must, of course, remain as it is today, the duty and responsibility of the Commission as a whole. This and other specific duties placed upon the whole Commission by law should and must remain the responsibility of the whole Commission.

We are informed that the Commission's proposed plan for modification of its organization contemplates that the chairman shall not be a member of any of the panels, except as a substitute for a member not present, and shall devote his principal efforts to being the chief administrative officer of the agency. While we agree that there is considerable merit in this proposal and that some of the broader problems of communications dealing with frequency allocations and revisions of rules require closer attention than they have received, we believe that a note of caution is necessary here. The chairman is the responsible head of the agency and it cannot, by its own rules, lift from him the responsibility that the law lays upon him. We already have made clear our opinion in regard to the adoption of a panel system without a change in the present law. However, the procedure suggested by your subcommittee would permit the chairman to spend more time on administrative duties.

2. Cease-and-Desist Orders. Our conferences with Commissioners and a study of decisions and actions of the Commission lead us to the conclusion that early attention should be given to improving that section of the Communications Act dealing with revocation of licenses (sec. 312). The present law provides that a station license may be revoked for false statements either in the application, or in the statement of fact which may be required from time to time, which would have warranted the Commission to refuse the license on an original application; or for failure to operate substantially as set forth in the license; or for violation or failure to observe any of the restrictions or conditions of the act or of the regulations of the Commission authorized by the act or a treaty ratified by the United States. This makes obvious, therefore, that revocation is the only administrative penalty for violations ranging from the most serious to the most minor, including even innocent violation of technical regulations.

We do not believe that such a situation makes for fair and efficient administration. Obviously the Commission would be reluctant to revoke a license for a minor offense and therefore minor offenses may be committed almost with impunity. Moreover, there is no distinction between the gravity of offenses; it is as if the penalty were the same for murder and for illegal parking of an automobile. It is our opinion that numerous actions which deserve censure and action thereby escape while at the same time the licensee has hanging over his head the final penalty of losing his license for a minor offense.

Your subcommittee recommends, therefore, the enactment of a section which would authorize the issuance of cease-and-desist orders for less serious violations. The revocation penalty would remain in effect for two classes of violations: (1) for cases in which the Commission learns of facts or conditions after the granting of a license which would have warranted it to refuse a license originally had it known those facts; (2) for violation of a cease-and-desist order. Both the revocation and cease-and-desist procedure would remain, of course, subject to judicial appeal.

Such a provision was a part of the White bill (sec. 12 of S. 1333, 80th Cong.) and had the general support of the Commission, the

industry, and members of the bar who practice before the Commission. The cease-and-desist-order procedure has had considerable trial in other administrative agencies and has proved generally satis factory.

3. Radio and Wire Communications Frauds.-Your subcommittee recommends the enactment, either as part of the Communications Act or as part of the general criminal code, of a fraud statute similar to the postal fraud statute (18 U. S. C. 338) which would make it a Federal offense to use wire or radio communications to defraud.

We are informed that the Commission from time to time has had called to its attention situations in which persons have used radio facilities for the perpetration or attempted perpetration of obvious frauds. In most of these cases, the station licensee is not a party to the fraud or culpable but rather is himself a victim of the fraud. In such cases, there is no basis for proceeding against the licensee. And unless the fraud scheme also involves use of the mails, there is at present no means of reaching perpetrators of such schemes. While the Federal Trade Commission has certain powers dealing with unfair methods of competition these have not proved to be fully effective in deterring such frauds.

4. Clear Channels and Superpower in AM Broadcasting.-The subcommittee believes that the most important question from a policy standpoint in the field of AM radio broadcasting is that involving so-called clear channels and the amount of power with which such stations should operate.

The subcommittee is of the opinion that a brief review of the background of this question would be helpful. There were in the United States (as of Jan. 1, 1948) a total of 1,962 AM radio broadcast stations. These operate on 106 channels, i. e., paths through the ether. Obviously, there must be many more than a single station on one channel. To facilitate allocation the channels were divided into three classes: local, regional, and clear. There are six local channels which must be shared by 1,032 stations; there are 41 regional channels which must be shared by 804 stations; but there are 24 clear channels which during nighttime hours are each occupied by only one station through the United States. (A technicality in allocation has assigned one additional station to one of the clear channels but a class 1-B channel is maintained without duplication.) Originally, in the earlier days of broadcasting in this country, there was upward of 50 clear channels but as need for more and more stations grew, the regulatory agency began to duplicate stations on some of these channels. In short, even then the problem was whether channels should be reserved exclusively as clear or whether the country should receive more and improved radio service. The regulatory agency decided in favor of the public interest and duplicated assignments. We regard this as an important precedent and we do not understand why the Commission suddenly halted such assignments.

