COMPETITION AND PROGRAM BALANCE? 1N COMMERCIAL. AM RADIO_» .f 7; *‘:-’ji_i;_,_f_i: , Them fat flu Dogma ®{ DE. D, _ MICMAN 5mm 'HNIYERSKTY OO . f MiCkie L.N,ewbiu 3963 L I B R A R Y Michigan out» University "L"W!'fll'll‘NllflWI‘WW This is to certify that the thesis entitled COMPETITION AND PROGRAM BALANCE IN * COMNERCIAL AM RADIO presented bg Mickie L. Newbill has been accepted towards fulfillment of the requirements for Ph . D . degree in the Department of Communication flute 5'. 6 Major professorW Datew i 1 0-169 regal. ABSTRACT COMPETITION AND PROGRAM BALANCE IN COMMERCIAL AM RADIO by Mickie L. Newbill This thesis was an attempt to determine whether commercial AM radio stations with power between 250 and 1000 watts decrease the proportion of their schedules devoted to educational, agricultural, religious, and discussion programs after a second commercial AM radio station within the same range of power begins broadcasting in the town. Findings are restricted to instances in which towns have no commercial broadcast outlets other than the two radio stations and possibly their companion FM stations. Other hypotheses represented an attempt to determine whether towns had more of the programs with two stations than with one and whether proportionate decreases in the programs would be correlated with the amount of the revenue decrease suffered by the older station. The final hypothesis sought information concerning whether stations would shift mas" i ll Mickie L. Newbill programs of the four types out of daytime hours and into periods before 7 a.m. and after 6 p.m. Information was gathered from applications and state— ments on file with the Federal Communications Commission. It was necessary for the newer station of the pair to have begun commercial broadcasts between two periods used by the older station in describing its programming to the Commission. Program changes shown by stations receiving compe— tition were compared with changes shown by matching stations that were as similar as possible to the older stations but that did not receive local AM competition during the period. Similarities were gauged on a basis of disposable income for each town, wattage, hours of operation, proportion of schedules devoted to the types at the beginning of the period, network affiliation, and distance from the nearest commercial AM or television station. Matching stations, like the competitive stations, were controlled to eliminate stations owned by educational, civic, or religious insti— tutions, share-time stations, and stations that had under— gone revenue decreases during the period considered. The sample was divided into two groups: (1) pairs in which the older station was affiliated with the same [H2315 Mickie L. Newbill network (ABC, CBS, MBS, or NBC) throughout the period, and (2) pairs in which neither station was affiliated with one of the national networks during the period. Network pairs were included only if their towns were at least ten miles from the nearest commercial AM or TV station. Pairs in which the older station had changed management during the period were eliminated. Thirteen of 19 non—network stations that received a second AM station in their towns decreased the proportion of the four program types in their schedules. The com~ parison with three groups of matching stations showed a significant difference supporting the hypothesis at the 5% level in four instances but did not show significance at this level in two other instances. Only 15 of 36 network stations showed decreases following the advent of local broadcast competition: matching stations.were not chosen for these stations. One test showed significance at the 5% level indi- cating that among stations showing decreases inthe program types, the size of the decrease was positively correlated with the size of the revenue decrease. Another correlation did not show significance.' TWO correlations showed significance at the 5% messy Mickie L. Newbill level indicating that among stations showing increases in the program types, the larger increases occurred among stations showing greater revenue decreases.3 Three of 55 towns had fewer hours of the program types with two stations than with one. Adding the second station doubled the amount of the programs for only 4 of the towns with non—network pairs and for 16 of the towns with network pairs. Information concerning shifts in the time at which the programs were broadcast was gained from.questionnaires sent to stations. This hypothesis was not supported. COMPETITION AND PROGRAM BALANCE IN COMMERCIAL AM RADIO BY 0 (0 {a Mickie.L@gNewbill A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Communication.' 1963 ACKNOWLEDGMENTS Many people deserve hearty thanks for assistance with this project. First among them is Dr. Walter Emery. His scholarship, unfailing kindness, and accessibility to his students have been invaluable. Also, his great familiarity with the Federal Communications Commission and the high esteem in which he is held there have smoothed the path of this project greatly. Each of the other members of the guidance committee made an individual contribution. Dr. David K. Berlo Offered both his knowledge of research design and his experience in commercial broadcasting; Mr. Leo Martin's thorough r wisdom in radio station management and procedure made possible many helpful suggestions. Dr. Colby Lewis contri- buted both a knowledge of writing style and a rare common sense. Dr. Sidney Ulmer's urging that financial data be included resulted in a more useful thesis. Many people at the Federal Communications Commission literally made the study possible. Dr. H. H. Goldin, Chief of the Research and Education Division, made the greatest single contribution by permitting the examination ii of much economic data. His kindness and the assistance of his staff could not have been greater. The staff in the FCC reference room could not have done more to help if the study had been their own. Many hours of work were given by Mr. George Simcoe, Mr. Henry Schauer, and Mr. James Martin. Their constant kindness made the weeks at the Commission a pleasure. Many people at the Commission made notable contri— butions during those weeks. Especial thanks must go to Mrs. Ann Stanton. She is one of those rare blessings in a large organization, a person who always knows where information may be found and who is as willing to help strangers as friends. The results of her aid appear on many pages of this thesis. Every request for help at the Commission was granted. Miss Clara Iehl, Mr. Quentin Proctor, and Mrs. Pearl Cook showed great kindness in searching for information upon a number of occasions. Unfortunately the broadcasters who contributed to this thesis cannot be thanked by name. To those men who gave up Saturday afternoons to talk about the coming of their broadcast competition, who dug through old files to. find information, who voluntarily wrote long letters, and iii I I _ L i i who answered the questionnaires cited below, I shall be forever grateful. The study was conducted with funds provided through a research grant made by the Delta Kappa Gamma Society. I am grateful to the society both for the grant and for its interest in the project. iv TABLE OF CONTENTS Chapter Page I. STATEMENT OF THE PROBLEM . 1 II. COMPETITION AND THE COMMISSION: A HISTORY . . 11 III. THE AM RADIO BROADCASTER AND HIS FIRST ' LOCAL RADIO COMPETITION: A RATIONALE . . . 62 IV. PROCEDURE USED IN TESTING THE HYPOTHESES . . . 119 V. RESULTS OF THE STUDY . . . . . . . . . . . . . 166 VI. SUMMARY: TOWARD A RATIONALE FOR STUDIES TO COME....................205 BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . 270 Table 10. LIST OF TABLES Revenue for older stations of pairs and matching stations . . . Total and average increases and decreases for competitive and matching non—network Stations 0 O O O O O O I O O 0 Comparison of revenue changes and program changes for matching stations Increases and decreases divided by program ,type . . . . . . . . . . . . . Decreases and increases in the four program .types for network stations according to the year the second station began ' operations . . . . . . . . . . . . . Stations divided by increase and decrease in the four program types and by network affiliation . . . . . . . . Total time devoted to the four program types by the non-network stations . . . . . .'. Total time devoted to the four program types by the network stations . . . . . . Revenue decreases divided according_to whether the newer station provided more of the program types than the older station offered during the first composite week . Revenue decreases divided according to whether the newer station provided more of the program types than the older station offered during the second composite week vi Page 159 168 171 175 177 178 182 183 185 188 Table 11. 12. 13. 14. Total broadcast revenue for stations showing increases and decreases in the four program types . . Stations showing decreases in program types ranked according to revenue decrease Stations showing increases in program types ranked according to revenue decrease . . . Hours at.which stations broadcast programs of the four types divided according to whether the stations had local competition Page 195 197 202 Appendix I. II. III. IV. LIST OF APPENDICES Federal Communications Commission Decisions and Court Verdicts Pertinent to a Study of Economic Injury . . Answers to Questionnaire Concerning Attitudes Toward Competition . Questionnaires and Letters Work Sheets . Program Changes for Non-Network Stations that Received Competition and for Matching Stations that Did Not Receive Competition viii o Page_ . 