Senator KENNEDY. On that point, Mr. O'Melia, how can you say there has been no route moratorium? How many competitive route applications were actually set for hearings in 1973 or 1974?

Mr. O'MELIA. Well, there are several points I would like to make. During the sixties, as you heard this morning, there were a lot of route cases. In early 1970 there was a downturn in the economy. The cases that came before the Board were very few. There was no Board policy stating that there was to be a moratorium. In 1973 we experienced the fuel shortage from the fall of 1973 until the summer of 1974 the carriers were trying to find fuel, not trying to find new routes to operate.

Senator KENNEDY. Were there applications during this period of time?

Mr. O'MELIA. I am not sure. There probably were. Normally there are about a thousand docketed cases a year of which 300 or 400 of them are route cases. Of those I am not sure how many are normally filed for expedited consideration, which would then bring them before the Board.

Senator KENNEDY. As I understand it, even though there were no hearings that were set during this period of time, and even though you have claimed there was no moratorium, the staff study itself opens by saying that since approximately 1970, the cases involving new domestic route authority were generally not being set for hearing. [Bureau of Operating Rights, CAB, The Domestic Route System, foreward at i-ii (Oct. 1974).] How else would you characterize the policy of the CAB? Isn't that really a moratorium-are we just fencing on words here?

CAB WILL BE INCLINED TO HEAR ROUTE ENTRY APPLICATIONS IN THE FUTURE

Mr. O'MELIA. As one Board member, let me give you as straight an answer as I can, Senator. During my hearings before Senator Cannon when consideration was being given to my nomination as a member of the Board, I answered the question of the route moratorium two or three times. I said I was not in favor of a moratorium, that I felt that if cases are filed, and if the applicants ask for expeditious hearing, that they should be heard. Now this is in the record of those two hearing.

Senator KENNEDY. That is your view?

Mr. O'MELIA. That is my view. In fact, as far as I am concerned, there is no route moratorium as of now.

Senator KENNEDY. Let me just say, I think that is a very positive

statement.

Mr. O'MELIA. Thank you, Senator.

Now, this probably has not been read but Board order 75-2-33 came out February 7, 1975, Eastern airlines exemptions, dockets 24626 and 27075. Let me read just two sentences:

During the past few years the Board has acted with caution in setting for hearing certificate amendment applications, where it appeared that granting the application would increase or intensify competition among the domestic air carriers. This course has been occasioned by depressed econome conditions in air transportation following a period of rapid expansion, and more recently by scarcity of fuel. It has also to some extent been influenced by unusual de

mands on the time of the Board's staff in fare and rate matters, for example, the recently completed domestic passenger fare investigation. Undoubtedly this course can be expected to change as the relevant circumstances change, and it goes without saying that the Board has a continuing duty to address those situations where it becomes apparent that there are legitimate needs for additional and improved air service which are not being met.

Now, that is a five to nothing vote by the Board on the 7th of February.

Senator KENNEDY. We reviewed with the earlier witnesses the provisions of the Federal Aviation Act as well as the Administrative Procedures Act, which would appear to require at least a timely disposition of matters which are brought before the respective agencies. Then we heard from some of the witnesses, who characterized the inaction during this period of time as being a moratorium, for whatever reasons.

Do I understand your testimony now, that you believe that any applications that come through to the Board are going to at least get a timely disposition, and that at least there will be the possibility of hearings before the Board on those that meet certain criteria? The problem is we don't know what those criteria are, as I understand it. You can correct me at any time. It is awfully difficult, I would think, for any applicant to really know whether they will get a hearing or not because they don't know what the criteria are. The criterion of public interest is sufficiently vague, I would think, to permit what I think fair-minded people would feel is simply a policy of nonhearing by the Board.

We are interested, as I am sure you are, in having the Board be responsive to these legitimate requests. I am interested in the extent you feel you can make any kind of a statement which would indicate what the Board's policy is? I might ask the other members of the Board what they feel to be the policy of hearing those cases that were set for hearing some time ago, but have never been heard: for example, the Ohio/Indiana nonstop investigation; the SpokaneMontana points investigation; the Louisville-Washington/Baltimore service investigation, and there are others. What kind of assurance can you give us as to when these cases will be heard? What is the Board's attitude with regard to these cases?

