Broadcasting Telecasting (Apr-Jun 1957)

NARTB CONVENTION ADVERTISERS & AGENCIES elapse before a decision is rendered." The senator said he thought the DBA case was "the most apt illustration" of one of the possible dangers to small businessmen when regulatory agencies fail to act on long-standing requests. Sen. Morse said he intends "to keep an open mind on the issues until all the facts are in" during the scheduled April 29-30 hearings on complaints of daytimers before his special three-man subcommittee. The unit was named last month to investigate DBA complaints that the FCC's failure to act on extending hours of small local stations is discrimination against them in deference to fulltime stations [B»T, March 25]. Other members of the subcommittee are Sen. Alan Bible (D-Nev.) and Sen. Andrew F. Schoeppel (R-Kan.). The daytimers are seeking extension of hours of operation from the SEN. MORSE present sunrise-to sunset limits to from 5 a.m. or sunrise (whichever is earlier) to 7 p. m. or sunrise (whichever is later) [B*T, April 1]. "It is increasingly my view that from all outward appearances the FCC will never be found guilty of partiality towards small business," Sen. Morse declared. He said that government regulatory agencies more often now are being "taken over" or "captured" by the industry they intend to regulate. That these agencies are oreatly influenced by the dominant voices in each industry is also true, he added, although it is difficult for any commission to avoid this. Sen. Morse listed the principal reasons why regulatory agencies are "captured" by the dominant companies in each industry: • Top companies account for most of the business in the field. • They have more money for experimentation, development of new products and techniques, for hiring lawyers and publicists in Washington, who can watch closely the activities of a particular commission. • Most of these regulatory agencies are handicapped by a shortage of time, of appropriations, and consequently of staffers. • Commission members naturally "think about the day their terms expire," and their "return to private industry or professional pursuits" is "yet another factor contributing to an agency's subservience to the giants in its particular field." In Washington, Lee White, counsel to the full Senate Small Business Committee, said tentative plans for the two-day hearings on DBA complaints call for two sessions on April 29 and one the next day. Testifying on the opening morning will be daytimers, followed by fulltime station officials opposing the DBA requests. On April 30, the special subcommittee plans to hear testimony from one or more FCC members and the Broadcast Bureau. FTC-CITED FIRMS NONCOMMITTAL • Whitehall, Block, Omega cautious in discussing agency charges • NBC-TV says it acted on own in questioning drug commercials A CAUTIOUS stand was adopted last week by three advertisers cited by the Federal Trade Commission for alleged false and misleading publication advertising and radio-tv commercials [At Deadline, April 1]. The complaints — first three of what is expected to be a number — were the initial ones to be issued as a result of monitoring by the FTC's Radio-Tv Unit established last October. Richard G. Rettig, vice president in charge of advertising, Whitehall Pharmacal Co., New York, said he had no comment to make on the complaint against Whitehall, other than it had been turned over to the firm's attorneys. Whitehall was cited by FTC for false claims for its Infrarub and Heet on CBS-TV and MBS. Block Drug Co.'s Al Plant (advertising manager) noted that he had not yet seen FTC's complaint charging that Omega Oil was falsely advertised. The Omega Chemical Co. mentioned in the complaint is a wholly-owned subsidiary of Block Drug, lersey City, N. J. Mr. Plant asserted, however, that quotes in news stories attributed to FTC's complaint on alleged Omega radio commercials appear to be in "error." He said Omega has had no radio commercials this year. As yet, Block has not made a decision as to how it will treat the FTC complaint. He explained that should the company wish to continue the Omega copy line in commercials, it would present then a defense before the commission. How the firm treats the complaint will "depend on whether we want to continue" the advertising in question, he indicated. Albert T. Hyde, president of The Mentholatum Co., Buffalo, cited for its advertising on behalf of Mentholatum Rub on CBS-TV and NBC-TV, similarly expressed surprise on the evidence presented, noting, too, that "the current campaign is over" and that the last commercial the firm had. scheduled in its tv advertising already has been run. He said the matter would be handled by his attorneys. Mr. Hyde added that so far as he could see the complaint was "charging false advertising" and that his company would "file an answer." All three companies were given 30 days to file answers with the FTC with hearings scheduled for Whitehall lune 3 and Omega lune 5, both in New York, and Mentholatum lune 7 in Buffalo. Meanwhile, NBC-TV has denied the network was prompted by the FTC monitoring and a liaison policy with the FCC in NBCTV's suggestion to an unidentified advertising agency that the latter substitute filmed commercials for two drug commercials deemed unacceptable. Carl Watson, New York manager of NBC-TV's continuity department, explained it that way in a follow-up statement to the NBC-TV action several days ago. The commercials in question were considered by NBC-TV's continuity acceptance department as being derogatory to a competing product, he said. According to Mr. Watson, New York manager of the department, the correspondence with the agency (on behalf of a drug advertiser) was of "routine" nature. He denied the commercials had been running on NBC more than a year, as had been reported, and asserted the filmed commercials were new and as yet not seen on television. The NBC action had been made known in the press along with the FTC's charge (both names of agency and client have been withheld) that the FTC-FCC policy was tying up advertisers, and which cited the NBC incident as an example. At the same time, Mr. Watson emphasized that the network's long-standing policy has been consistent with FTC aims on advertising claims and that the letter to the agency warning about the new commercials pointed out a new element had been injected and might be considered by FTC to be quite clearly in the field of derogation. The full text of the letter from network continuity acceptance to the agency (with deletions made to hide identity of client and agency) : "Yesterday we received for clearance filmed commercials No. (deleted). No. (deleted) and No. (deleted). Film No. (deleted) would appear to be acceptable with substantiation of the claim. "At the same time, we want to go on record as deploring the derogation of competitors in film commercial No. (deleted). Pointing out the weaknesses of your competitor's product in order to sell your own, and emphasizing this (phrase deleted) seems to suggest the main purpose of your commercial is to disparage your competitors. "This technique in our view reflects negatively not only on your own product but is an abuse of advertising tending to destroy believability in all advertising." FTC Citation May Hurt Another "routine" paragraph to the effect that "derogation" may result in citation from the FTC was included, with this added: "With the recent FCC announcement to all radio and tv stations, holding them responsible for advertising content and specifying that FTC action on an advertisement might be weighed against a licensee's renewal, we must retain the right to get back to you requesting a replacement should any complaints result." It was this last paragraph that led the agency to assert that already the government's monitoring and FCC-FTC coordination was hamstringing the advertisers. Actually, in the contract between advertiser and network, the latter reserves the right to change any language or content of the commercial if it deems the advertising Page 40 April 8, 1957 Broadcasting Telecasting