Broadcasting (July - Dec 1942)

try "option time operates to impede and hamper the development of local self-expression". Asserts Congress Should Prevent Restraints Mr. Fly cited a series of past incidents in which public service speeches scheduled on given networks were carried by only a handfull of stations on the networks. In one instance on NBC Red, Rep. Boren's (D-Okla.) address was heard on only 35 of the 136 stations on the network and under territorial exclusivity no other station in the 101 cities could broadcast the talk. He cited the BLUE Network incident where a Town Meeting program was not broadcast in nine States. On MBS, there was an incident wherein a roundtable program with prominent speakers was not heard in a half-dozen states. Finally, he cited a CBS speech by Rear Admiral Emory S. Land, head of the Maritime Commission, which was not heard in Norfolk-Newport News, an important ship-building center, because the two stations in that city were not affiliated with CBS and because two other stations which cover the area — WRVA, Richmond, and WDBJ, Roanoke — did not carry the program. Mr. Fly argued that restraints on freedom of speech result from exclusivity, territorial exclusivity and option time, but these, "bad as they are", do not rival in their restrictive effects what might be called the conjoint or united effect of the contracts as a whole upon free speech. The net effect of the contract provisions as a whole "is to close the door to any new network," the Chairman sa,id, "And to the extent that additional networks are kept out, freedom of ^speech is to that extent throttled." Mr. Fly contended that four people— "even such outstanding citizens as Mr. Trammell (NBC),' Mr. Paley (CBS), Mr. M.c.Cosker (MBS), and Mr. Woods (BLUE)" — should not have the right "to decide who shall and, who shall not have freedom to reach a nationwide radio audience." He added he was not suggesting that a new network could do a better job than the existing ones, but that he was suggesting that if Congress has a concern for free speech "you will try to make sure that monopolistic restraints do not prevent others — perhaps others of the calibre of these four and perhaps men even better equipped for the task — from also entering the field and doing their share for free speech." ^Monopolist Heaven^ Portrayed by Chairman Mr. Fly cited a speech made in 1923 by David Sarnoff, RCA president, and attributed to him the statement: "We ought to get away from all these small stations and have just two or three, or maybe just one, big station." After reading excerpts from this address, Mr. BROADCASTING • Broadcast Advertising practiced, Mr. Swing will not be free of restrictions over NBC, he said. In that event, he declared, ■"he will have jumped out of the frying pan of exclusivity of affiliation and into the fire of territorial exclusivity." Says Option Time Limits Self -Expression NBC has announced, since the network regulations were published, that it intends to and perhaps already has, abolished territorial exclusivity. If it is in fact abolished it will not stand in the way of Mr. Swing's broadcasts, said Chairman Fly, and this in itself indicates the importance of the regulations "in opening up new channels for free speech on the American air". Another example of the way in which territorial exclusivity has in the past "blocked free speech," Mr. Fly enumerated, was the experience of Theodore Granik's A^nerican Forum of the Air in Buffalo. The regular MBS affiliate in Buffalo decided not to carry the Forum, which Mr. Fly said was entirely within its province and on which there could be no complaint. A Buffalo independent wanted to carry the Forum but the network said no. It held the territorial exclusivity clause prevented it from sending the program to any other station in Buffalo. He pointed out that it was MBS' territorial exclusivity policy that was at fault, but that he understood MBS no longer practices exclusivity and the Forum now is heard in Buffalo. Mr. Fly contended also that option time seeks to "throttle freedom of speech, or more particularly freedom of millions to listen". He cited the WFBR, Baltimore, case as an example, when the station was an NBC-Red affiliate. This incident, previously testified to, dealt with the displacement of a National Guard recruiting program for a Procter & Gamble program for Oxydol. He said that NBC invoked its option time privilege and threatened to shift WFBR from the Red to the less profitable Blue unless the station moved the National Guard program to make room for Oxydol. Mr. Fly asserted this was not an isolated example and that all over the coun Fly said that was Mr. Sarnoff's dream of 20 years ago, and that during the intervening years "he and another dreamer, Mr. Paley, have come perilously close to establishing that monopoly or duopoly which Mr. Sarnoff predicted so frankly in 1923." He said he was not content to move further and further away from what Mr. Sarnoff called "small and comparatively cheap stations serving limited areas". Mr. Fly said he thought the 900 independent stations are the backbone of the American system of broadcasting and that he did not believe the Commission could stand idly by "while the monopolists' heaven pictured by Mr. Sarnoff and seconded by Mr. Paley is achieved step by step". Dealing with licensing of networks, Mr. Fly recalled that Mr. Paley in his testimony before the Senate committee last year said he thought the time had come for Congress to arrange for licensing of networks. Since then, he added, Mr. Paley has "somewhat modified his position". Declaring that licensing of networks is not something that can be arranged in an offhand manner, Mr. Fly said it involves a variety of complex problems, and should be undertaken only after the fullest study. These include such matters ar, national service, fixed standards of coverage to the end that none of the people will be discriminated against, limitation of sponsorship of commercial programs over stations in the area in which the advertiser has distribution. [He cited the situation of Lowell Thomas' news broadcasts over 25 stations for Sun Oil Co., asserting there appeared to be no good reason why Thomas' news broadcasts should not be heard throughout the country merely because Sun Oil does not sell throughout the country.] Any study of network licensing, Mr. Fly said, , would have to examine this problem thoroughly, plus the questions of the tendency toward duplication of types of programs; what happens when two ad-., vertisers want the same hour on a network, and related problems.. Says FCC Is Now Basically a War Agency Referring to an article in the June issue of Harper's written by Bernard S. Smith, introduced as an exhibit, Mr. Fly said Mr. Smith had found that 11 advertisers together furnish some 50% of all network programs and these companies, having been the first to come, are continuously through the years the first to be served. While this problem is wholly outside the present scope of the Commission's duties, it might become highly relevant in connection with any study of network licensing, he said. Mr. Fly said he did not think this was the appropriate time to inaugurate such a study. The FCC now is essentially a war agency with war duties occupying the bulk of its time and its best energies AL.BLMFD s/3fsm Me WCKY STATION TRY THE ftesoM AUDIENCE OF WFBL SYRACUSE, NEW YORK fREI £ PETERS, NATIONAL REPRESENTATIVES CRYSTALS fcy The Hipower Crystal Company, one of America's oldest and largest manufacturers of precision crystal units, is able to offer the broadcaster and manufacturer attractive prices because of their large production and the exclusive Hipower grinding process. Whatever your crystal need may be, Hipower can supply it. Write today for full information. HIPOWER CRYSTAL CO. Sales Division — 205 W. Wacker Drive, Chicaao Factory— 2035 Charleston Street, Chicago, III. hdy 6, 1942 • Page 57