1 The Communications Act of 1934 abolished the Federal Radio Commission and created in its stead the Federal Communications Commission. To this new Commission have been transferred not only the former duties imposed by the Radio Act of 1927 as amended, but also the duty of regulating telephone, telegraph, cable, and all other forms of electrical communication. These duties had been vested in several agencies; namely, the Interstate Commerce Commission, the Post Office Department, and the State Department. The need for this legislation was stressed in a special message to Congress, dated February 26, 1934, by the President of the United States, urging its passage. The Commission is charged with making certain specified investigations in the communication field, which include (1) the interrelationship between telephone and telegraph communication companies and their manufacturing subsidiaries; (2) the competition between various phases of communication; (3) new uses of communication; (4) allotment of radio-broadcast facilities for educational, religious, charitable, labor organizations, and other nonprofit organizations; and (5) depreciation accounting. The Commission is also charged with the effective regulation of the industry and must investigate all interstate rates, prescribe uniform systems of accounts, and hear and determine all complaints. It must also receive, file, and examine all schedules of charges filed by the carriers, pass upon the public convenience and necessity of any proposed extension of line by telephone or telegraph carriers, as well as the extension of radio communication facilities, pass upon all applications for interlocking directorates between the various carriers, cooperate with the State commissions in harmonizing the Federal with the State forms of common-carrier accounting regulations, issue rules and regulations covering the use of franks and make a valuation of all property of all the carriers. The Commission has been requested by the Department of State to supervise the preparatory work for international communication conferences and to furnish delegates and technical experts for these conferences. In addition to the Washington office, the Commission maintains 22 field offices for the purpose of carrying out the duties imposed under this act. PRINTING AND BINDING For the fiscal year 1936 the Commission is requesting an appropriation of $25,000. This is an increase of $10,000 over the amount appropriated for the fiscal year 1935. This appropriation will be used for the printing of blank forms, briefs, and records, and certain periodicals, such as the commercial and Government stations of the United States, broadcasting, ship, experimental, beacon, and special experimental and amateur lists. This increase is made necessary because of additional obligations, such as furnishing the carriers with prescribed forms for making monthly, quarterly, and annual reports, and also litigation which will increase the printing of briefs and records. SYNOPSIS OF ACT CREATING THE COMMISSION Mr. WOODRUM. I wonder if you could supply for the record at this point, or have someone on your staff to do so, a brief synopsis of the act creating the Commission? Mr. SYKES. Yes, sir; I will be glad to get that up for you. L 1910, about the time the Interstate Commerce Commission was vested with diction over common carriers engaged in wire or wireless communication, we Congress also beginning to deal with radio. At this time, radio communicaten was practically confined to communication between ship and shore and and ship. Consequently, this first radio act required ocean-going steamers carring 50 or more persons to be equipped with efficient apparatus for radio communication. The act of 1912 dealt with the same subject, but went a little more into detail. Also in 1912, the radio act was enacted which required licensing of a stations engaged in radio communication. In 1922 an act was passed Butterizing the President to arrange and participate in an international commuration conference. Due to the development of broadcasting and the fact that it was found under prior Federal legislation the Government was vested with no authority to deny applications of broadcasting stations, the Radio Act of 1927 was adopted. The cause of this primarily was the growth of broadcasting in the United States and the interference of stations operating on the same frequency. Under the radio act, no rate-making power was vested in the Commission. It was merely a Federal agency to control by licensing the operation of radio stations. Two years after the enactment of the radio law, Congress began a study of a bill for the establishment of a Communications Commission. Later, there was appointed by the President an interdepartmental committee to make a study of the entire communications situation. It was the opinion of this committee that the communication service should be regulated by a single body. This immediately preceded the passage of the Federal Communications Act. The purpose of this act is to regulate interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, nation-wide and world-wide wire- and radio-communication service with adequate facilities at reasonable charges, for the purpose of national defense and for the purpose of securing more effective execution of this policy by centralizing authority heretofore granted by law to several agencies and by granting additional authority with respect to interstate and foreign