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7/3/42
**The cure; Regulation 3.101 provides that network affil¬ iation contracts may not be so drawn as to prevent a station, If It so desires, from carrying programs from another network, •'
"TERRITORIAL EXCLUSIVITY The abuse; Frequently certain stations decide not to carry particular network programs. Terri¬ torial exclusivity means that If the regular affiliate in an area decides not to carry a program, the network may not offer that program to any other station in that area. Thus, the regular affil¬ iate in any area is in a position not only to reject a program, but also to prevent listeners in his area from hearing that program over any other station in that area, ”
"The cure; Regulation 3,102 provides that the regular affiliate may not prevent some other station from carrying a net¬ work program in the event that the regular affiliate rejects it.
The regular affiliate may, of course, have first call on the pro¬ grams of its network; but in the event that it chooses to reject such a network program, it cannot under our regulation block a neighboring station from bringing the rejected program to listeners in that area. ”
"DURATION OF AFFILIATION CONTRACTS ~ The abuse; One of the amazing things about these affiliation contracts is the term they cover. While the station is bound by the contract for five years, the network is only bound for one year. Since these con¬ tracts protect the station for only one year in any case, our regu¬ lation limiting contracts to two years is not a limitation at all from the point of view of the station’s certainty of affiliation,
"The network, of course, likes to have its stations bound to it for five years; but it is easy to see how this provision adversely affects the public interest. A network may be offering excellent service and putting on excellent programs at the time an affiliation contract is signed. During the five-year period thereafter, its service and programs may deteriorate. But no matter how low it falls, the station is still bound to take such programs, and only such programs.
"The cure ; Regulation 3,103 originally provided that an affiliation contract might not exceed one year which was at that time also the period of the license. Subsequently, the Commission lengthened the terra of the license, and coincidentally the maximum term of affiliation contracts, to two years. Thus, a station is in a position at least every two years to survey the entire field and make such arrangements as appear best at that time,
"Option Time The Abuse ; By taking an option on all the hours of its affiliates, CBS is able to discourage nonnetwork programs. NBC achieves substantially the same effect by optioning the best hours of its stations. These options discourage not only local programs but also transcriptions. Advertisers are unwilling to invest large suras in developing programs which may be moved on 28 days’ notice. The result has been that stations have been cramped in their efforts to produce worthwhile local programs and to procure high-quality transcriptions.
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