Administrative Law Judge, in relying entirely on the mere existence of a single protestant and the fact that protestant's service had not been tried and found wanting, ignored the specifics and pecularities of the supporting shipper's transportation needs, which cannot be met by the protestant. Protestant's reply to applicant's exceptions contends that the supporting shipper's transportation needs (into the States served by protestant) can be satisfied by protestant's equipment, which protestant admits consists solely of 40-foot flatbed air-ride trailers. Protestant's major point is the contention that the supporting shipper's desire to utilize 20-foot straight air-ride trucks is based primarily upon rate considerations, which normally are not considered in cases of this nature.

Turning to our resolution of the issues presented, we reaffirm the well-recognized requirement that an applicant for motor common carrier authority must show by substantial evidence that the operation in which it proposes to engage is or will be required by the present or future public convenience and necessity. Such proof, in substance, entails a showing that the proposed service will serve a useful purpose, responsive to a public demand or need; that existing carriers are unable or unwilling to meet such demand or need; and that the new operation may be authorized without impairing the operations of existing carriers contrary to the public interest. PanAmerican Bus Lines Operation, 1 M.C.C. 190 (1936).

To meet its evidentiary burden under the Pan-American criteria, an applicant for motor carrier authority must present evidence by shippers or consignees as to their present or reasonably foreseeable future transportation requirements. The evidence in this proceeding establishes that the shipper has a present or potential market for the involved lathes in each of the sought destination States. As to the majority of those States, the evidence reveals no existing carrier able or willing to provide the necessary service, and we reaffirm the Administrative Law Judge's conclusion that authority to serve many of those States should be granted.

We further conclude, contrary to the Administrative Law Judge, that the public convenience and necessity requires a grant of the authority to the remaining States covered by this application, which are now served only by protestant. It is undisputed that the protestant operates no 20-foot straight trucks with air-ride suspension, but instead would have to transport the lathes in 40-foot air-ride trailers. Although the lathes could be safely handled in protestant's equipment, the use of such equipment would not result in economic or efficient transportation, as mandated by the national

transportation policy, 49 U.S.C. preceding §1. The evidence reveals that normally only one lathe is shipped at any given time to one consignee. A single lathe will substantially fill applicant's 20-foot air-ride trucks, and this type of shipment can be efficiently handled with a maximum utilization of equipment and a minimum amount of delay. The use of protestant's 40-foot trailers, in contrast, would inevitably result in either delays in transit (if protestant delays dispatching the trailer until it is fully loaded) or an inadequate utilization of the trailer (if the trailer is dispatched immediately upon the loading of a single lathe, which occupies no more than half the available trailer space). Neither result is consistent with sound transportation policy.

Moreover, there is nothing in the record to indicate that a grant of the application could have a significant adverse effect upon protestant. Home has never participated in this traffic in the past, and there is no evidence which would demonstrate the existence of substantial amounts of idle equipment which would be utilized to serve the supporting shipper, or a financial condition which needs improvement through handling of the involved traffic. In these circumstances, we conclude that the advantages to the shipper resulting from a grant of the proposed application outweigh any potential adverse effects upon protestant.

II. FITNESS

Having determined that the proposed service is required by the public convenience and necessity, we now turn to the question of whether the applicant has carried its burden of proving that it is fit, willing, and able to provide that service.

The issue of applicant's fitness arises from its admittedly unlawful transportation of glass from Knox, Pa., during a 10-month period in late 1973 and early 1974. Briefly summarizing the relevant facts, which were accurately stated by the Administrative Law Judge, it is

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'As pointed out by the applicant and the Bureau, the Administrative Law Judge's finding that similar violations of existing authority have formed the basis of a denial of applicant's Sub-No. 19 application is incorrect. In the Sub-No. 19 proceeding the applicant was found fit and the authority sought therein has been granted. Moreover, it must be noted that while the findings in the Sub-No. 19 proceeding were officially noticed by the Administrative Law Judge upon the Bureau's unopposed motion, such notice can only go to the existence of that proceeding and the findings made therein. It is improper to take official notice of the evidence adduced in the SubNo. 19 proceeding. Terminal Transport Co., Inc., Ext.—Michigan Points, 111 M.C.C. 343 (1970). Thus, the Bureau's failure to comply with rule 82 of our Rules of Practice precludes consideration of the record evidence adduced in the Sub-No. 19 proceeding. Ayers Extension-Cheyenne, Wyo., 99 M.C.C. 795 (1965).

undisputed that applicant has no authority which would enable it to transport glass originating at Knox, Pa. However, in October 1973, shortly after applicant's Special Commodities Division management employed one Richard Bowser to serve as a "commission agent" at Knox, some 237 interstate shipments of glass were originated at or near Knox by Bowser on applicant's account. The evidence suggests that the division management initially approved the glass transportation under the erroneous belief that certain Pennsylvania intrastate operating authority held by one of applicant's affiliated companies had been registered with the Commission, thus enabling applicant, pursuant to a proposed interline arrangement with another carrier (which was never actually consummated) to lawfully handle the shipments. Although Bowser was warned to cease handling such shipments when the lack of proper authority was discovered, he continued to accept glass shipments in defiance of instruction until July 1974, when applicant's top management intervened and compelled him to terminate the glass movements. In September 1974 management began steps to fire Bowser, but at the suggestion of an I.C.C. investigator, the firing was delayed until November 1974, when the investigator had completed his investigation.

