Broadcasting (July - Dec 1941)

puspend Rules tor Duration, FCC Asked 5 B 4'' itigation Is Seen If New Rules Are Issued AST-DITCH efforts to pre■i|flail upon the FCC to suspend s punitive chain-monopoly Jtiules during the national 'mergency, lest the whole roadcasting structure be disDcated, were made last Friaj in oral arguments before -he Commission by NBC and .:BS. MBS renewed its plea I'ior prompt enforcement of niodified regulations which !pould permit it to expand in Liarkets now purportedly ilosed to it. ! In surprisingly brief arguJaents which followed filing of Voluminous briefs, John J. 4|5urns, chief counsel for CBS, ■ nd John T. Cahill, special ^iounsel for NBC, made almost :;ientical pleas for suspension. ?JBC, however, went farther in attacking MBS as a "switchboard Network" and in branding its whole iffort the "acme of commercializaion," based on the "dollar sign." ^ MBS Opposes Suspension Louis G. Caldwell, chief counsel or MBS, advocated action on his letition, filed last month, for a ^':raduated option time formula but I.aintained MBS could live under he original rules as drafted by the Commission. He opposed the sus)ension proposal, contending that 'he very fact that an emergency ■xists augurs for the regulatory ob being done properly and law■'ully. The more networks available, ^he m.ore defense programs will be i)roadcast, he said. , The only other appearance was nade by Paul D. P. Spearman, on behalf of Yankee and Colonial Networks. He made a plea for relaxation of the time option regulations o fit the peculiarities of regional chains, pointing out that the projosed Commission rules, as well ks the suggested Mutual substitute, would seriously deter operation of bhese New England networks and robably others. Some indication Was given that the regulations Imight be relaxed to relieve the plight of such regional operations. No immediate word was forth Boming from the FCC following losing of the arguments, which 'an for about 2 hours and 15 minutes. With the adjournment, the Ifive members of the Commission [PajTie absent] held an impromptu tOneeting but no decision on procedure was reached. Late last imonth, when the FCC suddenly called the oral arguments on the MBS brief and indefinitely postponed the Sept. 16 effective date of Ithe rules, it was announced that reasonable notice would be given on a new effective date. It was preisumed at least two weeks and prob ably a month would be allowed. How fast the FCC will act was not indicated. In some quarters, however, it was thought the Comniission might promulgate revised regulations by the end of September and make them effective Oct. 15 or Nov. 1. Ready to Litigate It was generally believed FCC Chairman James La^vrence Fly has sufficient votes to force through regulations, irrespective of the national emergency arguments. It was equally clear that NBC and CBS were poised for litigation, challenging the FCC's overall jurisdiction to issue rules once the new rules are revised and an effective date set. The litigation question was the subject of a conference following the oral arguments, participated in by acting General Counsel Thomas E. Harris and Seymour Krieger for the Commission, and Messrs. Cahill, Burns and Caldw e 1 1. No understanding was reached, however, aside from the open secret of NBC and CBS intentions to litigate unless the rules are suspended. Speculation centered on possible Commission action along the lines of revised rules on option time and extension of broadcast station licenses and concurrent contracts with networks from one to two years. As against the MBS proposal for BV2 to 4 hours of option time in each of the three five-hour segments, Chairman Fly had proposed not more than two hours in each bracket to be exclusively optioned to a particular network, with the balance free station time. It was thought this might be modified to perhaps three hours, along with the doubled license tenure. The Blue Problem No indication that the FCC proposes to deviate from its requirement that NBC dispose of the Blue has been given, though NBC still fought that battle in its brief. Some modification of the regulation requiring networks to divest themselves of key stations in markets other than New York, Chicago, or Los Angeles-San Francisco was indicated, probably to include Washington and both of the coast cities. If this is done, however, the burden still would be on NBC and CBS to dispose of other owmed stations, such as those located in markets like Minneapolis, Cleveland and Charlotte. MBS does not question the jurisdiction or power of the Commission to issue the regulations, Mr. Caldwell said in opening the argument. As far as the "selfish interests" of MBS are concerned, Mr. Caldwell declared, the regulations as drafted would be acceptable and he felt the New Studebaker Series To Include 90 