Broadcasting Telecasting (Jan-Mar 1956)

GOVERNMENT NBC-WESTINGHOUSE SWAP QUESTIONED manufacturers in 1954 were uhf, in 1955 it had dropped to 26% and he expected this to drop to about 20% in 1956. He exhibited sample vhf and uhf tuners and combinations and said the difference with uhf added to vhf at the factory is about $10. He said that with action by Congress it would take four to five years to put into circulation 30 million sets equipped to tune uhf and vhf. Mr. Steetle said abolition of vhf educational reservations would destroy educational tv's immediate prospects for growth which lie chiefly in the vhf band. Abandonment or deterioration of uhf would destroy educational tv's longrange prospects of full development, since twothirds of educational tv reservations are in the uhf band, he said. He said there now are 20 educational tv stations on the air (18 on reserved channels); that by the end of the year JCET expects that educational tv stations will be operating in all the cities in the first 20 markets where vhf channels have been reserved (10 cities); that in 7 of the first 10 markets and 10 of the first 20 metropolitan areas, educational tv is dependent upon the future of uhf. Broadcast Bureau Appointees Named THREE new appointments in the FCC Broadcast Bureau were announced by the Commission last week. Sol Schildhause, chief of the renewal branch. Renewal & Transfer Div., was promoted to chief of the tv applications branch, Broadcast Facilities Div. Mr. Schildhause is succeeded by Millard F. French, former FCC hearing examiner (1953-55). Also announced was the promotion of Robert J. Rawson, from assistant chief of the now defunct Hearing Div., to chief of the hearing branch, Broadcast Facilities Div. Mr. Schildhause, a native of New York City joined the FCC in 1948, prior to which he was in private law practice. He is a 1937 graduate of the College of the City of New York (B.S.S.) and was graduated from Harvard Law School in 1940 (LL.B.). Mr. French was born in Beckley, W. Va., and was graduated from Concord (W. Va.) College (A.B., 1930) and West Virginia U. (LL.B., 1933). He served as a judge at Beckley and during World War II he was a flight equipment super MR. SCHILDHAUSE MR. FRENCH visor and aviation ground school instructor. He also was a hearing examiner with the Civil Aeronautics Board (1948-53). Mr. Rawson came to the FCC in 1946, following four years of World War II service in the U.S. Navy. He was discharged as a lieutenant commander. Mr. Rawson was born in Boston and received his LL.B from Columbus (Ohio) U. in 1938. Before his naval service, Mr. Rawson was with the Dept. of Agriculture and the Dept. of Justice. Page 82 • March 5, 1956 House antimonopoly unit asks why the FCC approved Cleveland-Philadelphia station deal after Justice Dept. had said it was investigating case. DID the FCC thumb its nose at the Dept. of Justice when it approved the exchange of radio and tv stations between NBC and Westinghouse? Does the FCC action foreclose the Dept. of Justice from acting in the matter? Did the FCC receive the Justice Dept.'s letter about the transaction in time to withhold action? • These, and other questions about the FCC's approval of the swap of stations between NBC and Westinghouse — approved late in December [B»T, Jan. 2] — cropped up last week at the opening session of a Capitol Hill hearing on the antitrust laws and regulated industries. The hearing is being conducted by a House Judiciary subcommittee under the chairmanship of Rep. Emanuel Celler (D-N.Y.). Broadcasters and the FCC will come under the committee's examination in the latter part of March. The hearing opened with Assistant Attorney General Stanley N. Barnes, chief of antitrust division, in the witness seat. Mr. Barnes had gone no further than 18 pages of his prepared testimony when Rep. Celler interjected the NBC-Westinghouse transaction. At issue, according to Mr. Celler, was whether the FCC approved the exchange after receiving a letter from Mr. Barnes raising questions of antitrust violation. Mr. Celler read a copy of a Dec. 27, 1955, letter sent by Mr. Barnes to FCC Chairman George C. McConnaughey informing the FCC that the Dept. of Justice was initiating a preliminary investigation of the NBC-Westinghouse stations exchange and stating that there appeared to be a question whether the exchange may be "unduly restrictive." The FCC announced its approval (with FCC Comr. Robert T. Bartley dissenting and urging a hearing) Dec. 28. Early in January Mr. McConnaughey answered Mr. Barnes, it was developed. Mr. McConnaughey on Jan. 9 told Mr. Barnes that the Commission