Broadcasting (Oct 1931-Dec 1932)

Power of I.C.C.to Rule on Rates For Broadcasting to be Tested New York Company Raises Issue in NBC Case; Eastman Holds Body Lacks Authority THE POWER of the Interstate Commerce Commission to regulate advertising rates of broadcasting stations and to evaluate broadcasting properties as the basis for such rates will be tested before that agency in a pending case against the National Broadcasting Company and Station WGBB, of Freeport, N. Y. The complaint was filed by the Sta-Shine Products Co., Inc., New York City. Although the I. C. C. holds that under the Interstate Commerce Act it has the authority to regulate rates of broadcasting stations, it is the first time since the advent of broadcasting that such a complaint has been filed. The case has been docketed (No. 24738) and a hearing will be held probably in December. In docketing the case the Commission automatically assumed jurisdiction. It is expected, naturally, that its jurisdiction to regulate broadcasting will be challenged by the defendants, and this matter will likely be decided before an examiner considers the complaint. Whether or not the Commission has such jurisdiction is a debatable question even within the body itself. Commissioner Joseph B. » Eastman already has expressed the view that the Commission is not empowered to regulate broadcasting in any fashion. The Sta-Shine Company is described in the complaint as engaged in the sale and distribution of a fine liquid polish for ifurniture, automobiles, and other articles. It alleges that it has used the facilities of Station WGBB in program transmission, and that it desired and still desires to "send messages" via the NBC, but the "rates and charges demanded by defendant are too exorbitant." NBC, according to the complaint, asks $146.48 for 15 minutes time on one station and $1480.49 for chain transmission. Moreover, it is charged that NBC "has failed to furnish facilities." CASE TOO FAR-REACHING THE case is considered of vast potential importance to the broadcasting industry. It proposes to go into the rate structure of the industry in the same manner that railroads and other common carriers are regulated as to rates and evaluation. Because broadcasting is physically limited as to capacity and because a broadcasting station's main asset is the facility entrusted to it under franchise from the government, the case is beset with many complications not covered by the existing Interstate Commerce Act. The Federal Radio Commission, under the Radio Act, is not empowered to regulate rates. Section 1 of the Interstate Commerce Act, which is cited by the complainant as the basis for its action, declares that the provisions of the act shall apply to common carriers engaged in the transmission of intelligence by wira and wireless in interstate commerce as well as to the generally recognized common carriers. Broadcasting has never been held a common carrier it is pointed out, and the question arises as to whether the term "transmission of intelligence" is applicable to broadcasting. Wire or wireless messages delivered from one individual to another unquestionably fall within the scope of this provision, but in broadcasting the "message," which is a program, is from an individual to all those who may tune in with their sets. Another cardinal point cited is that under the interstate commerce act the common carrier proviso has only to do with contractual relationships between a particular producer of service and the public, in which service is provided for a fixed consideration. In broadcasting, the contractual arrangement is between the broadcaster and the sponsor, with the service given to the public gratis. The Sta-Shine Company alleges that the rates, charges, rules, regulations and practices enforced by the defendants are unjust and unreasonable, and in violation of Section 1. The complaint further charges that the practices of the defendants are "unlawfully discriminatory, because all persons are not accorded similar treatment," all to the great damage of the complainant. (Continued to Page 30) Permanent Exhibit Planned in Capital PLANS are being completed by the National Radio Equipment Exhibitors for a permanent "Show Window" exhibit of latest radio and sound apparatus for the benefit of broadcasters and others identified with the industry who visit Washington on official business, according to Carl H. Butman, former secretary of the Federal Radio Commission, who heads the project. Located in the National Press Building, which also houses the Radio Commission, the "Show Window" will be the only place in the United States where a broadcaster may inspect at one time transmitters manufactured by different firms, Mr. Butman said. This is also true of various accessories, such as microphones, speech equipment, turntables, controls, panels and component parts, including condensers, transformers, tubes and the like. The managers, he declared, "will undertake to give thorough but impartial exposition and demonstration of