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FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF RICHARD E. WILEY, CHAIRMAN
ACCOMPANIED BY:

CHARLES A. HIGGINBOTHAM, CHIEF, SAFETY AND SPECIAL

RADIO SERVICES BUREAU C. PHYLL HORNE, CHIEF, FIELD OPERATIONS BUREAU RAYMOND E. SPENCE, CHIEF ENGINEER J. CLAY SMITH, ACTING ASSOCIATE GENERAL COUNSEL R. D. LICHTWARDT, EXECUTIVE DIRECTOR CARLOS ROBERTS, OFFICE OF PLANS AND POLICY THOMAS P. CAMPBELL, ACTING CHIEF, FINANCIAL MANAGEMENT DIVISION

BUDGET REQUEST Senator PASTORE. Gentlemen, the next witness is Mr. Richard E. Wiley, Chairman of the Federal Communications Commission.

Mr. WILEY. Thank, you, Senator Pastore.

Senator PASTORE. For fiscal year 1977, the House provided $51,448,000 for the FCC, the full amount of the budget request. The committee is concerned about the amount of the budget request and the House allowance inasmuch as this amount may not be sufficient to fund the levels of staffing contained in the FCC budget.

The committee is also concerned about the backlogs in the applications for citizen band radio licensing and we would like to hear from Chairman Wiley on this matter.

Mr. Wiley. Thank you, Mr. Chairman, and members of the committee. We are pleased to have the opportunity to discuss with you our fiscal year 1977 budget estimates.

With me today are key members of the Commission's staff: Charlie Higginbotham, Chief, Safety and Special Radio Services Bureau; Phyll Horne, Chief, Field Operations Bureau; Carlos Roberts, Office of Plans and Policy; Clay Smith, Office of General Counsel; Ray Spence, Chief Engineer; Don Lichtwardt, Executive Director; Tom Campbell, our Budget Officer, and Mr. Arlen van Dorn, Deputy Chief of our Safety and Special Radio Bureau.

CITIZENS BAND RADIO As you requested, I am limiting my prepared comments to current problems in the Citizens Radio Service.

Since March, 1975, applications for citizens radio licenses have increased dramatically. Before then, we were receiving approximately 200,000 license applications annually.

Our current monthly receipts of approximately 600,000 are now more than triple previous annual totals. We expect to receive

(673)

4,800,000 applications in the current fiscal year and believe this will increase to 6,800,000 in fiscal year 1977.

In response to this unparalled growth, we undertook a comprehensive review of the Citizens Radio Service.

This review considered the need for the continuation of licensing, as well as short- and long-term recommendations for improvement of the Service.

The Commission unanimously agreed that there were compelling legal and policy reasons to continue licensing, and we outlined our reasoning in our letter to you of March 22, 1976.

In addition to the overall review of our citizens radio policy, we have taken several other important actions. We have simplified our license forms and developed a temporary permit which allows newcomers to go on the air immediately.

We have also made major procedural improvements in our license processing system. These changes have increased our productivity and speed of service to the public significantly.

During the current fiscal year, we have transferred funds to the citizens radio program in an effort to keep pace with application receipts. Our letter to you of January 16, 1976, outlines our initial reprograming action.

Pursuant to your letter of March 8, 1976, the Commission redirected an additional $335,000 and 17 temporary positions to citizens radio.

As a result of these actions, we have, for the first time in recent months, reduced our average processing time to less than 30 days.

Our goal is to provide a citizens radio license in 10 to 20 days, at minimum cost to the Government. Currently, we are completing the procurement of a contract to develop a high-speed citizens radio licensing system. If successful, this new system will allow us to meet our speed of service goals while accommodating up to 1 million monthly receipts.

In addition, we expect some of our other high-volume services to benefit from the system.

CITIZENS RADIO INTERFERENCE

While the explosive growth in license applications has created severe processing problems for us, the popularity of citizens radio has also generated other major concerns, including interference to other services, enforcement of our rules, and spectrum congestion. I will address each of these problems in turn.

