Variety radio directory (1940)

FEDERAL RADIO REGULATION— Continued the price paid by the purchaser or the excess of such price over the value of the tangible assets comprising the station purchased. Included in the transfers approved were many purchases by newspaper publishers, purchases by persons or corporations already having one or more stations, and purchases by absentee owners. In several instances very large amounts were paid. In certain of these instances all records for speed were broken.* The issue, however, continued to be the subject of interest in hearings before Congressional committees. In response to a question at such a hearing, the Commission chairman stated : 'The Commission has no jurisdiction over the price paid for equipment used by broadcast stations as such." By way of contrast, there has been a vigorous onslaught in instances where, in the Commission's judgment, broadcast stations were actually controlled by persons other than their licensees. The Network-Monopoly Report covers the matter extensively, including contracts whereby the licensee appoints a chain as sole agent for the purpose of supplying programs (such as those heretofore existing between National and General Electric and Westinghouse) and miscellaneous examples of management and agency contracts. The Report, referring to Sec. 310 (b) requiring Commission approval of transfers, expresses the conclusion : "The various types of contracts just reviewed raise serious questions under this Section of the Act. The problem is particularly acute where management is transferred to a network whose interest to serve the public might be secondary to its interest as a network organization." Most of the situations described in the Report were the subject of proceedings of one sort or another during the year prior to publication of the Report. Action by the Commission on January 30, 1940, setting the renewal applications of eight stations for hearing, announcing an inquiry into management contracts, and stating that about a dozen additional renewal applications would be similarly treated when they became due (including the Westinghouse and General Electric stations), was followed by a long delay due to the Commission's failure to send out notices of hearing or to specify the issues in which it was interested. In the meantime, the situations were to a large extent corrected voluntarily. The Westinghouse stations, for example, were shifted from National to Westinghouse management, effective July 1, 1940. Where the alleged unauthorized transfer of control was coupled with misrepresentations to the Commission, however, no such lenience was exhibited. In several instances, all having to do with small stations, licenses have been revoked, and the revocations have either become final after hearing or are still pending before the Commission. On January 25, 1940, the Commission made final its revocation of the license of KUMA, Yuma, Ariz., for alleged false statements as to control and operation. Similar action was taken on March 29th against WSAL, Salisbury, Md., where alleged control by a non-licensee was coupled with a charge of misrepresentation as to the * In one case, involving one of the largest purchase prices, newspaper ownership, multiple ownership of stations both in the same and in different communities, and absentee ownership, the application for approval was filed December 8, 1939, announced three days later, and granted on the fourth day. 429