commerce by wire and radio communication. The act shall apply to all interstate and foreign communication by wire or radio and all interstate and foreign transmission of energy by radio, which originates and/or is received within the United States, and to all persons engaged within the United States in such communication or such transmission of energy by radio, and to the licensing and regulating of all radio stations. It is made the duty of a common carrier to furnish communication service upon reasonable request therefor; and after opportunity for hearing, if the Commission finds such action necessary or desirable in the public interest, to establish physical connections with other carriers through routes and charges, and to establish and provide facilities and regulations for operating such through routes. All charges, piactices, classifications, and regulations shall be just and reasonable. It is unlawful for any common carrier to make any unjust or unreasonable discrimination in charges, practices, classifications, regulations, facilities, or to give any undue or unreasonable preference or advantage to any particular person. Every common carrier subject to this act shall within such reasonable time as the Commission shall designate, file with the Commission and print and keep open for public inspection, schedules showing all charges for itself and its connecting carriers for interstate and foreign communication showing the classifications, practices, and regulations affecting such charges. A carrier is not permitted to charge a different compensation for a service than is shown on its schedules so filed. Carriers are forbidden to refund or remit any portion of these charges. When there is filed with the Commission any new charge, classification, regulation, or practice, the Commission may either upon complaint or upon its own initiative, upon reasonable notice, enter upon a hearing concerning the lawfulness thereof. After opportunity for hearing, if the Commission is of the opinion that any charge, classification, regulation or practice of any carrier is or will be in violation of this act, the Commission is authorized to determine and prescribe what will be the just and reasonable charge or the maximum or minimum charge or charges to be thereafter observed and what classification, regulation, or practice is or will be just, fair, and reasonable to be thereafter followed, and to make an order that the common carrier or carriers shall cease or desist from such violation to the extent that the Commission finds that the same does or will exist. Sixty days from the enactment of the act, it is made unlawful for any person to hold the position of officer or director of more than one carrier subject to this act unless such holding shall have been authorized by order of the Commission. The Commission may prescribe the forms of any and all accounts, records, and memoranda to be kept by the carriers. It shall prescribe for such carriers the classes of property for which depreciation charges may be properly included under operating expenses and the percentages of depreciation which shall be charged with respect to each of such classes. The act does not infringe upon the regulation of intrastate communication by the States and is drawn with the idea of cooperation between the Commission and the various State authorities in charge of intrastate communication. The provisions contained in the Radio Act of 1927, as amended, have been set forth in the new act practically in their entirety. These provisions cover the administration of radio stations including the technical examination of all applications for the use of radio facilities for broadcasting, point to point, ship to shore, police, amateur and several other types of services. ORGANIZATION, POWERS, AND DUTIES OF FEDERAL COMMUNICATIONS COMMISSION Mr. WOODRUM. Do you want to make a general statement? Mr. SYKES. From the historical point of view, it might be well to call your attention to the fact that we had existing before the passage of the Communications Act a Radio Commission Act. The Radio Commission, which consisted of five members, had charge of radio broadcasting point to point communications, and of radio all over the country. It was a licensing body for radio. It had no ratemaking powers whatsoever. The Communications Act, which became a law just before Congress adjourned, provides not only for the regulation of both wireless and wired telegraph and telephone companies cables, and so forth, but it also gives the Communications Commission rate-making powers over common carriers of communications. Broadcasting stations are not common carriers. Mr. WOODRUM. Do you mean the telegraph and telephone services? Mr. SYKES. Yes, sir; the telegraph and telephone services. Mr. WOODRUM. That is, over the tolls that they may charge. Mr. SYKES. Yes, sir; over the rates. It gives very wide powers to investigate the business and business set-ups of those various concerns, and to make reports to Congress as to possible amendments under the act. It gives the Commission the power to organize into divisions, as it sees fit. It might be of interest, Mr.Chairman, if I gave you gentlemen the organization of the Commission under the act. After going into the matter very carefully, on the 17th of July, we organized into three divisions. Division no. 1 is the Broadcasting Division; division no. 2 is the Telegraph Division, and division no. 3 is the Telephone Division. The law