IMPOSITION OF ADMINISTRATIVE FINES BY FCC TUESDAY, JUNE 21, 1955 UNITED STATES SENATE, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, SUBCOMMITTEE ON COMMUNICATIONS, Washington, D. C. The subcommittee met, pursuant to notice, at 10:08 a. m. in room G-16, United States Capitol, Senator John O. Pastore (chairman of the subcommittee) presiding. Present: Senator Pastore and Senator Payne. (Staff member assigned to this hearing: Nicholas Zapple, Communications Counsel.) Senator PASTORE. The subcommittee will come to order. This hearing involves the bill S. 1549, introduced by Senator Magnuson at the request of the Federal Communications Commission. S. 1549 would amend the Communications Act of 1934 so as to proride authority for the Commission to impose fines in cases of violations of its rules and regulations applicable to all radio stations other than those in the broadcast service. There are four witnesses on this bill: the Federal Communications Commission; Donald Beelar, representing Aeronautical Radio, Inc.; and Jeremiah Courtney, representing the American Taxicab Association, Inc., National Bus Communications, Inc., American Trucking Associations, Inc., and American Automobile Association, Inc.; and Charles Cutler, Alaskan Aeronautical Radio, Inc. At this point, a copy of S. 1549 will be made a part of the record. Also, without objection certain letters referring to this bill will also be made part of the record, and a copy of the letter from the FCC to the United States Senate urging the introduction of this legislation, and a copy of the report from the Department of Justice on this bill. (The documents referred to above are as follows:) [S. 1549, 84th Cong., 1st sess.] A BILL To amend the Communications Act of 1934 so as to authorize the imposition of administrative fines by the Federal Communications Commission for violations of its rules and regulations, and to authorize the remission or mitigation of such fines by the Commission Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 503 of the Communications Act of 1934, as amended, is amended (a) by striking out the heading and inserting in lieu thereof "FORFEITURE IN CASES OF REBATES AND OFFSETS AND OF VIOLATIONS OF RULES OR REGULATIONS"; (b) by inserting "(a)" after "SEC. 503."; and (c) by adding at the end a new subsection as follows: "(b) Any person who violates any rule or regulation made by the Commission under this Act to govern any radio station, except licensed radio stations in the broadcast services, and the licensee of any such radio station at which such violation occurs, shall, in addition to any other penalty prescribed by law, each forfeit to the United States the sum of $100." SEC. 2. Section 504 (b) of such Act is amended by striking out "and section 507 and inserting in lieu thereof “, section 503 (b), and section 507”. FEDERAL COMMUNICATIONS COMMISSION, The VICE PRESIDENT, United States Senate, Washington, D. C. DEAR MR. VICE PRESIDENT: The Commission wishes to recommend at this tin for the consideration of the Senate the enactment of legislation amending th Communications Act of 1934, as amended, to provide a small civil penalty f violation of the rules and regulations of the Commission applicable to all rad stations other than those in the broadcast services, and to further provide f remission or mitigation thereof by the Commission. This same request has be submitted by the Commission to previous Congresses, but the provision has n been enacted into law. However, the problems which originally prompted t Commission to request this authority have assumed such proportions and su seriousness that the Commission believes that the enactment of this proposal absolutely essential in order to insure the continued orderly functioning of t nonbroadcast radio services, particularly those which have a direct impact the protection of life and property. There has been a rapid and phenomenal expansion in the nonbroadcast ra services since World War II, due largely to the development of new equipment a utilization of new portions of the frequency spectrum. Many small compar have been licensed to operate radio stations as specialized common carri particularly in the mobile common carrier services established in 1946. An e greater expansion has taken place in what are known as the safety and spe radio services where radio is employed for numerous diverse purposes by la groups of users such as the maritime and aviation interests, police and departments, electric and gas companies, forestry agencies, taxicab compar highway truck and bus companies, etc. As of January 1, 1954, the number of r stations in the safety and special radio services alone, exclusive of amateur disaster communications stations, has risen to 145,975, an increase of over 100 stations since 1947. One result of the extensive increase in licensed stations in recent years has a marked increase in the number of violations of the Commission's technical and regulations. This is particularly true in some of the newer private ser where radio is not the principal activity of the licensee but is utilized a adjunct to his