Service; Daily Press and Observer-Dispatch of Utica, New York; and The Times Mirror Company. As to these parties who made initial presentations, but did not participate after reopening, the record permits no assessment of the present validity of the evidentiary presentations made in 1963 and no findings of fact can be made or conclusions reached on the basis of these presentations. Scripps-Howard Newspapers (a trade name used to identify 18 daily newspapers as of September 30, 1962 published by the E. W. Scripps Company and its subsidiary corporations) did submit proposed findings of fact and conclusions of law following reopening of the proceeding based on its 1963 evidentiary showing and adduced additional evidence through the American Newspaper Publishers Association. The following parties participated in the proceeding following reopening by presenting direct cases consisting of written testimony and exhibits and oral testimony: The Associated Press; United Press International, Inc.; Los Angeles Times-Washington Post News Service; Field Enterprises, Inc.; The Copley Press, Inc.; Advance News Service, Inc.; PAM News Corporation; Twin Coast Newspapers, Inc.; McGraw-Hill, Inc.; Fairchild Publications, Inc.; American Newspaper Publishers Association; National Association of Broadcasters; Bell System Respondents (referred to throughout as AT&T); and Western Union.

FINDINGS OF FACT

6. United Press International, Inc. (hereinafter UPI) is one of the two principal news agencies in the United States and is engaged in the business of gathering, editing and distributing news reports, features, photographs, pictures and other news material to more than 6,400 newspapers, periodicals, radio and television networks and stations and other organizations engaged in the dissemination of news throughout the United States and in foreign countries. It operates news bureaus in the principal cities of the United States and has offices, correspondents and reporters in a number of foreign countries. UPI is a profit oriented business corporation owned 5% by Hearst Corporation and 95% by E. W. Scripps Co. which also owns the Scripps-Howard Newspapers and Scripps-Howard Broadcasting Corporation. It had 4,052 domestic subscribers at the end of 1965, 4,220 at the end of 1966, and 4,317 at the end of 1967. As of March 31, 1968 UPI's domestic subscribers included 1,175 newspapers and periodicals and 3,209 broadcasters for a total of 4,384. UPI revenues increased each year along with the net addition of subscribers.

7. UPI distributes its news reports, pictures and other material by means of communications networks extending to major cities of the United States and hundreds of smaller cities and towns. These networks make use of the private line services and channels of both telephone and telegraph grade offered by AT&T, the Bell System companies, and to a more limited extent by Western Union.

8. For the year 1967 the total charges of AT&T and Western Union to UPI for leased wires were $4,753,596, of which $4,568,161 were AT&T charges and $185,435 Western Union telegraph charges. A breakdown of the AT&T charges for 1967 shows the following: telegraph-$3,030,692; Telpak interexchange channels—$104,425; Sched

ule 4 data transmission channels-$72,487; foreign exchange-$2,352; Schedule 2 telephotograph-$743,167; full-period telephone (pictures)-$164,605; full-period telephone (audio)-$450,433.

9. In 1967, UPI's domestic leased wire expense represented 14.46% of total domestic operating expense. In 1965 and 1966 the percentages were 14.45% and 13.57%, respectively. UPI would not disclose additional information with regard to its revenues, earnings, expenses and charges which was requested by counsel for the Common Carrier Bureau on the ground that such information was confidential.

10. Effective August 1, 1967, AT&T and Western Union made substantial changes in the rates for private telegraph and private line telephotograph services applicable to non-press users, leaving in effect the generally lower rates for press users of such services. When these rate increases were filed in early 1967, UPI repriced all of its circuits to determine, on the basis of its then current usage, what the impact would have been if its telegraph and telephotograph circuits were priced at commercial rates. Such repricing shows that UPI's total charges would have gone up by more than $1,000,000 per year, due principally to the increases which would result from loss of the clockhour schedule and the supplemental service offering for telegraph channels and from having to lease telegraph circuits on a 24 hours per day basis. Previous to this time, however, UPI had obtained from AT&T tariff revisions which permit customers to derive telegraph channels from voice grade channels by the use of customer-owned multiplex equipment.

