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7/3/42
'*The cure; Regulation 3.104 does not ban options, but it does subject the optioning of time to four restrictions which the Commission found to be in the public interest, ”
"STATION REJECTION OF NETWORK PROaRAl<IS The abuse:
Under the law, a station licensee has the responsibility of deter¬ mining what shall and what shall not go out over his transmitter, and this responsibility is not transferable. There is reason to believe that under some affiliation contracts, the licensee gives up his right to reject improper network programs.
"The cure; Regulation 3.105 provides that a station may not contract away his right to reject unsuitable or improper pro¬ grams,
"The networks on the whole allege that their present con¬ tracts are unexceptionable in this respect; and if this is the case the regulation is quite unobjectionable. However, to the extent that such contracts do or may hereafter impair the principle of licensee responsibility. Regulation 3.105 serves as a remedy.
'•i:ETW0RK OWNERSHIP OF STATIONS The abuse; In addition to the hundreds of stations affiliated by contract with NBC and CBS, these networks were the licensees of 10 and 8 stations respectively at the time of our Report on Chain Broadcasting. "
"Since the announcement of our regulations, this concen¬ tration of stations has already improved somewhat. Thus 3 of NBC*s 10 stations have been transferred to the Blue Network, Inc. In addition, WMAL here in Washington has been transferred back from NBC to the Washington Star. Thus, when the Blue network is sold, it will have 3 stations and NBC will have 6.
"The cure ; Regulation 3.106 provides that no network shall own more than one station in any locality. When the contem¬ plated sale of the Blue is completed, this requirement will auto¬ matically be met. The regulation also provides that a network shall not be the licensee of a station in any locality where the existing stations are so few, or of such unequal desirability, that competition would be substantially restrained by such licensing.
"NETWORK CONTROL OF STATION RATES The abuse; NBC*s standard affiliation contract provides that, if a station sells time to a national advertiser for less than that which NBC charges network advertisers for that time, then NBC may lower the station's network rate pronortlonately. Thus, if you, as a national advertis¬ er, go to a station and say, *I want an hour over your station, and I'll pay so many dollars', the station may have to reply: *We*d like to, but if we did NBC would crack down on us,*
"This might properly be considered outside the Commis¬ sion's concern, if it did not affect listeners adversely. However, listeners are affected. Many programs which might be put on by national advertisers, through transcriptions or otherwise, are banned because network rates must be charged even though the net¬ work is not used. Thus listeners are deprived of programs which might otherwise be broadcast.
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