Broadcasting Telecasting (Oct - Dec 1952)

Record Details:

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'GIVEAWAY' SHOW TEST f,!^^^ LONG-AWAITED legal test of FCC's giveaway rules was put into the hands of the courts last week for decision — after three years. . A special three-judge federal court in New York heard attorneys for ABC, CBS and NBC argue that j FCC has no power to regulate the content of the programs and that, additionally, the order embodying the giveaway rules is void because it erroneously interprets the law 1 on lotteries (Sec. 1304 of the Criminal Code). To the contrary, the court was told by FCC General Counsel Benedict P. Cottone, the Commission ' has authority to act under its general licensing powers in behalf 1 of the public interest, and, in act< ing, correctly defines violations of • the Code's lottery section. He noted that the rules are directed against "telephone giveaways" rather than j those using contestants from the j studio audience. The three judges, who reserved decision pending further study of 1 the briefs and arguments, were i Circuit Judge Charles E. Clark i and District Judges Vincent L. Leij bell and Edward Weinfeld [B*T, j Dec. 8]. ' The argument was based on ac1 tion initiated by ABC, CBS and 1 NBC in 1949 against FCC's thennew rules banning giveaways. The ! networks won a temporary re' straining order at that time, and the FCC, which had set Oct. 1, ' 1949, as the original effective date of the rules, postponed them pending final outcome of the case. Regardless of the three-judge court's decision, an appeal is anticipated. Lottery Defined i In the argument, held Monday : afternoon, ABC was represented I by George B. Turner of the law ! firm of Cravath, Swaine & Moore; CBS by Max Freund of Rosenman, I Goldmark, Colin & Kaye and NBC i by Paul B. Williams of Cahill, i Gordon, Zachry & Reindel, all of ' New York. Explaining that a lottery usually is defined as involving "prize, I chance and consideration," Mr. Turner limited his argument to the "consideration" factor. He hamI mered at the point that FCC based its test of consideration on "consideration furnished by winner or . winners" instead of by "participants in the alleged lottery." Mr. Turner insisted that lottery statutes are not concerned merely with the few who win but with the many who lose — "who hazard their money or property in the hope of winning." "This is one of the examples of how the Commission has rewritten the lottery statute to catch the cases that it is interested in catching," Mr. Turner asserted. "It has rewritten the statute in disregard of the case law under the statute and comparable state statutes." Mr. Turner cited another point in which he said the Commission had departed from court decisions in its concept of consideration, referring to a case in which the court had held there was "no lottery, if the winner pays no price." He argued that "almost universally, the courts in this country have held that the requirement of consideration means the payment or delivery of something of value . . . not such things as listening to the radio or writing a letter." Mr. Freund, speaking on behalf of CBS, challenged FCC's interpretation of "chance." He recited cases upholding the principle that the test of a lottery is whether skill or chance predominates. But FCC's Rules, Mr. Freund continued, "state, in so many words, that the Commission will 'in any event' consider that a program comes under the proscription of Sec. 1304 if, in addition to prize and consideration, the award is made 'to any person whose selection is dependent in whole or in part upon lot or chance.' " "The rules," Mr. Freund argued, "thus improperly make chance in the selection of contestants conclusively determinative of the presence of chance, and not merely a factor which must be taken into account in ascertaining whether chance is present." Government Brief Touching upon the factor of consideration, Mr. Freund referred to the government's brief contending views or listeners are induced by sponsor's advertising to purchase products or Services. Insisting that no one is told he must purchase the sponsor's product in order to compete on a giveaway program, Mr. Freund declared: "Indeed, defendant's contention breaks down completely in connection with sustaining programs. No one listening to quiz-giveaway sustaining programs is induced to purchase anything because sustaining programs are not sponsored and because no product or service is advertised. Yet the rules do not distinguish between sustaining and sponsored programs." Mr. Williams, representing NBC, attacked FCC's Rules on "purely Constitutional grounds." He branded the rules as an attempt to censor program content and to enforce criminal statutes, maintaining that these functions were outside the province of the Commission. He singled out Sec. 326 of the Communications Act to bolster his contention that the Commission is forbidden to interfere "with the right of free speech by means of radio communication." Mr. Williams noted that if Congress intended the Commission to prohibit certain types of programs it would have granted the FCC this power in this section of the Communications Act. Maintaining that Sec. 1304 of the Criminal Code forms no basis for the Commission's assertion of jurisdiction, Mr. Williams explained: "If the proposed [FCC] order becomes effective, there will be no necessity for a conviction before punishment is imposed. There will be neither an indictment nor a jury trial for the accused broadcaster. All that will be necessary will be an administrative finding of fact of one program which has con ( Continued on page 31) "He wants to ask you about giveaways!" Drawn for Broadcasting • Telecasting by Sid Hix RADIO ACTIVITY Half-Dozen Sponsors Plan Campaigns A HALF-DOZEN advertisers are planning extensive radio activity to be launched early next year — two to use spot radio and another a halfhour network show, with the three others planning local program campaigns, Broadcasting • Telecasting learned last week. Park & Tilford, New York, for * its Tintex dye, is in the process of buying and preparing its annual radio campaign to start in midMarch for 13 weeks, coast-to-coast. The firm is planning to use over 200 markets, making one of the largest spot campaigns in the hisstory of the company. Storm & Klein, New York, is the agency. Diamond Match Co., New York (paper products), through Benton & Bowles, New York, will use 40 radio markets and a few Selected TV cities for a 13-week spot schedule to start early in January. Seabrook Farms, Bridgeton, N. J., will sponsor a half-hour network show starring Dick Powell, called 353 For Action effective Feb. 1. Hilton & Riggio, New York, the agency for Seabrook, currently is negotiating with Mutual and NBC for specific time. Goetz Country Club Beer, St. Joseph, Mo., has dropped its entire spot radio budget and will reallocate the money into sponsorship of a string of local radio programs in selected markets in the Midwest, effective Feb. 15. Contracts on the programs will vary from 13 to 52 weeks. Compton Adv., New York, is the agency. Hi-V (orange juice), New York, has signed a contract for participation on the Marjorie Mills show on the New England Regional Network, effective the middle of January for 52 weeks. Franklin Bruck, New York, is the agency. Hall Howard Products, New York (Myracin, an analgesic aid), is planning a three-week test with a quarter hour transcribed program in five midwest markets starting early in January. St. Georges & Keyes, New York, is the agency. BROADCASTING • Telecasting December 22, 1952 • Page 27