communication media is plainly evident. *** Tipping the balance in favor of Beaumont Broadcasting, then, are Hobby's newspaper and FM interests in Houston. When consideration is given to the relatively small area into which the KTRM and Hobby interests are concentrated and to the fact that overlap occurs between the existing KPRC-TV and the proposed KTRM-TV, any remote doubts as to the superiority due Beaumont Broadcasting are emphatically resolved. * **

You will notice that in that quotation there is no mention made of the Enterprise Co.

Now, after the Commission made that grant there was a complete shifting of interest between two of the parties, as disclosed by this quotation from a decision handed down by the United States Court of Appeals for the District of Columbia on December 29 last.

In the meantime, December 17, 1954, the Commission was advised of an agreement among Beaumont, KTRM and W. P. Hobby. Enterprise thereupon, December 20, 1954, moved for postponement of oral argument to enable it and the Commission to consider the effects of this agreement. In support of this motion, Enterprise urged that if upon scrutiny the agreement proved material to the comparative qualifications of the applicants, it should have time to move for a reopening of the record. The motion to postpone was denied and argument was held December 21. By petitions dated December 22, 1954, and January 7, 1955, Enterprise asked the Commission to reopen the record for incorporation of the agreement, and, upon its basis, to find such change in Beaumont's character as to require denial or dismissal of its application and grant of that of Enterprise.

On January 28, 1955, the Commission issued a memorandum opinion and an order affirming its August 4 decision. Enterprise's effort to have the record reopened was rejected, the Commission ruling that it was premature to consider the "executory" agreement. The Commission thereupon refused to modify its finding as to control of media for mass communication.

Now on page 7 of the pamphlet opinion of the court, the court added this statement:

But we repeat the events in question, though they occurred subsequent to the August order and the petition for reconsideration struck at the very basis which had been assigned by the Commission for its decision, and were disclosed at a time when the decision was still open for consideration.

The foregoing quotations from the Commission's own decisions. are typical of the many comments it has made in support of its policy of diversification, which I again emphasize is nothing more nor less than a policy of discrimination against newspaper applicants or applicants associated with newspapers-in the various decisions which the Commission has handed down adverse to such applicants.

In the Enterprise case, you will observe that one of the original applicants was not associated with a newspaper, and one was partially controlled by a newspaper and the third was wholly owned by a newspaper. After the decision was made in favor of the nonnewspaper applicant on the basis of this policy of discrimination, then the partially owned applicant and the nonnewspaper applicant got together and made a deal which left the newspaper applicant out altogether.

If I may say something which may sound a bit impolite, the exercise of this policy of discrimination really sets up the ground for holding up applicants who really deserve grants. In other words, if a newspaper applies and if it has had a record of 35 or 40 years of experience as a newspaper and it has had a record of 30 years of sound experience in radio, no matter how many awards for public service have been made to it, anybody who is financially able to come

in and support an application that is engineeringly sound gets the grant. That is just obvious. The newspaper has three strikes against it if a financially qualified applicant files in opposition.

Now there was another case down there at the Commission some time ago in which a newspaper out in Kansas was partially the owner of a radio station. The newspaper had long been outstanding as an independent newspaper, and it had never dominated the operations of the radio station which were conducted entirely apart from the newspaper operations.

The radio station came in and filed an application for a television grant. Another applicant appeared on the scene with no experience whatsoever in the field, either in the newspaper field or in the radio field. Again the Commission decided in favor of the newcomer with no experience and no background of public service solely on the ground of diversification.

That case went up to our court of appeals which by a 2 to 1 decision upheld the Commission's award, and one of the judges of that court just simply said in his dissenting opinion:

Against this superior and outstanding record we weigh no record at all from the Wichita Television. The decision to be reached was, which one of these applicants knows more about the community's need, and which applicant is most likely to be responsive to the community's needs, and which applicant can be relied upon to a greater extent to carry out its television commitments. We had KFH's splendid record before us and we had nothing from Wichita Television but promises.

Some years ago, our Supreme Court said that the Communications Act recognizes the field of broadcasting is one of free competition.

Yet it has ceased to be that. Except in rare instances, the only way in which a newspaper today can obtain a construction permit for TV facilities on a VHF channel either is through an uncontested proceeding and that is unheard of for a VHF channel at this time-or through a merger of applications by opposing applicants so as to make possible an uncontested grant.

