Broadcasting (Jan - Mar 1950)

Record Details:

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TRAFFICKING FCC Would Tighten Forfeiture Rules IN A MOVE against "trafficking in frequencies," FCC last Thursday proposed new rules which would automatically forfeit the construction permit for any station which is sold before program tests commence. Only exceptions would be ( 1 ) socalled "pro forma" transfers and assignments which do not affect control, and (2) transfer of an AM (or FM) grant along with an FM (or AM) license by the same owner. However, an authorized but uncompleted television station could not be sold in a package with a licensed AM or FM station. FCC's proposal would extend to construction permits for changes in facilities of a licensed station. If the authorized but unfinished changes were "minor," FCC said, transfer would be approved; if "major," it would not. The "facts of every case" would determine what is major or minor, FCC reported. It added that a change in transmitter location would be considered "minor," while a change from daytime local to fulltime regional would be "major." A change from Class A to Class B rating for an FM station, or from community to metropolitan classification in the case of TV, would be considered a "major" modification. FCC also proposed to keep a close watch for signs of trafficking in transfers occurring just after a station has gone on program tests. The proposed rules were issued on a 4-2 vote, Comrs. Rosel H. Hyde and Robert F. Jones dissenting and Comr. Frieda B. Hennock not participating. Hyde, Jones Dissent Comrs. Hyde and Jones, in a dissenting opinion by Mr. Hyde, contended the Communications Act's requirement that transfers be approved by FCC assures the Commission of opportunity to "deal with any question of trafficking" when it passes upon particular applications. They charged the proposed I'ules "ai'e inconsistent with the policy of the Communications Act and the procedures contemplated by the provisions of the Act," particularly the section dealing with construction permits. Further, they observed : Under the proposed rule, a permittee would stand to lose substantially his entire investment if for any reason it becomes impossible or inadvisable for him to complete construction under a permit. Good faith, unforeseen conditions and happenings, no matter how onerous, would be no basis for relief. This is not, in our opinion, a regulation which would operate to encourage the larger and more effective use of radio through private enterprise. FCC authorities estimated unoffically that in the last six months there had been four or five appli Page 20 • January 16, 1950 cations for transfer of stations not then on the air. It was felt that the rules were proposed as a means of serving notice on the entire industry, rather than calling for hearings on specific, and perhaps isolated, cases. FCC invited comments for or against the proposal until Feb. 17 and said oral argument would then be scheduled if the comments warrant it. Substantial opposition is expected to develop, to a great extent along lines cited by Comrs. Hyde and Jones: That is, that the rule would be unfair to permittees having legitimate and urgent reasons for selling, and that in actual trafficking cases FCC can act on a caseto-case basis. Proposal Basis FCC said it based its proposal on "the policy of the Communications Act that frequencies for the operation of a broadcast station are to be issued to persons who will operate such stations in the public interest and not for the purpose of permitting such persons to transfer the license to another person." The notice said that completion deadlines specified on a construction permit are designed "to insure that the frequency shall be utilized with dispatch and that the permittee be not allowed to commence that use at such time as he deems proper." The notice continued: Similarly the Commission is of the opinion that a construction permit should be forfeited if the permittee signifies definitely that he does not intend to complete construction and apply for a license to cover that construction, as is the case where the permitee enters into a contract to assign or transfer that permit prior to the time the station enters on program tests. The proposed new rules are identical for AM, FM, and TV with two exceptions: (1) the footnote appearing in the AM and FM rules to permit transfer of an AM or FM permit in a package with its FM or AM affiliate is omitted in the television rules; (2) different illustrations of "major modifications" are given for AM, FM, and TV. Following is the text of the AM proposal (Rules Section 1.314), with editor's notes indicating points of departure in the FM (Sec. 3.215) and TV (Sec. 3.615) versions: A construction permit shall be automatically forfeited if a contract for the assignment of the permit or transfer of control of the permittee FCC Actions NEW AM station at Springfield, 111., was granted by FCC last week and improved facilities were authorized for four existing stations, including approval to KNEW Spokane, Wash., for switch from 14.30 kc to 790 kc, using 5 kw directional. Authorizations