The Commission has taken several steps to reduce the potential interference from CB to other radio services and electronic home entertainment equipment.

We have recently released a notice of proposed rulemaking which would tighten the technial specifications for citizens radio equipment and significantly reduce its interference potential. We expect to finalize this action in July.

However, the emission of improper signals by CB equipment is only one cause of interference to home entertainment equipment.

The lack of shielding or filtering in the complainant's television receiver or stereo, for example, also contributes to the problem.

Legislation is now pending in both Houses of the Congress which addresses this situation.

Our field offices nationwide are besieged with complaints of interference involving CB operation. We were receiving only 30,000 to 40,000 such complaints annually for many years. They are now coming at a rate of nearly 100,000 per year-and we are not receiving all of the complaints.

In a recent telephone company survey involving our Dallas, Tex., office lines, we found that over 2,000 telephone calls, for one day, in that one office, went unanswered because the caller received a busy signal.

In response to the many inquiries we receive on CB interference, we have an extensive program underway to provide educational material detailing steps to be taken to minimize or eliminate the interference.

We normally mail this material, although in severe cases, one of our field staff will visit the location. In spite of our best efforts, we expect the interference problem to continue due to the growing number of citizens radio units in residential areas.

As a result, we foresee a continuing and important role for the Commission in resolving interference complaints.

CITIZENS RADIO ENFORCEMENT The Commission has had a separate citizens radio service enforcement program underway for several years. In view of the rapidly increasing numbers of licensees, the Commission has shifted the emphasis of its enforcement program from routinely attempting to enforce all rules, to emphasizing enforcement of only the most serious violations.

At the same time, we reregulated our rules to ensure that they were the minimum necessary for the operation of an orderly, effective service.

In the final analysis, we believe that the enforcement of rules in the Citizens Radio Service can be accomplished only through a strong self-regulatory program which stimulates voluntary compliance on the part of the licensee.

The citizens radio users must work with each other if the Service is to fulfill its potential as a useful, personal radio service available to all citizens. The Commission, for its part, must maintain a strong enforcement capability to deal with those individuals who commit serious, repeated violations that may pose a threat to other services or which involve the safety of life and property.

SPECTRUM CONGESTION

Finding a solution to the problem of spectrum congestion will be the major determinant of the utility of the Citizens Radio Service through the end of the decade and beyond.

Spectrum congestion is a function of the number of total citizens band users and the amount of long-range skip interference.

In response to the immediate problem of spectrum congestion due to the rapidly increasing number of citizens radio users, the Commission currently has pending a notice of proposed rulemaking to expand

the number of citizens radio channels from 23 to at least 40 or more.

While we recognize this will not fully respond to the spectrum congestion problem, it may offer some temporary relief, and its finalization is awaiting further technical analysis.

Also of significant consequence to congestion will be the effects of long-range skip interference brought about by the rising solar index. The range of frequencies in which the present Citizens Radio Service is allocated is particularly sensitive to this solar cycle.

At present we are enjoying a period of minimal solar activity. However, by as early as 1979 the solar activity will begin to increase very rapidly, causing long-range propagation in the citizens band which will greatly increase interference and congestion within the Citizens Radio Service.

To consider the long-term problem of congestion in the Citizens Radio Service, the Commission has formed a task force headed by the Office of Plans and Policy, to obtain information, analyze and make recommendations on such questions as users needs, spectrum availability, and technical characteristics. We anticipate the results of this effort within 12 months.

As we have discussed, citizens radio problems extend beyond application processing. We have attempted to respond to the problem during fiscal year 1976 by reprogramming the necessary funds.

For fiscal year 1977, we were unable to complete our comprehensive review of the citizens radio program in time for inclusion with our budget submission to OMB. We currently have pending an amendment to our fiscal year 1977 budget at OMB. We believe that this amendment contains the resources necessary to respond to the major issues in the citizens radio program in fiscal year 1977.

