Broadcasting Telecasting (Oct-Dec 1957)

FOR THE RECORD CONTINUED MAX G. PFAENDER, President Like Hundreds of Broadcasters... Station Manager MAX G. PFAENDER of WKLY Hartwell, Georgia and Chief Engineer B. A. McLANE Selected STAINLESS TOWERS B. A. McLANE, Chief Engineer LEARN WHY MANY BROADCASTERS CHOOSE STAINLESS TOWERS Call or Write for Informative Literature. Stainless, inc. NORTH WALES • PENNSYLVANIA networks and stations, inherent in the affiliation relationship. Despite the very high network profits of CBS and NBC, there is little prospect for the immediate entry of a fourth network. While the three existing networks compete among themselves in many areas, the small number of networks and the formidable barriers to new network entry are limitations on the effectiveness of competition at the network level. The encouragement of greater competition between networks and national spot telecasting, therefore, holds out the principal hope of providing more effective competition in the public interest. However, a number of network practices have served to restrain competition between network and national spot advertising and to place the station representatives, program suppliers, and advertisers using national spot, at a competitive disadvantage. These practices, in combination, have restrained competition between networking and the national spot system to a significant degree. A third policy of the Commission is that of providing a nationwide television system, with one or more broadcast services available to as high a proportion as possible of the people of the United States. The network system has done much to foster the realization of this objective. But some practices of the networks designed to protect the area of their primary affiliates, especially in the larger and more profitable markets, have impeded rather than assisted this Commission policy. This report accepts the network system as a necessary and highly desirable component of the American broadcasting system. The recommendations which have been made are designed to provide effective competition in television by removing those competitive restraints which impinge upon Commission policy relating to the public interest in broadcasting. It is the opinion and hope of the Network Study Staff, that the present system of broadcasting, in which the networks play so large a role, will be rendered more competitive by adoption of these recommendations, and thus will better serve the interest of the public at large. It should be recognized, however, that the high concentration of control exercised by networks, the barriers to new network entry, the strong bargaining position of the networks in their relations with stations in many markets, and the limited opportunities for non-network groups to compete, present in combination a serious problem for the realization of the objectives of the Commission. Should measures recommended in this report, together with technological change in the industry within the next few years, not achieve effective competition in the broadcasting system, it may be necessary to consider basic structural changes in the system. The changes which might have to be considered under these circumstances include such alternatives as: a national television service available to any subscribing stations, as national news sources now make their services available to all newspapers; rationing of station time among program suppliers and advertisers; Commission regulation of rates; recapture of monop oly profits or economic rent in the use of valuable frequency channels allocated to the large commercially desirable markets; and recapture of the value of the frequency itself upon the sale of scarce, viable, station facilities. In lieu of considering such basic structural changes, the Network Study Staff has followed the policy of working within the framework of the existing network system and recommending the minimum changes necessary to remove competitive restraints and to effectuate Commission policy relative to licensee responsibility, diversity of ownership and control, and broadcasting in the public interest. Thus, it has been recommended that the self regulating value of publicity as to affiliation practices, rates, and compensation be relied upon to the extent possible. Where this is not feasible, it has been recommended that the restraints on station freedom and the competitive opportunities for non-network groups, resulting from option time, must-buy, the use of affiliation and rate decisions to influence station behavior and other practices, be prohibited or further limited. The recommendations are designed to improve upon the existing structure rather than to provide a substitute for it. Through these recommended changes, stations will have additional freedom in programming to meet the needs of their local communities; there will be somewhat greater opportunity for access to the valuable television medium of non-network groups, such as program producers and national station representatives provided a wide range of program choice; some greater access of local and regional advertisers to television will be provided; multiple ownership will be reduced and more entrepreneurs will be brought into broadcasting, thus increasing opinion sources and the opportunities for local community service; and the networks will be subject directly to the Commission s rules so that any restraining conduct in matters affecting the public interest may be more effectively administered. Adoption of the recommendations should result in a greater degree of competition in broadcasting, programming which is more responsive to community needs, and a more nearly nationwide service. The viewing public would have available a wider variety of television services and a more varied program fare. In the opinion of the Network Study Staff, these recommendations, if adopted, will bring about important and substantial improvements in television broadcasting service to the people. THE COMMUNITY-NEWS VOICE WSRS GREATER CLEVELAND'S NUMBER 1 STATION SRS "M-Mm"MBS Page 106 • October 7, 1957 Broadcasting • Telecasting