LETTER TO ALLEN W. DULLES FROM F. C. ALEXANDER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP78S05450A000300010002-7
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: December 27, 2016
• Document Release Date: April 24, 2013
• Sequence Number: 2
• Publication Date: October 26, 1955
• Content Type: LETTER

Declassified in Part - Sanitized Copy Approved for Release
2013/04/24
(IA-KUH/85U545UA0003UUU1UUU2-/
JWER WILL CIRCLE C--ASSIFICATION TOP AND BOTTOM)
CENTRAL INTELLIGENCE AGENCY
OFFICIAL ROUTING SLIP
TO
IN IALS
DATE
I
DDS
/6
2
OFFICE OF COMMUNICATIONS gO~
__
3
4
5
FROM
IN TIALS
DATE
1
Assist. to the Director
MC
31 Oct
2
3
APPROVAL ? INFORMATION F1 SIGNATURE
I I ACTION DIRECT REPLY I RETURN
I COMMENT I PREPARATION OF REPLY I DISPATCH
CONCURRENCE I- RECOMMENDATION ? FILE
e~~
/`~ L ~~
Remarks:
/~
,
yy.~ /GL~r ??.~"~ vc~
STAI
SECRET CONFIDENTIAL UNCLASSIFIE
Declassified in Part - Sanitized Copy Approved for Release poi
2013/04/24: CIA-RDP78SO545OA000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78SO545OA000300010002-7
1 K"=B" Bowl*
O
EXECUTIVE OFFICE OF THE PRESIDENT 1
Yyi~
October 26, 1955
Honorable Allen W. Dulles
Director
Central Intelligence Agency
Washington, D. C.
Dear Mr. Dulles:
As a matter of additional information concerning
the subject of the Pacific cable installation, there is
attached the Reply Of RCA Communications, Inc. To Oppositions
Of American Telephone And Telegraph Company And Hawaiian
Telephone Company.
Sincerely yours,
~GC
C. Alexander
Deputy Assistant Director
for Telecommunications
., U, ' c-', t t. f
STAT
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78SO545OA000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78SO545OA000300010002-7 Z~'I
p
Before the
FEDERAL COMMUNICATIONS COMMISSION
Washington 25, D.. C.
)
In the Matter of the Application of )
AMERICAN TELEPHONE AND )
TELEGRAPH COMPANY )
)
For authority under Section 214 of the )
Communications Act of 1934, as amended, ) FILE NO. P-C-3630
to construct and operate twin deep-sea )
submarine cables between Point Reyes, )
California and Koko Head, Oahu, Hawaii )
In the Matter of
License authorizing the landing and )
operation of twin submarine cables )
between Point Reyes, California and ) FILE NO. S-C-L- 14
Koko Head, Oahu, Hawaii by the American )
Telephone and Telegraph Company )
REPLY OF RCA COMMUNICATIONS, INC. TO OPPOSITIONS
OF AMERICAN TELEPHONE AND TELEGRAPH COMPANY
AND HAWAIIAN TELEPHONE COMPANY
October 21, 1955.
Howard R. Hawkins,
Frederick M. Porter,
Attorneys for RCA Communications, Inc.
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78SO545OA000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
Before the 0
FEDERAL COMMUNICATIONS COMMISSION
Washington 25, D. C.
In the Matter of the Application of )
AMERICAN TELEPHONE AND )
TELEGRAPH COMPANY )
)
For authority under-Section 214. of the )
Communications Act of 1934, as amended, )
to construct and operate twin deep-sea ) . FILE NO. P-C-3630
submarine cables between Point Reyes, )
California and Koko Head, Oahu, Hawaii )
In the Matter of )
License authorizing the landing and )
operation of twin submarine cables
between Point Reyes, California and ) . FILE NO. S-C-L-14
Koko Head, Oahu, Hawaii by the American )
Telephone and, Telegraph Company )
:REPLY OF RCA COMMUNICATIONS, INC.
The Orders of the Commission which permit AT&T's intrusion
into the overseas telegraph field jettison sound precedents of this Com-
mission and long-established U. S. policy. These Orders are not sup-
ported by adequate findings or by substantial evidence as to telegraph
service. . They are wholly unjustified.
The AT&Tes Opposition raises no valid objection,to reserving the
issue of telegraph service.. The contention that such, action would be
"unreasonable" (page 7) is not supported and does not rest upon the
public interest.