11. In 1967 UPI thereupon commenced installation of a multiplexing program termed the Sked 4 System with the first installation having been made in September of that year. Under this system most of its news networks is being converted from telegraph to voice grade channels leased from AT&T for data transmission. These voice grade channels are subdivided into telegraph channels using equipment owned by UPI. Use of channelizing equipment permits UPI to derive 18-22 telegraph channels from each voice grade channel. Completion of the system was originally scheduled for December 1, 1968 which date was subsequently extended to March 1, 1969. Upon completion the system is to provide the equivalent of 1,080,000 miles of individual telegraph channels by derivation from 60,000 miles of ordinary common carrier voice grade facilities. UPI will then utilize individual common carrier telegraph channels only in extremely limited, isolated and unusual situations. Development of this system results in greater news dissemination at a lower overall cost for telegraph grade services with the cross-over point in numbers under present press rates averaging "in the neighborhood" of four to five telegraph circuits. At the time of the hearing more than 26,000 miles of this system were in operation with the scheduled completion date having now expired. 12. UPI is also availing itself of additional new developments in communications facilities which improve its capacity to disseminate news and will continue to avail itself of such developments. The use of computers was cited as an example and as having made it possible for UPI "to do things that we couldn't do before both because the costs of doing them were prohibitive and because they were technically

impossible to do." UPI uses computers with teletype A wire in its typesetting service which eliminates the time lag between receipt of wordage off a teletype machine and typesetting. UPI is thereby able to produce a typesetting service simultaneously with the breaking news story.

13. Those circuits which UPI leases for its domestic telephotograph network are not included in its Sked 4 system.1 Its newspictures service includes a domestic telephotograph network connecting 412 cities in the United States and Canada which as of December 31, 1967, covered 45,000 miles and served 353 newspapers and 219 TV stations. Total number of subscribers was 1,439 of which 760 are located in the United States. Except for four full period telephone sections, the UPI network utilizes 16 separately numbered Schedule 2 telephotograph channels leased from AT&T, which can be tied into a global network of leased cable and radiotelephoto channels connecting the North American continent with Africa, Europe, Asia and Latin America. 14. UPI's domestic telephotograph network is operated as a part of UPI's Newspictures Department and has always been a loss operation. For the years 1965 through 1967 the total loss in the domestic newspictures operations exceeded $319,000 with the loss for 1967 being $80,600. Leased wire costs represent approximately 18% of approximately $5,000,000 per year domestic newspicture operating expenses. 15. UPI repriced its private line telephotograph channels leased from AT&T under the rates applicable to commercial customers as of October 1, 1967 in order to determine what the net increase in charges would be if the commercial rates for telephotograph services are applied to the press. The increase to UPI would be $8,050 per month, or $96,600 per year. If passed on to UPI's 760 domestic subscribers this would require an increase of approximately 2% or approximately $10.60 per month per subscriber. UPI does propose to pass any increased cost on to its subscribers though, on the basis of its experience with other price increases, it would expect to lose "some of its subscribers." UPI's total domestic operating expenses for 1967 were $33,213,995 representing a substantial increase since 1963. To offset this increase, UPI raised its rates with general increases for all its services of 9% in 1964, of 9.15% in 1966 and of 10% in 1968. Following these increases the number of notices of cancellation did increase each time above the number received the preceding month. Though all such notices did not result in actual discontinuance of the service due to the efforts of UPI's executive and sales force, a higher than normal loss of subscribers did result. Nevertheless, UPI did add steadily to the number of customers served and has increased its revenues each year throughout this period. UPI, as did all other press parties, concedes that there are no cost differences to the carriers in services provided to the press as distinguished from other users.

16. Scripps-Howard Newspapers maintains a news bureau in Washington, DC. known as the Scripps-Howard Newspaper Alliance, where editorial matter for the various Scripps-Howard newspapers is

1 Telephotograph is a specialized service offered by AT&T which is predominantly utilized by the press. As of October 1, 1967 a total of six press customers accounted for 86.4% of total private line telephotograph revenues.

produced. Through arrangements with Western Union in 1953 it established a private line telegraph service extending from Washington to various cities across the country, for the purpose of transmitting to the Scripps-Howard Newspapers the news product of the Washington bureau and of Scripps-Howard correspondents abroad. The Scripps-Howard Newspaper Alliance is designated as the customer in the contract with Western Union, and at the time of the 1963 hearings the wire extended to 15 cities across the country carrying news material for use in 16 of the Scripps-Howard Newspapers. It presently extends to 13 Scripps-Howard newspapers in 13 different cities.

