policy (OTP) was created to advise the President and to represent the views of the Executive Branch on matters of telecommunications policy. Its effectiveness in this role is necessarily dependent upon the support and attention which it receives from the White House. If confirmed, do you believe that the OTP will have this necessary support and attention? What changes do you anticipate in the policies and organization of OTP in the months ahead? Are you satisfied with the present status of OTP as a creature of Executive Order? Do you think legislation to reconstitute OTP would be advisable? Please explain.

Answer. Based on my conversations at the White House, there appears to be genuine interest in, and support for, OTP. There exists an OTP Study Group in the White House with which I will be associated and which seeks to secure an optimal role for OTP. I am not sufficiently advised to comment on changes in policy or organizational structure. I have no views as to whether OTP is functioning with maximum efficiency via Executive Order. I would have no hesitancy to recommend statutory change if warranted by the facts.

Question 2. Do you believe there should be an articulated national telecommunications policy? How might such a policy be developed? What will be your policy priorities if you are confirmed?

Answer. Because of its enormous impact on our economy and society generally, I believe that an attempt should be made to formulate and articulate an openminded national telecommunications policy. Initially, I would see my policy priorities as follows: a. Spectrum management; b. formulation of international policies, both satellite and wire, due to upcoming conferences; and c. assessment of pending legislative proposals dealing with Cable, Copyright, and common carrier issues.

Question 3. What are your views as to the appopriate role of the OTP vis-a-vis the FCC and other governmental agencies responsible for the formulation and implementation of telecommunications policy? Please be specific for each agency. Do you anticipate any change in the relationships between OTP and other Executive Branch agencies concerned with telecommunications policy? Please explain.

Answer. To coordinate and cooperate with a view of curtailing duplication and husbanding a scarce national resource. There are a number of federal agencies which relate to OTP. DOD, HEW, Commerce, FAA, CAB in addition to FCC and State Department and Coast Guard deal in telecommunications on a regular basis. National Security is involved and I have not yet been briefed in this area. The FCC has a statutory mandate from Congress to regulate the Telecommunication industry on a day to day basis and I would work with the FCC on that principle. At this point I do not anticipate any change in relationships with other Executive Branch and regulatory bodies. The FCC has a joint responsibility with the President to intelligently allocate and manage the radio spectrum.

Question 4. There is, at times, a difference of opinion on particular international telecommunications issues between the FCC, the State Department, and

U.S. common carriers. What is your view of the appropriate role for OTP in the formulation and implementation of international policy?

Answer. OTP, FCC and the State Department each brings a peculiar expertise to the formulation of international telecommunications policy. I do not see the problem as one of sorting out as to whom has a superior role, but rather of finding a procedure to insure the most efficient input from each of these agencies. Question 5. Because of the tremendous growth in international communications traffic, specialized systems are developing outside of the INTELSAT structure. For example, there are proposals pending for an aeronautical satellite system now in the experimental stage and for a new venture involving a maritime satellite system. What are your views as to the general approach which should be taken with regard to such matters of international facilities planning? Do you have any views on the question of the appropriate vehicle or entity for U.S. participation in such ventures?

Answer. This question is most intricate and I have not been briefed. However, I would follow an open-door experimental approach to the resolution of this important issue. The INTELSAT agreements must be considered and coordination is essential.

Question 6. As the economies of the world are drawn together, communications is one sector of the U.S. economy that continues to have a dominant role. OTP has recently taken a number of initiatives to insure U.S. leadership. Specifically, OTP has made an effort to strengthen the U.S. position in the ITU, OECD and most recently has embarked on an effort to coordinate joint concerns with nations in the Pacific Basin and Latin America. Have you had an opportunity to formulate any opinions on the appropriate role for the U.S. in international telecommunications?

Answer. Based on my experience as Deputy Director of the Peace Corps, and recognizing the superior role of U.S. technology, it would be my opinion that the U.S. cannot afford anything other than a leadership role.

Question 7. The OTP has advocated and supported legislative proposals for extensive de-regulation of cable television. What are your views in this area? Answer. Because of pending copyright legislation and the changing needs of society, the future role of cable television as part of the telecommunications industry is unsettled and is being tested in various areas. Any change in cable regulation has to be carefully weighed in its impact on the economy and free broadcasting including UHF considerations. Possibly congressional action in copyright will help resolve the problem of the relationship between over the air broadcasting and future development of cable television.

Question 8. The OTP has been an advocate of competition in common carrier services in terminal equipment. What are your views on this subject? The Acting Director of OTP recently criticized legislation pending before the Congress which would alter current regulatory policy of telecommunications common carriers. Do you anticipate any changes in the position of OTP with respect to this legislation? Please explain. Your former law firm, Sidley and Austin, has represented and continues to represent AT&T. Does or will this have any bearing or influence on your views on these matters?

Answer. In answering the question I would like to state that while serving on the FCC, I voted for the entry of specialized carriers, served as Chairman of the FBX Interconnect Committee and voted for competition in the Computer Services Proceeding. I have not had any opportunity to study pending legislation re common carriers and can only state my belief that, if carefully and selectively done, competition can be substituted for regulation. National Policy has been to favor competition. We should however, always have fore-knowledge of the economic and social impact of proposed changes. With respect to my association with Sidley & Austin I would state as follows: a. I have severed my relationship; b. my former partner, Newton Minow served many notable broadcaster clients while I served as an FCC Commissioner yet I don't believe there was any criticism of my being pro-broadcast; and c. I had no role in AT&T legal work at Sidley & Austin and can assure that I will be free of improper influence.

Question 9. As you know, the frequency spectrum is a little understood but very important natural resource. What is your view regarding the necessity of establishing priorities between government and the private sector affecting use of the spectrum? Do you have any views on the various proposals before the FCC to drop in additional channels in the VHF portion of the spectrum? Are you aware of the complaints concerning interference with television reception and the in

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