Senator PASTORE. Mr. Wiley, let's get down to the questions. The budget estimate is $51,448,000. That is exactly what the House allowed you.

What are the total dollars and positions included in the amendment?

Mr. Wiley. Mr. Chairman, our amendment proposes an increase of $3,843,257 and 89 permanent positions in fiscal year 1977 over fiscal year 1976.

Senator PASTORE. How are the positions distributed by program?

Mr. Wiley. The safety and special radio services program would receive 53 additional positions: 29 positions will go to our CB applications processing with the remaining 24 going toward public reference, public liaison, and enforcement; 33 of the positions will be assigned to the field operations program. They will be dedicated to enforcement of our CB rules and responding to public inquiries on CB at our field offices. The remaining three positions will be used to provide additional legal support for the anticipated increase in enforcement actions.

Senator PASTORE. In what areas are the funds to be used?

Mr. WILEY. Our total proposed increase is for $3,843,257. The total includes $805,457 for compensation and benefits requirements associated with the 89 new positions. The remaining $2,252,800 is associated with other object costs. These include $81,000 for travel associated with CB enforcement and to increase our efforts to educate

CB users. The remaining major other object costs include $795,000 to pay for postage increases associated with mailing the increased number of licenses, $659,000 for technical equipment in the enforcement program and to provide the equipment to implement the results of our high-speed licensing study. Finally, the amendment includes $785,000 in contractual research funds. These funds will be used in a variety of research studies, including citizens band radio.

Senator PASTORE. Are additional funds for CB radio included in your fiscal year 1977 budget request to the Congress?

Mr. WILEY. No; due to the delay resulting from the overall policy review of CB, which was not completed until December 1975, we were unable to include adequate request for funds for CB in our fiscal year 1977 budget request to OMB.

Senator PASTORE. What would be the impact of not receiving additional funds for this program in fiscal year 1977?

Mr. WILEY. We would have to reexamine our total CB program in light of that situation. At a minimum, we would have to request extensive reprograming from the remaining Commission programs just to maintain a minimal on-going program in licensing, enforcement, and interference complaint resolution. Our application processing speed of service would increase and our programs to increase educational and informational material would be deferred.

Senator PASTORE. What is the impact of the OMB allowance on your remaining programs?

Mr. Wiley. The primary impact will be our continued inability to meet fixed costs. We did not receive adequate funds to keep all existing positions filled in both fiscal year 1976 and fiscal year 1977. We have had a hiring freeze on since December 15, 1975. If we do not receive additional funds to cover our fixed compensation increases in fiscal year 1977, we would be forced to continue the freeze throughout fiscal year 1977. We estimated that we will keep as many as 150 positions vacant in fiscal

year

1977. Senatore PASTORE. What additional funds are required to meet fixed compensation costs?

Mr. Wiley. In fiscal year 1977 our fixed compensation costs, which were not included in our OMB allowance, included $1,115,000 to meet the costs of within-grade increases and promotions. An additional $184,000 is required to annualize the costs of the fiscal year 1976 pay increase in fiscal year 1977. In order to fill the expected 150 vacant positions resulting from our fiscal year 1976 hiring freeze, using a lapse rate of 50 percent, an additional $1,125,000 will be required. The total compensation requirement would be $2,424,000. Adding to this the associated requirement for personal benefits of $230,000, the total compensation and benefits requirement would then be $2,654,000.

Senator PASTORE. Let me ask you this question: You say that you have a large backlog on your citizens band applications, right?

Mr. Wiley. That is right, Mr. Chairman.
Senator PASTORE. How much did you ask of the OMB?
Mr. Wiley. Mr. Campbell?
Mr. CAMPBELL. For citizens band processing?
Senator PASTORE. No; for the total budget.
Mr. CAMPBELL. $58 million, sir.

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