219 . . . 227 . . 242 . . . 258 . . . 267 lli l CHAPTER I STATEMENT OF THE PROBLEM Hypotheses Hypothesis I may be stated as follows: The entry of a commercial AM radio station into a community containing only one other commercial AM radio station will be followed by a decrease in the proportion of the older AM station's schedule that is devoted to those program types classified as religious, agricultural, educational and discussion. This hypothesis, as tested, is restricted to situations which meet the following requirements: The older station does not yield majority OWnership to a person not an owner at the beginning of the period; the community has no commercial FM stations other than companion(s) of the AM stations; the community has no commercial television stations; each AM station has a powerxof not less than 250 or more than 1000 watts; neither station is owned by a religious or educational institution; neither station shares time with any other stations. Stations will be divided into two groups; in one group will be pairs Of which neither station was affiliated {Basis l with a national network during the period considered; in the other group will be pairs in which the older station was affiliated with one natiOnal network throughout the period considered. Radio stations considered in this study will be designated as those having licenses from the Federal Communications Commission giving the stations authority to distribute commercial radio programs on any of the ampli- tude modulation frequencies between 535 and 1605 kilocycles. ' Stations will be considered as serving the community or city to which they are licensed. The name of the city or community will be gained from information on renewal applications filed with the Federal Communications Commission. Only changes of ownership requiring applications to the Federal Communications Commission for consent to transfer control will be noted. To disqualify a station, the change of ownership must have been completed during the period con— sidered in the study. Network stations will not be con— sidered if the older station of a pair underwent any tranSfer of control or assignment of liCense other than a name change. Because the data for testing this hypothesis will be gathered from license renewal applications submitted by the stations to the Federal Communications Commission, the definitions of religious, agricultural, educational, and discussion programs will be those promulgated by the Commission for use by stations in describing their program service. These definitions are as follows: Religious (include here all sermons, religious news, music and drama, etc.). Agricultural (include here all programs containing farm or market reports or other information specifically addressed to the agricultural population) Educational (include here programs prepared by or in behalf of educational organizations, exclusive of discussion programs . . . Discussion (include here forum, panel and round—table programs).l , National networks will include the American Broadcasting Company, the Columbia Broadcasting System, the National Broadcasting Company, and the Mutual Broadcasting System. The entry of a radio station will be said to occur on the day the station begins program tests: these are usually a full schedule of commercial broadcasts. A station will be considered as being owned by an educational or religious institution when (1) it is listed . . . . 2 as non-commerc1al educational 1n Broadcasting YearbOOk, 1Federal Communications Commission, "Application for Renewal of Broadcast Station License," FCC Form 303, July, 1954, Section IV. 2Broadcastinng‘earbook (Washington: Broadcasting Publications, Inc., 1948—1963). (2) the license contains any of the following words in the name of the owner: University, academy, school, college, education, Welfare, temple, church, tabernacle, parish, municipal, fathers, or Christian, (3) the station is owned by a city government, or (4) the studios of the station are located on a college campus. Hypothesis II may be stated as follows: The entry of a commercial AM radio station into a community containing only one other commercial AM radio station will be,followed by a net increase for the community of religious, agri— cultural, educational, and discussion programs provided by stations in the community, when the stations meet the re— quirements set out in Hypothesis I. All terms in this hypothesis will be defined as for Hypothesis I. Hypothesis III may be stated as follows: Among stations showing decreases in religious, agricultural, edu— cational, and discussion programs, the program decreases will be greater among stations showing greater revenue decreases than among stations showing smaller revenue decreases. Revenue decreases will be defined as the percentage decrease derived from a comparison of the total broadcast revenue figures in the annual broadcast financial statements filed with the Federal Communications Commission. Smaller revenue decreases will be the percentages that are less than the median for all stations with decreases in the four program types; included as showing a "smaller" decrease will be those stations showing no revenue decrease. { Larger revenue decreases will be the percentages i that are more than the median for all stations showing i decreases in the four program types. 5\ All other terms in this hypothesis will be defined as in the preceding hypotheses. Hypothesis IV may be stated as follows: The proportion of an AM radio station's educational, agri— cultural, religious, and discussion programs that are found in the 7 hours immediately before 7 a.m. and in the 6 hours immediately after 6 p.m. will be greater following the entry of a second AM radio station into the community than before the entry of a second AM station. All terms in this hypothesis will be defined as in preceding hypotheses. Purposes and Limitations A perusal of the above hypotheses can lead to the conclusion that this study predicts that an increase in competition will lead to a decline in "public service" programs. Actually the study is much more restrictive in scope. The term "public service programming" has a cluster . of connotative meanings around it. Any attempt here to define "public service programming" while omitting the "talks" category could lead to sincere and well-founded questioning of the study. Doubtless, many persons would include as "public service" talks by congressmen, mayors, and sheriffs; these could logically be included as "talks" by broadcasters filling out their renewal applications. But the talks category was omitted from consideration in this study be— cause the Commission defines talks as "all conversation programs which do not fall under Points (2), (5), (4), (5) or (6) above, including sports."l These "points" are religious, agricultural, educational, news, and discussion. It was felt, for reasons to be pointed out in the rationale, that sports programming would not necessarily decline upon chc, o . cit. the entry of a second station. Thus, it seemed necessary to omit the talks category from consideration. Further, a few broadcasters in their renewals added as a program type "public service." They were apparently considering public service as none of the program types listed by the Commission. The inclusion of this added category with no more than the hazy cloud of meanings to be used as a definition would reduce substantially the precision of the study. Further, this inclusion would distort the results by including programs that one broadcaster might classify as public service but that another broadcaster might classify as something else. The difficulty would have been compounded by the fact thatiJ1one renewal the term "public service" may appear as an addition to the Commission's categories whereas in the following or preceding renewal alsO to be cited in the study, the broadcaster added no such category. It was believed that such omissions might not necessarily imply an absence of "public service" programs. For the above reasons, this is a study of competition and program balance; it is not a study of competition and public service programming. If the major prediction Of this study must be stated in terms other than those of the hypotheses, the prediction would be: An increase in competition will be followed by a shift in program balance toward a lesser proportion of certain program types. It must be added, however, that the history of the Commission's concern with competition and program balance, as well as the rationale, will show that the study does have implications concerning the ability and willingness of broadcasters to serve their publics. Purposes The problem with which this study deals is a real one. Within the sample of 55 pairs of radio stations utilized in this study are four instances in which the older station has protested the Commission's grant of a second station to the town.1 These protests have ranged from a simple letter later included in the station's file through complaints about the applicant's character to a full—scale request for hearing on a basis of economic injury. In all four cases the older station got its local competition; in all four cases the revenues of the older station declined; and in three of these four cases the older station decreased the lBecause confidential financial statements on file with the Federal