each individual display." Mr. Butman explained that the exhibition management in no wise will be a sales organization. Representatives of the manufacturers may be present, however, to confer with the visiting broadcasters and with those interested in sound and public-address equipment. Radio Advisor Named RADIO'S first "official advisor" to a governor was appointed by Gov. Joseph B. Ely, of Massachusetts, when he placed George A. Harder, in charge of program and editorial features for the New England Westinghouse stations, on his staff as expert on all radio matters. Mr. Harder will continue his connections with WBZWBZA, Boston Springfield. Gov. Ely is one of the original "radio governors," having a microphone in his executive chambers as have the governors of New York and Pennsylvania. Hearst Buys WBGS Planslmprovement Deal Revealed by Application ; May Also Take Over WCAE PURCHASE of WGBS, New York City, by William Randolph Hearst, the publisher, was disclosed on October 10 when General Broadcasting System, Inc., owner of WGBS, applied to the Radio Commission for a voluntary assignment of license to American Radio News Corp., Hearst radio subsidiary. The purchase was next day confirmed by Joseph V. Connolly, general manager of the Hearst subsidiary. This will be the first newspaperowned radio station in the metropolitan area. It is the second station owned outright by Hearst, the other being WISN, Milwaukee. Hearst also operates KYW, Chicago Westinghouse station, under lease. He is also expected shortly to take over WCAE, Pittsburgh. Purchase was made by acquiring the stock of Daily Paskman, J. W. Loeb, and Fred Gimbel at an unnamed price. About $100,000 will be spent immediately to improve the station, which operates 500 w. on the 1180 kc. channel until Pacific sunset. Call letters may be changed to WINS, representing International News Service, the Hearst press association. The expansion program will include an entirely new transmitting station being planned by William G. H. Finch, chief engineer of the American Radio News Corporation and inventor of the long-wave radio-typewriter system being developed under Hearst auspices for news distribution. The new manager will be Clark Kinnaird, who announced that features and writers of Hearst's King Features Syndicate will be drawn on for programs. Wrigley On Air Nov. 2 WILLIAM WRIGLEY, Jr. Company, Chicago, chewing gum manufacturer, has signed a contract for a coast-to-coast CBS network, using the 7 to 7:15 p. m., E. S. T., period five nights a week. The program starts November 2, but the feature was not announced up to the time of going to press. It involves more than $1,000,000 time charges. Networks Seeking Modification of Call Letter Rule 15-M inute Stops Interrupt Dramas, Commission Told BECAUSE of the growing number of dramatic skits on the air and the marked trend toward 15-minute programs, both the National Broadcasting Company and Columbia Broadcasting System have petitioned the Federal Radio Commission to modify its existing callletter regulation, requiring station announcements every 15 minutes, except for extraordinary occasions. The Commission has indicated it will consider modification of this order, General Order No. 8, in connection with the codification of its General Orders, to be published in the form of rules and regulations in the near future. The order was adopted four years ago, and has been the source of considerable complaint from broadcasters, who contend that it is not abreast of program development, and therefore is not in the best interests of the public. Letters formally suggesting amendment of the regulation have been sent to the Commission by Frank M. Russell, NBC vice president in charge of its Washington offices, and Harry C. Butcher, director of the CBS Washington office. Both network officials called the Commission's attention to the increased number of dramatic presentations and pointed out that station breaks required by the order almost invariably interrupt some tense situation. Similarly, they emphasized that there is a definite trend toward programs of shorter duration, notably of 15 minutes. General Order 8, as now written, provides that 15-minute announcements shall be waived only "when such announcements would interrupt a single consecutive speech or musical number, and in such cases the announcement of the call letters and location shall be made at the beginning and end of such number." WGN Joins CBS Net Effective Nov. 1, WGN, of Chicago Tribune, will be added to the CBS network, leaving its present affiliation with NBC. Decision of Tribune officials to join Columbia follows the recent acquisition of half interest in WMAQ, of the Chicago Dailv News, by NBC, effective also Nov. 1. Details of the arrangement whereby the Tribune station joins CBS have not been announced beyond the statement by Columbia officials that it is "for a considerable portion" of WGN's time. The Tribune station operates with 25 kw. on 720 kilocycles. Page 12 BROADCASTING • October 15, 1931