Broadcasting Telecasting (Jan-Mar 1960)

OREN HARRIS WARMS UP AGAIN Two new bills of vital interest to broadcasters slated for subcommittee hearings in April Hearings on two new bills that would impose severe shackles on broadcasting have been promised within two or three weeks by Chairman Oren Harris CDArk.) of the House Commerce Committee. Rep. Harris said he hoped the committee can finish its current hearings on federal agency ethics and get to the new legislation before the Easter congressional recess (starting sometime the week of April 10). The bills (for detailed provisions see box, this page), authored by Rep. Harris and implementing recommendations made Feb. 7 by the House Legislative Oversight Subcommittee which he heads, would provide for FCC regulation of the tv and radio networks; impose restraints on station trading and alleged "strike" applications in moves aimed at trafficking in licenses; require local hearings for all initial station applications; authorize the FCC to suspend licenses for 10-day periods for certain offenses; prohibit payola and plugola activities, and making rigging of tv or radio programs a criminal offense with a fine of $10,000 and/ or imprisonment for two years. Rep. Harris said other bills on the same subjects also will be considered at the hearings. Still to be introduced by Rep. Harris is a bill implementing Oversight recommendations that the Federal Trade Commission be empowered to seek temporary injunctions against all alleged unfair or deceptive practices under its jurisdiction and to make broadcast licensees, networks and advertising agencies subject to criminal penalties provided in the FTC Act for false advertising of food, drugs, devices or cosmetics or cosmetics likely to be injurious to the health. Rep. Harris last week also expressed satisfaction at the progress of hearings on the agency ethics bills. FTC charges Schick The Federal Trade Commission issued its eighth complaint Thursday (March 24) in its current campaign against misleading tv advertising. Charged with deceptive tv commercials was Eversharp Inc., maker of Schick safety razors and blades. Also cited in the complaint were E. E. Ettinger, company vice president, Compton Advertising Inc., the firm's advertising agency; lohn Hise, a Compton vice president; and Alex Hoffman, account executive. The FTC charged that the Schick tv commercial unduly frightens prospective purchasers of competitive razors. The ad shows a Schick razor and "an old style round head razor" shaving a boxing glove worn by heavyweight champion Ingemar Johansson. The competitive razor slashes the glove. FTC names 8 more The FTC last week issued eight more payola complaints against the recording industry, swelling the total to 68. The companies: Decca Distributing Corp. (subsidiary of Decca Records Inc.), Hull Records Inc., Carlton Record Corp. and Carlton Distributing Corp., W.S.F. Inc., and Dolores Enterprises Inc., all New York City; Southern Record Distributors Inc., Nashville, Tenn.; Field Music Sales Inc., San Francisco; and Savoy Music Co., Newark, N.J. The FTC charges that each company has given payola to disc jockeys in order to increase record sales. The commission also alleges that Decca, Field, Southern, and Carlton made payments to station personnel. IN THE HILL HOPPER . . . Here are capsulated versions of congressional legislation of interest to broadcasting and allied fields: S 3244. Sen. Vance Hartke (D-Ind.)— to exempt some tuner manufacturers from liability for failing to pay tax on tubes installed before selling tuners to tv set manufacturers during the period Sept. 1, 1950, to Sept. 1, 1955. (They bought the tubes on a tax-free basis and sold their tuners to setmakers without adding tax charges, but Internal Revenue Service holds tuner makers should have paid; thus taxes would be paid twice on tubes. Finance Committee. March 21. HR 11233. Rep. Byron Johnson (D-Colo.)— to provide free tv time for major presidential candidates, identical to earlier Senate bill. Commerce Committee. March 17. HR 11260. Rep. Stewart Udall (D-Ariz.)— same as HR 11233, foregoing. Commerce Committee. March 18. HR 11333. Rep. Henry Dixon (R-Utah)— to exclude tv boosters from licensing requirements and waive requirement of a permit for a tv booster previously constructed without authorization. Commerce Committee. March 23. HR 11340. Rep. Oren Harris (D-Ark.)— would (1) restrict trafficking in and acquisition of stations without FCC public interest finding by: eliminating ban against Avco rule, requiring minimum three-year operation by licensee, requiring local public hearing where only one prospective purchaser is involved (but FCC could approve transfer without hearing in such a case if it states and publishes reasons no hearing is necessary); (2) bring tv and radio networks under FCC regulation by requiring "operating certificate" for networks with proscriptions against illegality in programs, failure to exercise control over matter broadcast, giving unfair advantages in matter broadcast to products or services in which network has interests and making con tracts with affiliates inhibiting latter's operation in public interest. Commerce Committee. March 23. HR 11341. Rep. Oren Harris (D-Ark.) — would (1) require FCC to hold local hearing on all applications for original grants or construction permits (and substantial modifications) with burden on applicant to "affirmatively" establish grant would be in public interest; set renewals, other modifcations and other applications for [Washington] hearing only upon FCC finding this is necessary; (2) prohibit payment by one applicant to another for withdrawal (before earliest time FCC grant is subject to rehearing or appeal to courts) without prior FCC permission and provided payment does not exceed amount FCC thinks was "legitimately and prudently" expended in prosecuting application; require FCC to publish its consent to payment and, unless it has made the grant to another applicant than that making the payment, set aside the grant, permit the grantee to file a new application and for 30 days accept applications from "other persons"; (3) express sense of Congress that "swapoffs" of licenses and permits (agreement by an applicant — in return for withdrawal of another applicant — that he won't apply for or will withdraw as an applicant for another facility) are contrary to public interest. FCC would be required to consider an applicant's past activities in this respect in acting on his application for a license, construction permit or transfer; (4) authorize FCC to revoke license for false statements in applications and their prosecution, for any conditions that would be cause for refusing to make an original grant, for willful or repeated failure to operate substantially as set forth in license, for willful or repeated failure to observe laws or FCC rules, and for violation of FCC cease and desist orders to enforce these sanctions and of certain criminal statutes; FCC could suspend a license for up to 10 days for the same reasons if offenses were not '"willfully, knowingly or repeatedly" committed. The FCC, before revoking or suspending, or before issuing a cease and desist order would be required to issue a show cause order stating the matters under inquiry and ordering the recipient to appear and give evidence; then if FCC decides to revoke, suspend or issue a cease and desist order it would have to give grounds and reasons; (5) require person in "control" of broadcasting matter for which payment has been made to make an announcement naming the person who made payment, but would excuse him if (a) neither he nor his "employe" knew payment was made and he used "reasonable diligence" in seeking information or (b) if he made an announcement in good faith based on false or inadequate information, but could furnish a guaranty signed by the person who made the payment of the source, nature and amount of it. The person making the payment would be required to furnish a written guaranty that his representations were true; (6) prohibit the supplying of answers or secret assistance, with intent to deceive, to participants of any contest of skill or knowledge, broadcast to the public and purported to be bona fide, where the outcome would be pre-arranged or pre-determined; prohibit bribery, persuasion or intimidation to cause a contestant to refrain from using his skill or knowledge and thus affect the outcome; prohibit production or participation or offer for broadcasting or sponsorship of any such program having knowledge or belief that such practices are involved; and prohibit conspiracy with others to commit any of the things prohibited. Sanctions apply where contests constitute all or part of broadcast programs and where prizes are offered to successful participants. Violators of prohibition against rigged programs would be fined $10,000 and/ or imprisoned up to two years. Commerce Committee. March 23. 80 (GOVERNMENT) BROADCASTING, March 28, 1960