provides that not less than three members must be members of each division. All of the Commission members except the chairman are members of only one division, and the chairman of the Commission is the third member on all the three divisions. Now, in setting up those divisions of broadcasting, telegraph, and telephone, it was necessary to go carefully into the radio field to put in each one of the appropriate divisions the kindred radio matters. Without reading this, it is quite interesting to note the detailed set-up of broadcasting, amateur, aircraft, and Coastal telegraph. It might be of interest to file this with the committee. Mr. WOODRUM. And to have it inserted in the record. FEDERAL COMMUNICATIONS COMMISSION, Washington, D. C., July 17, 1934. The Federal Communications Commission organized its divisions today in keping with the communications act. Three divisions composed of three membe each were created, with Chairman E. O. Sykes serving on each division. The divisions and personnel follow: Irision No. 1, broadcasting.-Commissioner Gary, chairman; Commissioner Bra, vice chairman; Commissioner Sykes. Lision No. 2, telegraph.-Commissioner Stewart, chairman; Commissioner Pare, vice chairman; Commissioner Sykes. Dsion No. 3, telephone.-Commissioner Walker, chairman; Commissioner Case, vice chairman; Commissioner Sykes. The broadcast division shall have and exercise jurisdiction over all matters relating to or connected with broad casting. The telegraph division shall have and exercise jurisdiction over all matters relating to or connected with record communication by wire, radio, or cable, and all forms and classes of fixed and mobile radiotelegraph services and amateur services. The telephone division shall have and exercise jurisdiction over all matters relating to, or connected with, telephone communication (other than broadcasting) by wire, radio, or cable, including all forms of fixed and mobile radiotelephone service except as otherwise herein specifically provided for. The whole Commission shall have and exercise jurisdiction over all matters not herein otherwise specifically allocated to a division, over all matters which fall within the jurisdiction of two or more of the divisions established by this order, and over the assignment of bands of frequencies to the various radio services. In any case where a conflict arises as to the jurisdiction of any division or where jurisdiction of any matter or service is not allocated to a division, the Commission shall determine whether the whole Commission or a division thereof shall have and exercise jurisdiction, and, if a division, the one which shall have and exercise such jurisdiction. The following radio services and classes of stations were allocated to the three divisions established as follows: All matters relating to or connected with this class of station concerning the development of apparatu for any service assigned to the Broadcast Division. * Stations in Alaska only. All stations of this class except those assigned by designations (1) and (6) to the broadcast division api telephone division, respectively. The broadcast division will hold its first meeting at 10 o'clock Wednesday, July 18, 1934; the telegraph division will meet at 10 o'clock Thursday, July 19, 1934; the telephone division will meet Friday at 10 o'clock, July 20, 1934. Next week the broadcasting division will meet at 10 o'clock on Tuesday, the telegraph division at 10 o'clock on Wednesday, and the telephone division on Thursday at 10 o'clock. These will probably be the regular meeting days of the divisions. FACILITIES TO HEARINGS HELD ON ALLOCATION OF BROADCASTING Mr. SYKES. Each division meeting separately has adopted a number of general orders. In brief, we took the Communications Act, and we figured on what general orders under that act should be adopted by the Commission to carry out the act. Then we adopted those orders. I presume that all of the divisions, as well as the Commission in banc, up to this time have adopted between 30 and 33 or 34 general orders. We have had a number of hearings in each division of the Commission under the new act. For instance, there is a section of that act which provides we shall carefully consider the question of whether, or not-I am not pretending to quote the exact language of the act, but rather to get its sense-any part of the broadcasting facilities should be allocated for nonprofit, educational or eleemosynary institutions of any character. The Commission in banc delegated that duty to the broadcasting division. I should say further that reports to Congress will be made as to whether, or not, the law should be changed in that respect. That hearing before the broadcasting division lasted for 6 weeks, and we are at work now analyzing the testimony preparatory to making our report. Mr. WOODRUM. Were other than educational institutions heard in that, or other than the people directly involved? Mr. SYKES. Everybody was notified that we thought had any possible interest in it, and quite a number of appearances were made. It was quite an interesting hearing, and I think it will be quite an interesting report. Exept ship telephone stations connecting through coastal telephone stations with the public telephone Ept stations in Alaska. A matters relating to or connected with the research, development, and operation of public telephone Stop telephone stations connecting through coastal telephone stations with the public telephone net servic |