Evening star. [volume] (Washington, D.C.) 1854-1972, 1940-11-29
FEC. Proposes Curb
On Chains Relations
With Radio Stations
Restrictions on Contracts
And Ownership to Be
Argued Here Monday
BY WILLIAM ]. WHEATLEY.

by WILLIAM y. WnLh LIE Il
Restrictions on contractural rela-
tons between radio chains and
affiliated stations and curb on
chain ownership Of stations are pro-
posed in suggested regulations of
the Federal Communications Com
mission to be argued here Monday
The commission made public the
proposals yesterday in announc-
ing program for hearing arguments
on the monopoly report of an F.
C. C. Committee which investigated
chain broadcasting. 1t was empha-
sized that the rules, some given as
alternatives, are merely suggestions
and have not received commission
sanction
1t also was disclosed yesterday
that the Antitrust Division of the
Justice Department is investigating
the broadcasting industry at the re-
quest of the F. c. c. 1t is under
stood the commission has merely
asked advice and has not definitely
recommended action. At the JUS
tice Department it was indicated
that no suit would be filed unless
formally requested by the commits
sion.
The refusal of the Senate Com
n1ittee on Interstate Commerce to
report out the nomination of Thad
H. Brown to succeed himself as a
member of the commission is at
tributed largely to the monopoly
report which received a prelim-
mary investigation at the time of
public hearings on his nomination.
Mr.. Brown was chairman of The
Monopoly Committee.
Proposed Restrictions.
The first of the suggested regula-
tions has an alternative. Part one
would prohibit affiliated stations
from contracting to give exclusive
rights to chain to use the station.
The second part would contain the
first, but with proviso lifting the
restriction in cities having primary
service from five or more full-time
stations.
Another proposal would restrict
the number of hours which could
be optioned to the networks. There
are three variations to the proposal
to limit contracts.
One would prohibit station from
contracting with network for
period longer than that of its
license. The license period now is
one year, although the commission
has authority to grant licenses up to
three years. This proposal also
would prohibit station from
placing in the contract an option for
renewal at the end of the contract
period.
The second would prohibit con-
tracts which give the network any
rights with respect to renewal or
cancellation which are not given to
the station licensee.
The third would prohibit a con-
tractural period longer than two
years.
Interference With Rates.
The fourth proposal would pro-
hibit contracts which would give the
networks control or in any way in
terfere with the rates to be charged
by the licensee for the sale of time
to advertisers. Another would pre-
clude a contract which would per-
NIT the broadcasting of programs
of one network company by two or
more stations rendering primary
service to the same city.
The sixth proposal also is in three
parts. 1t provides that after jan
uary /, 1912, no ncensee of a stand
81 i -.
or be owned, or be under the control
of any network. The alternative
provides that no one engaged in
network broadcasting shall be IL
censed to operate more than two
clear channel stations or more than
three standard broadcast stations of
all classes. The third would pro-
hibit the chains from operating any
standard broadcast station in a city
receiving adequate primary service
from less than five full-time stand
ard broadcast stations.
Rejection of Programs.
The last proposal would prohibit
any contract which would prevent
the Icensee from rejecting for rea-
uSAAoSAS SoetoC oAiJ PAO6I Oil O44ClCo
by the network organization.
Neville Miller, president of the
National Association of Broadcast
ers, in formal statement said that
although the suggestions at least
show the trend of thinking of some
OF the Commissioners, nevertheless
I'VE are confident there exists in
the commission sufficient good judg-
ment and restraint as to the exer-
else of powers, to the end that all
of the implications of any proposed
rules will be fully realized and
brought to light before final adop-
ton"
He added that at would be I'M
fortunate If the high standard of
radio entertainment and informa-
ton now enjoyed by the American
public was jeopardized by restric-
tions sought to be imposed without