Broadcasting (Jan - June 1943)

ANA Says FCC Rule Creates Monoply Enforcement of Time Option Ban Would Injure Locals A DEVASTING indictment of the FCC's chain-monopoly regulation banning exclusive time options was delivered by the Association of National Advertisers last Thursday in a brief filed with the Supreme Court, in which it predicted that national network business would gravitate to the highest powered stations and would tend to create the sort of monopoly the FCC contends it is seeking to avert. The brief, filed by Isaac W. Digges, of New York, ANA counsel, accompanied a motion for leave to intervene as a friend of the court in the NBC and CBS suits against the FCC chain-monopoly regulations. It was revealed by Mr. Digges that plans already are under consideration by many national advertisers to use the 30 most powerful stations (50,000-watt unlimited time outlets) and the 64 stations comprising the best coverage of the United States as sort of "tailormade" networks, if the option time regulation becomes effective. Final Phase of Controversy ANA buttressed both the NBC and CBS arguments that enforcement of the option time regulation, aside from the other seven rules, would kill network broadcasting as it is known today. The major networks had consistently predicted that enforcement of the regulation would open the way for "fly-bynight" operators and for creation of tailor-made networks by national advertisers or their agencies. Coincident with the filing of briefs by the appellants, NBC and CBS, last week, the Supreme Court docket indicated argument of the cases about Feb. 10. This argument constitutes the final phase of the "life and death" controversy with the FCC which began with the issuance of the Commission's chainmonopoly regulations on May 2, 1941. Obviating the need for Supreme Court action extending the mandate of the statutory three-judge court in New York deferring enforcement of the much-litigated regulations, the FCC last Friday announced it had, on its own motion, suspended the effective date until April 1 or the date of the decision of the Supreme Court, whichever is earlier. The previous deadline, fixed by the lower court when it suspended the FCC's action last November, was Feb. 1 or the argument of the appeal, whichever was eariler . Stations Intervene ANA's brief contended that the regulation was invalid and that there was no finding by the Commission that public interest required its enactment. The brief cited that ANA's membership com prises not only important users of broadcast advertising but many potential users of the medium. It cited compilations made by Publishers Information Bureau and Broadcasting that members of ANA placed with the networks 72% of gross business of the networks in 1940. ANA brought out that it had. procured written consent of all the parties to the litigation for filing of its brief as a friend of the court. The court presumably will act on the motion prior to scheduled argument. Opposing the network appeals are the FCC, as the respondent, and MBS, which has intervened in the Commission's behalf, as it did in the lower courts. Briefs in support of NBC's position were filed by Stromberg-Carlson, as licensee of WHAM, Rochester, and Woodmen of the World Life Insurance Society, as the then licensee of WOW, Omaha. Both of these stations, as typical Blue and Red outlets, respectively, joined in the original NBC litigation in the lower courts. Nets Depend on Options Mr. Digges argued that the record is barren not only of substantial evidence but even of a scintilla of evidence to support any finding that "wholesale destruction of radio stations' freedom to contract for time options will not deal a damaging blow to network broadcasting". To the contrary, said the brief, common knowledge and experience well accepted in advertising, merchandising and distribution, and the generally known past experiences of the broadcasting industry itself, establish that "the network system of broadcasting is dependent upon the ability of networks to obtain options for radio time from their affiliates". Despite the fact that these economic considerations, inherent in the placement of advertising contracts, easily could have been ascertained upon inquiry by the Commission, "the Commission nevertheless issued no invitation to the advertising community, as represented by buyers of radio advertising, to present evidence to the Commission," ANA contended. 