17. The Scripps-Howard wire service is presently priced on the basis of a total of 3,143 miles and operates from 6:00 p.m. to 2:00 a.m. Sunday through Friday. Monthly charges payable to Western Union total $1,695 per month for circuits, loops, drops and equipment, of which $835 per month is for line charges. If required to pay at the commercial rates, the total monthly charge for this service would be increased by $2,916 per month to $4,611 per month. It is principally the requirement under the commercial rates that circuits be leased for 24 hours a day, seven days a week that would account for the increase. It would have no need or use for these additional hours. Scripps-Howard does not plead inability to pay a $34,992 annual increase in operating expenses, but asserts that it would be unreasonable and violative of the principle that rates should be responsive to customer usage to require it to pay for service for which it has no need.

18. The Associated Press (hereinafter AP) is the other of the two principal suppliers of national, international and regional news in the United States. Its news bureaus, domestic and foreign, gather news to be disseminated to newspapers, broadcasters and other news media. AP is a non-profit co-operative with its members being engaged in business for profit. Its membership includes more than 1,200 daily newspapers and more than 2,600 broadcast stations. AP provides supplemental services in addition to its basic newswire services. Basic news service is the AP general news wire and is provided only to members while some supplemental services are made available to both members and nonmembers.

19. There are two classes of AP members-regular and associate. Regular members must make local news available exclusively to AP while associate members may make their local news available to entities other than AP. Newspapers are generally regular members, while broadcasters are associate members. Members bear all costs of AP's operations by means of assessments. Regular members only, however, select the Board of Directors which determines the charge for AP services. AP wire services have been expanding over the past five years. On January 1, 1947 AP, however, raised its membership assessments for the first time in five years by approximately 9%.

20. To facilitate the distribution of news and news-feature material to its members and to permit each member to receive service tailored to its individual needs, the various services of AP are divided into a number of wires. These services are (1) general news wires, (2) radio-TV

In 1963 the hours of service were from 7:00 P.M. to 3:00 A.M. Sunday through Friday.

newscast wires, (3) financial wires, (4) special news wires, and (5) telephotograph wires.

21. General News Wires-The general news services of AP include both multiple and single wire services. A multiple wire service includes one wire providing news of national and international significance and additional wires providing news of state and regional interest. A single wire service provides national and international news and pertinent state and regional news on one wire.

22. Radio-TV Newscast Wires-To serve its broadcast members, AP provides continually revised news in a format suitable for immediate broadcast by the radio and television stations. This format includes periodic news summaries written in the form of five and ten minute news scripts, urgent news bulletins on important events, indepth coverage of important news, regional and local news pertaining to each member's own area, and a balance of sports, weather, financial news, farm news, and other news and news features. This service differs from service to newspapers in that it requires the use of wire services on a virtual 24-hour per day basis.

23. Financial Wires-AP financial wires provide reporting and analysis of the nation's and the world's business and tabulation of trading on all major United States security and commodity exchanges from open to close of each trading day. These services are available to members on typesetting wires operating at 66 words per minute 3 and on Dataspeed circuits sending tabulations throughout the trading day at either 1,050 or 2,100 words per minute. These Dataspeed circuits are also used to transmit Presidential texts and other important news documents.

24. Special News Wires-This category includes all other teletypewriter news wires. These include the sports wires-general sports news, box scores, play-by-play, race results, and feature sports newsand special wire circuits established by AP to service individual needs of members or groups of members.

25. Telephotograph-The AP Wirephoto service provides a variety of pictures on regional, national, and international events, along with daily weather maps, news maps, sketches, and color separations to over 700 newspapers and television stations in the United States and Canada. In addition AP also provides two less comprehensive telephotograph services to accommodate the needs of smaller members and also supplies some small members with a daily selection of mats by mail in lieu of wire service.

26. To provide these services AP uses the full spectrum of AT&T private line facilities from telegraph through TELPAK C, including telephotograph and data channels. The total expenses of AP for domestic news and supplemental services for 1967 were $38,420,232. Of this sum $5,674,417 (14.77%) was paid to AT&T for private lines and terminals. Repricing the telegraph circuits leased by AP in September of 1968 under regular commercial rates gave an increase of $55,273 per month or $663,276 per year. The AP Wirephoto service operates 6:00 a.m. to 2:00 a.m. Monday through Friday, 6:00 a.m. to 1:00 a.m.

3 For faster service using telegraph-grade equipment, the AP member may obtain financial news on as many as 12 wires simultaneously at almost 800 words per minute.