NAB reports (Jan-Dec 1944)

proximately four and one-half times the net worth of the licensee corporation and nearly thirty-three times its net profiits before taxes. “Radio broadcasting is competitive and it is not the func¬ tion of the Commission to protect either the buyers or the sellers of radio stations from the consequences of the exercise of their own business judgment. However, the Commission does have the responsibility of seeing to it that licensees observe the provisions of the Communica¬ tions Act and that licenses for the operation of broadcast¬ ing stations are neither granted nor transferred unless the public interest will be served. Its responsibility in approving transfers is no less than its responsibility in making original grants of licenses. Section 310(b) of the Act provides: “ ‘The station license required hereby, the frequencies authorized to be used by the licensee, and the rights therein granted shall not be transferred, assigned, or in any manner either voluntarily or involuntarily disposed of, or indirectly by transfer of control of any corpora¬ tion holding such license, to any person, unless the Com¬ mission shall, after securing full information, decide that said transfer is in the public interest, and shall give its consent in writing.’ (Italics supplied.) “Sections 301 and 309(b) of the Communications Act provide clearly that radio channels are public property and incapable of private ownership. It follows that neither the channels nor any right to use them is for sale, either by private individuals or by the Government. The Communications Act provides that they are to be licensed by the Commission, only for limited periods of time, and only to whose whom the Commission finds best qualified, by ability and intention, to use them in the public interest. Ability to outbid others in the price offered for a station has no relation to qualifications of this kind. “In each of the three transfers under consideration, the price being paid appears, on its face, to be greatly in ex¬ cess of any demonstrated value of the properties and busi¬ ness being sold. For what is this excess being paid? Are there elements of value in the transferors’ properties and businesses which are not apparent from the information contained in their applications, or are they selling some¬ thing they do not own and have no right to sell, namely, the use of a radio channel? Moreover, the new licensees are taking on financial loads many times greater than those of the old licensees. All of these stations are com¬ mercial stations, and it is reasonable to assume that the purchaser of a commercial station buys with the expecta¬ tion of earning at least a reasonable return on his invest¬ ment. In the present cases, do the transferees regard their purchases as business ventures, or do they intend to operate the stations without regard to profit? If the former, how do they expect to operate the stations so that they will be self-sustaining and at the same time yield a fair business return on investments ranging from four and one-half to ten times the investments of the former licensees? Is it anticipated that profits will be increased through more economical and efficient operations or by in¬ creasing the price per unit of time sold, or is it contem¬ plated that a substantial amount, if not all, of the in¬ creased profits will have to come from selling more time? If more time is to be sold, will a reasonable amount of the free time still be left for local civic programs, educational programs, the discussion of controversial public issues, and other sustaining programs? “It seems to me that the applications, on their face, point to the need of ‘securing full information’ before the Commission can decide that the transfers are in the public interest. “Far from the least important feature of our American broadcasting system is that the cost of establishing and operating radio stations has been within the reach of qualified individuals and groups having only moderate financial means. In many communities, ail presently avail¬ able standard radio channeles are occupied and the only way for a newcomer to get into the field is by the pur¬ chase of an existing station. The present inflationarv trend in the price of radio stations, if continued, will tend not only to increase still further the already tremendous pressure on sustaining programs but also to push radio broadcasting more and more beyond the reach of any but the well-to-do. Certainly the inflationary trend should not be encouraged by permitting the capitalization of licenses. C. J. DURR, Commissioner.” The reasons set forth in the memorandum also apply to his dissent from the Commission’s action of July 25 ap¬ proving tiansfer of New Jersey Broadcasting Corporation, licensee of Station WHOM and relay station WABC, Jer¬ sey City, N. J., from Paul F. Harron, Joseph Lang, et al., to the Iowa Broadcasting Company for $403,528.23, Com¬ missioner Durr said. TWO BOARD MEMBERS ENTER SERVICE Two members of the NAB Board of Dirctors have en¬ tered the armed services and as a consequence presented their resignations from the NAB Board. James W. Woodruff, Jr., Director for the Fifth NAB District, embracing the States of Alabama, Florida and Georgia, and Puerto Rico, entered the Army as a private. Barney J. Lavin, one of the Dii'ectors-at-Large for medium-sized stations, reported to the Marine Corps at Quantico, Virginia, where he was commissioned a Second Lieutenant. These two vacancies on the Board will be filled by Board action at the meeting of the Board to be held in connection with the Executives War Conference RYAN SPEAKS ON RADIO AND WAR President Harold Ryan delivered an address on Thurs¬ day (27), before the State Conference on the Use of Radio in Farm and Home Safety under the auspices of the New lork Department of Health. Mr. Ryan’s topic was Radios Public Service in Time of War.” His address follows: Kamo, to a great many people in this country, was born on the sixth day of June in the year nineteen hundred and forty-four— less than two months ago. They had used it enjoyed it grown accustomed to it, turned to it instinc¬ tively on D-Day — but never really knew what it was until its microphones went into action alongside fighting sons husbands and brothers invading the shores of Normandy from the sea and from the air. The minute by minute account ot this mighty combat, the voices of brave men from abroad, the roar of guns and planes and noise of battle sent thousands impulsively to their knees in praver for those who were known to be in the invasion forces. Here was realism — but realism that everybody wanted _ realism that made Americans feel that they were close to then loved ones realism that placed a new value on this precious link of communications with the other side of the woidd And so, to millions of our people, radio was born on D-Day. To the industry itself, however, D-Day marked radio’s arrival at maturity. A great crisis, more than the passage of years, often brings a person or an industry to its full development, to the firm realization of its faculties and abilities. Radio, slowly and painstakingly groomed foi its majoi role in world affairs, which its founders vi sioned twenty years ago, on D-Day came to grips first hand with a major phase of this world shattering war To paraphrase a well-known quotation: “We came we saw we communicated:’ In doing so, we attained our uncon¬ tested majority. Radio had to be developed to the point where it could handle such an assignment as the coverage of this war Vv’e think of radio as an invention that was capable of spanning great distances from its very beginning Why then, could it not have broadcast from 'a batdlefront. to the rest of the world at any time in its career? Here the theory must give way to the many practical and engi¬ neering problems which beset the industry durin° its life since the early twenties — not to mention the development of personnel and methods on a laborious scale. July 28, 1944 249