primary business activities, and the station operators are ac ingly less concerned with the necessity for adhering to the technical governing the use of radio. Most of the offenses are, taken individually, comparatively minor nature. Collectively, however, because of their numbe variety they represent a very real menace to the orderly use of the radio spec and to efficient and effective regulation by the Commission. In addition, violations result in a serious menace to life and property in those services. as maritime and aviation, where radio serves as a vital and necessary device. Thus, a special survey conducted for a limited period during 1950 rev that 75 percent of the ship radio stations inspected abroad small vessels to comply with one or more of the rules governing the ship service. The seriousness and magnitude of the problems presented can best be illus by the situation that now prevails with respect to small boats equipped for telephone communications and operating in the 2-3-megacycle band. Ov past few years there has been an increase of approximately 400 percent number of such small boats equipped for radiotelephone communications. increase has, in turn, increased the problems of enforcing the Commission's With respect to the small boats, one of the focal points of the Commi difficulties is the fishing fleets operating off the coasts of the gulf States Mexican territorial waters. In this area the Commission has been plag a constantly increasing number of violations of its rules, involving transm on unauthorized frequencies, malicious jamming of channels, and the tra sion of profane language. For example, in April 1954 two Commission fie neers conducted monitoring operations for 12 days while aboard a fishing the Mexican coast. During that period they observed a total of 291 viola the Commission's rules. Most serious of the violations occurring in the gulf area is the wid misuse of the frequency 2182 kilocycles, which has been designated by tional treaty to be a distress frequency. It is essential, of course, that a frequency be kept clear of all routine communications. However, in the gulf area the frequency 2182 has been misused for nonessential communications to such a degree that it has been rendered practically useless for safety purposes. Instances have occurred when ships and the Coast Guard have been unable to receive emergency distress calls on 2182 kilocycles because of the volume of illegal transmissions on the channel. The Commission believes that this situation presents a definite menace to the safety of life and property, and one which is steadily growing worse. Moreover, situations of a similarly serious nature are occurring in other parts of the safety and special radio service, such as the areonautical service. Unfortunately, however, the Commission does not presently have available any adequate sanction for dealing effectively with this mass of rule violations in the nonbroadcast services. The Commission is authorized to revoke the licenses of stations willfully or repeatedly violating the rules, but even where the seriousness of a particular offense or the substantial number of separate offenses might otherwise warrant resort to this extreme sanction, it will often be particularly inappropriate in the nonbroadcasting services where, as in the case of a ship or plane station, the effect of the revocation would be to deprive the licensee of essential safety equipment or, in the case of a common carrier, to deprive the community of muchneeded communications service. Similarly, the Commission is authorized to refer aggravated cases of willful or knowing violations of its rules to the Department of Justice for criminal prosecution as a misdemeanor. But, especially since most of the minor violations result from negligence and disinterest rather than willful disregard for the Commission's rules, resort to the criminal sanction can only hope to be of limited value in the Commission's overall enforcement program. During the $24 Congress, there was enacted a series of amendments to the Communications Act of 1934, including a provision, incorporated in the act as section 312 (b), authorizing the Commission to issue cease and desist orders directed against any person violating the act or the Commission's rules and regulations. And the grant of this additional authority to the Commission was advanced by the conferees on this bill as the reason for their elimination of a provision, applicable to all radio services, permitting the imposition of forfeitures of up to $500 for violation of the act or the Commission's rules which had been included in the House version of the bill. But while the new cease and desist authority has proven of real value in certain areas of the Commission's enforcement program our experience indicates that the cease and desist procedure is ill-adapted to dealing with the great increase in minor technical violations of the Commission's rules in the common carrier and safety and special radio services. Our records indicate that violations on the part of a particular operator may be many and varied and may occur