Broadcasting Telecasting (Apr-Jun 1957)

GOVERNMENT JUSTICE-NBC SUIT TO BE AIRED • Court hears arguments tomorrow in antitrust charges • Government demands sale of network's WRCV-AM-TV FIRST argument in the government's portentous antitrust suit against RCA-NBC — in which the 1955 exchange of stations by NBC and Westinghouse Broadcasting Co. is labeled an antitrust violation by RCA-NBC — will take place tomorrow (Tuesday) before Philadelphia Federal District Judge William H. Kirkpatrick. And, in answers to inquiries submitted by RCA-NBC earlier this year, the Justice Department specified that it wanted the network to be forced to sell its Philadelphia radio-tv outlets to a non-network purchaser and that the network be prohibited from acquiring any more vhf television stations in any more of the first eight markets. Argued in Philadelphia tomorrow will be various motions made by RCA-NBC and the Justice Department regarding additional documents requested by both parties, objections by the government to answering some of the questions submitted by RCANBC in a series of interrogatories last January and to RCA-NBC's request for transcripts of a Philadelphia grand jury term last year. One of the most significant debates, if the issue is aired, is expected to be the question of whether the Department of Justice can step in after the FCC has acted in a case involving broadcast licensees. RCA-NBC will be represented by Bernard Segal of the Philadelphia law firm of Schnader, Harrison, Segal & Lewis. The Justice Dept. will be represented by Bernard Hollander and Ray Carlson. The government is asking not only that RCA-NBC be forced to sell its Philadelphia stations to a non-network owner, but that NBC be prohibited from acquiring any more vhf television stations in Pittsburgh, Boston. Detroit and San Francicso without court approval. This was made clear in the government's answers to 33 interogatories submitted by RCA-NBC earlier this year. The answers spell out the government's case in explicit terms. The sale of the Philadelphia stations to a non-network purchaser is "necessary and indispensable," the Justice Department said. The clarification of charges and the relief sought came in government replies filed with the court in the past two weeks. Named by the government as participants in the alleged unlawful "combination or conspiracy" were NBC executives David Sarnoff. Charles R. Denny, Joseph V. Heffernan, Harry Bannister and Emanuel Sacks. Gen. Sarnoff is chairman of RCA, parent company owning NBC. Mr. Denny is executive vice president in charge of NBC operations; Mr. Heffernan. staff vice president; Mr. Bannister, station relations vice president, and Mr. Sacks, vice president in charge of tv network programs. The government suit was filed early in December 1956. It grew out of the exchange of NBC's WTAM-AM-FM and WNBK (TV) Cleveland for Westinghouse's KYW and WPTZ (TV) Philadelphia, plus $3 million. The Justice Department complaint charged that the network coerced Westinghouse into agreeing to the exchange under threat of withdrawing NBC affiliations from Westinghouse stations. Among the specific charges spelled out in the latest filings: That the purpose of the alleged conspiracy was to improve the position of NBC's owned and operated stations by securing vhf outlets in five of the top eight U. S. markets. That the alleged conspiracy was entered into during March 1954 at a meeting of NBC executives in the offices of Gen. Sarnoff. Negotiations were carried out by various NBC executives mentioned above with WFIL-TV Philadelphia, WNAC-TV Boston. WWJ-TV Detroit, KRON-TV San Francisco and "possibly" WDTV (TV) Pittsburgh (now KDKA-TV and owned by Westinghouse) for the purchase of those stations. That in October 1954. Gen. Sarnoff told Chris J. Witting of Westinghouse that RCANBC had to have tv stations in the top five markets of the U. S. and indicated that he (Sarnoff) already had talked to other station owners in Philadelphia and Boston and that he could make arrangements excluding WBC from consideration in those cities. (The Justice Dept. also charged that several similar representations were made by other NBC executives.) That if WBC would submit to the Cleveland-Philadelphia swap, NBC would not attempt to place its own station in Boston and would continue its affiliation with Westinghouse's WBZ-TV there. NBC would not agree to a network affiliation for WBCs new Pittsburgh station (KDKA-TV) until Westinghouse was firmly committed to the exchange. (This offer was repeatedly made, Justice said.) As part of the consideration to WBC for giving up its Philadelphia stations, NBC agreed to affiliate three additional WBC stations and to give 2Vi-year extensions for all existing NBC affiliation contracts with WBC stations. That NBC forced WBC to agree to the exchange of stations, which was economically undesirable and undesired by WBC. That WBC was required, as NBC's price for continuing affiliation in Boston and assurances of affiliations in Cleveland and Pittsburgh, to relinquish its Philadelphia stations, despite the fact that this exchange meant a continuing loss to WBC of revenue in excess of $1 million annually. That only after Westinghouse agreed to the exchange, on or about Nov. 15, 1954. did NBC agree in writing to affiliate KDKATV. That the ability of Westinghouse Electric Spring has sprung in Providence, R. I. • afternoon audience grows 324% • morning audience grows 297% WICE is now either first or second in audience in 16 daytime quarter hours. . . . in just 6 months of Elliot programming Source: C. E. Hooper, Jaii.-March 1957 The ELLIOT STATIONS great independents • good neighbors TIM ELLIOT, President Akron. Ohio WCUE / WICE Providence, R. I. National Representatives The John E. Pearson Co. Page 62 • May 13, 1957 Broadcasting • Telecasting