(There were none.)

Mr. KEATING. I have heard some of the television companies in speaking highly of their merchandise use figures as to how many people can see television, but I do not remember at this time what those figures were.

Mr. HARDY. Well, it is somewhere between 60 and 75 percent. I believe it is very near there.

May I correct one statement which I made? There are actually 116 television stations on the air in 69 markets.

The CHAIRMAN. Is that every State in the Union?

Mr. HARDY. No, I think it is not, sir. You mean operating at the present time?

The CHAIRMAN. Yes.

Mr. HARDY. No, it is not.

The CHAIRMAN. During the past campaign there were 116 operating stations, serving approximately a viewing audience of 60 or 70 percent of the American people. In that 70 percent some of that coverage is not ideal. In other words, many might be 70 miles away from the television station. So, it is a bit difficult to evaluate.

Mr. HARDY. That is right.

The CHAIRMAN. In that event, with only 116 stations, what accounts for the fantastic cost that was given here of $50,000 for one television, Nation-wide hook-up?

Mr. HARDY. Well, I would say, Mr. Boggs, that what accounts for it is the operating costs of the television station, individually; the unbelievable cost of purchasing line facilities to carry programs across the country, which you must understand do not go at all into the pockets of the television people, but a very substantial function of that money pays for coaxial lines and cables to get these facilities across the country. That is the only answer I can give you, that the operating costs of the stations are reflected in the charges.

The CHAIRMAN. With the increase in the number of television stations, the costs will go up, will they? Let us say 4 years from now, rather than 116 television stations as were operating on November 4, there would be 516 television stations. How would the costs then compare with the cost now?

Mr. HARDY. I can assure you, Mr. Boggs, that there are a great many people who are about to jump into the television business who would like to know just exactly what that answer will be.

One of the things which I think is important for this committee to take note of is the fact that of the statistics which I gave you in regard to the 116 stations, 46, or virtually half of those stations, are located in single-station markets where there is one television station that has feeding into it, in most cases, the services of all existing television networks. Eleven of them are in two-station markets and then they break down variously, but when you get down to what looks like may one day be the competitive picture, as typified by the two sevenstation markets, which are New York City and Los Angeles, last yearand I am reading now from the Federal Communications Commission Financial Data Report-8 of the 14 losing stations, meaning the stations that suffered a loss during 1951-

The CHAIRMAN (interposing). Were there only 14 that lost during 1951?

Mr. HARDY. Let me see. I will read the full paragraph. Of 106 television stations-that is, including all but 2 stations for which comparative data was not available-92 reported profitable operations in 1951. Eight of the 14 losing stations were located in the two sevenstation markets, New York and Los Angeles, and 7 of the losing stations reported revenues in excess of $1,500,000. Only one of the 40 television stations located in a one-station market reported a loss in 1951.

So, anticipating what you were getting at, as the television system develops in the country and as economic forces of competition gravitate to their natural levels, there is bound to be a tremendous influence and effect on the whole distributive system of television. Instead of having the station carry three or four network services, it will go, presumably, to what we now have in radio where one station either is independent or affiliated with one network and not with two or three. Now, just what effect that is going to have on costs and prices, I must confess that our best economists do not have an answer for that.

The CHAIRMAN. But it would be fair to assume-would it?-that, from the point of view of political costs in a national campaign, with the greater number of television stations covering a greater market, the costs would go up and would not go down.

Mr. HARDY. I would think that is a fair assumption.

Mr. KEATING. You mean the total cost?

Mr. HARDY. The total cost.

The CHAIRMAN. In light of that, do you feel that our existing laws are adequate to take care of that situation?

Mr. HARDY. No. I think I answered Mr. McCulloch to that extent. I think they are inadequate and unrealistic.

The CHAIRMAN. With further reference to the question of costs, we had Mr. Smith, I believe it was, the chairman of the Volunteers for Stevenson, here Monday, and he testified that they had raised a total sum of approximately $785,000, and out of that $785,000 over 50 percent of it was spent for radio and television, and all of that, as I understand it, was spent on network programs. Now, of course, that does not include one dime for local television and radio services. Would you be able to inform the committee as to how much was spent for political purposes on radio and television stations? The total?

