seem to have been caught up in what they got me caught up in-I am new to the program. It seems like it could not be solved by a Federal policy in this area. That is why we drew this picture or target. We said, "Let us approach it and then we can amend it."

Without amendment, I get a different impression from you that we ought to kill it.

Mr. WILEY. I would say without amendment that the majority of the Commission would not support it in its current form. Our strong preference is for State regulation. We would have to let Congress determine whether they felt after all of the testimony you heard here, that you would have to make a determination as to whether the problem is serious enough to need Federal regulation.

I personally believe that the cable industry has a concern here, that there are potential dangers of monopoly pricing power. I was struck by that testimony more than anything else that was given, that someone could say, "We can charge anything we want to, even to the point of bankrupting that cable television system."

Senator CANNON. I am confused now. You are saying if we are going to have the Federal Government step in where the States do not act, then do not give you tariff power. Who will have it?

Mr. WILEY. I think it can be done on a simpler basis rather than tariffs. Not a full tariff regulation, in other words.

Senator CANNON. You were already shocked by this statement on the part of one of the carriers that they could charge any price they wanted. Yet it would seem you are going to leave it with no tariff regulation at all.

Mr. WILEY. We could have an FCC formula which might allow us to handle it based on contracts. We do not have to have a full tariff procedure in order to provide assistance in this area if you decide we should provide assistance.

My statement is not a black-or-white statement. I have considerable ambivalence on this thing. I think it should be at the State levelprivate sector first, State level-and, No. 3, if all else fails, what do you do with it? If you do give it to the Federal Government, I am saying make it as simple as you can, give the FCC clear-cut authority so we do not have 50 people litigating this thing. Where there is money, you will have litigation. You will have telephone companies and electric power companies saying it should be done by tariff.

You have to face up to one other thing. You have to give us manpower to do it. You cannot heap responsibilities on the Commission without manpower. In the common carrier area, we are so overworked already that we cannot do the job we have to do.

Senator SCHMITT. I want to be sure the record will be open for submitting questions to the Chairman and his staff.

In particular, could we ask that the study referred to will be made available to the committee?

Mr. WILEY. As soon as I get it, it will be right up to you. The work is done. It hasn't been written up. All the Commission has received is a three-page summary of it. That, in part, is the reason for my ambivalence I don't know how serious the problem is. I take the cable people at their face value, that it is a heck of a problem. I have to see the study, however, too.

Senator SCHMITT. I doubt if the pricing could go to the point of bankruptcy or the cable industry would start to create their own poles or conduits.

Mr. WILEY. I will let the cable witnesses respond to that.

Senator SCHMITT. Somewhere there is a balance in a free market system.

Mr. WILEY. There should be. You might want to take, and some of our people take, the position that it should be a matter of the free marketplace. It should be a matter of private contractual arrangements. The argument on the other side is you have a monopoly controlling the poles. The question is whether a public utility would let the cable people build a second set of poles.

Do they have an alternative, in other words. I'm not sure they do. Senator SCHMITT. We need to explore that and whether or not there are statutes elsewhere that would prevent that kind of monopolistic action. I suspect there are. There seems to be statutes on everything else.

Mr. WILEY. One of the paths is the Federal courts and our antitrust laws. I have suggested why don't you take it to court. If you think you are discriminated against or there is a conspiracy, take it to Federal court.

They say they are too small an industry, it is too time-consuming. They can speak for themselves in that regard, but that is another possibility.

Senator SCHMITT. I appreciate your statement. It is an excellent statement and has added considerably to the bill. You may still be here when I get back.

Senator HOLLINGS. Mr. Hobson, let me hear you. As to the personnel involved, the Commission has had this experience. Why would you, as I understand, suggest that this is a Federal problem and the only way it can be solved is at the Federal level as I understand it.

Mr. HOBSON. I personally-and I think I can speak for our Bureau on this point agree with the Chairman that we hope the solutions could be reached below the Federal level. We do believe the Federal Government is necessary as a backstop in a case, as the Chairman has indicated, where there is a potential for abuse and monopoly pricing

power.

