Broadcasting (Jan - June 1941)

arvd Broadcast Advertisingr Vol. 20, No. 24 WASHINGTON, D. C, JUNE 23, 1941 .00 A YEAR— 15c A COPY Senate Group May Intercede in Net Rules Industry's Leaders Plead Strong Case STRONG indication that the Senate Interstate Commerce Committee will intercede in the fight of the broadcasting industry to stave off the "death sentence" chain-monopoly rules promulgated by the FCC, to become effective Aug. 2, were given by committee members after three weeks of hearings on the White Resolution proposing a Congressional investigation of the regulatory body. Sentiment in favor of drafting a new statute, clearly defining the functions of the FCC, developed following testimony of such industry figures as William S. Paley, president of CBS, and Niles Trammell, NBC president. They, along with others, bitterly contested the newnetwork rules promulgated by FCC Chairman Fly and his majority colleagues and argued point by point against them and against Mr. Fly's earlier testimony in their support. Criticism of the FCC chairman became intense at times. The hearings on the V/Iiite Resolution still were in progress when Chairman Wheeler (D-Mont.) clearly indicated he felt a new law should be drafted, and concluded that the "monopoly" rules go too far in certain particulars, mentioning specifically the proposed time option ban. Senator Wheeler predicted that new legislation v/ould be introduced. Wheeler on Tour The hearings were recessed last Friday, subject to the call of the chair. Senator Wheeler left for a speaking tour in the Midwest and South but planned to return about June 25. There was possibility he might call a hearing for a day or two in the hope of concluding the proceedings. On the other hand, if that could not be done, it was considered likely the hearings would go over until about July 8 or 9, after he completes the second leg of his tour. Senator White has been in somewhat frail health and left for Maine for a brief vacation, but planned to return whenever the hearings are resumed. Only three or four additional witnesses remained to be called, with the last witness to be FCC Chairman Fly, who had asked for an opportunity to present "rebuttal testimony". There was also the possibility that network spokesmen would seek an opportunity to "rebut the rebuttal" if the chairman left any issues hanging in the balance. Approval Uncertain In some quarters concern was evinced over the indicated delay in committee action, since the controverted regulations, which would remake the whole commercial fabric of broadcasting, are slated to become effective within such a short time. It v/as felt by committee members, however, that the FCC would not seek to enforce the rules while the committee had the subject of new legislation pending. The like Complete running story of last week's hearings before the Senate Interstate Commerce Committee on the White Resolution will be found on Page 34. ly course seen was a voluntary postponement of at least 30 or 60 days, ordered by the FCC, during which it was presumed new legislation would be introduced. There was no assurance that the White Resolution, because of its unorthodox status, v/ould be approved by the committee. Several Senators, during the course of the hearings, advocated remedial action but indicated, as ciid Chairman Wheeler, that a reappraisal of the law in the form of new legislation would be the most desirable course. One prevalent view was that new legislation might be offered promptly and that the FCC thereby would be impelled to hold up its regulations, or at least the most controversial ones, until a clear-cut expression from Congress is forth Newspaper-Radio Committee Is Granted Delay to July 23 ACTING on the petition filed by Harold Hough, chairman of the Newspaper-Radio Committee, the FCC announced Friday that it has postponed until July 23 the opening of hearings originally scheduled to begin June 25 under Order 79 to determine policy and rules governing newspaper operation of FM stations and future apnlications by newspaper interests for standard broadcast stations. The Hough committee had asked for postponement until Sept. 15 fsee earlier story on page 12] but Chairman Fly told Broadcasting the date was moved up in order to avoid "unnecessary delay". He said he wants the matter disposed of as "expeditiously as possible in consideration of all interests" but he indicated another postponement might be considered "if an urgent case is presented". The Commission, which usually adjourns during the summer months with the exception of one or two members who remain to handle routine, has not yet determined whether it will sit en banc or name a committee to conduct the hearings. Mr. Fly foresaw the possible need of two sessions, the f^rst to hear factual and statistical data from the Newspaper-Radio Committee's witnesses, and the second to consider studies being conducted by research men of that committee and by FCC experts. The reason for the haste, it was indicated, is that there are so many newspaper applications on file that the Commission wants to arrive at policy determinations without undue delay. Representatives of the Newspaper-Radio Committee expressed disappointment that the hearings were set so early, giving them scarcely a month to prepare material which they said they could not possibly gather in that time. They were uncertain whether to ask for another postponement, but indicated the belief that perhaps the FCC will be prepared to present its data first and thus give them further time to put in their case — possibly during the second phase of the hearings. coming. More than a dozen industry witnesses, who paraded before the committee last week, forcefully supported the White Resolution and implored the committee to check the reckless pace of the FCC majority, which they said would undermine commercial broadcasting and probably result in eventual Government ownership. Both Messrs. Trammell and Paley berated the FCC for seemingly favoring MBS while forcing their own networks to knuckle down to rigid new regulatory requirements. Mr. Paley asserted the Commission "strives and strains to injure Columbia and NBC and help Mutual." Mr. Trammell called the rules "brutal" and predicted that if NBC is forced to divest itself of the Blue Network, it will be only a matter of time before the Commission orders further restrictions and eventually Congress will find that "Chairman Fly has taken over the entire radio industry". Blue Sale Deferred Meanwhile, at the other end of Pennsylvania Avenue, the FCC majority held frequent huddles, presumably plotting means of offsetting industry gains before the committee. Chairman Fly disclosed that the FCC voluntarily had modified its rules so NBC would not be forced to dispose of the Blue by Aug. 2 and so stations could continue to affiliate with NBC beyond that date. He followed that up with a letter to Chairman Wheeler, essaying to offset some of his testimony which had been controverted by industry witnesses. Something more than a new fufore, however, was precipitated with the disclosure that the FCC, at a meeting last Tuesday, tacitly approved a form of contract drafted by MBS, only supporter of the FCC rules, designed to show that contractual arrangements could be made with affiliates to conform with the regulations [see page 10]. Regarded as a "maneuver" to win committee favor, this action was protested by the FCC minority of Commissioners T. A. M. Craven and Norman S. Case, who dissented from the rules originally. The minority voted against the action on the ground that the Commission had no such authority under the Supreme Court decision in the Sanders case restraining it BROADCASTING • Broadcast Advertising June 23, 1941 • Page 7