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
IF 2 f
1.. New matters presented. - The AT&T states (pages 1-2) that
"no new matter" has been presented by RCA's Petition. This is not the
fact. Indeed, points included in the Petition (e. g. , pages 13-16) could
arise for the first time only after the very summary approach by the
Commission in this proceeding.
2...A dangerous first ,step. - The AT&T says that statements
concerning the use of its Atlantic cable for telegraph service have been
taken out of context and that there has been no change in its position.. To
eliminate any possible question of the context, the Commission is re-
quested to consider as part of the record the full text of the letters cited
by the parties.
From the letters it is undeniable that despite the AT&T's stated
position on November 20, 1953, it did thereafter request and urge the
Commission to authorize *its Atlantic facilities for "telegraph service. "
The AT&T's Opposition (pages 4-5),, while expressing a "desire to stay
out of the international telegraph field, " nowhere commits itself to such
a course of action or states a present or long-range intention to stay
out of the international telegraph field.. Such service with Hawaii would
be merely a first step toward the ultimate end-a dangerous and destruct-
ive step for the international telegraph carriers and the over-all public
interest.
3. Prejudgment of the telegraph issue. - The AT&T states that
the petitioners, without commitment on their part, would be glad to
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
3
have AT&T undertake construction of the cable "which will be available
for their use.. " Under RCA's proposed revision of the Orders, however,
whether or on what conditions the AT&T or any international telegraph
carrier should be permitted.to use the cable for telegraph. service would
be reserved for appropriate determination by the Commission in the light
of all pertinent considerations. . Whatever the considerations, they can
be evaluated more judiciously at the time a specific factual situation is
presented to the Commission. Prejudgment of this vital telegraph issue
would not be in order.
4.. RCA's Petition not predicated upon an assumption. - The AT&T
contends that RCA's Petition is "predicated upon the assumption" that
Section 222 of the Act applies.. * Apart from the fact that the express
policy of Congress in Section 222 is not an assumption, RCA's Petition
cites this policy as only one of several reasons why the issue of tele-
graph service should be reserved.. These other considerations are ap-
plicable regardless of the interpretation which the Commission reaches
as to Section 222 of the Act.
5. Policy of Section 222 a factor in the public interest. ? The
indisputable fact is that communication with Hawaii involves overseas
telegraph service whether or not it is "interstate," domestic or inter-
national.. Such service has been historically treated differently from
* References to the AT&T should be considered applicable to
Hawaiian's Opposition wherever pertinent.
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
4
communications within the continental United- States.. There is no magic
in the repeated and misplaced emphasis on the term "interstate" in the
AT&T's Opposition. . Here, as in all other cases, the Commission is
bound to look at the substance.
. The Supreme Court has decided, and the Court of Appeals has
repeatedly held, that all provisions of the Communications Act-reflect-
ing as they do the policy of Congress-must be considered as.factors in
the public interest standard. * Section 222 may not summarily be
brushed aside.
. The AT&T cites Section 3(e) of the Act to support the argument
that communications service with Hawaii.is "interstate" and. that pre-
cedents involving overseas service are not applicable.. Section 3(e) is
a general definition, not directly applicable to the instant questions of
policy. The obvious purpose of 3(e) is to define the geographical scope
of the Commission's jurisdiction set forth in Section 2(a) of the Act.
Even if Sections 3(e) and 222 should be deemed in conflict, the specific
policy of the latter controls over the general provision in Section 3(e).
Ginsberg & Sons v. Popkin, 285 U.. S. 204, 208 (1932).
Interstate Commerce Commission v. Parker, 326 U. S. 60, 71
(1945); Mansfield Journal Co. v.. Federal Communications Commission,
180 F. 2d 28, 33.(D. C. Cir. 1950); Western Union Division, Commer-
cial Telegraphers' Union v. United. States, 87 F.- Supp. 324, 335
(D.. Ct. D. C. 1949),. aff'd per curiam 338 U. S. 864 (1949).
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
1P 5 ?
-Congress has been vitally concerned with the inherent and unfair
competitive problems of combined domestic and overseas telegraph
operations.. Congress resolved these problems by adopting a basic
policy in-Section 222 requiring, separation of such operations. . This
was to eliminate "the power of life and death over our international
companies" (Hearings on.S. 2598, 77th Cong. 2dSess. p. 26).. Com-
munication with Hawaii was definitely placed in the category of over-
seas or international telegraph, operations. . Section 222(a)(5) and (6).
Yet the Orders would create another situation of the very type
Congress condemned in requiring divestment and in restricting mergers
between overseas and domestic telegraph carriers.. How can the Orders
possibly be valid as to telegraph service when Congress has decided
that such combined. operations do not serve the public interest?
