Variety (Apr 1939)

8ft VARIETT RADIO Wednesdajt April 12, I939 APPEALS COURT IN NEW CHIDING OF FCC FOR CAPRICIOUS ACHONS ON PEIITIONS Waxers Rap NBC Library Sharply Limits Discretion of Comimish—Pottsville SPARhTANBURG BOUT Case Involved —Will Affect Other Pending I wspa anrf Newcomer Firn* Thinn ^ At .Each Other Matters Spartanburg, S. C, April 11. Spartanburg is a radio fireworks center at moment. Southern Adver' tising Corp., headed by A. i. Tay- lor, industrialist, wants new station while WSPA, long alone in local field, is resisting and pushing for ex' pansion concurrently. Meanwhile WFBC, Greenville, has had a repre- sentative scout the hearings, first ol which were held in Spartanburg. Counsel tor new corporation had a stenog take down WSPA programs three consecutive days and intro- duced this as evidence at Washington hearing. WSPA attorneys counter blocked with a motion for 10 days extension for reply. Ministers, busi- ness men and others will be among those making trek to nation's capital for arguments before commish. Local papers - which recently re- stored WSPA mention and programs to morning and ievening spots after several years ban are hands-off .ex' cept for impartial spot coverage of the radio war. Washington, April 11 Stinging reprimand — sharply limiting the discretion of the regula tors and interesting every member of the broadcasting industry — was handed down a week ago by the District of Columbia Court of Ap- peals in latest decision in the hard- fought Pottsville (Pa.) controversy. Reopening of a case where the Com- mish' is reversed for arbitrary ac- tion Is permissible only with court permission, the decision said. The court in effect instructed the FCC to grant a construction permit to the Pottsville Broadcasting Co., which last May won a significant tiiT In which thje Judges nixed the idea that it is fair to deny an application because the sponsor is not a resi- dent of the community where op- erations are . contemplated. A new hearing—with, different parties and new Issues—Is a violation of the rights of. the applicant. Chief Jus- tice D. Lawrence Groner asserted. The vital procedural point was af- firmed in another similar case also decided Monday (3). Court held the door open for Paul R. Heitmeyer. seeking a permit for a local outlet at Cheyenne (Wyo.), to ask for a writ of mandamus compelling the FCC to decide his application on the basis of the prior record, rather than forcing hira to compete with two late-comers. Cant Do as It Pleases The significant. aspect ot the lengthy decision in the Pottsville case is the Court's declaration that the FCC does not enjoy unlimited power to proceed ai it pleases, par- ticularly when It has been over- ruled on appeaL Chief Justice Groner asserted that when an appli- cant has been turned- down and the Conunlsh is reversed It Is the duty of the Commission to comply with that order and, unless for some ex- ceptional reason. It obtains leave ot this court to reopen the case, to re- consider the matter on the record and in the light of this court's opin- ion ... In such a case, petitioner ought not. now to be put In any worse p«|t}on than It occupied on- the original ^letirln'g. and therefore ought not to be required any morei now than originally to be put in hodge-podge with later applicants whose records were not made at the time ot the previous hearing.* Giving the Commish SO days to comply, the tribunal stood ready to Issue a writ compelling the regula- tors to redeclde the case on the facts presented at hearings in the fall of 1936. Chief Justice Groner said tartly the jiirlsts believe 'this ex- pression ot our views' will make such action unnecessary. Central po'nt in the tiff was whether the Commish could go back to the starting point and force Potts- ville Broadcasting Co. to compete with Schuylkill Broadcastini{ Co., which did not' file Its application until after- the former's had been slated tor hearini;. Procedure pro posed following the reversal by the court last May—a de novo trial- constituted violation of rules and law, according to Eliot C. Lovett. counsel for the aggrieved applicant. Although circumstances were somewhat different, essentially the same view was taken by Chief Jus- tice Groner In deciding the