Mr. HARDY. No, sir; I cannot. Since there have been questions of this type, I am now reminded of the fact that the Senate is getting in a very comprehensive survey which will answer most of the questions that you have most recently asked of me.

The CHAIRMAN. In that connection, we would appreciate it if your association, in furnishing that information to the Senate committee, would be good enough to furnish this committee with copies of the total amounts.

Mr. HARDY. Actually, Mr. Boggs, the association is not furnishing it. It is a matter of relationship between the individual stations and the Senate committee directly, but I am sure arrangements can be made to have you receive that information.

The CHAIRMAN. Thank you very much.

Let us ask you a general question in that connection, and possibly you cannot help us. Is it fair to assume that certainly there was as

much spent locally on radio and television as there would be nationally?

Mr. HARDY. In dollar volume?

The CHAIRMAN. Right.

Mr. HARDY. I would not even hazard a guess, Mr. Boggs, on that. The CHAIRMAN. I think the answer would show that there was a lot more spent.

Mr. HARDY. A lot more spent locally?

The CHAIRMAN. In many States there were separate campaigns run in conjunction with the national campaigns, and there were countless radio programs almost every night, where your network programs might be limited to once a week or twice a week with respect to the national parties. I think those figures will show that the total amount spent was a very large sum of money.

Mr. KEATING. I would be inclined to think you were right about radio, but not as to television. I would be inclined to think that national television would exceed the local.

Mr. HARDY. I suspect, Mr. Keating, you voiced some of my own concern about it. I am trying to think about all of the tremendous costs involved in getting the material out to the various stations for programs originating locally, and that accounts for such a tremendous part of the expenditure.

The CHAIRMAN. Is there any difference in the cost for a 15-minute program, let us say, on the National Broadcasting System of television advertising for Philco, for instance, and a 15-minute political campaign program advertising the Republican Party?

Mr. HARDY. All other things being equal, there should be no difference. There may be a difference reflected in what we call preemptive charges.

The CHAIRMAN. Just what do your preemptive charges cover?

Mr. HARDY. Let us assume there was a program locally in which Philco or Admiral was to be the sponsor, or something that was to be put on that would involve a live orchestra or talent, and that they had gone through the rehearsals and the script would have been written and the agencies would be performing their services, and we come in and say "Look; that program which was going on tomorrow night isn't going on. We are going to take it over for a political talk." The agency's commission has to be paid; the union requires that the musicians be paid and that the talent be paid. The preemptive costs, according to my impression, would be what that originating station or network has to lay out of its pocket because of the displacement. It does not mean you pay double the cost of the program. There was an implication made here the other day that would lead you to think that the politician has to pay the total cost of the program as though it would go on and then pay his own cost. That is not correct. It is only that amount that the station or network would be out of pocket because of the displacement of the program.

The CHAIRMAN. I gathered that there was some concern in your mind, and possibly reflected a concern of the people you represent, that political broadcasting and political television matters might affect your normal market for your product that you are selling. You said there was no way of telling how many people turned off and did not turn back on. Would not the opposite also be true? For instance, do

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you not feel that, as a result of the televising of the two national conventions, you probably had a very large audience of people that you would not have had otherwise?

Mr. HARDY. There is no question about it. That is why, Mr. Boggs, when I laid out some of our worries, I also stated a political campaign presents a tremendous opportunity for the industry; and, certainly, what you have just pointed out is definitely true; and, promotionwise, you cannot overestimate the value of those conventions in terms of arousing people's interest and acquainting them with the facilities of the media. Certainly that is true.

The CHAIRMAN. Under existing regulations, are you specifically prohibited from editing copy?

Mr. HARDY. Yes.

The CHAIRMAN. In that event, could a candidate for public office refuse to give you an advance copy of his speech?

Mr. HARDY. Certainly.

The CHAIRMAN. Has that happened, and does it happen?

Mr. HARDY. I think it has happened, and I think it does happen, but I think that the rule is rather not in that direction. I think, as a matter of the best interests of the politicians, that the most frequent thing that happens is that, if the candidate has any concern in his own mind that something in his speech is objectionable, he will frequently counsel with the broadcaster and will say, "Look; this raises a question in my mind. What do you think about it?" There is a good deal of interest, on an informal basis, as to what constitutes good radio and good television programs.