Stations STUDEBAKER Corp., South Bend, Ind., plans news and sports broadcasts on about 90 stations to introduce its new models. Roche, Williams & Cunnygham, Chicago, is agency. Although it was pointed out by Paul G. Hoffman, president of Studebaker, when queried recently by Broadcasting that Studebaker's advertising appropriation has always been determined on unit basis of per car produced [Broadcasting, Sept. 8], manufacturers may shift from the traditional per car basis of appropriation, to institutional campaigns based on a percentage of company earnings. Nash this year will not use any radio to introduce the new models but will use national magazines despite distribution problems. Chrysler Corp., Detroit, is reported to be considering the use of spot announcements for Dodge as are Hudson and Packard, to introduce their new models. Schreter Schedule A. SCHRETER & SONS, Baltimore (Smoothie neckties), on Sept. 29 begins a 13-week schedule of one minute announcements on WNEW, New York; KQV, Pittsburgh ; WBAL, Baltimore, and WEIL, Philadelphia. Agency is Bermingham, Castleman & Pierce, New York. Insurer's Spots LIBERTY MUTUAL INSURANCE Co., Boston, on Sept. 10 started a campaign of one-minute transcribed announcements on an undisclosed number of stations in New York State to dramatize the new automobile insurance liability law in the State. Agency is BBDO, New York. Elman for Colgate COLGATE PALMOLIVE PEET Co., Jersey City (Palmolive shaving cream), through Ted Bates Inc., New York has purchased rights to Dave Elman's Hobby Lobby, last heard to replace City Desk starting Saturday, Oct. 4, on 68 CBS stations, 8:30-8:55 p.m. Addison Smith is director in charge and the music will be by Harry Salter. Each week a personality who has done most for defense work in a hobby way will be featured. Glass Series PITTSBURGH PLATE GLASS Co., Pittsburgh (door mirrors), recently started a schedule of oneminute transcribed announcements with local dealer tie-ins on WIS WIBA WFEA WRDO WGAC KGBX WMAN. Agency is BBDO, New York. Wine Series EASTERN WINE Corp., New York (Chateau Martin Wines), during latter September will launch a year-round campaign of transcribed announcements on 20-25 stations in cities along the Atlantic Seaboard. Agency is H. C. Morris & Co., New York. network already had demonstrated that it could operate without option time, although it is a convenience. Asserting that MBS is suffering from the delay in placing the regulations in effect, he said the network is losing prospective commercial accounts at the rate of one a week to the Blue, because it could not clear time in certain cities. He admitted under questioning by Commissioner T.A.M. Craven that MBS business has sho-wn substantial increases. He cited as one instance the March of Time program, which he said had been "worked up" by MBS but was sold on the Blue. This was only one of eight new accounts which have been lost to the Blue in the last 60 days, he said. Option Proposals Mr. Caldwell said that whatever formula is established for maximum option time, it will become the minimum. He urged that whatever option time is decided upon be in the nature of specified hours to avoid what would in reality be an option on all time. Moreover, he said that whatever formula is placed into effect on option time should be subject to annual revision by the FCC. Mr. Caldwell said MBS recognized the business convenience involved in exclusive option time but non-exclusive options on all stations from its standpoint would be just as satisfactory. He discounted allegations that confusion would result, saying this would only develop in cities where there are not enough outlets to serve all four networks, such as Cleveland, Des Moines, Jacksonville and Providence. In this connection, he pointed out, while his petition advocated some exclusive option time, he thought the result would be the same with non-exclusive time throughout. Mr. Caldwell emphasized the importance of not allowing "one minute more" of exclusive option time than that actually used, based on the preceding year's business placed by a particular network or a particular station. If an extra halfhour is allowed, he said, it would result in almost exclusive control over desirable hours. Because the option plan is based on actual use. he said it would progressively result in the same situation. Commissioner Craven, however, pointed out that the time option works both ways and that when business tapers off, the station would lose its options to some other network. Answering arguments that the rules should be designed to permit NBC to build up the Blue Network so it could sell it at a "large price", Mr. Caldwell said he felt this was no concern of the Commission. Any new network like MBS wants to (Continued on Page 41) BROADCASTING • Broadcast Advertising September 15, 1941 • Page 9