soeclal Heitmeyer appeal which sought to block a new hearing on his appli- cation. After the judges reversed the first denial of Heitmeyer's ap- plication, Commish proposed to re- hear his evidence, along with the contentions of Frontier - Broadcast- ing Co. and Cheyenne Radio Corp,, neither of whom was a party In the initial proceeding. The Court told the Commish to make findings'on the basis of the record already estab- lished but did no. instruct It to grant ,the application, because the legal situation Is different In this Instance. In the Pottsville proceeding, the FCC denied the application (1) be- cause the applicant was not finan- cially qualified and (2) because proprletorir were non-residents. The Court lield the first conclusion was .a'bitTBry and canrlclous in the l'i?h* of .the evidence. On the' se<;nnd point, is said there is no rule ban- ning absentee landlords, although It held In effect the Commish has the right to lay down such a. principle it It is applied uniformly and Im- partially. Spanking for the Commish law- yers was most pointed when the tri- bunal stated: 'We think It Is obvious that the particular dbjections of the ■ Com- mission to a reconsideration on the record—to which we have referred —are mere makeweights, and that the real bone of contention is the in- sistence by the Commission upon ab- solute authority to decide the right of applicants tor permits without re- gard to previous findings or de- cisions made by it or'by this court While it is true the authority to grant is exclusive in the Commis- sion, and while it also Is true, as we have said before, that the license conferred on the owner of a radio broadcasting station Is permissive only and within the power of the Conimission by congressional dele- gation, we cannot consent to the view that either the right to grant or the right to revoke is subject to the uncontrolled discretion of that tribunal.'. Furgason Reps WIND ■ WIND, Gary, Ind., has turned over its sales representation for the east to Gene Furgason. | Station was formerly on the list of Weed & Co. (Continued from Page 2B) . sponsors and agencies or for spot ad- vertising on non-network stations. They had no cdmplalnt alMUt the talent situation, although S. King Funkhouser, Commish attorney, asked each about the possible re- straint resulting from the chain's maintenance of an artist bureau, but knocked down the NBC explanation for the policy which prevents com- petitors from running wires into its plants. The tliree independent Arms said CBS, Mutual, and non-affiliated sta tiohs in the New York area are mucl^ more cooperative than NBC, although BrinckerhoS said WOR is unfair to outsiders. They agreed NBC treats them all alike, however, and does not discriminate. Grombach told the Commish jury that numerous advertisers using NBC have asked him to make reference discs but the chain refused to waive the rule against wires to independ- ent canneries. In contrast, CBS pays tor lines linking Grombach plant with its studios, In return tor the right to use his quarters -tor over- fiow web programs at a 'nominal fee.' He said his discs have been aired by NBC stations and h^ has recorded shows with talent obtained from NBC artist service. Explaining he records for several New York stations and agencies, Brinckerhofl had about the same story. Attempts to get permission to wax NBC programs have been unsuccessful and the chain rule is unfair. In his estimation. He had a squawk about WOR, which makes it so costly to run a line Into the stu- dios that indies might as well be barred. Brink said he has lost po. tential Young & Rubicam business because he was unable to make ret- erence discs of NBC shows which the agency handled. Agreeing with implications In Funkhouser's questions; Brincker. hoff took the slant that NBC has no right to deny sponsors or agencies the privilege 'of obtaining recordings wherever they please. The chain is virtually a public utility, he said, and when 'a sponsor buys time on NBC he is entitled to freedom to use their facilities as he desires. Tompkins concurred that the NBC attitude is injurious to indies, having prevented Associated Music Publish. e»s from developing a promising line Of business. Policy has been a bar- rier in the way