Broadcasting (Jan - Dec 1935)

Federal Operation Of Radio Opposed By Chairman Prall Points to Huge Tax Burden as One of the Main Objections GOVERNMENT ownership of broadcasting "has no place in our democratic form of government", Chairman Prall of the FCC declared Dec. 5 in a luncheon address before the Downtown Athletic Club, New York, of which he is an officer. Many notables in radio were present. "Proposals have been advanced for government ownership or operation of broadcasting in the United States," Mr. Prall stated. "These propositions have grown out of the fact that in most other important nations, radio is government controlled. It is my view that government-owned broadcasting has no place in our democratic form of government. "To give any administration control of the air would possibly point the way to the suppression of free speech. In every other nation having government broadcasting, it has been found necessary to tax the people to defray the operating overhead. The enormous operating expense of American broadcasting on its present scale would greatly add to the general tax burden." Federal Cooperation DISCUSSING the work of the FCC in connection with certain types of programs, Mr. Prall asserted that the fine degree of cooperation of most stations has resulted in widespread improvement. "Many unscrupulous broadcasters," Mr. Prall asserted, "have permitted their stations to be used by high-powered salesmen to present fraudulent claims while advertising quack medicines, while others have indulged in fortunetelling, astrology, and lotteries, which have found many gullible victims because of misrepresentations made and over-statements presented in the broadcast. "In these efforts the Commission, I am happy to say, has had the unqualified support and cooperation of the better class of stations throughout the country, and we believe we will soon have arrived at a point where such misrepresentations will be the exception rather than the rule and that the standards of broadcasting will have reached a degree of excellence to which we may point with pride." Taking a "glimpse into the future of radio," Mr. Prall said: Apparatus for facsimile broadcasting has been perfected, although I understand there is still an economic obstacle which must be surmounted prior to large-scale distribution. When practical facsimile arrives, photographic reproductions of your favorite daily newspaper will emerge before your very eyes through your receiving set. Television, I understand, will follow very closely, and while great technical strides have been made, the producers of television sets are not yet ready to place them at your disposal. However, it will not be long, I am sure, before these new devices will be placed in your homes. When the era of visual broadcasting arrives and you get the news by reproduction of your daily newspaper, as you watch the football or baseball game, your favorite opera, and other activities. I trust you will think back to the fifth day of December, 1935, GUESTS AT RADIO LUNCHEON — Prominent radio and communications figures attended the luncheon giver 4nning S. Prall, FCC chairman, on Dec. 5 at the Downtown Athletic Club, New York. Left to right are J. L Kilpatrick, president of N. Y. Telephone Co.; Walter S. Gifford, president of AT&T; Mr. Prall; Walter L Conwell, president of club; Roy B. White, president of Western Union; Walter P. Holcombe, vice president of club; Donald Flamm, president of WMCA, among other distinguished guests. WHY FEDERAL STIPULATIONS Both Stations and Public Protected by Procedure Adopted by FTC in Checking Advertising By E. J. ADAMS Chairman, Special Board of Investigation, Federal Trade Commission WE ARE frequently asked why we stipulate with radio stations. The answer is that we are following the same procedure with reference to radio stations that we have satisfactorily followed with publishers and advertising agents for many years. By an Act of Congress in 1914, the Federal Trade Commission was created, and unfair methods of competition in interstate commerce declared to be unlawful. By Section 5 of this Act the Commission is empowered and directed to prevent such unfair methods. The courts have uniformly held that misleading advertising is one of such unfair methods. Stipulations submitted by advertising agents, publishers and radio stations, if accepted by the Commission, must disclaim any interest in the business of the advertiser, or the subject matter, except such interest as an advertising agent, publisher, or broadcaster, serving or selling space or time at regular rates, may have. Abiding by Terms THIS disclaimer is then followed by an agreement to observe and abide by the terms and provisions of any cease and desist order that may be issued by the FTC against the advertiser, or any stipulation between the advertiser and the Commission, of which the broadcaster or publisher may have notice. Broadcast stations and networks, and publications, are used by advertisers to reach the buying public. Neither radio stations nor periodicals are