over a considerable period of time. Generally, these violations are clearly established and present no dispute as to the facts or law. The cease and desist procedure, which is most useful when directed to a single or continuing situation or practice concerning which there may be disagreement as to facts or interpretation of rule or statute, would appear to be ill-adapted as a means of discouraging such clear-cut violations. Moreover, a cease and desist order is directed only at a particular violation, and, while possibly effective in causing the particular operator to strive to avoid repetition of that particular violation, would not, it is believed, be of any lasting value in stimulating the operator to live up to the Commission's rules in all aspects of his operations. On the other hand, it is thought that knowledge on the part of the licensees that any violation could lead to the prompt imposition of a money penalty, even thought it be a small one, would be quite effective in creating an attitude of responsibility for compliance with all regulations. The cease and desist procedure is also believed to be too cumbersome and timeconsuming for the quick and efficient enforcement procedures desired in dealing with the multitudinous violations occurring in the non-broadcast services. Even where the offense is clearly willful, or involves questions of "public health, interests, or safety," so as to make unnecessary the requirement of section 312 (d) of the act of first calling the offense to the attention of the licensee and affording him an opportunity to comply with the particular provision of law which has been violated, a show cause order must first be issued affording the licenses involved a period of at least 30 days from the time of receipt in which to reply and, if desired, request a hearing. Furthermore, the ultimate penalties which must be relied on to make the cease and desist orders effective remain either license revocation or criminal prosecution, which, as has been pointed out, are usually inappropriate for the types of violation the common carrier and safety and special radio servi A study has been conducted of enforcement met Guard and Civil Aeronautics Administration, both jurisdiction over large groups of persons involving t lations which are so common in the nonbroadcast se Commission. Both the Coast Guard and the CAA administratively, a civil penalty with further auth compromise the amount of such penalty. If paym is referred to the Attorney General for collection i Both agencies have had considerable success for m method to secure compliance with their respectiv obtained from these agencies indicate that com average amounts of civil penalties are assessed, and of instances has it been found necessary to call up collection. It is the opinion of the Commission that similar be made available for use in the nonbroadcast ser exists under title III, part II of the Communicat larger oceangoing vessels subject to those provisions to be most successful with respect to enforcing th sion's rules applicable to such vessels. Extension o broadcast licensees would. it is believed, aid grea the many thousands of such licensees. While the provisions applicable to vessels provid each day during which a vessel is navigated in sion believes that the sum of $100-noncumulati Commission's rules in the common carrier and sa would be sufficient to accomplish the purpose fo mitigation and collection provisions applicable u Communications Act would, however, be equall feitures. Upon discovery of a violation, the lice forfeiture incurred because of such violation and Commission for remission or mitigation or to ref court for a judicial determination of his liability the Commission would be payable into the Trea provided by section 504 (a) of the Communica the ability of the Commission to mitigate the for it does in the ship cases, encourage payment with ney General bringing a judicial proceeding for re It is, therefore, recommended that the Comm follows: 1. Under title V change subtitle "Forfeiture in to read "Forfeiture in Cases of Rebates and Offs Regulations." 2. Redesignate section 503 as section 503 (a): to read as follows: "(b) Any person who violates any rule or reg under this act to govern any radio station, exce broadest services, and the licensee of any such r tion occurs, shall, in addition to any other penalt to the United States the sum of $100." 3. Amend section 504 (b) by revising the phr "The forfeitures imposed by part II of title II include a reference to section 503 (b) so that i "The forfeitures imposed by part II of title 507 of this act shall be subject to remission or mi application therefor, under such regulations facts as may seem to it advisable; and, if suit General, upon request of the Commission, shall prosecution to recover such forfeitures: Provi shall be remitted or mitigated after determinat diction." The Commission considers the enactment of importance for the proper enforcement of the tions, and to insure that radio can continue to of protecting life and property. It is, theref receive early and favorable consideration by |