of the entire tran- scrlptlon trade, although he felt the webs should not be banned from making recordings. Tompkins noted, however, that AMP library clients include 22 NBC outlets and 29 CBS plants. Scoff 'Copyright Trouble* A$ Poor NBC Defense »«♦«♦♦♦♦ ♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦ M v««»«« ♦♦♦♦♦♦«♦♦♦»»♦♦»♦♦♦♦♦♦♦♦♦♦»♦♦» ♦♦♦♦♦♦>♦♦> . ♦*♦♦« F. C C's WASHINGTON DOCKET MAJOR DECiaONS ♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦♦t♦♦♦♦«♦««*♦♦*♦»♦«>♦♦♦♦♦♦*»♦♦♦♦♦♦»♦♦♦♦♦♦♦♦♦♦♦♦( power. Removal of tranamltter to a new location, erection of a vertical antenna and cbangei In equipment would In- volve approximately tlSiOOO, but applicant waa found amply financed ttarougli Its radio-newspaper assets ot nearly 12.00(1,000. Piedmont Publlshlns Co., licenses, retained Ben S. Fisher and John W. KendalL Oklahomai Involuntary asslgnmsnt ot license and renewal of llcenee of WBBZ, Ponca City, tentatively (ranted to Adelaide Lillian Carroll, e.-(eoutrlx ot the estate ot Charles I.ewls Carrell, deceased, In a 'proposed flndlnc* ot the Commlali. Widow ot the late station owner won a lony battle with the Commish, Involvlns several wrlst-slapplngs tor 'varloua Infractions of the Coramlselon's rules (overnlnr the mainte- nance and technical operation of broadcast stations': sloppy management of the program log; program troubles brought on by fortune-telling broadcast to which listeners kicked In two-bits apiece, etc.. Not contemplated, however, that Mrs. Carrell will 'depart from the standards of maintenance and operation of the station' In ths futurSk Commish determined after earlier mistakes were forgiven, Frank Stollenwerck represented applicant. TlrglDla: Daytlms transmitter to furnish Fredericksburg with primary service received Commish nod. Tranamltter to operate on lICO ko with 2C0 watts wlU be coUHtrncted at a coat ot $9,0S0 by the Fredericksburg Broad- casting Corp/ A California radio engineer—Richard F. Lewis, Jr., chief engineer ot a San Bernardino radio station—^wlll be Imported to become vice-president ot the corporation and active manager and engineer of the proposed transmitter. Has kicked In tl(,000, out of which he will buy CS shares at IISO each—the excess to be refunded to him. Other execs will be Benjamin T. Pitts, president; John F. Could- wian, treasurer, and Ray Hall, secretary. DIreotors are w. Marshall King, James O. Harrison, J. V. O'Toole, Jullsn J. Garner, and Claude ParcelL No broadcast service at present available to the community although WRVA, Richmond, will provide a slgnnl ot about .6 millivolt per meter centaur when It begins operation with to kw. No Interference problems Involved. W. Uarehall King appeared on behalf of applicant. Washington, April 11. CHliromlat (1) Night operation and Jnlce-Jump for KTKC, Tulare-Klngs Counties Radio Aasoolates, Visalln, okayed with provision that requirements for a proposed directional an- tenna are revised to meet Commlah dcmcihda. Station also will change frequency from llOCT to BOO kc Nerd for the proposed service has been demonstrated In times of flood and transmitter would be aiding farmers and ranchers by supplying weather torecastR, frost warnings and other agricultural Information, Commish decreed. Enlarged coverage would make up for night limitation by XBW, Mexico City—now operating with 100 kw power—to the ap- proximate 8.S millivolt per meter, contour of KTKC, Cost of Improvements will approximate tlO.OOO, report showed .and operating costs will be Increased by Wi per month. Anticipated additional monthly revenues, however, will be $1,500 from merchants who have Indicated a desire to use the station nights and tl.OOt a month from the Son Lee-Mntnal network with vHloh applicant proposes to d« business. Station, now nsing 2C0 watts days only, will go to 1 kw all times. Represented by. H. H. Shinnlok. (?) Transfer of KYOS, Merced, from the Merced Star Pub- lishing Co., Inc., to the Merced Brosdcastlns Co., accom- plished last week,-with three principal stockholders In the newepaper company taking over the radio subsld. Reason given tor the sate was divorcement ot the rag (Merced Bun-Star) from-the transmitter. Orlglnkl author- l»d capital ot the publishing company—t7(i.000, ronslsting of 760 shares ot 1100 par value common stock—was held by Bve members ot the same family, as follows: Ray McCluhg, proxy, 24S shares; Peter McClung. v.