Communications Commission form part of the data for the study, it is necessary to omit footnotes that Would give information concerning the call letters or location of stations included in the sample. amount of time it devoted to religion, agriculture, education, and discussion. Within the sample are five stations that have either gone out of existence or have moved to other towns. During the Commission's history more than seventy— five broadcasters (including both radio and television) have gone to the Commission to request hearing or oral argument on whether the allocation of a competing station should be made. The protests, as will be discussed in Chapter II, have often been based upon the claim that the competition would harm the public interest. This study does not propose to offer advice to the Commission. The possible change in programming that this study seeks to investigate is not the only-—or even perhaps the most important-—matter that the Commission must con— sider in deciding whether to permit a new station to begin broadcasting. It is hoped, however, that this study will be one of a group of studies that may help the Commission to predict the effects of various licensing policies. Second, it is hoped that the study may provide a few facts to be used in the continuing argument concerning whether prosperity does increase service to the public. The argument has ranged over many years and has appeared —_______ “.5 ma % ._ —._.__ [Haas “" '-"-“3'.-" ' “' ' ' " '-_ f ,.._—_::';:...'__.._-__‘-- 10 in many publications.1 Once again, this study does not provide the answers. The argument concerns a number of units that this study does not touch; e.g., the study says nothing of competition among networks or among television statiOns, of the matter of program quality, or of cities with three or more stations. Third, it is hoped that this research may serve as a background for later studies of relationships between competition increases and program changes. A high priority should be given to a repetition of this study with better controls and with another sample. A baker's dozen of related studies is suggested in the final chapter of this thesis. lMany statements concerning the relatiOnships between prosperity and programming will be cited in the pages to follow.‘ Among the discussions that will not be cited later are those found in: Morris L. Ernst, The First Freedom (New York: The MaCmillan Co., 1945), passim,, and Wilbur Schramm, Responsibility in Mass Communication (New York: Harper and Brothers, 1957), pp. 121-25. - .. .‘ __"' --‘—~———_- __ I CHAPTER II COMPETITION AND THE COMMISSION: A HISTORY Competition in Many Contexts Of one thing there can be no doubt: Broadcasting in the United States was intended by Congress to operate on a competitive basis under the restraints of the antitrust laws. Sections 313 and 314 of the Communications Act of 1934 make this quite clear by declaring, in part: All laws of the United States relating to unlawful restraints and monopolies and to combinations, contracts, or agreements in restraint of trade are hereby declared to be applicable to the manu- facture and sale of and to trade in radio apparatus and devices entering into or affecting interstate or foreign commerce and to interstate or foreign radio communications. Even though these two sections of the Act determine that broadcasting should operate on a competitive basis, these are not the only sections that the Commission has invoked in promoting competition among the various units concerned with radio and television. For example, in deciding whether an applicant should be granted a construction 1Section 313(a), Communications Act of 1934, 1 R. R. 10:97. 11 -<-~.—_....__ _._‘._ . -——-_5__ 12 permit for building a station, the Commission has considered competition as being relevant to the instruction in Section 309(a) that construction permits should be granted only if the "public interest, convenience, and necessity" will be served.1 The following discussion of the Commission's major activities in promoting competition with a more detailed discussion of the Commission“s activities in promoting entry of competing stations should serve two functions. First, the discussion will show how constant has been the Commission's concern with competition. Second, this review will show how frequently the Commission has been faced with decisions involving considerations that are relevant to the hypotheses of this study. The Commission's concern with restraints of trade has been evinced in two ways. First, the Commission, in deciding whether to grant an application, has considered past antitrust violations. In deciding which of two appli— cants should be allowed to construct a television station in Denver, the Commission investigated past antitrust actions 1Section 309(a), Communications Act of 1934, 1 R. R. 10:88a. 13 . . l . . 1nvolv1ng stockholders. In another case, the CommisSion investigated before granting a transfer of a television station to NBC. Later an antitrust suit involving the transfer was brought against the network and its parent . . . 2 company, the Radio Corporation of America. The Supreme. Court's verdict clarified the FCC's role in enforcing the antitrust laws: The Communications Act does not give Federal Communications Commission pOWer to decide anti— trust issues as such, and action by Commission under the act does not prevent enforcement of antitrust laws in federal courts, and therefore Commission's approval of agreement for exchange of television stations did not bar civil antitrust action. . . .3 Chief Justice Warren discussed the second method that the Commission employs in guarding against restraints of trade: applications of the public interest standard to bar practices and applicants that might hinder the full play . . 4 . . . . of competition. In employing this method, the Comm1351on refuses grants to applicants who have attempted to restrain lAladdin Radio and Television, Inc., et al., 9 R. R. 1, 8-10. 2United States of America, Appellant, v. Radio Corporation of America and National Broadcasting Co., Inc., 79 S. Ct. 457, 460. 4 . 31bid., p. 457. Ibid., pp. 467—68. 14 trade or to harm competitors in ways that might be analogous to restraints punishable by the Sherman Act and other anti— trust 1aws even when the practices do not necessarily con— stitute full-scale violations; the practices are disapproved because they would not promote the public interest. For example, the Commission refused a construction permit for a radio station to a newspaper owner who had tried to destroy a radio station through refusal to print advertisements from . . . . 1 some firms that advertised on the radio station. In proposing the Regulations on Chain Broadcasting in 1941, the Commission made it quite clear that it was not determin— ing whether the network practices to be outlawed were anti— trust violations: While many of the network practices raise serious questions under the antitrust laws, our jurisdiction does not depend on a showing that they do in fact constitute a violation of the antitrust laws. It is not our function to apply the antitrust laws as such. It is our duty, however, to refuse licenses or re— newals to any person who engages or propOSes to engage in practices which will prevent either himself or other licensees Or both from making the fullest use of radio facilities. This is the standard of public interest, convenience or necessity which we must apply to all applications for licenses and renewals. lMansfield Journal Co. (FM) v. Federal Communications Commission, 180 F. (2d) 28, 32. 2U. 8., FCC, Report on Chain Broadcasting.(Washington U. S. Government Printing Office, 1941), p. 83. 2 15 Thus the Commission, in deciding among applicants for broad- cast facilities, considers past antitrust actions and also considers as part of the public interest standard both full— blown and budding restraints of trade. In addition to minimizing restraints of trade, the Commission has adopted rules to promote long-range Objectives. The objectives are (1) effective competition within areas served by broadcasting facilities, and (2) a large number of licensees, SO that the public will receive entertainment and information from competing, independent sources. The large number of licensees iSyexpeCted tolhelp inwaSSuring'that no single licensee is able to exercise such power over competing licensees as to make effective competition impos— sible. A rule that promotes the first objective for AM radio is called the "duopoly rule." It prohibits the licensing of more than one AM station to a single party when the primary coverage areas of the two stations will overlap substantially, except upon a showing that the This public interest would be served by such ownership. rule was honored as a principle before it became a rule. 1 I) t . U. 5., FCC, Rules and Regulations," Section 3.35. 