Broadcasting Telecasting (Jan-Mar 1963)

A new dodge in town-and the FCC's after it The FCC warned all stations last week to avoid entering agreements to set combination advertising rates. The commission said such activities are illegal and clearly violate commission policy. The arrangements concerning the commission, one official explained, are usually engineered by an advertising salesman who organizes several stations in a town into a "network." He then offers combination rates to an advertiser for spot time on all the "network" stations. The commission notice didn't indicate how many stations are involved in such arrangements. But one source said at least 12 stations — all am — are known to have participated in them. The problem is a fairly new one for the commission. It reached the commission level several months ago through the Renewal and Transfer Division which had received complaints about stations entering into combination agreements. One official said stations participating in them apparently don't realize they are violating the law. He said there's nothing "covert" about the arrangements. Much of the commission information about them comes from promotion brochures. terest, and the proposed payment of $523,000. The company made its comments in reply to a Broadcast Bureau recommendation that the withdrawal be approved but the payment denied (At Deadline, Jan. 21). The bureau, questioning Philco's good faith in filing its application, said there was "a serious question" as to whether the application was merely a device to improve the bargaining position of the parent Philco Corp. in its court fight with NBC's parent, RCA, over patent rights. Court Settlement ■ A settlement, under which RCA paid Philco $9 million, ended that court fight at the same time agreement was reached on Philco's withdrawal from the ch. 3 contest (Broadcasting, Jan. 7). In contending the Communications Act doesn't apply to the NBC-Philco case, in which one applicant is seeking renewal, the other a construction permit, Philco presented an analysis of Sec. 311 (c). This is the section cited the Broadcast Bureau as the basis for the commission's jurisdiction. Philco noted the section, added in 1960 to outlaw "pay-offs," speaks of situations in which "there are pending before the commission two or more applications for a permit for construction. . .!" "Technical words and phrases," Philco said, "are assumed to have been used by a legislative body in a technical sense. Terms of art in a statute are to be taken in their technical meaning which is presumed to have been understood by those responsible for the passage of the law." Turning to the bureau's main argument against approving reimbursement, Philco said there is no evidence to support a contention of bad faith. It notes the bureau concedes there is no evidence for concluding that there was "a lack of bona fides," only a doubt. The company said the agreements settling the various court suits have already been executed and cannot be affected by the fate of the ch. 3 issue. Attached to its filing are affidavits by Joseph H. Gillies, president of Philco Broadcasting, and David B. Smith, vice president, stating that the application was filed only because Philco wanted to operate a Philadelphia tv station, not because of the litigation between Philco and RCA. Riding on the FCC decision is NBC's hope of early renewal and its transfer of its Philadelphia properties — WRCVAM-TV for RKO General's Boston stations, WNAC-AM-TV and WRKO (FM). NBC is required to dispose of its Philadelphia stations by a 1959 Justice Dept. consent decree. Rep. Bennett proposes administrative court An administrative court proposed by a Florida congressman resembles in some ways the communications court suggested in a monograph prepared for the consideration of the Federal Communications Bar Assn. (Broadcasting, Jan. 28). In H.R. 43, Rep. Charles E. Bennett (D-Fla.) would provide a United States Administrative Court to be composed of nine justices appointed by the President for 11 -year terms. With powers equivalent to a U. S. district court, the administrative tribunal would appoint hearing commissioners and "establish such divisions or panels as it may deem appropriate for the conduct of its proceedings." A communications court patterned after the tax court would assume the adjudicatory functions now exercised by the FCC, according to the bar association's proposal. Rep. Bennett's court would consider matters of all agencies, unlike the specialized court proposed by the bar association. Station owner complains about wire-service terms Complaints of a radio broadcaster that five-year contracts required by suppliers of radio news wire services are too long have been reported turned over to the FCC and the Department of Justice. Ranulf Compton, president of South Jersey Broadcasting Co., Camden, N. J., claimed such contracts are arbitrary and non-cancellable. His company, licensee of WKDN-AM-FM Camden and WARN-AM-FM Ft. Pierce, Fla., cannot foretell economic conditions over such an extended period of time, he contended. Two-year contracts would be fairer, he added. Mr. Compton argued that network affiliation contracts were for two-year periods, and FCC licenses for only three years. The New Jersey broadcaster filed complaints with two federal agencies and commerce committees of Congress. Both committees referred the matter to the FCC for study. The FCC last week... ■ By its Review Board granted John A. Egle a construction permit for a new am station on 1600 kc (1 kw) in Golden Meadow, La. At the same time, the board denied a joint request by Mr. Egle and competing applicant KLFT Radio Inc. for reimbursement of expenses incurred by the later in processing its application (Broadcasting, Dec. 24, 1963). ■ Granted, by Chief Hearing Examiner James D. Cunningham, a petition by the Broadcast Bureau to hold a field hearing on the application of Geoffrey A. Lapping for a new am station in Blythe, Calif. Mr. Cunningham last November denied a request by Mr. Lapping for the field hearing (Broadcasting, Dec. 3) but stated that matters set forth in the bureau's petition and disclosures at the pre-hearing conference now warrant a field hearing. ■ Hearing Examiner James D. Cunningham was designated, by himself, as chief hearing examiner, to preside at the commission's investigatory proceeding concerning the alleged misrepresentations made by the McLendon Corp. concerning its intended programming for WYNR Chicago (Broadcasting, Jan. 28). Hearing will be held in Chicago beginning March 5. 46 (GOVERNMENT) BROADCASTING, February 4, 1963