Mr. O'MELIA. First, before I turn your question over to the other members, let me say that the standards for determining priority of hearings are in section 399.60 of the regulations. I won't go over them, but they are the standards that the carriers need to measure up to in their application where they want priority of hearing.

[The regulation referred to, 14 CFR sec. 399.60 (1974), follows:]

§ 399.60

Standards for determining priorities of hearing.

(a) General. This policy statement describes the general standards which will be used by the Board in determining the order in which it will designate for hearing those matters on its docket which are to be decided after notice and hearing. Among such matters are applications for certificates of public convenience and necessity or for foreign air carrier permits; applications under section 408 of the Act for approval of consolidations or acquisitions of control; complaint cases; and various ratemaking proceedings.

(b) Standards. Matters will be assigned for hearing in accordance with the degree of relative priority which each matter is entitled to on the basis of the comparative public interest involved therein. Among other things, the Board will take into account:

(1) Statutory requirements for preference or statutory limitations on the time within which the Board shall act;

(2) The impact of delay on the public or particular persons;

(3) The need for promptly securing compliance with the provisions of the

Act;

(4) The time for which the matter has already been pending and which would be required to dispose of it;

(5) Whether the application requests renewal of an existing temporary authorization; and

(6) In matters relating to cperating authority—

(i) Whether a proposal might reduce subsidy or increase economy of operations;

(ii) Whether an application proposes new service;

(iii) The volume of traffic that might be affected by the grant or denial of the proposal;

(iv) The period that has elapsed since the Board considered the service needs of the places or areas involved; and

(v) The relative availability of necessary staff members of the carriers, communities and the Board, in the light of other proceedings already in progress, to handle the processing of the case.

Interested persons may urge upon the Board such considerations as they believe should lead it to accord a particular application a priority different from that which the Board has given it.

As I said, I can speak only for myself, but as one Board member, I have given you my opinion. Now, if you want to ask the other Board members the same question, go ahead.

LEGALITY OF THE "ROUTE MORATORIUM"

Senator KENNEDY. You are aware, before we leave, Mr. Chairman, that there is a substantial body of lawyers who feel that CAB orders have been at some variance with what is in the regulations

Mr. O'MELIA. I think you are referring to section 399.60.

Senator KENNEDY. Section 401 [of the Federal Aviation Act of 1958, 72 Stat. 754, 49 USC § 1371] and the regulations thereunder. Let's hear other points.

Mr. MINETTI. I have prepared some comments here on the question on the legality of a route moratorium.

I do not believe the Board could simply announce it was not going to hear any more new route applications either for a period of years or an indefinite time. If the Board had ever announced such a policy I would certainly have dissented. I think section 401 of the act clearly contemplates that route applications are to be set for hearing, that they are to be granted if the Board finds after notice and hearing that the public convenience and need so requires; otherwise, they are to be denied.

At the same time, I think the Board has to have control over the order in which applications are heard. If we heard them in strict order of filing most of our time might easily be spent hearing applications which promise very little benefit to the traveling public.

Applications for service critically and urgently needed by the traveling public might take many years in coming to the top of the list. I recall, for instance, that soon after the first successful moon shot one major carrier got publicity by filing an application with the Board for a route to the moon. Now should the Board have set that application for hearing?

It is my understanding that the Board at first tried to hear applications in order of filing, and the result was that certain carriers flooded the docket with applications for every new route they hoped to acquire in the next 10 years.

So we have to have some preliminary method, before actually setting an application for hearing, of deciding where it ought to go in a rational order of priorities, based on the factors of the public interest and not simply when it was filed.