16 In 1936, owners of the Centennial Broadcasting Company wanted a second station in Dallas, Texas. The Commission refused the grant, saying that the new station would add nothing ‘ "by way of novelty or as a general advancement over the programs now being received in that area." Four similar applications were refused in 1938. In all four cases the Commission mentioned the desire to promote competition, and in one of the cases the Commission explored the conse— quences of duopoly at some length: Station WREN, Station WDAF, and Station KMBC, which serve substantially the same area, now compete g on equal terms, each having the same day and night power. If the transfer were to be approved by the Commission, Stations WREN and WDAF would be owned and 3 controlled by the same interests and would compete , with Station KMBC, thus creating a situation in the service area of these stations in which, instead of three equally powerful mutually competitive stations, there would be one station having as a competitor the owner and operator of two equally powerful stations. This would obviously place Station KMBC at a serious competitive disadvantage as well as materially reduce competition in the area. Upon similar grounds the Commission refused to grant a 1 East Texas Broadcasting Co. (KGKB) et al., 2 FCC 402, 408. 2 . . . Carolina Advert151ng Corp. et al., 6 FCC 230, 235, and The Colonial Network, Inc., 5 FCC 654, 664. 3 _ . R. R. Jackman, et a1. (WREN , 5 FCC 496, 500. P; ES) l 17 second Louisville station to the owner of Station WHASfi During the forties and fifties came rules and amend- ments to the effect that no single body may control more than a Specified number of broadcast outlets. The Commission set numerical limits on the number of AM, FM, and TV stations that can be controlled by one person or corporation and instituted duopoly rules for FM radio and television. These rules seem aimed at achieving the second objective cited above. A double standard has existed concerning the granting of two licenses for stations of different types to one owner in one town. The Commission granted FM stations to AM licensees for reasons explained by H. H. Goldin, the Chief of the Commission's Research and Education Division: After some initial doubts the Commission accepted this virtual merger of AM and FM; this acceptance was partly based on the assumption that FM as the superior technical aural service would eventually supersede AM as the dominant aural broadcast service, and it was felt that permitting joint AM—FM operation would facilitate the transition to FM. For a variety of reasons, however, FM has failed to establish itself as a competitive broadcast service. lThe Louisville Times Co. et a1., 5 FCC 554, 559. 2U. 8., Congress, House, Committee on Interstate and Foreign Commerce, Network Broadcasting, House Report No. 1297, 85th Cong., 2d Sess., 1958, p. 84. 3H. H. Goldin, "Economic and Regulatory Problems in the Broadcast Field," Land Economics, XXX, No. 3 (August, 1954), 232. 18 The Commission has also been willing for owners of AM stations to operate television within the same town. However, in some cases in which applicants were competing for television construction permits, the person not affiliated with an AM station has been awarded a preference. The Commission early became concerned over the lessening of competition that could occur when newspaper owners were licensees of stations in the tOWn served by As early as 1936 a Commissioner dissented the newspaper. from a grant of a radio station to a newspaper for reasons that would later be adopted by the FCC as a consideration in competitive hearings for broadcast licenses. Commissioner Stewart said: It is not clear from the opinion that consideration was given to the matter of the public interest in— volved in the granting of a broadcast station license to an applicant controlled by a newspaper. Broadcast stations and newspapers are the two principal sources of current public information and enlightenment; in a more mundane field they are the two principal media of local advertising and two of the principal media of national advertising in any community. Throughout the thirties the Commission granted several 1 . . The Radio Station KFH Co. et a1., 11 R. R. 1, 4, 115—116. 2 . United States Broadcasting Corp. (WARD) et al., 2 FCC 208, 241. gun‘s _ .siei_ . 1 e??- 19 licenses to newspaper owners, often noting that the news— paper and the radio station would be operated separately. In granting a construction permit to the Bell Broadcasting Company in Temple, Texas, the Commission noted, in 1936: Identity of control exists between the Temple Daily Telegram, a local news publication, and the applicant herein, the stock ownership in each organization being held by the same persons. Testimony was introduced in this connection indicating that the broadcasting station here proposed, and the newspaper, will be operated independently of each other. The importance of the separate operation provision became evident in the ruling on an application for a station in San Diego, California. In this 1936 case, the FCC did not grant the construction permit. One reason among several was: " . . it is proposed to operate the station, not as an independent business but as an adjunct and subsidiary to the news a er business." The Commission's concern P over newspaper ownership of radio stations reached a peak in 1941 when the FCC ordered an investigation to determine whether a rule or policy should be formulated concerning further grants to newspaper owners. The Commission stated 1 . . . ‘ Harold M. Finlay and EloiSe Finlay, 4 FCC 356, 357, and Mason City Broadcast CO. et a1., 3 FCC 116, 123. 2Bell Broadcasting Co., 3 FCC 90, 91. 3Union Tribune Publishing Co., 3 FCC 451, 453. M 4:; :4 ‘11:“ . 20 the issue in its Seventh Annual Report: In deciding whether or not to license a station to a newspaper, a variety of considerations may be relevant in determining the public interest, con— venience, and necessity. For example, neWSpaper owner— ship of a station may make available to the listening public a wider supply of news due to the licensee's superior news-gathering facilities, or, on the other hand, the newspaper's desire to protect its news— paper investment may cause it to limit the broad— casting of news in the interest of wider newspaper circulation. While the unified operation of news— paper and station might bring financial stability to the joint enterprise, it might also result in unfair competitive advantages and eventual monopoly. After the hearing, the Commission decided against a specific rule prohibiting newspaper ownership of broadcasting facilities. The FCC did announce its intention of continuing to favor diversification as a policy.2 By 1954, according to Commissioner Rosel Hyde, the Commission's philosophy had "matured" so that newspaper ownership was scarcely, if at all, a bar to getting a television license.3 Another aspect of the Commission's desire to equalize competition among the mass media has been the problem of UHF television stations' ability to compete with VHF stations. 1U. 8., FCC, Seventh Annual Report, 1941, p. 25- 29 Federal Register, 702-3. 3"FCC Policy 'Matured' on NewspapersHBidsf"lEditor and Publisher, January 23, 1954, p. 51. 21 During the early 1950's, it became obvious that UHF stations, because their signals would not customarily extend as far as the signals of VHF stations and because many television sets were not equipped to receive UHF stations, were hard put to survive. Audiences, advertisers, and netWOrks all gravitated to the VHF stations.1 The FCC has shown its concern. For example, in deciding whether to eliminate a VHF channel from an area served by UHF stations, the Commission said that one con— sideration would be:> "Whether, taking into account all the local circumstances, the elimination of a VHF channel Would be consistent with the objective of improving the opportunities F for effective competition among a greater number of stations."2 Probably the most ambitious project of competition— equalization was the promulgation of the regulations on chain broadcasting. Here the Commission was working to equalize competition among agencies it licensed and agencies it did not license. The regulations restricted the number of hours that a network could demand of a station, thus giving 1For a discussion of the problem, see U. 8., Congress, Network Broadcasting, op. cit., passim. 2U. 8., FCC, "Amendment of Part 3 of the Commission's Rules and Regulations Governing Television Broadcast Stations," 13 R. R. 1582. 22 other program sources——including other networks——more ability to compete for a station's time. The Commission stated that it would not license stations having contracts under which the stations promised to broadcast the programs of only one network; this made it more possible for several networks to compete for a station's time. The regulations removed one aspect of network control over a station's ratestxnnon—network advertisers. This made it more feasible for stations to compete with networks for national advertising. The regulations forced NBC to sell one of its radio networks, thus increasing the number of national networks and making it almost impossible for one network to achieve dominance of a market through control of two stations in one town. Had the network affiliation contracts of 1941 been possible during the advent of television, there Would have been only two independent, national television networks instead of three (excluding the now defunct Du Pont network), and the single—station television market would have been denied programs from one of these two networks. 1 . . . 'U. 8., FCC, Report on Chain Broadcasting, op. c1t., pp. 91—92. 2Sydney W. Head, Broadcasting in America (Boston: Houghton Mifflin Co., 1956), P. 141. 