Broadcasting Telecasting (Jan-Mar 1960)

PAYOLA PROPOSAL DRAWS FIRE Broadcasters comment on FCC rulemaking regulations to make more explicit the meaning of Sec. 317. A major revision took place in 1944 when the commission spelled out the requirement that a proper commercial announcement must be made for political speeches or the expression of views on controversial public issues where services or consideration were provided. Originally this proposal included a similar provision for all program activity, but after industry opposition this was dropped. In 1950 the commission issued an identification notice which detailed more explicity the meaning of commercial identification. The gist was that the buyer of the program or announcement must be fully identified by way of his corporate name or recognizable product. References to generic terms ("The cigar man," or " Send money to Nylons, Box . . .") were banned. The identification problem arose most recently last year when a number of tv stations carried film clips of the Senate Labor Rackets Committee hearings on the Kohler strike. These were furnished gratis by the National Assn. of Manufacturers. The commission chastised those stations which carried the films and did not announce they had been furnished by NAM. Celler to introduce new anti-payola bill A new anti-payola bill — modeled on one suggested by the American Society of Composers, Authors & Publishers and narrowed specifically to broadcasts of musical works — will be introduced this week by Rep. Emanuel Celler (DN.Y.), chairman of the House Antitrust Subcommittee. A second bill would give the FCC authority to issue a one-year conditional license — instead of one for the regular three years — for violation of the proposed anti-payola measure. The anti-payola measure would make it unlawful, with a fine of up to $1,000 and/ or a year's imprisonment, for any licensee to accept payment for performance on the air of a particular musical work or record in which the person paying has a pecuniary interest, for a person to make such payments and for an employe to accept payment for such performances from anybody but his employer. But the bill authorizes persons to buy time on a station to play musical works. Rep. Celler said activities of the House Oversight Subcommittee, the FCC and the Federal Trade Commission indicate payola is prevalent in many forms. He said he thinks payola is responsible for rock and roll music. It's a kind of corruption the FCC should have dealt with years ago, he said. Unanimous in their opinion that the FCC's proposed payola rulemaking leaves much to be clarified, broadcasters fired heavy salvos at the commission last week. The three networks, the NAB, Westinghouse Broadcasting Co., and the Meredith stations all filed comments to the proposed FCC rulemaking announced Feb. 8 which would amend the commission's rules to read: "All licensees and operating permittees shall adopt procedures to prevent the broadcasting of any matter for which service, money or other valuable consideration is, directly or indirectly, paid or promised to, or charged or accepted by, any officer, employe or independent contractor of the station, unless at the time the same is so broadcast it is announced as being paid for or furnished by such person." The NAB, CBS, NBC and Westinghouse told the commission that its ruling is not directed to the employe but to the broadcaster as licensee, thus imposing a liability on a licensee who takes reasonable procedures but is injured by the act of a dishonest employe. "If the licensee has exercised good faith and reasonable judgment concerning his particular operation, this is the maximum the commission should expect," the NAB said. NBC suggested that the commission "may not have intended this literal result," and said that commission objectives would be attained if it required that the licensee merely exercise "due diligence." There is no safeguard procedure against payola, CBS told the FCC, that can provide a "remedy that is both complete and certain." The network using the same language as the NAB, said that the proposed rule requires reasonable diligence by the licensee but does not place him "in the position of an absolute insurer." The opinion of the Meredith stations that the proposed rule is "ambiguous" and "inconsistent with the requirements of Sec. 317" was shared by all the respondents. The station chain urged the FCC to analyze the controls and procedures submitted by all broadcast stations in response to the commission's two-part payola questionnaire, and make its findings known to the industry. Control Over Contractors • NBC. CBS, ABC and WBC objected to the inclusion of the "independent contractor" in the proposed ruling, since the licensee has no control over this segment of broadcasting. They pointed out that material used on shows supplied by independent contractors might have been obtained surreptitiously but that it would be impossible for a licensee to know this. There was almost unanimous agreement that the FCC should revise its proposed ruling to read that licensees should adopt and enforce procedures reasonably designed to prevent broadcasting of payola material. Both West New firm claims A new variation of an old profession— the song plugger — has been organized. It is aimed at the 5,000odd disc jockeys in broadcasting and is considered by its organizer as "the answer" to payola. The company is Record Promotion Inc., Washington, D.C. It was announced by Hirsh de La Viez, owner of Hirsh Coin Machine Corp. Mr. de La Viez, prominent in Washington show business for 40 years, leases and maintains more than 750 jukeboxes in that area. Record Promotion Inc. plans to have its promotion men call on the nation's disc jockeys in behalf of paying clients. These "detail" men will attempt to persuade disc jockeys to play a client's record. They will also report back to the client what the disc jockey thinks of a record payola 'answer* and, if it is played on the air, how the public reacts. The company will be independent of and will work separately from the promotional activities of the record makers. Mr. de La Viez reported that he already has opened offices in five areas — Baltimore-Washington, Richmond-Norfolk, southern Florida, northern Florida and New England. He said he hopes to establish 15 other area offices in the next 60 days, employing 40 men to make the rounds of the disc jockeys. The basic charge to clients — record manufacturers, music publishers, artists and writers — will be $50 per record per area. The new company, which calls its service "Practimation," is located at 1320 Rhode Island Ave. N.E., Washington, D.C. 66 (GOVERNMENT) BROADCASTING, March 28, 1960