In addition to firing Bowser, applicant's president has instituted a program of eliminating all "commission agents." At the time of the hearing, two agents had been replaced by full-time employees, and the president testified that the remaining four agents would be replaced as soon as competent employees could be obtained. In addition, applicant's president has personally assumed the responsibility of monitoring all freight bills to assure prevention of further unauthorized shipments and the responsibility for field agent hiring and operational expansion of applicant's Special Commodities Division.

There is no doubt as to the existence of past violations of the act. The essential question is whether the steps taken by applicant to prevent such operations in the future are sufficient to justify a finding that the carrier is now fit within the meaning of the statute.

The determination as to whether an applicant has sustained its burden of establishing its fitness must be made upon a full consideration of the nature and extent of the violations committed by applicant, the mitigating circumstances, if any, shown to exist and to have existed, whether applicant's conduct represents a flagrant and persistent disregard of the provisions of the act and of its certificates, whether applicant has made a sincere effort to

correct past mistakes, and whether applicant is willing and able to comport in the future with the statute and the applicable rules and regulations of the Commission. Johnny Brown's, Inc., Extension-Winchester, Va., 111 M.C.C. 905 (1970), and Eagle Motor Lines, Inc., Ext.-Lincoln, Ala., 107 M.C.C. 499 (1968). Moreover, each proceeding must be determined on the basis of its own particular facts and circumstances. L & M Express Co., Extension-Crewe, Va., 106 M.C.C. 334 (1968).

With respect to the undisputed violations demonstrated by the evidence of record, it appears that no unauthorized operations have been conducted since July 26, 1974, 2 days after Miller's traffic manager ordered the Knox commission agent to terminate the interstate transportation of glass. The Administrative Law Judge, although apparently cognizant of this, concluded that an indefinite calendar period of time would be required before applicant can eliminate from its system what he regarded as the prime source of its problems-i.e., the use of "commission agents" to conduct field operations. We disagree. By the time of the hearing in this case, one-third of the commission agents had been eliminated, and the control program outlined by applicant's president is sufficient, if faithfully carried out, to assure future compliance with the act and its regulations. On the basis of the entire record, we conclude that applicant has demonstrated a sincere and determined effort to prevent future unauthorized operations and has thus sustained its burden of proving its fitness.

We further conclude, however, that because this new control program has not yet been in effect for a sufficient period of time to enable us to make a full evaluation of its effectiveness, the public interest would best be served by the issuance of a 3-year term certificate, rather than an unconditional grant of authority. Cf, Radke Extension-Various Commodities, 113 M.C.C. 89 (1971); Johnny Brown's, supra; Spector Freight System, Inc., Extension-Whitley, 111 M.C.C. 889 (1970); and Jamerson Contract Carrier Application, 110 M.C.C. 469 (1969). Applicant itself has indicated the ongoing nature of its control program, and admits that this program is necessary to make certain that in the future its responsibilities as a regulated carrier are fully satisfied. Accordingly, in finding applicant fit, we deem it appropriate to limit the certificate granted in this proceeding to a 3-year term, which will afford us the opportunity to make certain, at a future date, that applicant's compliance efforts do in fact result in the prevention of further unlawful operations and activities. Thus, any certificate to

be granted herein will expire at the end of the 3-year term, unless, prior to its expiration date, applicant files a petition, as described below, for its extension and demonstrates that it has been in full compliance with the act and the applicable rules and regulations. thereunder.

III. DUAL OPERATIONS*

Section 210 (49 U.S.C. 310) of the act, as amended by the Transportation Act of 1940, provides in substance that no carrier (or carriers under common control) shall hold both a certificate and a permit authorizing operations in the same territory or over the same routes except upon a specific determination by this Commission that, for good cause shown, the holding of such dual authority will be consistent with the public interest and the national transportation policy. The potentials for undue preferences and/or discriminatory treatment inherent in dual operations were fully articulated in Gallot-Purchase-Holst, 45 M.C.C. 1 (1946) and subsequent cases and need not be repeated herein. However, neither the prohibition of section 210 nor the principles upon which it is based are absolute and inflexible. While an application may be properly denied where an opportunity for discrimination exists, even though the applicant has no intention of engaging in such activities (Hunt-Purchase-Schideler, 50 M.C.C. 683 (1948); Hudlow-Control-General Transport, Inc., 70 M.C.C. 352 (1957)), the presence of such opportunities does not automatically require denial of all or part of an application. Merchants Delivery Co. Common Carrier Application, 99 M.C.C. 680 (1965); Polman Extension-Montana, 92 M.C.C. 114 (1963); United Parcel Service of New York, Inc., Comm. Car. Applic., 79 M.C.C. 629 (1959), affirmed sub nom. Yale Transportation Corp. v. U.S., 185 F. Supp. 96, affirmed per curiam, 365 U.S. 566. Thus, we have approved dual operations where good cause exists for such approval and/or where an appropriate restriction may be imposed to prevent realistic opportunities for discrimination. United Parcel Service of New York, Inc., Comm. Car. Applic., supra; Estes-Purchase-Minton, 80 M.C.C. 51 (1959).

In order to determine whether the dual operations presented by the instant application require denial of the application or the

'The possibility of dual operations consequent upon a grant of the sought authority is mentioned in the Federal Register publication of the instant application. The Administrative Law Judge, however, having determined that applicant was not fit and that the application would have to be denied, made no findings with regard to dual operations.