for one AM outlet and two FM stations were deleted, for first in 1950. Three station transfers were approved. Details of these and other FCC actions may be found in FCC ROUNDUP on page 72 and ACTIONS OF THE FCC beginning on page 66. corporation shall have been entered into by the permittee or if an option shall have been given by the permittee for such assignment or transfer prior to the time the station has actually commenced program tests in accordance with the applicable Commission Rules concerning such tests; provided, however, that this paragraph shall not apply to contracts or options relative to the pro forma assignments or transfers outlined in Section 1.321(b) of the Commission's Rules.' The Commission will carefully scrutinize contracts or options, entered into within a short period after commencement of program tests, in order to determine whether the per(Ccntinued on page 73) '49 Biums Networks Near $188 Million TOTAL billings for the four major radio networks in 1949 were $187,830,799, a decrease of 5.6^1: below the total for 1948, according to computations released last week. By networks, total gross billings were : ABC $42,342,225 CBS . 863,403,588 MBS $18,071,695 NBC $64,013,296 The ABC and Mutual figures were compiled by the networks themselves. Figures for CBS and NBC were estimates by Publishers Information Bureau. The $187,830,799 total gross billings figures calculated last week were at only slight variance with Broadcasting's own estimates of $188,000,000 of total network gross business published in its issue of Dec. 26, 1949. The 1949 total billings represented a decrease of $11,164,843 below the $198,995,642 all-time record volume in 1948. Neither CBS nor NBC releases billings. Those released by ABC and Mutual follow. American Broadcasting Co. Gross AM Billings by Months August 2,544,141 September 3,076,900 October 3.404.713 Novem-ber 3,406,989 December 3,656,492 2,787,805 3,164,857 4,279,369 3,908,034 3,981,169 ,724 448 Total $42,342,225 $44,303,376 By Advertisers Month January February March April May Jnne July 1949 54,067,907 3,845.610 4,''38,780 3,893,736 4,030,915 3,387,939 2,788,103 1948 $3,989,001 3,792,256 4,076,207 3.997,640 4,045,384 3,488,474 2,793,180 General Mills, Inc. S4 Sterling Drug, Inc 2 Swift & Company 2 P. Lorillard Company 2 PiUsbury Mills, Inc 2 Philco Corporation 1 The Quaker Oats Co 1 Pepsi-Cola Company 1 Libby, McNeill & Libby 1 The Procter & Gamble Co. 1 Appliance and Merchandise Department of The General Electric Company Equitable Life Assurance Society of the U.S. Westinghouse Electric Corporation The Norwich Pharmacal Co. Association of American Railroads Gillette Safety Razor Co. . . The Texas Company United States Steel Corporation of Delaware Derby Foods, Inc. Kaiser-Frazer Sales Corp. Bristol-Myers Company General Motors Corporation The Andrew Jergens Co. Pacific Coast Borax Co Seeman Brothers, Inc. Speidel Co. Nash-Kelvinator Corporation The Goodyear Tire & Rubber Company, Inc. The Frank H. Lee Company Philip Morris & Co., Ltd., Inc. American Oil Comoany Carter Products, Inc Chpsebrough Mfg. Co., Cons'd. Geo. A. Hormel & Co. Fversharo. Inc. United Elctrical, Radio & Machine Workers of America Rovere Camera Co. Gospel Broadcasting Assn. ,805.038 ,392,910 ,236,448 ,122,919 ,054,016 ,964,929 ,631,713 ,438.414 ,335,742 ,074,456 977,168 909,025 904,137 809,838 776,344 731,151 677,225 670,775 636,198 623,292 607,494 603,420 602,382 584,620 537,160 519,469 492,976 436,736 428,351 407,425 396,722 385,558 380,148 377,456 365,533 360,352 355,238 344,384 Richfield Oil Corp. 324, The Christian Science Publishing Society 324, Elgin-American Division of Illinois Watch Case Company 288, Champion Spark Plug Co. . 283. Smith Brothers 278, Bruner-Ritter, Inc 266, Fruehauf Trailer Co. 225. Serutan Co. 218. H. J. Heinz Company 214, Phillips Petroleum Co. 202, Toni, Inc., Div. of Gillette Safety Razor Co. 199, General Foods Corporation 195, William H. Wise & Co., Inc. 160 The Drackett Co. 146, Club Aluminum Products Company 143, Adam Hat Stores, Inc 140, Miller Brewing Company 137, American Bakeries Company 134, Servel, Incorporated . . 130, Voice of Prophecy, Inc. . 125, Lutheran Laymen's League 105, Petri Wine Company 101, Radio Offers Company 85, Farnsworth Television & Radio Corp. "4 The U. S. Air Force Recruiting Service The Southern Baptist Convention P. J. Ritter Co. Globe Mills PiUsbury MUls, Inc. Waltham Watch Company Dawn Bible Students Association 48,757 Langendorf United Bakeries, Inc. 44 The A nahist Co. 41 Richfield Oil Corp of N. Y. 41 First National Stores, Inc. 38 Wilson Sporting Goods, Co. 27, Doubleday & Company, Inc. 24 Stanley Home Products, Inc. 24. Beauty Factors, Inc 24 Politicals 24 Greystone Press 23 Pacific Greyhound Lines 21 California Medical Associa tion 20,396 Whitehall Pharmacal Company ■ ■ ■ I National Assn. of Mfrs. J Safeway Stores, Incorporated I (Continued on page 39) 67 ,870 ,954 ,673 ,580 ,631 ,168 ,224 ,341 ,683 006 ,587 ,971 ,352 ,685 ,811 ,154 544 ,389 ,722 ,943 ,485 ,727 ,021 ,544 ,711 .199 ,813 ,160 ,400 ,015 ,472 ,806 ,995 ,909 ,704 ,428 ,992 ,160 ,598 ,482 030 BROADCASTING • Telecasting