Evening star., 1939-12-11
Telephone Control
ByF. {. {. Faces.
Delay Another Year
Body Will Discuss
Budget Bureaus Action
In Refusing Funds
By WILLIAM ]. WHEATLEY.

rs g. result OF the acClOn OF Cne
Budget Bureau in wiping out the
commissions request for $329, 900 for
this purpose, it was learned today.
This action, together with the
Budget Bureaus ALLEGATION of an
increase of 100000, divided half
for personnel and half for radio
equipment, is causing some concern
among the officials of the regulatory
body.
The commission is expected to
give considerable time to this prob
lem at its meeting tomorrow. The
commission is to have a hearing
Wednesday before the subcommittee
OF the House Appropriations Com
mittee which handles its funds. In
view of the fact that the full COM
mission had not yet been formally
apprised of the action of the fund.-
liking bureau, Chairman James
Lawrence Fly said yesterday that
he was unable to state just what
the commission might want to do
about the matter. The fact is, he
said, that the question has not yet
completed the administrative stage,
And added that he was not certain
what, if anything, could be done
about it.
1t Is said to be the practice of
the Appropriations Committee when
hearing officials on their recon-
mendations for funds to ask, "off
the record" what funds they have
requested which were denied by the
Budget Bureau. There is a possi-
bility that the fact that the commits
sion's work in telephone regulation
which is required by its organic act
is made largely nugatory because
1t never has been given funds may
get an airing under this opening.
President Approved Request.
Officials are pondering the latest
act of the Budget Bureau in re-
5ecting the current request, in the
face Of the fact that the President
toward the end of the last session
OF Congress approved a request of
the communications body for SIM
Har amount. However, Congress did
not provide it, although that body
is said to be fully cognizant with
the lack of regulation, not only as a
result OF its own investigation, which
resulted in including regulatory pro-
visions IN the Communications Act,
but was again fully informed in the
commissions report on its investi-
cation, which it conducted for Con-
gress at cost of more than a mil
Lion dollars.
The commission informed Con-
gress that it has become apparent
as a result Of the telephone investi-
CATION that the issues involved in
the regulation of interstate telephone
rates are broad and intricate, and
that highly organized effort will be
essential to any adequate or effective
permanent regulatory procedure. It
was asserted that efficient machin-
cry for the gathering, digesting and
presentation of all necessary facts
must be devised and brought into
continuous operation, and a care
fully developed administration must
be set up in order to perform these
specialized functions.
1t was added that the Splawn
report of 1884 disclosed that Federal
attempts to regulate interstate tele-
phone operations prior to that date
had proved largely Ineffective be-
cause Of CD the lack of adequate
statutory background, and (2)' the
lack OF adequate funds to carry on
the effort. The commission pointed
out that the first of these two ele-
ments was supplied by Congress
through the enactment of the Com
munications Act Of 1884, and added
that in order to enable the COM
mission to carry on and properly
develop the exploratory work of the
telephone investigation and to create
the necessary machinery to carry
out this mandate of Congress, pro-
vision for the other element must
be made.
Research Machinery Lacking.
Without the necessary funds to
carry out the mandates of its organic
act, the commissions functions so
far as telephone regulation is con-
cerned is largely that of providing a
place where its tariffs may be filed.
Although the small force which it
uses for this purpose is able to detect
Inconsistencies in tariffs from time
to time made efforts to regulate in
chinery for research whereby the
tariffs and their background may be
thoroughly examined, to determine
the fairness of the various charges.
State commissions have from time
to time made efforts to regulate in
tra-State rates, but even they are
hampered, it was pointed out, by
the setup of the telephone industry,
which prevents State units from
assembling sufficient information.
It was asserted that the Communi-
cations Act provisions were intended
to close this gap, by making it pos
sible for the Federal body to get the
information and supply it to the
State organizations, and to CO.
operate with them on regulatory
matters.
While the commission is merely
trying to perform its duty when it
asks for funds for telephone regu-
lation, it realizes that the matter
Is fully up to Congress, and there
Is the belief that the failure to OBJ
tain the funds may be due to the
activities of the company in the
halls of Congress.
The commission informed Con-
gress of this when 1t said that the
files of the American Telephone and
Telegraph Co. disclose that the OBJ
jective of legislative activities of the
Bell System is to foster and retain
every possible protection for its pri-
vate ownership, service, rates, flnanc-