Broadcasting Telecasting (Oct-Dec 1957)

BARROW REPORT continued tional advertiser. The report contained NBCTV and CBS-TV circular letters to affiliates pressing their stand. Another conflict area specified by the Barrow report dealt with "the network's desire to sell as much of the station's time as possible on a network basis, including time periods not subject to the network's option, and the station's desire (shared by its representative) to sell at least some of these time periods on a potentially more profitable national spot basis." The report claimed there was evidence that some stations have approached networks for spot sales representation in order "to cement" their network affiliation relationship. In the same theme, according to the report, networks have taken spot representation into account in affiliation decisions and have indicated "on one or more occasions" that the two should be looked upon as a single "package." The report noted that the network spot organizations have been circumspect in operation and have not attempted to expand too far into that field; also, that while the two network organizations accounted for one quarter of the national spot business (in April 1956), only 8.3% was accounted for by non-network-owned affiliates. Station Representatives Assn. and its predecessor, the National Assn. of Radio Station Representatives, have spearheaded the opposition to the network operation of spot sales organizations. You're headed in the right direction with Plough, Inc., Stations! vim • NEW YORK • CHICAGO • BOSTON • SEATTLE • ATLANTA . LOS ANGELES . SAN FRANCISCO chapter n Network Practices: Interconnection Problems The Network Study Group has not attempted an appraisal of the conflicting views of broadcasters and telephone companies with respect to issues of rates or private relay facilities. Noting that the FCC has docketed two formal proceedings with respect to these matters, the study group did not undertake an investigation but merely outlined the situation. It did recommend that the Commission expedite resolution of the rates and private relay issues. It further urged that the FCC closely examine procedures for allocating scarce program transmission facilities to determine whether they are fair and equitable and in the public interest. The report emphasized a concern about the potential effect of allocation procedures on the entry of new networks as well as like television services. In tracing the history of interconnection and the shortages thereof in the past, the report noted the disadvantage of the nowdefunct DuMont Television Network as well as ABC-TV due to the contractual necessity of buying facilities in eight-hour blocks when the networks involved did not have sufficient network programming. Docket 9863, a nine-year-old proceeding before the FCC, concerns the lawfulness of the rates and regulations covering AT&T services. Docket 11164, instituted in 1954, was an aftermath of FCC's authorization of private relay systems only on a temporary basis, pending availability of AT&T. Case is concerned with the petition that private tv intercity relay systems be permitted, even if common carrier facilities are available, and if the cost factor justifies the private system. chapter 12 Multiple Ownership of Stations The network study staff recommended that the FCC, in the long run, seek through regulation a pattern of tv station ownership that approaches one to a customer as closely as circumstances permit. This would entail changes in licensing, renewal and transfer policies. The main objective would be a limit on ownership of three vhf outlets in the top 25 markets. The study noted that the trend at the present time is in the direction of increased multiple ownership and at the present most of the stations in the top 25 markets (serving half the U. S. population) are held by multiple owners. Recommendation was made that, in proposed sales involving multiple owners, Commission rules require the offer to be made in cash, and that public notice be given to other interested parties who could then compete by meeting the offer. If this procedure is adopted, it would necessitate repeal of the MaeFarland Amendment which precludes FCC consideration of competitive applications in transfer cases. In connection with this, the report said that — like original applications for facilities— first consideration should be given local applicants with roots in the community and those who do not own another station. A further recommendation to check the growth of multiple ownership would require that each person acquiring a tv station be limited to one television outlet until that station has been operated for one license term. Thereafter, he might apply for more tv's, subject to the Multiple Ownership Rule and the presumptions of this report. The effect on present multiple owners was partially envisioned as follows: NBC, with holdings in the first, second, third, fourth and tenth markets, would be required to divest two stations. ABC, with stations in the first, second, third, fifth and sixth markets, would have to drop two outlets. CBS would be required to drop one station. Among the non-network multiple owners, it was pointed out that Westinghouse with five stations in the top 25 markets would have to drop two; Storer Broadcasting Co. might possibly have to relinquish one — contingent on the ranking applied to its Philadelphia-Wilmington tv property; and Crosley Broadcasting Co. would have to divest one, depending on the rank assigned Columbus, Ohio. Should this numerical limitation be imposed, it was suggested that a three-year period be allowed for the multiple owners involved to relinquish the extra tv properties. It was pointed out in the case of ABC that the network might improve its income position sufficiently that the divesture would not reduce its income below that necessary to provide programming in the public service. The FCC should review from time to time the ownership of stations by networks and if it could be found that a network could be divested of additional stations without endangering the network program service, such divestiture should be required. Throughout this portion of the report, the theme of local ownership, diversification of interest and control of monopolistic tendencies was stressed. The report felt that network multiple ownership, as it now stands, tends to restrict programming and programming sources. chapter 13 The Radio Industry Though the Network Study Report primarily is concerned with television because of its relative newness, it urges periodic reappraisals of radio. Cited are the increased number of am stations, changing listening patterns and programming, the decline of the relative position of network radio, changes in the revenue pattern among radio stations, the effect of tv on am, the development of fm and the advent of new types of services in fm. With less reliance now on networks, radio stations are generally assuming their "avowed" responsibility in selecting programs to serve their own community, the report said. Stations are freer now than in the past to reject network programming. On the other hand, it was pointed out, this trend has stimulated radio networks to ex Page 98 • October 7, 1957 Broadcasting • Telecasting