23 3 All the Commission policies in support of competition reach their fullest interplay in the hearings on competitive applications for broadcast facilities. The above consider- ations may be divided into two general policies: The Commission supports diversification and opposes concentration. In promoting diversification the Commission has looked favorably upon the applicant who controls fewer media of mass communications. But the Commission is not always faced with a clear choice between one applicant who Controls other media and another applicant who does not; often the Commission must choose between two applicants, both of whom have extended holdings. For example, in the Richmond Newspapers decision, the Commission noted: As between two mutually exclusive applicants, preference on the factor of diversification of control of media of mass communications will be given to applicant which controls a clear channel station and two FM stations, one in the city in question and the other in another city, and a 16% stockholder in which, some of Whose officers and directors interlock With the applicant, owns a number of motion picture theatres, as compared with applicant which owns the only local newspapers, controls AM and FM stations in the city, and is also connected through stockholders with the only daily newspapers in two other cities and in the state, AM, FM and television stations in another city, and newspapers and AM, FM and television stations in a different state. lRichmond Newspapers, Inc., et a1., 11 R. R. 1234, 1236. 24 The diversification policy has not been strongly enforced when there was only one applicant for a construction permit.1 The policy favoring diversification has also been held to disfavor persons connected with networks. In a competitive hearing, an applicant including as a stockholder the President of the Texas State Network was refused a construction permit for a station in Abilene, Texas. One reason given was that as a network president he would wish to build up the audience of an existing netWork station in Abilene. This might conflict with his desire to use the proposed station as a full competitor with thatnetwork out— let.2 In considering a grant to Wabash Valley Broadcasting Corporation, the Commission disfavored an applicant because one of the stockholders was an officer of the American Broadcasting Company. His position, it was felt, might create difficulties for other stations in the area that might wish an ABC affiliation; however, the construction For a discussion of this, see "Diversification and the Public Interest: Administrative Responsibility of the FCC," Yale Law Journal, LXVI, No. 3 (January, 1957), 365-96. For instances in which owners with many media in one region were given television construction permits without hearings, see Southern Newspapers, Inc., 10 R. R. 59—60, and Birney Imes, Jr., 10 R. R. 1192—3. 2Abilene Broadcasting Co. et a1., 12 FCC 576, 585. 25 permit was granted.1 The second prong of the policy against granting new licenses to owners of mass media may be termed a policy opposing "concentration." In considering concentration, the FCC notes the number of mass media owned by the applicant in the vicinity of the facility for Which application is made. In these caSes the Commission also is concerned with the number of competing media in the area. Concentration is sometimes considered a weaker threat if the area has sufficient media to prevent the applicant's obtaining dominance of mass communications in the area.2 Other aspects of the Commission's concern with competition might be cited; one example would be the study of the competitive effects of licensing stations of more than 50 kilowatts power.3 In harmony with the belief that the public interest standard is paramount in Commission actions, the summary of advantages that the Commission expected to flow from lWabash Valley Broadcasting Corp. et a1., 11 FCC 341, 342—3. 2Evansville Television, Inc., et a1., 11 R. R. 411, 456—7. 3U. S.,FCC, Report on Social and Economic Data Pursuant to the Informal Hearing on Broadcasting, 1938, pp. 56-57. g . l 11H 26 competition, When given by H. H. Goldin, was almost entirely concerned With advantages to the public rather than to the broadcaster: The benefits which the Commission expects to flow from competition relate both to the business practices and to the programming of stations. On the business side, the existence of competition is presumed to provide a greater assurance that advertisers, large and small, will receive fair and equitable treatment in obtaining access to radio facilities and that undue concentration of economic power will be avoided. On the programming side the competitiOn of stations tying with one another for audience is expected to encourage programming attractive to the public and reflecting community tastes and needs. Further, by limiting multiple— station ownership and by discouraging cross—owner- ship of communications media, the Commission seeks to maximize diversity of program sources and ideas, to foster the free flow of news, and to encourage the airing of diverse and conflicting views, attitudes, and opinions in the public interest. From this summary one might gather that the Commission has given little thought to the protection of the broadcaster from trade restraints. But,looking at the Commission policies from another vantage point, it becomes obvious that the broadcaster has been protected in many ways. The deinter— mixture plans, by removing VHF channels from areas served by UHF stations, have enabled UHF broadcasters to survive; this has been the effect, even if the policy has been pursued lGoldin, op. cit., p. 228. I} 27 so as to provide better service for the public. The duopoly rules have kept One broadcaster from obtaining dominance through ownership of a number of stations greater than the number owned by other broadcasters in the town. By refusing licenses to persons guilty of illegal trade restraints, the Commission has protected licensees from applicants who would continue such policies as operators of stations. By favoring diversification and opposing concentration, the Commission has protected licensees——to some extent——from combinations of stations that would have such market power as to place OWners with few stations at a denials. By considering newspaper ownership as a minus factor in competing hearings for broadcast facilities, the Commission has protected licensees from owners who Would use their double ownership as an instrument to achieve dominance over the market. The network regulations gave licensees more freedom to set rates for national advertising. These rules also gave broadcasters more freedom to choose their netWOrk and their programming. It will be noted that in most of these cases the existing licensee has been given some protection through the denial of a request made by a newcomer or non—licensee. It should also be remembered that all these denials have been made in the name of protection of the public's interest 1m: 28 in better service. In one area the existing broadcaster has not been protected, and the licensee has almost invariably been denied a request in order to grant a privilege to a new— comer. In this area, it is the public interest Which the Commission has held supreme. The protection of the existing licensee has rarely been granted in cases involving economic injury pleas. It is the Commission's policy toward economic injury that is most relevant to this study, and this matter is treated in detail in the next section of this chapter. Economic Injury: The Heavy Burden of Proof It might be well to begin this discussion of the Commission's attitude toward the entry of new stations with a statement of some of the major features of policy that have remained fairly constant throughout the Commission's history. First, in dealing with the pleas of broadcasters that they will be injured by new competition, the Commission has consistently held that the public's interest must be the controlling consideration. This will be evidenced by many cases cited below. Second, the Commission has often ruled that a plea of economic injury is speculative; the effects of competition, according to the Commission, depend u upon too many Third, the Con a broadcaster' given the bro: proceedings. The y which the Com with economic Commission ha protecting ar was the polic Station. A11 need was not Station did ‘ of many of t Permit Was 0 of need. On Station in A Commission, ficient Pat] 0f Appeals 1 \ 1 m 29 upon too many variables to allow for a decision in a hearing. Third, the Commission has usually been willing to listen to a broadcaster's claim. Fourth, the Commission has usually given the broadcaster the burden of proof_in economic injury proceedings. The years before 1940 may be considered the era in which the Commission was seeking a principle for dealing with economic injury cases. During most of this period the Commission had one policy that had the effect of sometimes protecting an existing licensee from new competition. This was the policy of deciding Whether a community needed a new station. Although there are a number of cases in Which need was not established and in Which the existing radio station did not get its new competitor, a close examination of many of these instances reveals that the construction permit was often refused on several grounds along with lack of need. One of the earliest cases occurred in 1930. A station in Abilene, Texas, protested to the Federal Radio Commission, the FCC's predecessor, that there was not "suf- ficient patronage to support two such stations."1 The Court of Appeals noted that the existing station had failed to lAnsley v. Federal Radio Commission, 46 F. (2d) 600. of render "effici matter had bee station would its share of : the needs nor were followed refusal of a in San Diego, need, but ot} planning and On ti Station in R that there w (Call letter Davenport, 1 the Protest: AtkinSon Wh< 30 render "efficient service" and that "much objectionable matter had been broadcast." Even so, the fact that the new station would create interference, the fact that Texas had its share of stations, and the FRC's statements that neither the needs nor economic support could justify the new station were followed by the court's agreement with the FRC's refusal of a grant.1 An application for a fourth station in San Diego, California, was refused because of insufficient need, but other grounds for the decision Were insufficient planning and newspaper ownership.2 On the other hand, in spite of the protest of a station in Rock Island, Illinois, the Commission decided that there was a need for the Palmer School of Chiropractic (Call letters KICK) to establish a station in nearby Davenport, Iowa.3 Likewise, a need was established over the protests of an existing licensee in the matter of F. W. Atkinson who wished to operate a station in Watsonville, California.4 Need was not established, and a grant was not lIbid., pp. 600—601. 