Senator KENNEDY. I do not think there is any dispute whatsoever about what you mentioned concerning setting the order of agenda. I do not think any of us could possibly dispute that you have the responsibility and authority to work that kind of will, but that is not what we are talking about. We are talking about the fact there were not any hearings, not the question of whether you have the authority and responsibility to set them in a particular order.

Mr. MINETTI. As you know, Senator, I did dissent in many, many cases in which the Board refused to set cases for hearing.

Senator KENNEDY. As much as you may or may not be interested in the merits of a particular situation, that is out of our particular area of interest. What we are interested in is what I think has been characterized as a moratorium. Different words have been used. We are interested in the substance of the situation: that no hearings were held. What we are trying to find out-and I would be interested in whatever comments you make on the rationale from the legal and policy point of view-is what you are going to do in the future. I am interested in what happened in the past and reasons for it, but I am most interested in what the attitude will be now.

Mr. O'Melia has very constructively commented that he believes there should be a timely hearing in those matters.

Mr. MINETTI. That is what I am interested in, too.

HISTORY OF CAB DEVELOPMENT OF THE "ROUTE MORATORIUM"

Senator KENNEDY. Perhaps you could develop, since you were on the board from the beginning of the moratorium, or whatever word you want to use

Mr. MINNETTI. The phrase route moratorium came up in 1969 after the Board had decided a number of cases. I think at that time some of the carriers came in and suggested to the Board that we have a route moratorium to give them an opportunity to digest the new routes they had received. This was not shared by all the carriers, but some of them felt we should have a route moratorium. That is how the phrase route moratorium came up.

Senator KENNEDY. How did you respond to some of the applicants who pointed out that under the various legislation there was a responsibility by the Board for timely consideration of the various route applications? When someone raised that point to you how did you respond to that?

Mr. MINETTI. Well, as I said in one dissent, Senator, several years ago, I have no problem with a policy of caution in setting down route cases during time of financial difficulty. What I disagree with is carrying the policy of caution to the extreme of refusing to hear any route cases. I still think hearing no such cases at all is inconsistent with the mandate of the statute.

Senator KENNEDY. Could you tell us just a little bit about the meeting that you had with the carriers, in which it was suggested that there be a moratorium? Was that an open hearing or were there any notes kept on that?

Mr. MINETTI. I do not know whether there were any notes kept on that one.

Senator KENNEDY. You can see the point-I think it was suggested that the major carriers get new routes and, in order to solidify their positions, that there be a moratorium. They used those words. Subsequently, there was in effect a moratorium, and I suppose what we are interested in is how that policy was made. Was it made openly, if it was, how was it considered, and who said what, and what other interests were considered?

Mr. MINETTI. Well, I think that just developed as cases came before the Board. The Board stated the position was that there was a policy of caution.

Senator KENNEDY. It does not appear that every time it came up the merits of the particular case just happened to be consistent with the policy of caution during that period of time. That is not quite what you said earlier. As I understand what you said in response to an earlier question, a number of the major carriers came to members of the Board and indicated they needed some time to solidify their position. There was no announced policy, but at least an implied one, that there were not going to be any more new routes granted. I do not want to put words in your mouth, but it seems that is really the sequence of

events.

What our subcommittee is interested in is what are the procedures developed resulting in some major policy considerations. Could you give me your view on this point, Mr. West? What I am interested in is moving from the current situation: Where we are going in the future.

Mr. WEST. I gave Senator Stevenson the same comment out in Peoria. I had no part, since I am newly on the Board, in the development of route moratorium, philosophy, of course. I am not in favor of it. I do not feel inclined to defend it.

I am in favor, and have so recommended to the Board, that we do conduct hearings in regard to applications. Now, there has to be some priority considerations and I think you recognize that. I think the Board is evolving a policy of trying to determine those and pass on them at the Board level rather than all together at the staff level, and I am active in the effort and will be in the future.

I do not think there is an official moratorium. I think that was a majority philosophy at the time.

I do not question the motives of the members involved in that socalled philosophy. I just do not agree with it.

Senator KENNEDY. I suppose the point is in that reaching a policy of this importance and magnitude, informal discussions, whether they