Newspaper ownership of or newspaper association with an applicant constitutes an almost irrebuttable presumption of comparative disqualification under present Commission policy.

Now, there is no sound basis for that policy. There is not and there cannot be any such thing as a monopoly of mass media communications in this country of ours. I will tell you why.

Engaged in the business of gathering and disseminating information are more than 1,500 daily newspapers, more than 500 Sunday newspapers, 3 great news press associations with offices and correspondents located not only in every important city and community throughout the United States but the entire world, numerous picture and feature services, thousands of weekly and semiweekly newspapers and several thousand weekly, monthly, and quarterly periodicals. All told, there are approximately 25,000 publications regularly printed and distributed in this country. They represent in their editorial columns all sorts of opinion. They represent a variety of ownership that is as American as the American scene itself. In relation to the whole, no one man, no group of men controls any great number of these publications.

There is not a single locality in the United States today which cannot choose and readily choose between various media if it so desires.

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This is easily demonstrated when one stops to consider that with our present rapid means of transportation a newspaper published in New York this morning can be found on the luncheon table or at the latest, on the office desk in any of our great Pacific or Gulf Coast cities on the same day. A newspaper published in New York this morning can be read at breakfast in Washington. So can the newspapers published in Philadelphia, Wilmington, Baltimore, and Richmond. I could continue with such illustrations ad infinitum.

Now, what do we have in radio stations and television stations? Notwithstanding the fact that today one great segment of television channels is practically useless, and I refer to the UHF channels, nevertheless with few exceptions every citizen in this country owning a VHF television receiver can have his choice between a number of VHF channels for television programs.

Similarly, if one looks at television or listens to radio, he can get every shade of opinion where opinion is expressed. He can get every type of news reported where news is reported objectively. All he needs to do to get what he wants is to turn his dial.`

There is not, there cannot be any monopoly of the dissemination of information or opinion in the United States. This has been demonstrated in the Sacramento and the Wichita and other cases where the Commission has invoked its policy of discrimination in order to deny the newspaper applicant.

The time has come when, if an end is to be put to this policy, it must be done by the Congress.

Mr. HARRIS. Thank you very much, Mr. Hanson.

I observe that the chairman of our committee is here with us this morning. I recall that I had quite an active part along with other members of the committee in dealing with amendments in 1951 in a bill which was referred to as the McFarland bill. Mr. Priest, our chairman, offered an amendment to that bill which was adopted by this committee and which passed the House. That amendment included the language or the substance of the language which you have here in this bill regarding discrimination against newspaper appli

cants.

Since Mr. Priest was one of the original sponsors of this amendment and since he is with us in our committee this morning, I thought maybe he might have a question to ask of you.

Chairman PRIEST. Thank you very much, Mr. Chairman. I did not come to the subcommittee meeting for the purpose of asking any or many questions, but I shall ask one question since you have so generously recognized me at this time.

Mr. Hanson, you suggested, I believe, an amendment on line 7 of page 1 of the pending bill.

Mr. HANSON. Yes, sir. I did.

Chairman PRIEST. As I understood the amendment you suggested, you would place after the word "procedure," language with reference to the adoption of any "policy."

Mr. HANSON. That is right.

Chairman PRIEST. My question is this: Is it your opinion that the Federal Communications Commission presently is following a rigid policy on this particular question, and that they have in effect adopted a policy adverse to the position of newspaper applicants?

Mr. HANSON. I think that there is no question about it. Through their decisions they have adopted such a policy. While they admit that they have no authority under law to promulgate a rule, nevertheless, they can get around the rule and the lack of authority on that by deciding cases under a policy which they frankly announce to be their policy as they have done in the McClatchy and other cases, and briefly stated, it is to give preference to the newcomer to the field over one who is experienced or to give preference to the nonnewspaper applicant over a newspaper applicant. They write it right into their decisions, and there is the policy.

Chairman PRIEST. You feel that that constitutes a fixed, definite, and somewhat rigid policy.

