Broadcasting Telecasting (Oct-Dec 1957)

GOVERNMENT FCC ANNOUNCES SPECIFICATIONS FOR NATIONAL TESTS OF TOLL TV • Only outlets in cities of 4 Grade A signals may apply • Uhfs, vhfs eligible for 3-year tests, using any method Specifications for a national toll tv test were made public by the FCC last week — almost a month after it had formally announced that it had instructed its staff to draw up an order proposing the acceptance of applications for a test period of subscription tv [Lead Story, Sept. 23]. Simply put, the Commission said it would accept applications from tv stations for a three-year test of pay tv. But, it added, the tests will not be permitted in any community which does not receive at least four Grade A tv signals. A Grade A signal is one which is at least 68 dbu for chs! 2-6, 71 dbu for chs. 7-13, and 74 dbu for chs. 14-83. It also stated that any station — vhf or uhf — can participate in the tests; and that any station can use any method of toll tv — in fact can use several methods if it so desires. The only out-and-out prohibition is that no method of scrambling or decoding the tv signal will be approved if it interferes with other radio services or degrades the technical quality of the tv signal. And, the Commission said that each qualified method will be permitted to be used in not more than three eligible markets. It also warned that the regular requirements for tv station operation (licensee's responsibility to broadcast in the public interest, minimum hours, equal opportunity for political candidates, etc.) will still be maintained. The order issued last week is entitled "First Report." It stems from the 1955 petition by Zenith Radio Corp., Chicago radio-tv manufacturer, that the FCC authorize subscription tv for commercial operation. Included in the report is a list of information to be furnished by applicants in applying for permission to broadcast pay tv (see separate story, next page). Emphasized in the report was the decision of the Commission not to authorize pay tv operations until March 1, 1958. This is, the Commission stressed, so Congress can consider the question and legislate its desire. There are bills in Congress to prohibit pay tv on broadcast frequencies. Rep. Oren Harris (D-Ark.), chairman of the House Commerce Committee, has announced that hearings will be held in January as soon as Congress resumes. The "First Report" was accepted by five members of the Commission. Comr. Robert T. Bartley issued a dissent, and freshman Comr. Frederick W. Ford did not participate. Comr. Richard A. Mack issued a concurring statement. Gist of Comr. Bartley's dissent was that the Commission should establish a general policy on pay tv before considering even test authority, He maintained that pay tv proponents should be forced to justify the public interest in an evidentiary hearing before the full Commission. The report traced the history of the present proceeding, the proposals made by each of the principal pay tv enthusiasts— Zenith, Skiatron and International Telemeter Corp., plus the more recent TeleGlobe and BiTran — questions of law, public interest considerations. It was decided to authorize tests, the Commission said, because this is the only way that meaningful information can be secured on a host of questions. In any event, the Commission stated unequivocally, there will be an evidentiary hearing following the three--year experimental period and before commercial pay tv is authorized completely. Some of the details which should become known following this test, the Commission said, are: (1) public reaction, (2) extent of audience diversion from free television, (3) operation of different methods, (4) technical performance, (5) methods employed, (6) nature of programs preferred, (7) role of station licensees, (8) potential monopoly. Permission to conduct tests might, the Commission said, be an aid to uhf. This was explained this way: Many markets now only receive three good Grade A signals. If pay tv is the bononza its proponents claim, the idle channels which are mainly uhf might be snapped up in order to put the community into the eligible class. In discussing non-exclusivity, the Commission stressed that applicants will be required to file with the applications "a contract between the applicant and any local subscription television franchise holder or ELIGIBLE CITIES There are at least 20 cities where toll tv tests can be commenced under the Commission's limitation that demonstration communities must receive at least four Grade A tv signals. Here is the list as culled by the Commission: Chicago, Dallas-Fort Worth, Denver, Fresno-Tulare, Harrisburg-Lancaster-Lebanon, Reading-York, Hartford-New Britain-New Haven-Waterbury-Springfield, Los Angeles, MiamiFort Lauderdale, Milwaukee, Minneapolis-St. Paul, New York, Philadelphia-Camden-Wilmington, PhoenixMesa, Portland-Vancouver, St. Louis, San Antonio, San Francisco-Oakland, Seattle-Tacoma, Washington (D. C), Wilkes-B arre-Scr anton . any other person participating in the local trial application, in which it is provided that the franchise holder or such other contracting party as may be appropriate in the circumstances, will, upon request of the licensee of any other television station serving the local area, participate with such other station licensee or licensees in local subscription television operations under the same terms and conditions are set out in the contract with the applicant station." This section also provides, it was stated, that no contract between a station and a franchise or other pay tv entrepreneur may prohibit the station from using any other type of pay tv system. And, the Commission continued, these contracts must include a provision expressly providing that the station licensee may reject any program he considers unsuitable. Also the Commission said the station licensee must not only be a party to determining the charges to be made to the public for the fee-tv service but must have the right of "ultimate decision" in such matters. Stations granted the right to broadcast pay tv, the Commission warned, will still be responsible for maintaining the minimum number of hours of free programs (28 hours per week, and at least two hours daily). The Commission stressed that grantees must be ready to file reports on their activities, and that any contracts between the station operator and other parties must provide for a full disclosure on such matters as charges, collections, method of disseminating coding information to subscribers, plus all other questions which the Commission might ask. The Commission commented: "In making our decision we are, at this stage, unaided by any meaningful demonstrations of the service in operation. Nor are there available to the Commission precise blueprints of the manner in which the operation would be conducted. The proponents indicate that it is difficult to elaborate further on the basic proposals already submitted until an announcement is made of the conditions under which subscription television operations would be permissible, thereby affording interested segments of the industry an opportunity to formulate specific plans, and negotiate detailed business arrangements and contracts which would govern the conduct of the operation. What is more, the need to adapt initial methods in the light of experience as it is progressively gained, is said to justify, and in fact necessitate, flexibility in the initial operations. Thus, in circumstances which offer no fixed guideposts either in past experience or in crystallized future plans, the Commission is called upon to rule on petitions to permit a service about which proponents and opponents have urged the most widely divergent views, in a debate which has necessarily been conducted more on the ground of potential implications of the service than on the basis of demonstrable facts. "Proponents, claiming large benefits to the public from the introduction of a broad new financial base and added programming resources into television broadcasting, urge the immediate, definitive authorization of Page 82 • October 21, 1957 Broadcasting