Broadcasting (Oct 1931-Dec 1932)

Property Rights Issue Revived As Chicago Stations Are Deleted WIBO and WPCC Appeal Order Favoring WJKS; WMBB-WOK Loses 3 -Year Court Fight THE QUESTIONS of property rights of broadcasting stations and of the constitutionality of the Radio Act of 1927 are hack before the courts stronger than ever as a result of the Radio Commission's action of Oct. 16 ordering WIBO and WPCC, both of Chicago, off the air and assigning their facilities to WJKS, Gary, Ind. Action was taken in purported compliance with the Davis equalization amendment. By coincidence, the new appeals follow what amounts to a final adjudication of similar issues by the Circuit Court of Appeals at Chicago in the three-year old case of WMBB-WOK, also of Chicago. A fortnight ago the court denied a petition for rehearing of this case, filed by the American Bond & Mortgage Co., former licensee of the station, which was removed from the air by the Commission in September, 1928, to relieve congestion. The alternative left the appellant is a plea to the U. S. Supreme Court for review, but it is believed that no such effort will be made. The new cases have been taken to the Court of Appeals of the District of Columbia and are believed to present more comprehensive issues. Stay orders to restrain the Commission from making effective its decision are requested, and, if the usual procedure is followed, the court will grant them, and thus permit the stations to remain in operation during the litigation. The Commission reversed the recommendation of Chief Examiner Ellis A. Yost in the Chicago cases. Mr. Yost, who held lengthy hearings last April, reached the conclusion that there was nothing in the Radio Act and the Davis amendment or in General Order 102, relating to quota allocations, to justify the granting of the WJKS application, and the "practical destruction" of WIBO and WPCC. CHARGE CONFISCATION WIBO, owned by the Nelson Brothers Bond and Mortgage Co., and WPCC, owned by the North Shore Church, share time on 560 kc, the former with 1 kw. and the latter with 500 watts. WJKS is licensed to the Johnson-Kennedy Corporation, and controlled by Ralph Atlass, of Chicago. It now is assigned to 1360 kc, sharing with WGES, Chicago, and using 1 kw. night and 1250 watts until local sunset. In his appeal Levi Cooke, counsel for WIBO, charged the Commission's decision did not follow the law, that it represented confiscation of property without due process of law, and that it proposed to destroy the investment of $300,000 in the station. He contended that the Davis Amendment and General Order 102 could not apply since Illinois is delinquent in regional station facilities, as pointed out by Mr. Yost. WPCC's appeal was along the same general lines. At the hearings WJKS was represented by Mrs. Mabel Walker Willebrandt, former assistant At torney General. Following the Yost recommendation against the Gary station, she filed with the Commission a bill of exceptions in which she charged, among other things, that Mr. Yost had "muddled" the whole question and had exceeded the province of an examiner in his recommendations. In its statement of facts and grounds for decision the Commission said it found that the two Chicago stations are not rendering service of distinctive character and that their deletion would not deprive Chicago listeners of program service which they are not now getting from other stations. Moreover, it brought out that Indiana is 2.08 units, or the equivalent of approximately two stations of 1 kw. each under quota, while Illinois is 12.49 units over quota. RAISED PROPERTY ISSUE THE WMBB-WOK case now off the court records, was the first to raise the issue of property rights and of the constitutionality of the radio act. WMBB-WOK challenged not only the right of Congress to regulate broadcasting but also the legality of the Federal Radio Commission, which was created by the radio act. Moreover, it was contended that the Commission, by removing the Chicago station from the air, had confiscated its property without compensation and without due process of law, in violation of the Fifth Amendment to the Constitution. After the Commission removed WMBB-WOK, the owners announced their intention of broadcasting without a license. This was blocked by an injunction issued by the Federal District Court in Chicago, presided over by Judge J. H. Wilkerson. On March 1, 1929, Judge Wilkerson rendered his opinion in which he upheld the radio act and denied the contention of property rights. An appeal was taken to the Circuit Court of Appeals, which certified five questions on this and a related case to the Supreme Court. Last January, however, the Supreme Court remanded the case to the Circuit Court, after hearing arguments, on the ground that the questions were too indefinite. Subsequently the case was argued before the latter court, with Assistant Attorney General John Lord O 'Brian as counsel for the Government. This court last July handed down its opinion in which it sustained, in substance, the findings of Judge Wilkerson. The new ruling of the court settles the question of