Mr. KEATING. Of course, he is liable too for anything libelous.
Mr. HARDY. Yes, sir.

Mr. KEATING. And the candidate gets free legal advice out of the station.

Mr. HARDY. Yes, sir; that is right.

The CHAIRMAN. Let us assume he is not a responsible man; let us say "He is a crackpot," and there are such individuals.

Mr. KEATING. Candidates for public office?

The CHAIRMAN. Public officers. What would be done in that case? Mr. HARDY. Mr. Boggs, the broadcasters are very anxious to get the answer to that question. It was described by one of your associates on the floor of the House last summer as tantamount to handing a loaded shotgun to a maniac. But, legally and within the interpretation that the Commission has made of these rules and regulations, the broadcaster has no right, in full view of his obligation to function in the public interest, convenience, and necessity, to insist upon a change or deletion, or even a prior examination of his speech.

The CHAIRMAN. Let me ask you a legal question. In the cases that you referred to, does the broadcaster have the right to plead in defense of a suit for libel that he was prohibited by FCC regulations from examining or editing the speech in question.

Mr. HARDY. Mr. Boggs, I am not a lawyer; so my answer will have to be a layman's answer. In my own mind, he would certainly not only attempt to plead that but that would be his major defense and that the present interpretation of the law made it impossible for him to do so. The CHAIRMAN. These decisions that you refer to, were they rendered after the FCC ruling or prior to that?

Mr. HARDY. The decisions I referred to are FCC decisions.

The CHAIRMAN. I am talking about the award for damages for libel which you mentioned earlier.

Mr. HARDY. The ones that I speak of took place before the present holding of the Commission.

The CHAIRMAN. Before then?

Mr. HARDY. That is correct.

The CHAIRMAN. So far as you know, there has been no decision by the courts since then?

Mr. HARDY. I am not aware of any, sir.

The CHAIRMAN. Do you feel that that ruling should be clarified by an act of Congress?

Mr. HARDY. Yes; I think the rule should be clarified.

The CHAIRMAN. What specific recommendations, if any, would you give the committee relative to amendments to the existing Federal election laws?

Mr. HARDY. Well, I have listened with great interest to the questions of the committee and have listened to the other witnesses, Mr. Chairman, who have appeared here. I listened to Mr. Brown, who seemed to indicate the unworkability of the regulations in this field. I am not enough of an expert in the field, I am sure, to add much to the comments that have been made; but certainly, within the devices that are available for honest citizens and honest organizations, there are so many ways of circumventing what was the intent of the law when it was enacted these many years ago, and the factors have changed so drastically in terms of (1) our access to people, and, concomitant, is the cost of reaching people. I recently, in a friendly discussion with a man who was needling me about the cost of television, asked him, in the old days when they used to pay a ward healer to go around the block to knock on doors, how much would it cost to pay ward healers to knock on the doors of 80,000,000 people? Of course, the cost is astronomical. The cost of television seems tremendous because you drop your television costs into the slot in one payment.

The CHAIRMAN. Do you feel that is eliminating the so-called ward heeler?

Mr. HARDY. No, sir.

Mr. KEATING. Do not get any ideas in your head that it is as effective to go on television as it is to go and rap on the door.

Mr. HARDY. I have made no statement of that kind, Mr. Keating. That is why I say it is relative.

Mr. KEATING. It is a great medium. Do you think the ward heeler will go on out?

Mr. HARDY. I cannot say.

The CHAIRMAN. I feel that "ward heeler" is also a relative term. It depends on which candidate or which party he is working for.

Mr. HARDY. I should have said "contact man." I suppose that would have been a more gracious term to use.

The CHAIRMAN. Precinct worker.

Mr. HARDY. Yes.

The CHAIRMAN. This question also is a bit off the track, but I would like to have your reaction. How do you feel about the controversy that has arisen here in the House of Representatives relative to the telecasting of congressional investigations?

Mr. HARDY. Of course, we have a tremendous interest in that problem. We were bitterly disappointed when Speaker Rayburn ruled