Evening star., 1941-05-04
Radio Networks
Face SharpCurb
In New Rules
N. B. c. Ordered Split,
Two Chain Outlets in
Same Area Barred

radio regulations which would make
it necessary for the National Broad
casting Co. to dispose of one of its
two networks; would prohibit a
chain from operating more than
one station in the same area, unless
it can be shown that public interest
requires otherwise, and would
sharply regulate the affiliation con-
tracts between networks and sta
tions.
The commission, which acted by
a 5-to-2 vote, said the new rules
were intended to increase the num-
Der of radio networks and give indi-
vidual stations wider latitude" in
their dealings with networks.
Features of present affiliation
contracts which the F. C C. said
the new regulations we're intended
to eliminate included:
l. EXCLUSIVELY" under which a
station affiliated with one network
may not carry program of an
other.
2. Territorial EXCLUSIVELY" under
which network is bound not to
send a program to any station To-
Gated in an area served by its af-
fllated station, even though the af-
filiated station rejects the program.
Rules May Be Challenged.
3. Contracts binding for more
than one year.
4. Network optional time under
which a station must cancel any
program scheduled during an option
period if the network with which it
is affiliated offers a program for
the period.
5. Restrictions on the right to
reject network programs. Some
afhhatlon contracts restrict tie
right OF a station to reject net
work programs, the F. C. C. said)
s. Limitation of competition be-
tween network and stations. Some
afflliation contracts penalize a sta
ton for selling time to national
advertisers at less than the rate
which the network charges for TIE
stations time, the commission said)
There was immediate indication
that the industry might challenge
the regulations in the courts.
Neville Miller. president Of the
National Association of Broad
casters, called meeting Of the as
sociations Executive Committee
Wednesday in New York and said
in a statement that the F. C. C.
order Constitutes ursurpaticn of
power which has no justification in
law and menances the freedom of
the American system of broadcast
ing"
Paley Sees Blow at Freedom.
Mr.. Miller quoted a recent resolu-
ton of the associations directorate
which said:
THE philosophy of American
broadcasting as expressed in deci-
sions of the Supreme Court of the
United States and the applicable
statutes envisages control of pro-
grams, of business management and
of policy in the broadcaster and not
subject to the supervisory control
of the Government"
In New York, William S. Paley,
president of the Columbia Broad
casting System, declared that the
regulations would make networks
mere catch-as-catch-can 1y-by-
night sellers of programs" and
termed them a blow at freedom of
the air, because commission which
can exercise such drastic powers
without even going to Congress for
authority to exercise them, will
have reduced the networks and
stations of America to impotent
vassals able to survive only so long
as they please the regulatory au-
thority"
Mutual Chairman Pleased.
On the other hand, Alfred j. Nc
Cosker chairman of the Mutual
Broadcasting Systems Board of
Directors was quoted by the AS
sociated Press as saying:
From the limited opportunity We
have had to examine the press
SummariZation of the majority
monopoly report released today by
the F. c. c., we find it a scholarly
and thorough analysis of the net
work monopoly problem"
National Broadcasting Co. execu-
tives were unavailable for comment.
The F. c. c. order prohibiting a
network to operate more than one
station in the same service area
provided for exceptions when it can
be shown that the public interest
requires otherwise.
Regulations regarding existing
contracts between networks and sta
tions will not become effective for 90
days; others are effective inmedi-
ately.
Rules Called Magma Carta.
Chairman James L. Fly Of the
commission called the new rules "a
Magma Carta for American broad
casting stations" Norman S. Case
and T. A. NJ Craven, the two COM
missioners who voted against the
regulations. however. expressed the
fear that the proposals Of the ma
jority will result inevitably in inn
paired efficiency of the existing
broadcast organization of the coun-
try '". More specifically, we fear
that the revolutionary change pro-
posed >" will result in the destruc-
tion of the present excellent ma
tional program distribution system
and the substitution therefor OF some
new kind of system, the effects of
which the majority does not ade-
quately visualize"
The commissioners voting with
Chairman Fly for the new regula-
tions were Paul A. Walker, George
Henry Payne, Frederick l. Thomp-
son and Ray C. Wakefield.
Meanwhile, it was reported that
members of the Senate and House
called the r. C. c. for information
on the new regulations yesterday
and the belief was expressed that o
congressional investigation of the
commission and the radio industry
was in prospect.
In his statement, MIR. Paley as
serted that Ito make fetish OF
competition to the extent the COM
mission proposes makes as much
sense 10 me as II one were 70 argue