constitutionality unless an appeal on certiorari is sought and accepted by the Supreme Court. The Circuit Court, in holding that Congress has the power to regulate broadcasting as interstate commerce, said "it would exercise its power in the only manner which would accomplish the desired end, which was through elimination of a plurality of broadcasting stations operating on the same wave length in the same territory as the same time." As to property rights the court Maj. Gen. Geo. S. Gibbs MAJ. GEN. GEORGE S. GIBBS, recently retired chief of the Army Signal Corps, who joined the International Telephone and Telegraph Co. on July 1 as vice president in charge of telegraph, cable and radio communications subsidiaries, was elected president of the Postal Telegraph-Cable Co. by action of the board of directors Oct. 15. He succeeds Clarence H. Mackay, elected board chairman. A. H. Griswold was named executive vice president and William J. Deegan vice president and comptroller. Broadcasters Are Urged To Advertise Services ADVERTISING campaigns designed to call general attention to the advantages of using broadcasting stations as well as other communication services were recommended to the communications enterprises of the continent by the Fourth Pan American Commercial Conference in session at Washington in October. A resolution emphasizing the importance of "illustrated advertising" was adopted by the conference on motion of its committee on communications. It recommended that the attention of private enterprises and governments which control electrical communications be called "to the advantages derived from illustrated advertising on the cost and benefits obtained from the utilization of the various services which they have established." Another recommendation urged the countries of America to enter into agreements for the regulation of communications in view of interference that has developed between radio stations. Such interference was described as a "serious obstacle to the development of international communications." The resolution was adopted as introduced by Luis Sanchez, of the Mexican Government's radio administration. held that "every investment in broadcasting stations was subject to this exercise of reasonable and necessary regulation by Congress. As against such possible regulation there existed no vested right in favor of investors." Press -Radio Fight May Bring Ruling THE RIGHT of newspapers to engage in direct competition with existing broadcasting stations in their communities may be passed upon by the Federal Radio Commission soon in deciding a newspaper-radio controversy at Williamsport, Pa. The point was raised before Chief Examiner Ellis A. Yost, but he said it was not his purpose to make this a test case, adding that he would submit his recommendations solely on the basis of public interest, convenience, and necessity. Through Elisha Hanson, its counsel, the SunGazette Co., of Williamsport, publishers of the Sun and the Gazette & Bulletin, raised the question in presenting evidence supporting their application for authority to build a new 100-watt station to share time with WRAK, Williamsport, now using full time on 1370 kilocycles. Mr. Hanson, who also is counsel for the American Newspaper Publishers Association, said the matter was considered by that association and by the Pennsylvania state branch as a test to protect the advertising rights of newspapers. The application was opposed by C. R. Cummins, owner of WRAK, who declared that if the application were granted, he, in effect, would have to go out of business. Mr. Cummins asserted the Pennsylvania state association had appropriated $500 to bring the Sun-Gazette application before the Commission. "We are interested," said Mr. Hanson, "because any one has the freedom to enter the newspaper business, while radio stations are more or less in a protected position by the license they hold from the Radio Commission." While Mr. Yost may not discuss the general newspaper-radio issue in his report, the Commission can take cognizance of it through the record in the case. WOV Wins Battle On Insurance Law STATION WOV, New York City, recently won an interesting legal battle over insurance advertising, according to Edward Dukoff , director. WOV was awarded the decision in the case of the New York State Insurance Department versus the International Broadcasting Corporation on charges of violation of the New York state insurance law, which states that it is a misdemeanor to solicit insurance for a foreign company. WOV was charged with soliciting insurance for the Union Mutual Life Insurance Company of Iowa by means of electrical transcription broadcasts. Magistrate Weil, Harlem magistrates court, held that broadcasting as done by the insurance company, i.e., merely stating the nature of the policy and requesting that inquiries be made, is advertising and not solicitation. The court defined solicit as meaning "to earnestly request," while advertising is merely to state facts. John Iraci, president of WOV, fought the case through the courts for six months. Page 14 BROADCASTING • November i, 1931