Mr. HANSON. It constitutes a fixed and definite and rigid policy, and the examiner referred to it in one of the cases I cited as being the policy of the Commission. Even so, he said, because there was no threat of monopoly, and because of the superior service and the long record of service he recommended the grant to the newspaper applicant and the Commission, in reversing him, simply said that they did it on the basis of their policy of diversification which was controlling in that particular case.

Chairman PRIEST. And it is your opinion that language dealing with the question of this policy would be necessary in this legislation in order to completely meet this problem?

Mr. HANSON. Far be it from me to say that it would completely meet it. I hope it would. I think that it is necessary as the best effort that I could conceive of to meet the situation at this time, Mr. Chairman.

Chairman PRIEST. I was just wondering what the legal effect of language with reference to a policy would be. Would such language strengthen the act very much in your opinion?

Mr. HANSON. I think it would strengthen the act. I think the act as it now proposed, or the bill as it is now proposed, shows the intention of Congress. But, also, I think that the record of the Commission shows its intention to avoid the intention of Congress. I think you have that in there you will take a great stride toward stopping the Commission in its proceedings from coming up with a decision which it says is determinative because of its own policy of favoring nonnewspaper applicants over newspaper applicants.

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Now, the Commission has gone so far out on the end of a limb on the policy that I think the inclusion of the words in this bill, if they are included, will correct a situation that is very apparent and most obvious today.

Chairman PRIEST. Thank you very much, Mr. Hanson.

Thank you, Mr. Chairman, for permitting me to ask a few questions. Mr. HARRIS. We are glad to have you with us this morning.

Mr. HALE. Mr. Hanson, are you completely untroubled by the possible monopolistic consequences of having newspapers run television stations and radio stations?

Mr. HANSON. Well, now, that depends upon your definition of "monopoly." In the first place, the jurisdiction of this Congress over television and radio stations is a jurisdiction which goes solely to the heart of one question, and that is interstate commerce. Any radio station that operates has almost an undefined and unlimited signal

area. Now, you can define and limit it within primary or secondary service areas, but then when it bounces and hops it will come downsomeplace else.

There is no way in the world, Mr. Congressman, in which you could limit a radio or a television station to, say, one city or one county or one State or one particular area because of the variations of signal strength and the forces of nature.

Now, just let rs illustrate. Baltimore is about 40 miles away from Washington. Richmond is 113 miles the other way. You have television stations in Baltimore and you have television stations in Washington, and you have radio stations in Baltimore and you have radiostations in Washington. You have the same in Richmond. You go up to Wilmington, which is between Baltimore and Philadelphia, and you have television and you have radio stations and you have newspapers. You go into Philadelphia which is just about 20 miles away from Wilmington or a little more, and you have the same situation. Now, the people who live between Baltimore and Washington have the choice of Baltimore or Washington radio, Baltimore or Washington television. The people who live between Richmond and Washington have the same choice. There is more on radio than television because they have not gotten the television signals out as far as radio yet. But there is no area in the well-populated portions of the United States where there could possibly be a monopoly, and when you come to the lesser populated areas, then your question of public service comes in as to who can best render this service. If the local newspaper has succeeded there and it is doing a good job in bringing in information and gathering and disseminating information, it has proved that it can do a good job in radio and it has proved that through the job that has been done by other newspapers owning radio and television stations.

I am not advocating that newspapers should be put in a favored place. I am merely saying that there is no possibility of monopoly from my point of view or from my analysis of the situation, and that newspapers should not go in handcuffed in a hearing and spend all of their money merely to be told because of the policy of the Commission they have not any chance any way.

Mr. HALE. I think the illustrations which you have given are very good to support your argument. But the fact remains that in large areas of the country the tendency of the listeners is to tune in on the local radio station, or the local TV station. In some instances, at least, those are the only stations that he can get very satisfactorily. If they are controlled by newspapers, then certainly there is some monopolistic tendency. How serious that is you can debate to your heart's content, no doubt.

Mr. HANSON. We could discuss that problem with different points of view, and maybe not come close together, for hours.

Let me point out one thing. The news that a newspaper gets other than that that it gathers locally, comes to it largely through its correspondents and through the press associations and through the news syndicates and through its picture service, all away from home, which are available to many newspapers and under our present law are practically available to all, today.

If you have a television station, and you have only one in that particular area, there is no local television station or no local news