Television digest with electronics reports (Jan-Dec 1956)

3 year. Washington is no slouch, either, though it showed smaller gain — going from 26 to 33. Pennsylvania remains "the CATV state," leading with 88, a gain of 4 in year. West Virginia held steady at 38. Equipment manufacturers tell us there are plenty of others — mostly very small, however — the locations of which not even they are sure of. More accurate data should become available, gradually, as more state and regional CATV associations are formed. CONGRESSMEN BLAST FCC IN TRUST PROBE: FCC went through 3 rough days before House Judiciary anti-trust subcommittee this week, coming under Congressional fire for policies which Chairman Cellar (D-N.Y.) thinks may be contrary to anti-trust laws. Incisive questioning was keyed to network profits, affiliation contracts, option time, must-buys, allocations — all leaving strong impression subcommittee was putting commissioners on notice that they better get busy and take some action to bring more competitive outlets and networks into the TV structure. At Dept, of Justice, meanwhile, former Los Angeles Judge Victor R. Hansen was being sworn in as chief t rust -bus t.er, succeeding Stanley N. Barnes who has had his men watching all the Capitol Hill proceedings relating to TV — and Wall Street Journal, which has unusually accurate pipeline to anti-trust division, predicted: "Possible payoff of [Dept.'s] TV study: an autiunn suit against all 3 big networks." Mysterious sidelight on Judiciary subcommittee's public hearings was closeddoor quizzing of CBS pres. Frank Stanton July 12-13 for total of 5 hours, followed by 2-hour secret session for questioning of Comr. Lee. Subcommittee clamped maximum security tag on subject of executive sessions, and neither Stanton, Lee nor any of the Congressmen would talk. But Lee emerged with broad smile, and high praise for Celler's conduct of hearings and for Congressional investigations in general. Secret sessions provoked speculation that lawmakers thought they smelled a "scandal" — but it would seem that none was uncovered. Praise for conduct of hearings wasn't confined to Comr. Lee. Other commissioners and FCC personnel felt that, despite the sharp and sometimes leading questioning, Celler's inclinations were to be fair and to respect FCC viewpoints. But that didn't stop him from lambasting Commission actions which he said are leading to monopolistic concentration. Subcommittee Republicans, however — notably Keating (N.Y. ) and McCulloch (0.) — generally defended networks, FCC and the status quo. * * * * Network finances occupied July 11 open hearing as Celler reeled off 1955 FCC figures on earnings & revenues of networks and their owned stations (see pp. 1-2) — using same ratio-of-earnings-to-investment formula as Senator Bricker, which networks maintain is false yardstick of profitability. Celler said, for example, that before-tax profits of WCBS-TV in 1955 ($9,375,339, probably highest of any station) constituted 2290% return on investment ; that of WRCA-TV ( $7,260,255) an 857% return — drawing from McConnaughey remark that, yes, some of profits were "extremely high." It was Celler's thesis that "only wealthy industries can get the opportunity to use these services" for advertising — and he urged FCC "to direct itself to the proposition of these high charges." He thought FCC ought to determine whether such profits are proper, but FCC general counsel Warren Baker insisted it didn't have statutory authority to consider profits in connection with license renewals. "I don't object to them making money." snapped Celler, "but it gets to the point where the Commission should stop, look and listen." Anti-trust implications in network-station relations occupied second day of hearing, as subcommittee counsel probed into these practices as possible law violations: (1) Fixing of stations' network rates by networks. (2) Discrimination in terms offered by networks to different affiliates. Most questions about network practices were parried by McConnaughey with the comment that Roscoe Barrow's FCC network study committee is now making a thorough investigation. Barrow himself submitted report on study's techniques and goals. Must-buy practice was called illegal by Celler. "Tie-in sales are in violation of the anti-trust laws," he said. "The situation in regard to must-buy is