Evening star., 1940-12-04
Mutual Tried 10 Buy
Contracts Of N. B. {.
AffiIiates, Quiz Told
Counsel Declares Deal
: Would Have Broken Up
Blue Network
Bv WILLIAM J. WHEATLEY.

The Mutual Broadcastlng System
fought to buy contracts of certain
initiates of the National Broadcast
tng Co. Blue network about year
and half ago, the Federal Com
munications Commission was in
formed yesterday by Philip J. Hen
nessey, counsel for N. B. c., during
rebuttal arguments on the monopoly
report OF an F. G. c. committee.
He said the sale, if consummated,
would have left the network without
sufficient stations to carry on
chain.
The Mutual System, which has
been supporting the committee re-
port, seeks to have the commission
prohibit chains from making ex-
elusive contracts for the time of
stations affiliated with them. Samuel
r. Rosenbaum. chairman of the
independent Radio Network At
filiates and president of Station
WILL, Philadelphia, said his station
had used Mutual programs until
the latter insisted it must have an
exclusive contract.
Mr.. Hennessey told the commits
sion that if radio stations were
conforming to license requirements,
even though they were acting ille-
gally otherwise, such as violating
local laws or engaging in unfair
trade practices, the commission has
no authority under present statute
TO do anything about it.
Questions Hennessey.
Commission Chairman James
Lawrence Fly questioned Mr.. Hen
nessey on this phase of the commits
sion's authority.
Louis G.. Caldwell, attorney for
Mutual. told the commission short
age of radio facilities had been ''ex-
plotted to create a monopoly in
some sections of the country.
He said his organization was in
general agreement" with the COM
mittee report proposing that the
commission regulate contracts be-
tween networks and the stations
which carry their programs. Some
Of the suggested rules, Mr.. Caldwell
said, were too drastic"
Earlier, attorneys for N. B. c. and
Columbia had opposed the suggested
rules, and contended the commission
had no authority to promulgate
them.
Mr.. Caldwell criticized N. B. c. and
c B. S., and said they want to in
trench themselves behind the barbed
wire entanglements of exclusive
contracts" with their affiliated
stations.
Argument Completed.
The commission completed two
days Of argument on the report and
took it under advisement.
Questioned as to the reason for
N. B. C. maintaining an artists
bureau for retaining the exclusive
services of talent, Judge A. L. Ashby,
general counsel for N. B. c., said
the company found many problems
in the artists service field. For
example, he said a program for
services of an artist will be sold
and later it would develop that
the artist had sold his time to
some one else. He said that artists
sought the services of the bureau
voluntarily and that there were 200
other organizations they could
choose to handle their services.
John j. Burns, chief counsel for
Columbia, insisted that radio con-
troll was not exclusively under the
F. C. C. He said labor relations
were under the jurisdiction of the
Labor Relations Board, antitrust
matters under the Department of
Justice and sale of securities by
radio under the Securities and Ex-
change Commission. He asserted
that the commission had the au-
thority only to regulate licensing
and technical phases.