Broadcasting (Jan - June 1941)

Running Account of Senate Hearings on White Resolution FCC CHAIRMAN James Lawrence Fly utilized his fourth and last day on the stand June 9 to summarize his testimony begun June 2 [Broadcasting, June 9]. He renewed his proposal to the industry to "confer" on amelioration of the rules, and offered to postpone the effective date from time to time insofar as they require networks to dispose of certain properties. As during his past appearances, Chairman Fly frequently was interrupted by members of the committee, with the number present having dwindled to seven or eight of the 21-member committee. Fly Criticizes Self-Regulation Plan Chairman Fly placed in the record copies of NBC, CBS and MBS contracts, together with a memorandum setting out the rates for a typical network evening hour on the several basic networks. Reading from a prepared statement. Chairman Fly said it had been charged that the network regulations would "strike at the foundation of the American system of broadcasting" and result in "anarchy and chaos" and "destroy the major networks". He said he was afraid that any regulations adopted to eliminate "restraints" in the broadcasting field would have met the same reception from the major networks. Alluding to suggestions that elimination of the abuses be left to "selfregulation". Chairman Fly said that in 1938 IRNA was formed and drew up a list of problems which the affiliates recognized as existing in their dealings with the networks. The chairman of IRNA, he cited, said there was no need for Commission action because IRNA proposed to solve these problems through industrial self-regulation. More than 2% years now have elapsed since IRNA was formed and "nothing has been done", the chairman said. Another of the arguments of those who "cry havoc" is that the network incentive for putting on sustaining programs will be eliminated and such features as Toscanini and the National Farm & Home Hour will be taken off the air. Chairman Fly declares. He reiterated his previous contention that the networks do not "give" away sustaining programs, but are well paid for them in free time or in some other fashion. The accounting, he said, is "scrambled". Calls Toscanini Pickups Selfish The broadcasts of Toscanini, he argued, are an "extremely effective advertisement for NBC" and serve a "substantial selfish purpose". RCA can get as much advertising good out of such broadcasts as Ford gets out of the Suyiday Evening Hour, he added. Mr. Fly struck at RCA's ownerPage 22 3 hine 16, 1941 INTENT OBSERVERS throughout the Senate hearings are these NBC executives and counsel (1 to r) : John T. Cahill, former U. S. District Attorney in New York, of NBC counsel; Niles Trammel!, president of the network; A. L. Ashby, vice-president and general counsel; William S. Hedges, vice-president in charge of station relations. ship of NBC, citing that RCA began as a communications company, but today "bestrides whole industries, dwarfing its competitors in many fields". Whether the tendency of RCA to "grow and expand at the expense of smaller independent concerns" is desirable is primarily the business of Congress and not of the FCC, he said. He pointed out that the Commission's monopoly report covers RCA's development at some length, but that the Commission simply brings it to the attention of Congress. Problem of Switches Could Be Solved Before Chairman Fly was permitted to cover the jurisdictional aspects. Chairman Wheeler inquired about the workings of the new rules in respect to smaller stations. Much apprehension has been created in the minds of some broadcasters, he asserted, in situations where smaller stations might be frozen out by larger ones which would be demanded by advertisers as outlets in particular markets. Chairman Fly, however, contended that the smaller stations would have first refusal on programs of a particular network, under the rules, and that the larger stations could not take the commercials away from them. Despite Mr. Fly's contention that the advertiser would not be able to pick and choose stations in particular markets because of the first refusal provisions. Senator Wheeler held that if the commercial business gravitates to the big stations, it would provoke a situation wherein the Government would tear down one monopoly only to build up another. If such a situation "starts to happen, we'll have to re-examine the whole subject," Chairman Fly said. "We'll protect the little station." Basing his questions on complaints from smaller stations, Chairman Wheeler asked about the telephone line situation and whether it was not a fact that the networks leased lines for their own services which would not be available for the type of "switchboard" operation outlined by Chairman Fly. The FCC head said he felt such switches could be made on comparatively short notice and that the FCC had jurisdiction to require proper service. He pointed out that the Commission only last week effected a cut of $250,000 in the cost of AT&T lines available for program service [Broadcasting, June 9]. Resuming his prepared statement. Chairman Fly said there were a number of highly important matters relating to broadcasting which the Commission is not empowered to deal with. He mentioned the non-common carrier aspect under which the FCC cannot concern itself directly with rates which broadcasters charge; invoke uniform accounting practices, or concern itself with depreciation charges. But the act makes it clear, he contended, that the Commission is to concern itself with the public service aspects of broadcasting. He pointed out that Congress provided the Commission with no power of censorship and that the regulations do not prohibit the broadcasting of any particular programs, or penalize anyone from broadcasting programs, or require anyone to broadcast any particular programs. Criticizes Refusal Of Lindbergh Talk At this juncture Chairman Wheeler precipitated a discussion over the refusal of a station in Philadelphia to broadcast a recent address by Col. Charles A. Lindbergh. He said he thought it was a "reprehensible thing" for any station to take one side of the war situation. Such stations ought to be called on the carpet by the FCC on renewal of their licenses, he said, asserting it was the duty of the Commission to take action. Some of the "locals ought to be jacked up on this proposition", he said. He understood that a number of stations refused to put on speakers opposed to the Administration viewpoint, on the ground that re prisals might be taken and that the FCC or the Government would noti be pleased. Branding it a serious! situation, he said the Government should not dominate stations to the; point where they are "afraid" of what might happen. Also pulled into the fray were commentators on the networks who play one side or the other, "depending on which way the advertiser! wants him to go". Chairman Fly nodded approval practically everything Senator Wheeler said. He said he had given a lot of thought to this matter and that he thought it was essential ti the future and integrity of the industry that both sides be adequato-| ly presented. Calling for a "balance" on con troversial programs. Chairman Fl;/ said that adequate time should bt given whether the programs arc free or commercial. Only then will we have "this thing serve as an effective mechanism of free speech" Chairman Fly had identified the station in Philadelphia that had re fused the Lindbergh speech as WCAU. He said the station was owned by "the Levy Brothers", who were important stockholders in CBS. Later, however, a release was given out through the NAB, clear ing up WCAU's status. A telegran dated May 23 from Dr. Leon Levy WCAU president, to Rep. W. P Lambertson (R-Kan.), who had criticized the refusal of Philadel phia stations to broadcast the Lind bergh address, was made public. Levy Explains Station's Position Dr. Levy recited that WCAU was one of the stations mentioned in the press release as refusing time. Be said the station had not received a request to broadcast this speech and that if and when such a request is made, it would be given "proper consideration". He pointed out that WCAU had broadcast Lindbergh's speech from Minneap olis May 10 and would broadcast! Senator Wheeler's speech May 23. Rep. Lambertson acknowledged re ceipt of the wire, declaring he did not remember that the news item mentioned WCAU. He said that if WCAU had done what it claimed, it should be "exonerated", and its action "is commendable". Senator Smith (D-S. C), who enlivened the hearings at the start; with his jibes at various aspects of radio, took Chairman Fly into an extended discussion on program ming, emphasizing the desirability of having the Commission require all stations to carry all programs of transcendent importance, par ticularly the World Series baseball games. Senator Smith apparently intended to carry on in a jocular vein, but was taken seriously by Chairman Fly and the colloquy wound up nowhere. Chairman Fly responded to Sen i BROADCASTING • Broadcast Advertising