Broadcasting Telecasting (Jul-Sep 1960)

GOVERNMENT NBC-RKO DEAL IN COURT AGAIN ■ KRON-TV files antitrust charges, asks full hearing before FCC ■ Move follows failure of Westinghouse attempt to intervene The largest station deal in history — involving NBC and RKO General exchanges and acquisitions in four major markets — is becoming the most disputed. Several major developments took place last week as KRON-TV San Francisco, which stands to lose its NBC-TV affiliation, initiated these moves: ■ Filed a civil antitrust suit against NBC, RKO General and individuals involved in ownership and operation of the competitive KTVU (TV) Oakland, which NBC wants to buy. ■ Asked FCC to set KTVU's license application for hearing. (KTVU has been operating on a construction permit since it took the air in March 1958.) ■ Asked FCC to consolidate in one hearing all the applications involved in the NBC-RKO deal, involving outlets in Philadelphia, Washington, Boston and San Francisco. Court Action ■ A further development last week was a decision by the U.S. District Court, Philadelphia, denying a Westinghouse Broadcasting Co. petition to intervene in the NBCRKO swap of Philadelphia and Boston outlets. This removed one of the obstacles to the exchange. Applications for the individual station transfers had been filed with the FCC June 3 (Broadcasting, June 6). The NBC-RKO deal involves: NBC acquisition of WTvfAC-AM-TV and WRKO-FM Boston in exchange for WRCV-AM-FM-TV Philadelphia; NBC purchase of KTVU; RKO purchase from NBC of WRC-AM-FM-TV Washington. In addition RKO would sell its WGMS-AM-FM Washington to Crowell-Collier Publishing Co. Judge William H. Kirkpatrick, in denying the Westinghouse request to intervene, denied a plea based on what Westinghouse termed irreparable injury through loss of its Boston NBC affiliation if the network takes over the present RKO outlets in Boston. Reduced ability to compete in the sale of advertising and elimination of competition in the market had been claimed. The chain deal had developed last autumn after NBC and its parent RCA had signed a Dept. of Justice consent decree requiring the network to sell its Philadelphia properties and to clear any additional station purchases through the department. This decree had grown out of a government antitrust suit brought in 1956 after Westinghouse exchanged its Philadelphia outlets for NBC's Cleveland stations. Westinghouse got $3 million out of the exchange. Justice Dept. has stated it had no objection to NBC"s latest moves, the 1959 consent decree requiring NBC clearance of such transfers. On the other hand Rep. Emanuel Celler (DN.Y.), calling the consent decree "worthless," has threatened to reopen NBC seeks to delay rep divestment order NBC has asked the FCC to allow two years after judicial review for its affiliated television stations to find new spot sales representatives. Under an FCC ruling, NBC has until Dec. 31, 1961 to divest itself of affiliate representation. The network, which is appealing the commission ruling prohibiting tv networks from representing affiliated stations other than network-owned outlets, told the U.S. Court of Appeals in Washington that it is "entitled" to have the status quo maintained during judicial review. This cannot be accomplished, NBC said, unless the two-year period "commences after final judicial determination." Otherwise, "it is inevitable that the represented stations will begin taking active steps aimed at severing their relationship with NBC." This would "undoubtedly begin to occur prior to final judicial determination," NBC declared. The network asserted that once a station changed representatives, "it is problematical" whether it would be willing to return to NBC in the event of a court reversal because of the expense and trouble involved. The network said that "some" of its affiliates also were filing similar requests for time extension and that they would "summarize the various business problems which would confront them" if they were forced to engage in finding new representatives during the period of judicial review. KOA-TV Denver, KSD-TV St. Louis, WAVETV Louisville and WRGB (TV) Schenectady, all NBC affiliates, have joined with the network in its appeal to the court. his antitrust subcommittee's hearings on network monopoly. Barrier Removed ■ Judge Kirkpatrick's ruling thus removes one block to the series of station transfers. KRONTV had entered the Philadelphia case but later withdrew. KRON-TV (Chronicle Publishing Co.) charged in its antitrust suit, filed June 29 in U.S. District Court, San Francisco, that RCA and NBC have conspired since 1954 to dispose of Cleveland and Washington outlets so they could get stations in two larger markets (fourth to eighth in size — Philadelphia, Detroit, Boston, San Francisco and Pittsburgh). They have used NBC's "power to grant or withhold network affiliation," KRON-TV charged. In addition KRON-TV charged RCA-NBC tried to eliminate competition from other station buyers in major markets and to induce KTVU to withdraw from the broadcasting business. If NBC acquires KTVU, it is claimed, competition for NBC-TV San Francisco affiliation will be permanently eliminated. This, it was contended, will cut network program sources available to KRON-TV and the Westinghouseowned KPIX (TV) by 50%. And CBS is likely to buy a station in the market, it was added, should the NBC package deal go through, and the Bay Area station that doesn't sell to CBS will be permanently denied a chance to affiliate with a tv network. Impact on Spot " KRON-TV said the opportunities to sell spot programs would be substantially reduced by the NBC-KTVU deal. It charged NBC's spot rate at some of its o&o stations is higher than the station rate for network programs and in some cases NBC stations won't even quote a spot rate because time is reserved for network programs. The o&os are used by the network as "price leaders" in alleged efi'orts to force independent station affiliates to boost their own spot rates above the network scale, the petition claimed. Finally KRON asks that the tv station licenses of NBC, RKO and KTVU be revoked for violation of Sec. 313 of the Communications Act. The charge is made by KRON-TV that RKO, a General Tire & Rubber Co. subsidiary, is "in command" at KTVU. In its filings, KRON-TV says "substantial questions of trafficking and 50 BROADCASTING, July 4, 1960