Senator Schmitt has asked whether, indeed, you have conditions approaching monopoly. Is there such a restraint on the cable industry setting its own poles that you have a monopoly? It has been our opinion that you do have such a severe restraint, that you do in effect see monopolistic behavior from some of the providers of the poles. It is on the basis of that threat that we consider that Congress is going to have to consider providing some administrative forum.

We say an "administrative" forum because, frankly, we would agree that the courts are quite expensive. By the way, there are cable systems in court. I think you will hear from one witness today from a public utility district in Washington who could elaborate on that point.

I also know there is a North Carolina system in court. That is expensive, time-consuming. One of the theories of the administrative process is that it may be possible to solve some of these problems short of our very overcrowded court dockets.

That is the reason, in sum-the potential for abuse, monopoly pricing power-that we feel ultimately there must be some backstop although we would agree that the best solution lies short of the governmental, or at least short of the Federal governmental, level.

The reason I can't put as much faith in private action at this juncture is that if pole providers are truly monopolistic then I would expect them to behave in the private sector as monopolies.

I am, therefore, left with the hope that the States or localities, the governmental entities at those levels, would act. I support the Chairman in urging your consideration of incentives for this to happen. Mr. WILEY. You may wish to hear the other side of the coin. Senator HOLLINGS. What incentives?

Mr. HOBSON. We in the Cable Bureau have discussed informally whether it would be possible to give the Commission the authority to ask for factual material from State agencies, which may not have asserted jurisdiction yet over the question of just and reasonable rates but which nevertheless could provide factual data to us from their past proceedings.

We could make use of their experience. We could elicit information from them. I hope we can do it voluntarily You are asking for realistic incentives. Perhaps some strong statement of our authority to make use of existing State bodies, whether or not they have asserted jurisdiction, in order to aid in our problem solving.

The way I see that incentive working possibly, and I haven't thought it through so I don't want to offer it as a final program of any sort, is that the States might say: "Gee whiz, we are helping the Federal Government out here to such an extent, because the Congress wanted us to, that we might as well take jurisdiction over the ultimate decision."

There might be, if you will, a sort of negative incentive to take in the whole ball of wax. That is one possibility.

I think there is also a possibility of some incentive when you consider one side of the support for this legislation. One assumes that the National Association of Regulatory Utility Commissioners has taken a position which is not totally at odds with its constituent membership of State public utility commissions.

If they support this legislation, then one of two things may happen. Maybe the States will say, "Yes, we support it because it will take the burden off our shoulders."

On the other hand, maybe the support of NARUC indicates an intent to get the State public utility commissions involved in this problem. I can't say.

Perhaps you want to direct that question to NARUC or the State representatives.

Mr. PERMUT. The Bureau is asking for 59 more people because we think we need a minimum of 59 more people to function in the way necessary.

The concern we have about this program is that it is yet another regulatory burden placed on the public.

Second, the vagueness of the bill and the degree of difficulty we would have enforcing this program would put a tremendous burden on the Bureau. We feel, in fact, if we could get 20 more people that

they would have a tremendous amount of other problems in the common carrier area that deserve consideration other than the pole attachment problem.

We would like to get into some form of deregulation, and see if we can make our regulations simpler and easier. If there is going to be a bill and Congress deems pole attachment to be a problem, we would almost beg that it be done in the simplest and easiest manner possible.

Senator HOLLINGS. Thank you, Mr. Wiley, for your statement here this morning. I would rather give you 40 people rather than have 40 more judges.

Mr. WILEY. We will technically assist you in any way we can, Mr. Chairman.

Senator HOLLINGS. Our next witness is Amos B. Hostetter, executive vice president, Continental Cablevision Inc.

You may proceed.

STATEMENT OF AMOS B. HOSTETTER, JR., EXECUTIVE VICE PRESIDENT, CONTINENTAL CABLEVISION, INC., BOSTON, MASS., ON BEHALF OF THE NATIONAL CABLE TELEVISION ASSOCIATION

Mr. HOSTETTER. I am Amos B. Hostetter, Jr., executive vice president of Continental Cablevision, Inc., a company engaged in the cable television business. I am a former national chairman of the NCTA and currently am chairman of NCTA's utility relations committee.

