Evening star., 1941-03-09
New F. {. {. Report
Called Death KneII
For Radio Chains
Study of Revised Draft
OfMonopoIy Units Work
To Begin Tomorrow
By WILLIAM J. WHEATLEY.

BY WILLIAM j. WHEAILE1.
The Federal Communications
Commission tomorrow will begin
consideration of the draft of a
report on alleged monopoly in chain
radio broadcasting which is
sharply revised version of a report
submitted some months ago by it's
special committee which conducted
hearings.
In its present form the report is
said to propose to regulate stations
contractural rights in their relations
with networks.
The new draft, it was learned, was
prepared in the F. c. c. law depart
ment under direction of Chairman
James L. Fly. If adopted without
revision, it will be the death knell
of chain broadcasting, and will lay
the groundwork for governmental
operation and control of radio, it
was said.
While the commission has no au-
thority over the organizations which
operate the chain systems, both the
original and revised reports, it was
said, find fault with long-term con-
tracts the chains made with inde-
pendent stations for chain pro-
grams. The revised report, it was
learned urges that the contracts
be limited to one year, the life of
q stations license.
There is said to be a group in
the commission which holds that
the commission has authority to
limit the contracts as a condition
for obtaining or renewing a license.
But, it was pointed out that the
Supreme Court, in the case of
Saunders Bros. Radio Station
against the F. C. c., specifically held
that the commission "iS given no
supervisory control of programs, of
business management or of policy"
In short, the broadcasting field
is open to any one, provided there
be an available frequency and he
shows his competency.
Discussion May Be Long.
Discussion of the monopoly report
may be prolonged, for it is known
that some of the commissioners
strongly opposed to the original
draft are firmly convinced the revi-
sion is no better. Unless marked
changes are allowed by the commits
sion majority, the belief was eX-
pressed that the reports adoption is
likely to be accompanied by strong
dissenting report.
One of the bones of contention is
the so-called exclusive contract
which the major chains make with
the independents. These contracts,
mostly for five years, require the
aff1liates to keep time available for
the networks. and prohibit the sta
tionS from making advertising con-
tracts with or taking programs from
other chains. But it was asserted
that the afhliates enter into the con-
tracts voluntarily.
One affiliate's representative said
his client sometimes got as low as Sc
a month from the chain but was
satisfied, because he got the ma
tional sustaining programs his audi
SIlC0 O6SlISO. Z FuIlI1SII1lOIS, IL was
considered an asset, because by OBJ
tanning a large audience for these
programs, he was able to keep them
for any local business he obtained.
Regulation Sequels.
Any attempt to regulate the busi-
ness of the broadcasters in any
way, it was said, is likely to be
resisted in the courts. 1t was ex-
planned that if the F. c. C. succeeds
in entering the contract field and
attempts to tell stations what agree
mentS they can make it is likely
to follow with regulation of other
relations, including advertising.
The report is to be considered in
executive session. However, if it is
approved, interested parties prob
ably will be given a hearing.
Another of the major problems
Is that of clear channel station oper-
alton The original report pointed
out that all but two of the "a high
power, clear channel stations and
all the high power regional stations
are on the two major networks,
Columbia Broadcasting System and
National Broadcasting Co. But
without awaiting discussion of the
report, the commission already has
started proceedings to break down
these clear channels, it was said,
by granting to a Boston station
increased facilities on the same
frequency as a clear channel station
In Denver, which is operated by N
B. C. The majority of the COM
mission has proposed to grant the