had approved the transaction Dec. 21, but had held up issuance of the order so that the dissent and a supporting statement (by the FCC Comr. John C. Doerfer) could be included. He asked that the Justice Dept. keep the FCC advised on its finding after the investigation was completed. Queried by Mr. Celler on why the Justice Dept. did not request the FCC to withhold action pending its investigation, Mr. Barnes answered that this was a field where both the Justice Dept. and the FCC exercised concurrent jurisdiction. Therefore, he said, he felt advising the Commission of what the department was doing was all he could do. The situation is "very involved" and "enigmatic," Mr. Barnes said. The Justice Dept. has been told some things by some people, Mr. Barnes explained, and other things by other people. The matter is extremely "delicate," he said, adding that the investigation is still underway. Mr. Celler intimated at one point that the Commission granted the exchange without a hearing in opposition to its own staff's recommendation that a hearing be held. Asked whether the Justice Dept. can bring action in the matter, even though the FCC has acted, Mr. Barnes said that if his investigation showed that there was a basis for action, it could. He said this was a preliminary conclusion, not a final conclusion. The NBC-Westinghouse exchange involved the network's owned WTAM-AM-FM and WNBK (TV) Cleveland and Westinghouse's KYW and WPTZ (TV) Philadelphia. NBC gave Westinghouse its Cleveland stations and $3 million for Westinghouse's Philadelphia stations. Rumors that NBC had threatened Westinghouse with loss of affiliation if it did not accede to the exchange were rife. WGR-TV Buffalo formally made such a charge in conjunction with that station's opposition to NBCs purchase of ch. 17 WBUF-TV Buffalo. It was one of the issues in a protest hearing to the Buffalo sale, but WGR-TV dropped its protest before the hearings got underway seriously. Mr. Barnes also told the committee that the FCC confers with the Justice Dept. on antitrust matters occasionally. He said that about a year ago, he and Mr. McConnaughey conferred on various overlapping matters and decided that as far as network affiliation with stations was concerned that this would be an FCC responsibility. In his introductory remarks, Mr. Celler said that one of the main questions to be explored was whether there is a tendency for regulatory commissions to become "unduly" responsive to the dictates of the industries which they regulate. "Excessive industry orientation," Mr. Celler said, "would go far to thwart our traditional anti-monopoly policy." Speaking of broadcasting and the FCC, Mr. Celler said: "Television broadcasting already exercises such an important influence over our daily lives that I can think of no field where antitrust objectives assume greater significance, especiallv in the light of the Congressional objective of a nationwide competitive system of broadcasting so as to provide a free marketplace for ideas." The committee will seek to ascertain, Rep. Celler said, whether (1) there is undue concentration of control in television broadcasting, (2) certain competitive network practices are compatible with the antitrust laws and public interest, (3) there is undue preemption of television network broadcasting time by certain concerns (advertisers), (4) the FCC has exercised its regulatory authority consistent with the antitrust laws, and (5) the FCC will handle the uhf problem so as to foster competition rather than monopoly and provide the maximum number of tv outlets throughout the country. The subcommittee's hearing started with a charge by Rep. Kenneth B. Keating (R-N.Y.) that it was tinged with politics. He asserted that the Republican members of the committee had not been informed of the subject matter to be investigated. In addition to Messrs. Celler and Keating, other members of the subcommittee are Democrats Peter W. Rodino Jr. (N.J.), Byron G. Rogers (Colo.) and James M. Ouigley (Pa.) and Republicans William M. McCulloch (Ohio) and Hugh Scott (Pa.). Herbert Maletz is chief counsel of the subcommittee. Ike Reappoints McConnaughey FCC Chairman George C. McConnauehey was reappointed chairman last Monday by President Eisenhower to serve in the post until June 30, 1957, when his Commission term expires. His present chairmanship expires March 22. He was named to the FCC in October 1954 to fill the unexpired term of George E. Sterling, who resigned. When he was first appointed chairman by the President, thought was voiced that the chairmanship would be rotated annually. Broadcasting • Telecasting