2Union Tribune Publishing Co., 3 FCC 451—53. 3Red Oak Radio Corp. (KICK) et a1., 1 FCC 163-66. 4F. W. Atkinson, 3 FCC 137-141. my made to the Cc in Providence because the p already contr Commission sa establishing The c matter of F. sixth statio intervened 1 against Meye Station: The app] upon hiI City are 0f the . Propose there a use of and tha rates c time 0V propose the add In 1939 the be noted tl 31 made to the Colonial Network which Wished to have a station in Providence, Rhode Island. The refusal was made partly because the parent corporation of the Colonial NetWork already controlled one station in Providence; thus, as the Commission said, the grant would not "have the effect of . . . . . l establishing or augmenting competitive conditions." The doctrine of need was dropped finally in the matter of F. W. Meyer who in 1938 asked to operate the sixth station in Denver, Colorado. Two Denver stations intervened in the proceeding, and at first the FCC ruled against Meyer saying that there was no need for another station: The applicant has not sustained the burden placed upon him by showing that the existing stations in the city are not adequately supplying the local needs of the community as to program service, and that the proposed station would fill said need. The fact that there are a number of business firms that desire the use of proposed station for advertising purposes, and that a good many of them cannot afford to pay the rates charged by the existing stations and would buy time over the proposed station at the 10Wer rates proposed, does not in itself justify the granting of the additional facilities sought.2 In 1939 the Commission reversed itself and said: "It should be noted that nothing in the Communications Act, our rules lColonial Network, Inc., 5 FCC 654, 659—664. 2F. W. Meyer, 7 FCC 544, 550. It? and regulatio: definite need In on different frc lies in the 1 its first yea could suppor1 fusing a con; Massachusett There is CommisSi broadcas sufficie nor that reasonal News Pu} 0f the e the app: Station In the matt declared th would not b above that TeXas, part 1 g; 2i 3 32 and regulations, or our policy requires a finding of a definite need to support the grant of an application." In one sense the decisions of the thirties are quite different from the decisions of later years. The difference lies in the repeated willingness of the Commission during its first years of existence to decide whether a community could support an additional station. For example, in re— fusing a construction permit for a station in Fall River, Massachusetts, the Commission said: There is nothing in the testimony before the Commission to encourage the belief that two local broadcast stations in Fall River would find sufficient financial support to sustain themselves, nor that the existing station could survive the reasonably expected rivalry of the Fall River Herald News Publishing Company, and since the performance of the existing station is acceptable and sufficient the application for permit to construct another station should be denied. In the matter of Saginaw Broadcasting Company, the FCC declared that "The establishment of more than one station , . , . _ l3 would not be economically Justified.' It has been noted above that the PRC refused a second station in Abilene, Texas, partly upon the ground that, as the Court of Appeals 1F. W. Meyer, 7 FCC 551, 558. 2Fall River Herald News Publishing Co., 5 FCC 377, 381. 3Saginaw Broadcasting Co. et a1., 4 FCC 110, 115. IE paraphrased t1 needs nor the justified the as was applieu The f of both the C three of thee Supreme Court Brothers case cast industry Was not an ac Considered a Sidering the SUbject to re In one Way b1 the Standard TWO deCiSionE within the jl \ 1 An : 600-601. ‘i 2 For F18 a BroadCi %. 33 paraphrased the Radio Commission: ". . . neither the radio needs nor the economic support of Abilene and vicinity justified the construction and operation of such a station as was applied for by appellant."l The first economic injury cases reflect the indecision of both the Commission and the courts on four related issues; three of these issues would be decided in 1940 when the Supreme Court would hand down its verdict in the Sanders Brothers case. The first issue involved whether the broad— cast industry should be considered a public utility. This was not an academic question. If broadcasting should be considered a utility, then the FCC had the task of con— sidering the effects of competition; public utilities were subject to regulation by the government of rates and profits. In one way broadcasting was like the utilities; it was under “the standard of public interest, convenience, and necessity.2 Two decisions of the Court of Appeals will show the conflict within the judiciary. In the Pulitzer case, the Court said that broadcasting was not, in every sense, a utility: lAnsley v. Federal Radio Commission, 46 F. (2d) 600-601. - 2For’a discussion of this, See Robert D. Heinl, "Is a Broadcasting Station a Public Utility?" Public Utilities Fortnightly, VI, No. 6 (September 18, 1930), 344—349. IF ‘ But we 1 station is railroad i that term rendering works, rai 3 use and en \ the legal and enjoyn j radio stat But the pc \ to the poi charged by rules req1 ‘ in the use \ assumed t} of its in‘ In the Yankee to that exist Interstate Co economic fact facilities.2 COmparison of Opinion: In these was said in the t1 Preservaj of the f: Casting : \ 1 Co ' EQEL ~JEE§§$QE_§ 2 c ' m 0mm1ssio } ““--£ 34 But we have never said that a radio broadcasting station is a public utility in the sense in which a railroad is a public utility. Generally speaking, that term comprehends any facility employed in rendering quasi public service such as waterworks, gas works, railroads, telephones,telegraphs, etc. The use and enjoyment of such facilities the public has the legal right to demand; but its right to the use and enjoyment of the facilities of a privately owned radio station is of a much more limited character. . . But the power of Congress has not yet been extended to the point of fixing and regulating the rates to be charged by the licensee or the establishment of rules requiring it to serve alike the entire public in the use of its facilities. Nor has Congress assumed the right to limit the profits on the basis of its investment or otherwise.1 In the Yankee Network case, the Court compared the situation to that existing under the Transportation Act in which the Interstate Commerce Commission was given power to consider economic factors in dealings with the nation's transport . , . 2 fac1lities. In the 1935 Jenny Wren case also appears a comparison of broadcasting to transport in this dissenting opinion: In these circumstances it may be said, somewhat as was said by Mr. Justice Brandeis of a like condition in the transportation field, the act recognizes the preservation of the earning capacity, and conservation of the financial resources, of the individual broad- casting station as a matter of national concern,for the lPulitzer Publishing Co. v. Federal Communications Commission et a1., 94 F. (2d) 249, 251. 2Yankee Network, Inc., v. Federal Communications ngmission, 107 F. (2d) 212, 220-222. mi reason tha permitted system wil to me, an the owner of either is not car And if the interests harm that com: issue upon wh: It has alreadj consider itsei SUPPOrt for a: APpeals accep Station near - . . it applicant appreciah 9f aPpell 1n that a lntereste Later that Sa \\ 1 sm 2 w a lon wo (2d) W) 484, 48E 35 reason that the property employed must be permitted to earn a reasonable return or the system will break down; thus indicating, as it seems to me, an identical or reciprocal interest between the owner and the public, in which it is the right of either to see that Competition between stations is not carried to the point of destruction.1 And if the courts and the Commission were to protect the interests of licensees, was it possible to predict the harm that competition would cause? This was the second issue upon which there was conflict during the thirties. It has already been noted that the Commission seemed to consider itself able to decide whether there was sufficient support for an additional station. In 1933, the Court of Appeals accepted the FRC's decision concerning an additional station near Omaha: . it does not appear that the operation of the applicant station in the Omaha area would to any appreciable extent curtail the advertising business of appellants, or that there is not sufficient business in that area to care for the advertising needs of all interested stations.2 Later that same year the court rejected a plea that a grant of additional hours to an existing station would harm another lgykes et al. v. Jenny Wren Co., 78 F. (2d) 729, 734. 