I have previously submitted for the record written testimony that runs to some length. I have also distributed to the members of the committee a substantially summarized statement which I intend to present this morning. However, I'm so heart-and-soul wrapped up in this issue that before presenting that statement I would like to respond to some of the statements that have been made on behalf of the Commission. With your indulgence.

Chairman Wiley has said the appropriate place for these disputes is at the State level. I think it is fair to say I have no ax to grind about whether jurisdiction should be local, State or Federal.

I know that the National Association of Regulatory Utility Commissioners passed a resolution saying that this was an area requiring regulation and urging their individual members to foster appropriate enactments in the individual States so that this area might come under State regulation. That was 7 years ago and only eight States have operated in this area of cable television regulation.

I think that you were totally proper, Mr. Chairman, in pointing out to Chairman Wiley, the fact that he and his commission have spent countless man-hours, since their proceedings started in 1966 on this particular issue. He personally was instrumental in fostering a settlement between the cable interests and A.T. & T., which consumed hours and hours of his time in 1974 and 1975.

His staff has been massively involved in this issue. I find it fanciful to think that if FCC jurisdiction and guidance are properly established by a bill of this nature that the burden on the FCC will be any greater than it has been since 1966, when this issue first came into contest at the Commission.

Simply stated, I am in search of a forum. If Chairman Wiley can direct me to a State forum which works and protects me from the monopolistic extortion that this industry has faced, that would be fine. However, I have tried that route. I have also tried the route of private negotiations. I have been a member of three different committees over a period of 6 years, attempting to reach a settlement with A.T. & T. and G.T. & E. Trying to negotiate with your friendly neighborhood utility has not proved very productive.

Senator HOLLINGS. Does NARUC persist in that 1971 resolution? Mr. HOSTETTER. Yes; they persist in that resolution. We took adversary positions before the House last September. Simply because we were insisting that a solution to the problem was overdue and that the only quick fix was the Federal approach.

The utility commissioners, although they openly conceded the problem, took the position they did not want the States foreclosed by a Federal solution. Last year, experience forced us into conversations. The bill, which is here before you, is the product of extensive work between NCTA and the State Association of Regulatory Utility Commissioners and comes here with the strong sponsorship of both organizations. Chairman Kalinski, of the New Hampshire Commission, will appear here tomorrow and I suspect will acknowledge a Federal role simply because not all States will be able to operate with equal speed and because they will have dissimilar budgetary constraints. Some interim forum is therefore necessary.

Interestingly, since the introduction of this bill, the State of California has passed an almost identical bill through its senate by a 39 to 0 vote. It now goes before the House in California. I think this suggestion that passage of a Federal bill will encourage the States to act and assume a responsibility in this area.

Our position is simply if they don't act, or better stated, until they do act we need some forum to adjudicate these disputes.

Chairman Wiley has urged, "Let's give the States a lot of time to do something."

I submit to you, they have been given a tremendous amount of time. Nothing in this bill will limit their further time. The bill is carefully drawn to assure that if States choose to act, that action will preempt the FCC, will foreclose the need of the FCC to do anything related to polls in that State. The Federal presence exists only until and unless the States have acted.

Senator HOLLINGS. Very good. Go ahead with the major portion of your statement please.

Mr. HOSTETTER. I would like to deal briefly, if I may, with the sections of the bill that deal with forfeitures and then deal with those portions related to pole attachments.

NCTA shares the FCC views that reasonable power to impose fines and forfeitures would be a useful regulatory tool. However, we question whether such powers should be given to the FCC at this time, considering the statutory vacuum that currently exists with respect to overall cable regulation. It is our view that Congress should prescribe its chosen role for cable television, establishing regulatory goals and guidelines for the FCC and should at that time grant the Commission the tools necessary to enforce the directives of Congress.

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