Chains Unchained?

Last week the Federal Communications Commission told U.S. broadcasters that they had nothing to lose but their radio chains. In a resounding 153-page report on "monopoly" in radio that has been three years a-gathering, the Commission declared that free competition in the U.S. radio industry was impossible so long as the three great networks dominated the 883 U.S. stations as completely as in recent years. In eight revolutionary new decrees, FCC offered what it called a "Magna Charta for American broadcasting stations."

The strictures were chiefly aimed to make the outlets more independent of the networks. Chains were forbidden to use more than one outlet in any area, or control more than one group of networks. The latter meant that NBC must choose be tween its Red and Blue networks, probably sell or disband Blue.

Practices between the chains and the outlets which FCC intends to stop are:

> "Exclusivity." By this arrangement a station can carry only the programs of the chain with which it is affiliated. FCC now says a station may carry programs offered by any network.

> "Territorial exclusivity" -- by which a network was prevented from sending a program to another station in an area served by its affiliated station, even though the affiliated station should reject the program. FCC now says a network can send to the other station.

> Longterm affiliation contracts. Most contracts run five years. FCC says contracts affiliating station to chain may run only one year.

> "Network Optional Time" -- by terms of which stations were compelled to can el any program scheduled during an "option period" if its network offered a program for that period. FCC now says stations may choose.

> Clauses in present contracts require stations to broadcast network programs, even if preferable programs are available for that hour. FCC now says stations may choose.

> Clauses in present contracts providing a penalty for a station if it sells time to national advertisers at less than the rate which the network charges advertisers for the station's time. These clauses prevent the station from competing in time-selling with the network. FCC now says the stations may set their own rates.

Defending these changes, the five ma jority members of FCC, dominated by tall, ambitious Chairman James Lawrence Fly, onetime TVA general counsel and seasoned New Dealer, talked straight antimonopoly language like that familiar around SEC, TNEC, and the Justice Department. His report rejected the alternatives of Government ownership and rigid utility-style regulation. Said the report: "Competition, given a fair test, will best protect the public interest. That is the American system." And it added: "We doubt that the networks have so little faith in the stability of their own enterprise as is suggested by their insistence that the whole structure of commercial broadcasting will collapse if their relations with outlets are modified along the lines indicated. . . ."

Yet, once they put a hand to net-outlet relations, FCC threatened the whole delicate basis of present chain broadcasting. Last year the two big networks sold $68,000,000 worth of commercial time; local stations got 28% of that sum as their share. In addition the networks spent nine millions on such worthy sustaining programs as Columbia's School of the Air, NBC's Symphony Orchestra, which they supplied to their members. If local outlets no longer can be made to promise cooperation, this whole intricate system of paid and unpaid programs may well break down. In that case, of course, unprofitable sustaining programs will be the first to go.

Roars. What burned up the broadcasting industry as much as anything was the manner in which FCC let fly. Dissenting Commissioner Tunis Augustus Macdonough Craven, home sick in bed, had been assured nothing would happen till he got back. The report appeared on the day of the Kentucky Derby. Neville Miller, president of the National Association of Broadcasters, and NBC President Niles Trammell got the nasty news at Churchill Downs. CBS President William S. Paley was weekending on Long Island.

Neville Miller, from Louisville, cut loose with a statement that the decrees were a "usurpation of power which has no justification in Law." Niles Trammell saw no sense in such sweeping measures during such critical times, and Bill Paley also gave tongue: "If the Commission succeeds in the venture it now launches, networks will become mere catch-as-catch-can, flyby-night sellers of programs." Only cooperative Mutual said no angry words, and that for a very good reason. Barred till now from many strategic communities by NBC-CBS domination, Mutual hoped to round out its network with stations lopped by the decrees from NBC and CBS.

This week radio men gathered in Manhattan to take counsel with NAB President Neville Miller. NBC already had indicated it might take to the courts.

Though issued to take effect immediately, the regulations provided 90 days of grace for sale or disposal of properties. Not all radiomen were in utter despair. There was President Roosevelt who has always patted radio's head; and the listeners were get ting a better break than any others in the world. Maybe, with the war and everything, it would all blow over.

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