Business: BUSINESS REGULATION

It's Confused & Stagnant

THE furor attending the resignation of Richard A. Mack from the Federal Communications Commission (see NATIONAL AFFAIRS) has obscured an even more serious situation. Entirely apart from skulduggery and influence-peddling, the critical fact is that the federal regulatory agencies, which make decisions vitally affecting both industry and the public, are not doing the job they are supposed to do in the way it should be done. They operate at a snail's pace in a jet age, bog down helplessly in incredibly lengthy and complicated procedures that entail enormous delays and staggering expense to all involved. Items:

¶ The Federal Trade Commission has been battling with the makers of Carter's Little Liver Pills for 15 years without a definite decision on FTC charges of false claims. It has been forced to hold 149 hearings, run up a transcript of 11,000 pages and 1,000 medical exhibits—at a cost of $1,000,000 to the taxpayers.

¶ The Civil Aeronautics Board has been involved for more than a year in investigating a general passenger fare increase for domestic airlines. Even though the CAB knows that carriers must have an increase and has granted a 6.6% temporary boost, the hearings may go on for another year, at least, before a decision.

¶ The Federal Power Commission has been considering for two years an application by the Midwestern-Tennessee Gas Transmission Co. to build a natural-gas pipeline from Tennessee to the Canadian border, has gone through 789 exhibits and 21,091 pages of testimony, at a cost of $1,500,000 to the Government and companies without reaching a decision. ¶| The Federal Communications Com mission has been listening to the arguments of seven applicants for a Toledo TV channel since 1952, with no end in sight. Says an FCC official: "We'd do just as well to draw a name from a hat."

One big cause of the paralyzing slowness of decisions is the fact that the agencies are two-headed, quasi-judicial bodies, thus are not only involved in fact-finding but must also judge the facts they find. The paradox was pointed up last month at congressional hearings by FCC Chairman John Doerfer, who remarked that as an administrator he should be out talking to people, but as a judge he should not. Under the fact-finding process, every citizen has the right to be heard before the agencies—and thousands use it. Lawyers have made an art of dragging out a case (at fees up to $500 a day) to their clients' advantage. Nonscheduled North American Airlines was able to hang on for two years, at a profit of $8,000,000 a year, after the CAB ordered it grounded because it was actually providing scheduled service.