6.. Insufficient basic findings and no substantial evidence. --
Hawaiian claims that RCA does not allege the Commission has failed
to make the requisite statutory findings in authorizing construction and
operation of the cable or that such findings are not otherwise supported.
On the contrary,. RCA specifically alleged that such findings have not
been made. as to telegraph service ;(RCA Petition, pages 13-14).. There
is a total absence of any finding by the Commission on the issue of
telegraph service. Reference to a letter from another government
agency does not constitute a finding by the Commission- which supports
the Orders.
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
. While urging that it is "purely technical, 8? the AT&T recognizes
this defect in the Orders. But it is far more than technical.. There is
no substantial evidence to support any finding by the Commission that
unrestricted operation of the facilities for telegraph service.is desirable
or in the public interest.. Any attempt to amend the Orders as AT&T
suggests would merely compound the lack of support for the Orders.
AT&T has not satisfied the statutory burden.of showing that the public
convenience and necessity would be served by the unrestricted licensing
of AT&T to enter the overseas telegraph field.
. The AT&T contends that. "existing facilities are radio facilities
and. subject to deficiencies in reliability and quality inherent on circuits
of that type. " If AT&T is referring to telegraph, the contention is not
entitled to any weight. . RCA has pioneered the radiotelegraph with
Hawaii for over thirty years. . RCA categorically denies that such
service is deficient in reliability or quality.
History shows that the radio has been far more efficient and
reliable than the cable in telegraph. service with Hawaii. . The cable is
inevitably subject to interruptions (of short or long duration) and other
deficiencies inherent in that medium of communication.
7. AT&T's claimed commitments are irrelevant. - Injection of
the claim that AT&T "has already committed large sums of money to
the project" is unjustified. and unwarranted (page 7).. It is fully aware
of legal procedures and that the Commission has no alternative but
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
' 7 0
adherence to the administrative process.. If AT&T has expended any
sums of money since the Orders were- issued, such action was taken
entirely at its own risk. It cannot now be heard to claim-in an effort
to support the unjustified Orders-that it has relied upon these Orders.
Moreover, AT&T does not state that any specific commitment has
been made for telegraph service or that its commitments would have
been any different if the issue of telegraph. service had been initially
reserved. Of course, the cable is the same whether used for telephone
or both telegraph and telephone services. Pressure arguments are
not factors in the public interest standard. Private parties cannot
attempt to estop the Commission from carrying out the statutory man-
date. See National Labor Relations Board v. Baltimore Transit Co.,
140 F. 2d (4.Cir. 1944); cert. den. 321 U.. S. 795.
Conclusion.
The Orders should be revised to include a provision.as follows:
"The cable facilities herein authorized shall not be used to
provide record communication services between the United
-States and Hawaii, unless and until prior authorization for
such use has been granted by the Commission upon specific
application therefor.."
Respectfully submitted,
RCA COMMUNICATIONS, INC.,
By
Frederick M. Porter,
New York, N.Y., Attorneys, 66 Broad; Street,
October 21, 1955. New York 4, N. Y.
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
 Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
IF
I,. MILDRED JOHNSON, hereby certify that on the 24th day of October,
1955, I served the foregoing: Reply of RCA Communications, .Inc. to
Oppositions. of American Telephone and Telegraph Company and
Hawaiian: Telephone Company on the following, by mailing copies
thereof to them at the following addresses:
James A. Kennedy, Esq.,
American Cable & Radio Corporation,
67 Broad. Street,
New York 4, N. Y.
Ernest D. North,. Esq.,
American. Telephone and Telegraph Company,
32 Avenue of the Americas,
New York 13, N. Y.
-Office of Defense Mobilization,
Washington 25, D. C.
.Attention: Mr.. F.. C.. Alexander.
Harold G. Cowgill, Esq., . Chief,
Common. Carrier Bureau,
Federal Communications Commission,
Washington 25, D.. C.
George_ D. Rives, Esq.,
Globe Wireless, Ltd.,
111. Sutter Street,
San Francisco 4, California.
John. H. Waters, Esq.,
The Western Union-Telegraph Company,
60 Hudson-Street,
New York 13, N. Y.
Omar L. Crook, E.sq.,
Hawaiian Telephone Company,
1700 K Street, N. W.,
Washington, D. C.
s l Mildred Johnson
Declassified in Part - Sanitized Copy Approved for Release 2013/04/24: CIA-RDP78S05450A000300010002-7
. CERTIFICATE OF SERVICE