-p., 241 shares, and Hugh McClung, secretary-treasurer, 2o0 shares. Ten remaining ducats owned by two others of the McClung ulbe. KYOa new deal will set up Ray, Peter and Hugh as equnl holders In }24,000 worth of tl common stock In the broad- cast company. Employees ot the station will have a rhanre at a remaining 11,000 worth ot etock, not yet Issued, and arrangements have been made for newspaper employees to obtain an Interest In the publishing plant Although ma- jority ot stock In both the radio and new8paT>er companies Is owned by the trio, announcement was made that plans to lAt In the employees could not 'properly be carried out so long as the newspaper and the radio slatlon are owned by the same corporation.' « With 24,000 out ot 2I>,000 sharps ot broadcast stock Issued, new company receives all properly and equipment of KT03. on which original cost of (29,087. depreciated value of 117,719 and replacement value of f!C,409 n-na set. Brosdrast outfit trill 'receive the beneflts ot the money expended by assignor for organization purposes' plus possible tIS.OOO set aside by resolution of the newspaper company for maintenance and operation of the station. In addition, stockholders have anid that they will cntrlbule. If necessary, another 120,000 In cash for operation expenditures. Only member ot the family with outside radio Interests Is Bay McClung—president of the newspaper company and vice-nresldent of Merced Broadcasting—who has nn Interest In KWLK, Long View, Wash., end is an anpllrnnt for trans- fer of a half-Interest In KHSU Chico, and KVCV, Redding, Calif. Station, which made a 1937 profit ot t7.B00 and averaged ):po per .month for the drat six months, and $1,000 per month for the next three months, of 1958, operntes on 1040 kc days, with 2C0 watts. No contracts have existed with regard to advertising In combination with the noirspaper and none are contemplated. Clarence C. Sill and James W. Cum represented assignor and assignee. Minnesota t Nighttime operation ot KWN'O. WInono, green-lighted by Commish to provide service tor a listening audience which now can be counted on for 'onlv about one hour each'day' because ot the fact thsi most of the residents Within the area are working during dnytlme hours. Transmitter,, owned by Winona Radio Service, will con- tine on 1200 kc with 250 watts daytime power, but will add nighttime hours with 100 watts; Clarence C. Sill and James W. Gum appeared tor an- pilcant. Mlssoarl; New station for Sedaliti authorized through grant of the application of Srollch Brothers. Albert S. and Robert A. Drohllch, of St. Louis, will handle the venture which Involves construction of a 112,200 transmitter to be oper- ated on 1200 kc with 100 watts nights, 260 watts days. Only interference will come frkm limitation ot WTMV, Bnst St. Louis, In the event WTMV'i night power should be raised to h"",! "'i"-. T*"!* POMlblllty Is 'contrary to rulee and regula- tlons adopted by the Commlsalon;' declelon pointed out. TJrohllch Brothers were represented by Ben S, Fisher. Charles V. Way land and John W. Kendall. '""er, »orth Carolina: Daytime power boost from 100 to 250 W.MU approved for WSJS, Wlneton-Solcm, to give the trans- mitter an Increased Held Intensity ot 68 "J throughout the entire area which It now serves with loo waits. No Inler- .rt'?m^„n'r'i;L'l/?r*" "fS't*^ transmitters onrt numorouR addltlannl advertisers would be attracted by the Increased MINOR DECISIONS New Torkj WBBR. Peoples Pulpit Association, Brooklyn, granted permission to change name of licenses to Watch- town Bible * Tract Society, Inc. Pennsylvania: WHP, Inc., Harrlaburg, granted new relay brnadcnsting station to be operated on 160(1, 2022, 2102 and 27:8 kc with 40 watts. SET FOR HEARING IndUnat WIBC, Indiana Broadcasting Corp,, Indianapolis, cha.ngc time of operation, from days only to limited sunset at Bau Claire, Wisconsin (set for hearing to detei-mlae If 'T'-rforence would result to Canadian station CB.M). ■Jregon: KAt.E. Portland, boost day power from 1 to 6 ■ *. make changes In composite equipment and Install vertical radiator. »,^i;"Vi«^;'?l','?L T^*"^ Spartanburg, change frequency J J?. iM* 1"'',^;;'"" "">• »' operation from ^ J^i" watts nights, 1 kw days. .