Broadcasting Telecasting (Oct - Dec 1952)

REBROADCAST RULE EASED FCC Backtracks in Part FCC backtracked in part last week from its threat to confront radio and TV stations with the regulatory doghouse if they refuse to let all comers rebroadcast their programs. Heeding widespread industry indignation over its oft-termed "legal larceny" rule, adopted last May 14, the Commission Thursday dropped the clause requiring licensees to file reports within 10 days when they refuse to give consent for program rebroadcasts. Left intact, however, is the Commission's interpretation of Section 325(a) of the Communications Act, another source of nationwide concern lest stations lose their important property rights in programs. In essence the FCC contended in its May 14 order, and still contends, that a station does not have an absolute property right over rebroadcasts without regard to its responsibilities under other sections of the law. The proposed 10-day requirement, which had broadcasters everywhere seething during the NARTB summer autumn district meetings, had run into opposition within the government itself shortly after the May 14 action. This had developed when Budget Bureau officials told FCC in plain language that bureau approval is required before the Commission can force anyone to fill out a form calling for information [B*T, June 16]. (See federal forms story page 50.) In its latest action the Commission noted it is not saying "that legitimate property rights, recognized by law, may be freely appropriated by others through the mere device of demanding rebroadcast privileges." Immediate industry reaction was generally favorable, particularly as to elimination of the 10-day reporting requirement. NARTB President Harold E. Fellows voiced gratification at the action and added that broadcasters around the NARTB district meeting circuit had adopted a series of strong resolutions protesting the Commission's May 14 rule. Mr. Fellows said that enthusiasm over the FCC's action "is dampened somewhat" by its reaffirmation of intent "to make determinations as to the propriety of refusal in given cases." He said that members of the association "would hail the Commission's statement that it did not intend to state that legitimate property rights, licensed by law, may be freely appropriated by others through the mere device of demanding rebroadcast privileges. Commissioner Hyde concurred in deletion of the 10-day reporting requirement but felt the remainder of the rule should be reconsidered and deleted. Commends Change Col. W. A. Roberts, DuMont TV Network Counsel, termed FCC's action on the rebroadcast issue a "very definite improvement." He said the effect of the change "is that the FCC carefully reserves to itself the right to investigate if the denial of requests for the rebroadcast privilege is on improper grounds." The FCC's May 14 decision arose out of an appeal for a declaratory ruling sought by WJIM-TV Lansing, Mich., in 1950, after WWJTV had refused permission to rebroadcast some NBC-TV programs [B*T, July 17, 1950]. The FCC issued a proposed clarification of Sec. 325(a) of the Act and called for comments [B»T, Oct. 9, 1950]. This call brought a request from Gordon P. Brown, WSAY Rochester, N. Y., who has long feuded with networks. He claimed the section should be interpreted to mean that if a sponsor approved a rebroadcast of a program it owned, neither the network nor the affiliate carrying the original program could object [B»T, Nov. 6, 1950]. Joining him was Rep. Harry R. Sheppard (D-Calif.) who claimed legislative history of the provision justified such an interpretation. He charged, too, that networks were trying to stifle competition. Opponents of FCC's proposed stand argued that the requirement of a written report on refusals to allow rebroadcasts amounted in itself to compulsion. This fear disappears as a result of FCC's decision last week. Twice since last May the Commission has postponed the effective date of its order. Last postponement had been to Oct. 31. Petitions had been received from NARTB; NBC; CBS; WHEN (TV) Syracuse; KLOK San Jose, Calif.; KLO Ogden, Utah; KPQ Wenatchee, Wash.; KPHO Phoenix; WKLO Louisville; KXRO Aberdeen, Wash.; KING Seattle; WOW Omaha. Sees Industry's Point Recognizing the industry's challenge of the reporting requirement, the FCC found on reconsideration "that the amendments to its rules requiring a report in each instance of a denial of consent for a rebroadcast are unnecessary." It added that no facts have been presented by opponents concerning "the probable extent of any possible burden which the reporting requirement might involve" and chided the industry for not claiming possible burdens at the