common carriers with fond recollections and pleasant memories of the Downtown Athletic Club's Radio Luncheon. Numbered among the 600 in attendance were David Sarnoff, RCA president; William S. Paley, CBS president; Alfred J. McCosker, WOR president and MBS chairman of the board; Donald Flamm, WMCA president; Walter Gifford, A. T. & T. president and R. B. White, Western Union president. Mr. Prall's address was broadcast. Entertainment lasting two hours was arranged by NBC, CBS, MBS, WOR and WMCA. H. V. Kaltenborn, CBS news commentator, also spoke and urged caution against anything that might smack of radio censorship. and, therefore, those who control such periodicals or stations have the right to reject any copy that is not approved by them. The effect of negotiating stipulations with publishers and broadcasters is: 1. To effectively bring to the attention of the publisher or broadcaster the fact that the advertising copy of those certain advertisers is questioned and being investigated by the Government ; 2. This stimulates the publisher or broadcaster to watch closely and scrutinize with great care all advertising copy presented by such advertisers; 3. It also has the tendency to induce publishers and broadcasters to refuse to publish or broadcast any copy that contains statements, claims, or representations that may mislead or deceive their readers or listeners; 4. To make such publishers and broadcasters realize and feel that they are cooperating with their Government to prevent false and misleading advertising, and are thereby doing their part to protect the public from being deceived and cheated by misrepresentations ; 5. To restore the confidence of the public in advertising, and thereby increase the value of advertising facilities as a means of reaching the buying public. Execution of stipulations is a practical and effective way of cooperating with the Commission. This method also provides a multitude of outposts, assisting the Commission to stop and prevent false advertising at its inception, and before the public is deceived or cheated. Every publisher or broadcaster who signs a stipulation thus becomes a sentinel, watching for misleading advertising, and ready to prevent its publication before the public is injured. Cooperation Received THE PROMPT execution and delivery of stipulations by publishers and broadcasters is accepted by the Commission as an expression of good faith and a desire to cooperate with the Commission. Advertisers cannot deceive and cheat the public unless they can secure contact with the buying public. The cheapest and most effective way is advertising. If misrepresentation is stopped before publication or broadcast, the Com mission's method of prevention is effective. Failure or refusal on the part of publishers or broadcasters to promptly sign and send in stipulations must be accepted as an indication that they are not in sympathy with the efforts of the Commission, or that they are willing to sacrifice the welfare and confidence of their readers or listeners for the revenue received for space in their periodicals, or time over their radio stations, or that they have an irregular interest in the proceeds resulting from such false and misleading advertising. The Commission has found that practically all reputable publishers and broadcast stations are in accord with its efforts, and they are giving fine cooperation. The besi evidence of this cooperation and the good faith of publishers and broadcasters may be found in the large number of stipulations from publishers, broadcasters and advertising agents in the files of the FTC. Without such cooperation the work of the Commission would be more difficult, more costly, anc less effective, and it is appreciated On the other hand, the privilege of stipulation is a distinct advantage to broadcasters and publishers. It enables them to avoid the trouble, expense and unenviable publicity which would be involvec if they were made parties respondent in proceedings against the advertiser charged with violation oJ the law. At the same time the procedure serves to fully protect the public interest. Clicquot Returns to Air After 30-Month Absence CLICQUOT CLUB Co., Millis, Mass (ginger ale), after a 30-montr lapse, returns to the air on 11 CBS stations Dee. 21, using the Saturday 8-8:30 p. m. period. L was exactly ten years ago thai the company first used radio to advertise the product. The first shov consisted of Harry Reser and hi; orchestra and was titled The Clicquot Club Eskimos. The series rai for seven-and-a-half years. In the new series the sponsoi will present the same talent set-up A special split network is bein£ utilized. Stations are concentrat ed along the Eastern Seaboard (in eluding Washington'' and in th< upper New York and New Eng land states. The program is con tracted for six months. N. W. Aye: & Son Inc., New York, is th<j agency. A BIG increase in travel in thi national parks is attributed by th< U. S. National Parks Service to its radio broadcasts over the networks December 15, 1935 • BROADCASTING Page 2<