2Woodmen of the World Life Insurance Association jStation WOW) v. Federal Radio Commission et al.,65 F. (2d) 484, 485. It licensee. Th< was "so vague furnish a pre. decision."1 a number of o The t vention in pr injury protes Party, or mus made and ther The Jenny Wre The Commissic Operated a 51 the grant Of made. The c. justices who The it necessary be injured, \ I l 6 .HEE 8 F- (2d) 4 RE 3 36 licensee. The Court said that the plea of economic injury was "so vague, problematical, and conjectural as not to furnish a present substantial objection to the Commission's decision."1 It should be added that the verdict turned upon a number of other grounds. The third issue centered around the matter of inter— vention in proceedings. Could a licensee pleading economic injury protest before the Commission made a grant to another party, or must a licensee wait until after the grant was made and then carry its protest to the Court of Appeals? The Jenny Wren case illustrates the division of opinion. The Commission said that the Jenny Wren Company which operated a station near Kansas City must wait until after the grant of additional hours to a Kansas City station was made. The Court of Appeals agreed, but there were two justices who dissented.3 The fourth issue was perhaps the most crucial. Was it necessary for the licensee to plead that the public would be injured, or could he protest merely that he himself would lWGN, Inc., v. Federal Radio Commission et a1., 68 F. (2d) 432, 433. 21bid., pp. 432—34. 33ykes et al. v. Jenny Wren Co., 78 F. (2d) 729—35. IE suffer? WGN h in the Great W injury to the . we a tention fr economic i establishn and uncert contest. part of th the applic any case v ‘ granting a l of the ho] the public j unless the nature f0] But in the Ya] the public in‘ Protection of There wou frequency Justify t Station c were not Equities relation Part. Th by VirtUe [Emphasis \- l wen, (2d) 432734. 2 Gr Federal —._§§ W 3 m Co ' . W» 37 suffer? WGN had not protested that the public would suffer;1 in the Great Western case, the Court of Appeals spoke of injury to the public: we are by no means in agreement with the con- tention frequently urged upon us that evidence showing economic injury to an existing station through the establishment of an additional station is too vague and uncertain a subject to furnish proper grounds of contest. On the contrary, we think it is a necessary part of the problem submitted to the commission in the application for broadcasting facilities; In any case where it is shown that the effect of‘ granting a new license will be to defeat the ability of the holder of the old license to carry on in the public interest, the application should be denied unless there are overweening reasons of a public nature for granting it. But in the Yankee Network Case, the court—-while not ignoring the public interest standard as a criterion——favored protection of the "equities" of existing stations: There would be no value in a right to use a designated frequency or in equities relating thereto—~which would justify the great financial outlays involved in station construction and operation——if the licensee were not protected from destructive competition. Equities and rights do not exist in a vacuum but in relation to the total situation of which they are a part. The Commission has control of that situation, by virtue of its power to grant or deny licenses. [Emphasis in the original.] ‘ lWGN, Inc., v. Federal Radio Commission et a1., 68 F. (2d) 432734. 2Great Western Broadcasting Association, Inc., v. Federal Communications Commission et a1., 94 F. (2d) 244, 248. 3Yankee Network Inc., v. Federal Communications Commission, 107 F. (2d) 212, 219. 114 he court gave of licensees: The rapidl resulting gram "tale electrical not merely service sh to develop effective not be ach The policies 5 what sense was licensee be a] be considered another appli, injury to the determine whe- the grant? 0 In 19 Herald in Dub e - . Conomlc lnju w' . lthln a few applied for a 38 The court gave an extremely high priority to,the protection of licensees: The rapidly increasing number of stations and the resulting competition for advertising as well as pro- gram "talent" has just as dangerous possibilities as electrical interference. The public interest requires not merely that a maximum quantity of minimum quality service shall be given. If competition is permitted to develop to that extent, then "the larger and more effective use of radio in the public interest" can— not be achieved. The policies and precedents were difficult to find. In what sense was radio like a public utility? When should a licensee be allowed to protest? Should any injury to him be considered enough to justify withholding a license from another applicant, or was it necessary for him to demonstrate injury to the public? And could the Commission or the Court determine whether a licensee would, in fact, be injured by the grant? One year after the 1939 Yankee Network decision came a Supreme Court verdict that provided many of the answers. In 1936, before the Yankee Network case, the Telegraph Herald in Dubuque, Iowa, began a legal process that was to last five years and that Would be the landmark case in economic injury. Two applications reached the Commission Within a few months of each other; the Telegraph Herald applied for a construction permit to build a radio station lIbid., p. 223. 1E in Dubuque, Io asked permissi Dubuque, Iowa . plead economic whether the Te permit,l but t a constructior to the Court c The Cc operation the Teleg: economic : large loss will furtl the servi< ing audie1 appellant the publ i1 Justice Crone took part in that the Coumj °n the matter \ Leis 39 in Dubuque, Iowa, and the Sanders Brothers Radio Station asked permission to move from East Dubuque, Illinois,to Dubuque, Iowa. The FCC gave Sanders Brothers permission to plead economic injury in the original 1936 hearing on whether the Telegraph Herald should be given a construction permit,1 but the Commission did not deny the Telegraph Herald a construction permit. Thus Sanders Brothers took its plea to the Court of Appeals, and claimed: The Commission erred in failing to find that the operation of the station proposed in Dubuque, Iowa by the Telegraph Herald will result in a financial and economic injury to the appellant, will result in a M large loss of operating revenue to the appellant, V will further increase its net losses, will impair ' the service rendered by the appellant to its listen- ing audience, and will destroy the ability of the appellant to render programs of high type and in the public interest.2 Justice Groner, one of the judges in the Great Western Case, ' . 3 . took part in the Sanders Brothers case. The court said that the Commission was obligated to make findings of fact . . . 4 . . . on the matter of economic injury. And the deCiSion included lTelegraph Herahd(KDTHL 8 FCC 389, 390—91. 2Sanders Brothers Radio Station v. Federal Communi- gations Commission, 106 F. (2d). 321, 323. 3Ibid. 41bid., p. 324. it some familiar On apj broadcast contempla equities shown tha be to def license t applicati weening r But the Sande went to the S injury is not Brothers was ‘ plea to the C delivered the Stand ing to F Cong: 402(b) (2) governing 0f Opinic injured 1 person he attentior the actic \ Ibic x. Jacc Protection 01 Competition, . 376. FGGQ 40 some familiar sentiments from the Great Western case: On application for license to construct radio broadcasting station, the Communications Act of 1934 contemplates that consideration shall be given to equities of existing stations, and where it is shown that the effect of granting a new license will be to defeat the ability of the holder of an old license to carry on in the public interest, the application should be denied unless there are over- weening reasons of a public nature for granting it.1 But the Sanders Brothers affair was not ended. The case went to the Supreme Court where the FCC argued that economic injury is not a basis for refusing a license and that Sanders Brothers was not a party aggrieved with standing to carry a 2 . plea to the Court of Appeals. In 1940, Mr. Justice Roberts delivered the opinion. Sanders Brothers did indeed have standing to protest, he reasoned: Congress had some purpose in enacting Section 402(b)(2) [a section of the Communications Act governing the right of appeal]. It may have been of opinion that one likely to be financially injured by the issue of a license would be the only person having a sufficient interest to bring to the attention of the appellate court errors of law in the action of the Commission in granting the'license.3 l;p_i_g.. p. 321. 2Jacob W. Mayer, "Sanders Brothers Revisited: Protection of Broadcasters from the Consequences of Economic Competition," Kentucky Law JOurnal,-XLIX, No. 3 (Spring, 1961), 376. 