time the rule was first proposed. FCC conceded situations could arise in which a station would have difficulty "in deciding whether particular types of inquiries are requests for rebroadcast privileges, or whether responses to such inquiries setting fortlv conditions for granting rebroadcast consent constitute 'refusals.' A station may thus act at its peril in failing to file a report which under a different interpretation of the circumstances involved might be deemed by the Commission to have been required under the rule." Another possibility, FCC noted, was "an undeterminable number of requests to rebroadcast" involving situations "which would not be thought to warrant a complaint or where a refusal would not be improper." FCC claimed "the same purposes may be achieved by leaving it to the Commission to request explanatory statements from licensees in situations in which complaint is made by another licensee of an alleged refusal to permit a rebroadcast." The Commission would not go along with the industry claim that Section 325(a) gives "an absolute right of refusal, and that the Commission is legislating, contrary to the intent of the statute, when it declares that the right to refuse consent for a rebroadcast is not absolute." Also cited by FCC was the argument "that the use of Section 325(a) to prevent a station from carrying a sponsor's program by means of a rebroadcast when the (Continued on page 4-i) Eating 'Legalized Larceny' Crow an editorial THE FCC ate crow last week. But not the whole crow; just a wing or two. It did a partial about-face on its rebroadcast rule of last May (we called it "Legalized Larceny"). It rescinded the most vicious part requiring an originating station to tell the FCC within 10 days why it refused any station or network the right to pick up any of its programs. It was the most dangerous foray into forbidden fields since the Blue Book of 1946. The part the FCC left unchanged at first blush would appear unimportant. It uses legalistic language about arbitrary refusals to permit rebroadcasts and about doing violence to the public interest. The danger here, as we see it, is that some of the infection remains and it can flare up again. The FCC did this on its own motion. It came after strong protests from the NARTB, stations and networks, which brought two postponements. By acting on its own, the FCC thereby, for the present, avoids a hearing and also saves some face by retaining some of the language of the rule. Of course, there are instances where the rebroadcast privilege must BROADCASTING • Telecasting be given. We have in mind a Presidential address, an extraordinary session of Congress, or similar transcendental events, where the rebroadcasting station shares its part of the expense. The FCC lawyers seek to make much capital of the point that there was no outcry back in October 1950, when the rule-making was proposed as the result of a controversy between two television stations. Perhaps they have a point here. But that didn't justify the sneak effort last May to foist on the broadcast arts rules that could destroy property rights in programs, stifle creative talents, force stations to endless legal expense and place them in constant jeopardy. Last May, when the FCC smuggled out its new interpretation (Vice Chairman Hyde and then-Comr. Jones were absent) we commented editorially: In some saner moment, we must believe that the FCC will see the error of its ways. That, obviously, has happened. Comr. Hyde, in the action announced last Thursday, favored reconsideration and deletion of the rule "previously announced." He isn't satisfied with partial action. Nor are we. While the Commission rescinded the most onerous provisions, it retains a degree of control by saying the same purposes may be achieved through the complaint procedure, i. e., the FCC itself can investigate complaints on refusal to permit rebroadcasts. It can be readily seen what could happen. Crackpot complaints reach the FCC by the score. There could be endless harassment of licensees and networks through the simple device of chain letters for rebroadcast permission — ■ letters which would be answered negatively with a resultant barrage of complaints to the FCC. An example of this is what has happened over the years because of the damned-if-you-door-don't language of the FCC's interpretation of the political section. We think the rebroadcast section of the law is adequate as written. It doesn't need the interpretative treatment of the FCC's legal geniuses. An aggrieved station has plenty of ways of getting its complaint before the FCC. Failing to get relief there, a broadcaster can always have his day in court. November 3, 1952 • Page 25