« c?» \ KUTA. Salt Lake City, change frequency from 1600 to 670 kc. Jump power from 100 watts to 1 kw. Install di- rectional antenna system for aU time operallou and make changes In equipment NEW APPUCATIONS ralttomla; The May Department Stores Co.. Los Angeles, new television slatlon to be operated on SOOOO-86000 kc. with i..V»,^ In*" i^i «•"'»»'•,'>: KBE, Central California Broad- walls Berkeley, night power boost froui 100 to 250 lOo'lTsilo'wMtJ'.^^* ^"y- PO^^er Jump from Broadcasting Co.. T.a* Vegas, new watIS dnys "« «atts nighis, 250 1 fo* 6 jfw New York, Increase night power from Jry-jM?n"i ^o'^fkr" .ntenna.^u^m°p po^'i'r-Lr/iV'w^al^sl^'i'Jli:'^'"'"'' I'eunHylvunIn: W8.XKA, Westlnghonae, Pittsburgh, move ihnnT",'"' SPrlngfleld, Maes,, install ne" transmuter 4.C00 kc. Jump power from 50 watts to 1 kw and clianae einlaalon to apeplal for frequency modulatlonT ' All ot the complainants scoffed at NBC's explanation the reason for the ban Is partly the danger ot copy- right trouble. They have not ex- perienced any difficulty in getting clearances, and have friendly rcia- tions with the unions as well as the copyright - holders, Commish was told. They diSereitt' however, as to whether there was ahjr ina,t)erlal dif- ference In the expense/Imposed on indies by the denial of permission to run wires Into the chain's studios. The indies did not see eye-to-eye on the question of rubbing out the FCC rule which requires specific identification. of transcribed pro- grams. Brlnbkerhofr suggested the FCC license recording companies in order to insure -satisfactory quality In transcriptions but had no objec- tion to requiring an announcement at the end of a canned program. Tompkins hoped the rule will be changed and feels It is unfair to put high grade transcriptions In the same class with ordlnaiy phonograph records. Lloyd Egner Takes Stand; Thesaurus Works Faiifly, Denials of any discrimination against Indies were made by C. Lloyd Egner, manager of NBC's transcription division. While there are cases where subscribers to the Thesaurus have pn exclusive right, the chain does not put barriers In the way of rival libraries. Nor does it promise to throw (Mmmeriitil pro« grams to stations buying the The- saurus. Discs enable many stations to put on much better programs than tUey could otherwise, Egner maintained. Non-webbers are definitely bene- fitted by the opportunity to obtain good quality waxed entertainment, notably those In small places where talent is scaBce. Originally NBC planned to serve only NBC outlets, helping them Improve their non- network programs. The exclusivity policy Is not in- jurious to non-network stations, Egner declared. While the Thesaurus is sold to only one station in a city, independents can obtain it if the NBC affiliates aren't Interested. First chance is given to NBC outlets, but they canpot prevent a rival from get- ting it if they don't want it In de- fense of the attitude, the NBC e.\ec said the material is so valuable the chain cannot allow too many repeats to the same audience. Financial difficulties first brought ERPJ into the World picture, Steven- son explained. Sound Studios, pre- decessor company, by August, 1931, Owed the telephone company subsid $60,000 for equipment and seivices. ERPI came to the rescue, with all Referred and common of Sound and world pledged as sectirity for loons and indebtedness. In 1935, World and Sound owed $166,000 for equip- ment and $201,000 in royalties, plus $126,000 to an vmidentified ERPI sub- sidiary. Understanding reached at that time cut the royalty fee, with the reduction retroactive so that debt was pared to $107,000 and equipment was taken back, with the $166,000 bill cancelled. When World began having good luck, ERPI unloaded some of its obligations. Leased to World the stu- dios It had rented, getting 3.000 shares of preferred. Purchased 5.845 shares of World common for $80,000. The holdings are being bought by Texas: kvwrrVeVnonVTumrd.r^ow"'"from 100 w-,tt» ^^al with Percy ope'ra lo«"i^"oL.''d'^!?^ f.«^"^ «™dV:%h„Z. wur,'o j Deutsph, although amount was not operation from days to unlimited, using 100 watts nights. | revealed.