However, despite ever-increasing demands for more radio stations and for improved service, 24 channels remain to this day reserved for exclusive nighttime use by stations. Because the assignments on these clear channels were made in the early days of radio broadcasting, the clear-channel stations are in the best part of the radio spectrum, and have become the rich, powerful stations located in the largest and most lucrative markets. Their collective power and

position is a factor in their successful resistance to any attempt to duplicate the channels they presently occupy. We cannot refrain from drawing the analogy to the dog in the manger story; radio frequencies are a scarce natural resource; additional stations are needed in many parts of the country and yet these 24 channels which would allow assignment of 75 to several hundred additional stations are reserved without duplication.

But exclusive use of a channel is only half of the story. Equally important to the fact that 24 stations have exclusive nighttime channels, is the amount of electric power with which they are authorized to broadcast. These stations broadcast with a power of 50,000 watts. The significance of this power may be realized when it is understood that a local station generally operates with a power of 250 watts and has a coverage of perhaps 10 miles in radius; regional stations operate with power varying from 1,000 watts to 10,000 watts and cover a radius on the average of 50 to 75 miles. Clearchannel stations, however, use power ranging from 5 to 250 times as much as any other radio station and cover an area of 175 to 200 miles in radius, although their signal may be heard under ordinary favorable conditions for upward of 500 miles. In fact, the total power used by 24 clear channels is greater than the power used by all the remainder of the radio stations in the United States combined.

Thus, it may be readily understood why these clear-channel stations already provide a type of competition against which the smaller local stations experience difficulty. They attract the large national advertisers, exercise tremendous influence over vast areas far removed from the source of the transmitter, and have made fantastic returns on their investment. Only a few years ago examples of annual returns of 100 percent to 200 percent on the investment were not uncommon in radio station operation.

Some 10 years ago a majority of these clear-channel stations formed an organization with the express purpose of securing Federal Communications Commission authority for a 10- to 15-fold increase in power for clear-channel stations. They sought 500,000 watts to 750,000 watts instead of the 50,000 watts then and now presently assigned to them. Even prior to that time (in 1934) one of their number (WLW in Cincinnati) had been granted a temporary experimental license to operate with 500,000 watts. That operation brought such opposition from so many smaller stations in the Midwest which complained of monopoly and unfair competition that the Senate approved a resolution (S. Res. 294, 75th Cong.) on June 13, 1938 asserting that it was the sense of the Senate that no AM broadcast radio station in this country should be operated with power in excess of 50,000 watts. We concur in that view today and in the absence of affirmative legislation authorizing power in excess of 50,000 watts, we doubt the Commission's legal authority to grant power in excess of 50,000 watts.

A few months after the passage of the Senate resolution the Federal Communications Commission withdrew the experimental license for superpower it had granted the Cincinnati station. Since that time (1939) no radio station has operated with more than 50,000 watts. But the organization of clear-channel stations seeking superpower continued its fight both in and out of the Commission for its demands. It lobbied Members of Congress, filed petitions before the Commis

sion, and participated in additional hearings. The advent of World War II put a temporary damper on its activities. But immediately after the war, it renewed its efforts. The Commission thereupon again conducted another hearing on the question during 1946 and 1947. By the spring of 1948, it had become an open secret in the radio industry that a decision in the clear-channel case, as the issue had come to be known, could be expected later that year. But more important, so publicly confident were members of the clear-channel association of the outcome that hundreds of smaller radio-station operators throughout the Nation became alarmed and began imploring Members of Congress to do something to prevent creation of a monopoly situation which they said would put them out of business. Educators and public figures wrote members of this committee that domination of the Nation's airways by a few high power stations (owned by 15 corporations) would be dangerous to freedom of speech.