'Practical Impact' ANA argued that comprehension of the facts was essential to an understanding of the "practical impact" of the option rule upon the business of national advertisers. Most significant was the disclosure that business would gravitate to the 30 most powerful stations in the United States — the 50,000 watters — if the option rule became effective, and to the 64 stations which cover 100% of the population most economically. These 64 outlets have a time cost of $12,015 as against $14,778, which would have to be spent for the same time on the air on 160 stations to reach only 84.1% of the population. Thus, it was pointed out that (Continued on page 48) Petrillo Pulls Dance Remotes From Blue Network and CBS AMERICAN Federation of Musicians last Wednesday ordered all remote dance band pickups off CBS and the BLUE network, which filled the vacancies in their program schedules with a variety of studio programs and, on the BLUE, with some recorded programs. Move was made by the national AFM to speed a settlement of a dispute between the Pittsburgh local of the union and WJAS and KQV, affiliates of CBS and the BLUE respectively, in that city. Both stations are owned by H. J. Brennen. It was explained at AFM headquarters in New York that with the expiration of the stations contracts with the Pittsburgh local, the union had asked that the staff musicians at KQV and WJAS be employed for more weeks each year then they were formerly. Mr. Brennen, the union reported, not only did not accede to these demands but presented a counter proposition that the annual term of employment for these musicians be shortened. Commenting on the AFM action last Thursday, Mark Woods, president of the BLUE, described that network as the "innocent but injured party in the current ban against broadcasting of dance bands from remote pickup points issued by the AFM." Pointing out that the dispute is a local one to which the BLUE is not a party, "the network as a matter of fact employing musicians under terms completely agreeable to the union," Mr. Woods said: "Not only is the network penalized by conditions beyond its control, but 145 independent American broadcasting stations, affiliated with the BLUE network are also penalized because one BLUE affiliate has differences with the musicians organization." Dance Pickups Affected Only the dance pickups were affected, it was understood, with the BLUE to be permitted to broadcast the Boston Symphony Orchestra on Saturday night and CBS to be allowed to broadcast the New York Philharmonic on s ill 11!. 3D :a ii 18 New Developments i As Senate Group | Awaits AFM Plan Petrillo Invokes Old Tactics In Denying Net Remotes THE PETRILLO music situation remained in a state of suspendec animation last week, while the Sen ate Interstate Commerce Commit tee awaits receipt of "demands' from the AFM international boarc for removal of the transcription recording ban. Two developments during the week, however, were pointed to as additional examples of the arbitrary mailed-fist methods of James C. Petrillo, AFM president, despite his testimony to the Senate committee a fortnight ago to the con trary. Petrillo's action in jerking remote bands from CBS and BLUEfl Wednesday, because of the controversy of WJAS, Pittsburgh, with the AFM local, and the disclosure in Los Angeles that the Army is paying $25,000 a year for music for the Command Performance program, aroused considerable interest Uses Old Tactics Chairman Clark (D-Idaho), of the Senate committee, said plans for resumption of the broad-scak inquiry into AFM would not be developed until after the committee received the AFM proposal [Broad |w casting, Jan. 18]. Meanwhile, he introduced a resolution in the Senate to continue the life of his sub committee for the duration of the new Congress. Approval of the resolution is regarded as automatic. All existing resolutions expire Jan. 31 under previous Senate action, unless renewed prior to thai date. Meanwhile, argument was set foi today (Jan. 25) on the AFM mo tion to dismiss the new anti-trusl suit of the Department of Justice against AFM, based primarily or the recording ban, pending before Federal Judge John P. Barnes ir Chicago. If the motion to dismiss is refused, regarded as likely ir the light of developments, the case will be heard Feb. 8. Last October Judge Barnes dismissed the origi nal suit, filed and argued by As (Continued on page UU) if! h ili i Sunday even if the dance bands were still off the network. The CBS remote action, it was reported, developed after Mr, Brennan had failed to come to an agreement with his local on demands for an increased allotment for musicians on the CBS outlet, WJAS. Mr. Brennan, it is understood, had been contracted for $19,000 per year for the station, with the union demanding $22,000. He has paid $10,000 for KQV. The negotiations reached an impassei with the result that Petrillo or-' dered the remotes pulled, resorting to customary tactics branded by in dustry as a secondary boycott. Page 8 • January 25, 1943 BROADCASTING • Broadcast Advertising