Broadcasting Telecasting (Oct-Dec 1957)

BARROW REPORT continued tensively repeated throughout the first chapter. From this benchmark, the study surveyed such areas as the opportunity for competition between networks and non-network organizations; the affiliation relationship between networks and stations; multiple ownership; network operations other than network broadcasting (station representation, film syndication, program ownership, etc.); intercity line rates, and direct regulation of networks by the FCC. Because the information on programming is still to be submitted, a supplemental report on this subject will be made at the earliest opportunity. Early this summer, four film producers balked at furnishing to the staff what they considered confidential financial information. The FCC issued subpoenas and, after litigation, the FCC's right to demand the data was upheld by the federal district court in New York. An order has not yet been issued, however, and when it is, some time must elapse before the requested information is submitted. The program report will be submitted later. Recommended for further study — because there was not enough time to do a proper job — were such subjects as: (1) joint ownership of radio and television networks and of radio and tv stations; (2) network ownership and related interests; (3) talent contracts; (4) alleged tie-ins between the sale of a network-owned program and network prime time; (5) the status of radio today, and (6) the allocations problem. The study offered no recommendations regarding such alternative methods of feeding network-type programs to' stations as (a) news association syndication whereby all stations may buy programs; (b) toll tv, and (c) federal subsidy for uhf development. The study, according to the introductory chapter, is not entirely critical of networks. Networks are given credit for pioneering tv, for technical developments in transmitting and receiving equipment, and for public service and sustaining programming. The report resulted from a "study" technique, it is explained. This was choosen in lieu of public hearings where, it was felt, the information desired would be secured laboriously. And, it was emphasized, much information would be withheld since the hearings would be public. The study technique comprised four elements, it explained. First, all available information at the FCC was scanned and studied. Then conferences were held with all segments of the industry — networks, stations (both affiliated and independent), program producers, film syndicators, station representatives, advertisers, advertising agencies, AT&T representatives. Staffers also visited selected groups of stations and markets. Finally, detailed data was secured via a series of intricate questionnaires to all elements of the broadcasting industry. Financial and competitive information was secured on a confidential basis, it was pointed out, only aggregates were used. However, it was noted, where specific identifiable information was necessary to make a point, this was done. The report makes recommendations in Page 34 • October 7, 1957 three distinct fields, it was pointed out. Some of these are for changes in FCC rules — requiring the usual administrative procedures. Others are suggestions for legislation, to be submitted to Congress. And, finally, evidence of antitrust violations are urged to be submitted to the Dept. of Justice. The final pages of the introduction deal with the organization of the report. chapter 2 The Television Industry: Development and Operations "In brief, the shortage of station facilities has militated against the full development of a nationwide, competitive television system." That short sentence in the middle of Chapter 2 comes closest to putting the finger on the basic problem. The entire chapter is devoted to a generalized outline of the history of television and the practices that are followed today. Television has "one major structural LEGISLATORS have long awaited the Barrow report, and received top priority when it broke last Thursday. Joe Sitrick (here entering the Senate wing of the Capitol), legislative assistant to FCC Chairman Doerfer, and two assistants hand delivered more than 100 copies to Hill offices at noon Thursday. The recipients: members and staff of the Senate and House Interstate Commerce committees dealing with independent agenSubcommittee, the Senate Small Business (Morse) Subcommittee, the House Committee on Legislative Oversight (Moulder), the Senate and House Appropriations Subcommittees dealing with independent agencies, the Senate and House majority and minority leaders, and other congressmen who had made special requests to receive it. weakness," the report stated. It is limited in its potential for station growth. This is due to the fact, the report declared, that tv began in the vhf portion of the radio spectrum, where only 12 channels were available and where only 500 commercial stations can be assigned. Uhf, it is noted, failed to develop as expected "for a variety of reasons." Of the 475 tv stations in operation in mid-1957, it is pointed out, 389 are vhf. This means, the report stated: "The relative shortage of facilities has important repercussions for the development of the industry and for regulatory policy. It has tended to limit inter-network competition, the opportunities for the development of non-network program suppliers, the development of local programming, and the opportunities for growth of local community outlets." The review of television's early development is of historical interest. The report referred to the 1940 FCC hearings on tv standards; the establishment of the National Television System Committee; the 1941 approval of commercial operation; the World War II freeze on stations; the institution of the Radio Technical Planning Board in 1943; the 1945 report allocating 13 channels in the vhf band on a shared basis and the assignment for tv experimentation of the uhf band. Also the 1945 hearings on rules and standards for commercial tv; the 1946-47 color proceedings; the 1947-48 proceedings which resulted in the deletion of ch. 1; the engineering conference of 1948 and the subsequent freeze on tv application processing; the establishment of the Joint Technical Advisory Committee in 1948; stratovision and polycasting; the ad hoc committee; the Condon committee on color tv potential; compatible and incompatible color tv. And the adoption of the CBS sequential color system in 1950; the faint beginning of color telecasts by CBS in 1951; the October 1951 order of the Director of Defense Mobilization to CBS to cease color set production due to the Korean War; the "Third Notice" of March 1951; the "Sixth Report and Order" of April 1952, and the adoption of compatible color standards in 1953. Station "profitability" increased sharply between 1950 and 1952, the report noted, and networking also became profitable by 1952. This mainly was due, it was explained, because of the freeze which left the 108 operating stations in a protected position. In fact, it was pointed out that 40 of the 108 stations were the only stations in their communities. With the resumption of tv processing in 1952, the sharpest growth took place between 1952 and 1954, with total stations moving from 108 to 380. From 1954 to mid-1957, the report mentioned, only 95 more stations were added to those in operation. This slow down in growth rate resulted from, the report alleged, (1) uhf difficulties, (2) lack of additional vhf facilities in large markets, and (3) delays in concluding comparative hearings. Nevertheless, the report noted, the num Broadcasttng • Telecasting