Heinl radio business letter (July-Dec 1941)

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10/7/41 "The Investigation (A. T. & T. ) ”, "State Regulation" and "Federal Regulation". A Preface state sHhis book should, serve a useful purpose in furnishing the critics of big business with the record of at least one tremendous organization in which a deep sense of obliga¬ tion is shown to have been continuously manifested in its dealings with employees and the public". Commenting upon the investigation that the FCC made of the A. T. & T. , Mr. Page wrote: "The chief counsel of the investigation started his hearings in a search for scandal, for he opened the investigation of a great national service with testimony on the use of telephone service by horse race bookies. At the end of this he suggested to Mr. G-ifford that this was a skeleton in the closet. "But the facts did not measure up to that stature. "The newspaper reporters looked on the investigation as a search for scandal and, when scandal did not appear, rather neglect¬ ed the hearings. "The investigators produced thousands of pages of reports in which it is hard to find any comment indicating their belief that the Bell System ever did anything well or from a good motive. The Chairman of the Telephone Division of the Commission in asking Congress for more money to complete the investigation 'admitted* that the telephone company gave the finest service in the world as if that were against his Interest. "The ‘hearings' during the investigation were conducted with¬ out allowing the company to present its case on the matters brought up or to cross-examine the Commission's witnesses. The 'comments' on the investigators' reports and the 'Brief* on Commissioner Walker's Proposed Report which the company was later allowed to file with the Commission could not take the place of cross-exajnination and the presentation of company testimony at the hearings. The investigators could make any statements or deductions without challenge and their reports, although not officially adopted by the Commission, were printed at Government expense and sent by the Commission to state commissions all over the country. The investi¬ gating group, while of a caliber to discover financial Juggling if it had been there, certainly had neither the engineering competence, management skill nor experience in telephone operations to give to a lay board like the Federal Communications Commission a balanced or Judicious background for its policies. It is inconceivable that anyone would rely on the reports of the investigating group as an authority if he were going to risk his own money in large quantities. "In its annual reports for 1936, 1937 and 1938, the American Telephone and Telegraph Company publicly registered its objections to the unfair methods of conducting the investiga.tion, as it had also done to the Commission itself. "This was a most unusual proceeding for a business tha.t had long advocated and lived with regulation. But there were two compell* ing motives to register every possible objection to the methods of the investigation. 3