Concerned with the situation, Senator Edwin C. Johnson of Colorado introduced on February 26, 1948, a bill (S. 2231, 80th Cong.) which would provide for duplication on clear channels and limit their power to 50,000 watts. The Senate Committee on Interstate and Foreign Commerce the following day (February 27) instructed its acting chairman (Senator Tobey) to write the Federal Communications Commission requesting that it defer any final action in the clear channel case until the committee had come to some conclusion on the bill. On March 5, Chairman Wayne Coy of the Commission replied to this committee advising that no action would be taken in the case pending Senate committee action.

Hearings on the Johnson bill began on the following April 5, and continued for 10 days through April 23, 1948. Seventy witnesses made personal oral statements; nearly 1,100 additional persons and companies, a substantial majority of which spoke for hundreds of radio stations, sent in statements or letters expressing their views; the final printed hearing covered nearly 1,600 pages. Members of this subcommittee attended a substantial part of the hearings and have examined the record rather closely. The subcommittee believes this hearing was one of the largest, best-attended, and comprehensive held during their personal experience in the Senate.

We have cited this brief history of the clear-channel superpower question so that our summary and recommendations will be more readily understood. One other fact should be noted. In discussions of the clear-channel superpower question, reference has been made frequently to the provisions of the North American Regional Broadcast Agreement. This is a radio treaty governing use of radio frequencies in North America to which Canada, Newfoundland, Mexico, Cuba, the Dominican Republic, the Bahamas, and the United States are signatories. It sets standards of operation and practice for radio stations in these countries. One of its provisions is that clear-channel stations should use a minimum power of 50,000 watts. Members of the clear channel organization who advocate superpower assert that if the United States does not authorize higher power our present clear channels will be duplicated in the other signatory countries and we will lose our clear channels. A further corollary argument is made that because a North American regional broadcast conference is to be held next September in Quebec and because the position of our Government at that conference must be circulated very shortly among the

other signatories, it is necessary that the Federal Communications Commission make an immediate decision in the clear-channel superpower case. Of course, when these two arguments by the advocates of superpower are coupled, it becomes obvious that they mean that the Commission should authorize operation of clear-channel stations with power of 500,000 to 750,000 watts.

We believe that these contentions centering around the North American Regional Broadcasting Agreement should be disposed of first. In the first place, we are firmly of the opinion that adherence to the present agreement does not require radio stations within the United States to operate with power in excess of 50,000 watts. We have studied the agreement and we assert that with respect to this point it is clear that the only requirement is that the clear channels of signatory governments operate with a minimum of 50,000 watts. That is the practice and policy within the United States today. It is implicit from the Agreement that the signatory countries bind themselves by adherence to certain standards not to interfere with the signals of radio stations located in the other countries. It would be, in our opinion, an unwise policy indeed for this country to have agreed to a policy of radio broadcasting which is injurious to American broadcasting generally and which would not serve the general public interest. Obviously, we did not subscribe to any such policy in the existing Agreement.

Secondly, we reject completely the argument that the Federal Communications Commission should render a decision forthwith in the clear-channel case so that United States policy on this question would be established for the purpose of informing the other countries now of what our position is to be at the forthcoming conference. It would be a new departure in Government, in our experience, for a regulatory agency decision involving private litigants to become binding as formulating what this country's policy should be in an international treaty. We would deplore the rendering of such a decision prior to the conference meeting as

(1) An action designed to bypass the Congress on a basic policy question;

(2) An action designed to bind this country's hands in advance of an international conference; and

(3) An action productive of suspicion and resentment on the part of the other signatories.

We know from conferences held with a number of representatives of other signatories that their countries do not look with favor on operation of United States radio stations with power of 500,000 to 750,000 watts. And, for our own good, we should oppose the operation of clear channels in the other countries with excessive power as being injurious to many of our own stations. Such high-power operation in Mexico at the present time already provides serious interference with stations ranging from Florida to California. We believe the United States should enter into the forthcoming conference in good faith, bound by only one basic consideration: to stand for a general policy of operation of domestic radio stations with such limited power as not to interfere with radio stations in neighboring countries. We believe that this means that the upper limit should be 50,000 watts and we are firmly of the opinion that all of the signatories would be better served by an agreement that no clear-channel station should operate with more than 50,000 watts.