3Federal Communications Commission v. Sanders Brothers Radio Station, 309 U. S. 470, 476-77. But the broa Commission, to regulate with utiliti that would p whether the The words of- change in ma Resu not, in of publi element This between 5 existing Commissic shows the may have of the a; may indic proposed- of the lj service; field, bc inadequai M lIbic' ~— N H [—1. n l _ (A) H U‘ H n l ; 41 But the broadcasting industry was not a utility; the Commission, Justice Roberts said, did not have the power to regulate the licensee's business dealings as is done with utilities.1 The verdict also included two paragraphs that would provoke a quarter—century discussion concerning whether the first paragraph or the second was more important. The words of the second paragraph would appear with little change in many future pleas of economic injury: Resulting economic injury to a rival station is not, in and of itself, and apart from considerations of public convenience, interest, or necessity, an element which the Federal Communications Commission must weigh, and as to which it must make findings, in passing on an application for a broadcasting license. This is not to say that the question of competition between a proposed station and one operating under an existing license is to be entirely disregarded by the Commission, and, indeed, the Commission's practice shows that it does not disregard that question. It may have a vital and important bearing upon the ability of the applicant adequately to serve his public; it may indicate that both stations--the existing and the proposed——will go under, with the result that a portion of the listening public will be left without adequate service; it may indicate that, by a division of the field, both stations will be compelled to render inadequate service.3 lIbid., pp. 474—75. 21bid., p. 470. 3;p;g.. pp. 475—76. That Radio Station quick, new pl similar to th The 9 will adve because 0 petitione Herald st listening (b) petit Herald st inadequat will go u service f in operat The protest rationales fo service: The Commi especiall experienc in a comm results p a general advertisi has frequ broadcast particula of progra well resu turesbeca increased M 1T 2.1. 42 That decision did not resign the Sanders Brothers Radio Station to its fate. .From Sanderszrothers came a quick, new plea of economic injury with words startlingly similar to those of the Supreme Court: The granting of the Telegraph Herald application will adversely affect the public interest in that because of the competitive situation, either (a) petitioner's station and the proposed Telegraph Herald station will both go under,'thus leaving the listening public without adequate service, or (b) petitioner‘s station and the proposed Telegraph Herald station will both be compelled to render‘ inadequate service, or (c) one of the two stations will go under with the public receiving inadequate service from each during the period they both continued in operation. The protest was answered with one of the Commission's rationales for a belief that competition improves program service: The Commission cannot assume this consequence, especially since it has been the Commission's experience that the addition of a competitive station in a community does not bring about the disastrous results predicted by petitioner. On the contrary, as a general matter, competition usually stimulates advertising. This is so because, as the Commission has frequently stated, competition in radio broadcasting means, insofar as listeners in a particular community are concerned, a wider choide of programs. A heightened listener interest may very well result in a greater amount of advertising expendi— tures because of increased listener hours resulting in increased revenues for both stations.2 —-—~ 9 lTelegraph Herald (KDTH), 8 FCC 389, 393. 21bid., p. 395. Thus the Sand years of liti its station i A following the need was in e policy that p was the Commu boradcast con The FCC deter for a period profit-making helping to gu; newcomer woul. onslaught of i the first mon‘ refused const: cations, the and 1960. Fri M 1S1 R~ R. 10:88. 2.. January 14. 1 43 Thus the Sanders Brothers“ plea was denied, and after five years of litigation the Telegraph Herald was free to build its station in Dubuque. A few months later came World War II, and following the war radio stations flowered. No doctrine of need was in existence to slow down the growth. The major policy that protected broadcasters from new competition was the Communications Act requirement that applicants for boradcast construction permits be financially qualified.l The FCC determined that new owners should be able to operate for a period until revenues could put the stations on a profit-making basis.2 This policy also had the effect of helping to guarantee that competition would be effective: the newcomer would have sufficient resources to withstand the onslaught of competition from the established station during the first months of operation. Although some stations were refused construction permits for lack of financial qualifi— cations, the number of radio stations tripled between 1946 and 1960. From 996 stations in operation in 1946 the number 1Section 308(b), Communications Act of 1934, 1 R. R. 10:88. ZTEngineered Births for Radio," January 14, 1963, pp. 29—30. Broadcasting, grew to 3,451 vision statio disappeared; $57,122,000 t appear was th In Alabama, the authorized in followed the It pleaded t public intere of the older service rende the proposed to cover its Th of its belief 1A Federal Commu Broadcaster' s The figures e 2 I 31: W 44 grew to 3,451 in 1960.1 This did not include FM or tele- vision stations. And during this period some radio income disappeared; radio income before taxes declined from $57,122,000 to $51,281,000.2 One thing that did not dis— appear was the economic injury case. In answer to a 1948 protest from Cullman, Alabama, the Commission affirmed a policy not specifically authorized in the Sanders Brothers decision. Station WKUL followed the relief-promising argument in the Sanders case. It pleaded that a second station would be against the public interest in that it would result in the destruction of the older station, the depreciation of the quality of service rendered by station WKUL, or the discontinuance of the proposed new station because of insufficient revenues to cover its cost of operation. The Commission delivered a detailed exposition of its belief that the result of allowing a second station 1Address by Frederick W. Ford, Commissioner, Federal Communications Commission, before the Kentucky Broadcaster's Association, October 19, 1961,13g.l.c¢Mimeographed.) The figures exclude network owned and operated stations. 2Ibid., p. 2. 3L. E. Duffey and B. C. Eddins,gd[b as The Voice of Cullman, l4 FCC 417. to operate in the FCC decla that. as a ma tition will new broadcast the District harbinger of construction a station in its listener cited the Sa loss of profi adequate basi court added t it financial] continue ope] the resultant interest and would apply, which the st: of Cullman, M 45 to operate in a community could not be foreseen. After this, the FCC declared: “. . . the Commission has determined ‘ that, as a matter of policy, the possible effects of compe— tition will be disregarded in passing upon applications for new broadcast stations."1 In the early fifties, the Court of Appeals for the District of Columbia delivered a decision that was a harbinger of things to come. When the FCC granted a construction permit for a Dallas station that would cause a station in Durant, Oklahoma, to lose as much as 41% of its listeners, the Durant station protested. The court cited the Sanders Brothers decision, and said that mere loss of profit to an existing radio station would not be an adequate basis for denying a license to a newcomer. The court added that if the grant of the license would make h it financially impossible for the existing station to , continue operations or to maintain a high level of service, the resultant loss of service might be adverse to the public interest and warrant denying the new license. The principle would apply, the court said, in cases like this one in which the station would be harmed through interference from 31L. E. Duffev and B. C. Eddins, d/b as The voice of Cullman, l4 FCC 770, 776. 46 another station. The case was remanded to the Commission.1 In 1952, one event made intervention with an economic injury plea simpler for the broadcaster. An addition to Section 309 of the Communications Act made it possible for a "party in interest" to intervene under certain circumstances in cases involving grants made with- out hearings.2 Four years later, when the Commission denied intervention in a hearing to a party pleading economic injury, the Court of Appeals struck down the Commission's denial and said: "The Commission may not deny intervention to a party in interest who makes timely application therefor, merely because it thinks his participation would not aid its decisional process, nor require the application to show that intervention will be of positive assistance to the Commissionixidetermining whether the public interest will be served by a grant.”3 The Commission, swimming against the tide of economic injury cases, took tWO more steps to decrease lDemocratic Printing Co. v; Federal Communications Commission et al. 202 F. (2d).298, 302fn.,305.. v2"EConOmic Injury Charges Delay Three More Grants," Broadcasting, April 13, 1953, p. 48. 3Elm City Broadcasting Corp. v. United States et a1., 13 R. R. 2199. 47 broadcasters“ hope of success. First, when two stations in .Laurel, Mississippi, protested the grant of a third station. the FCC emphasized once again the speculative nature of any allegations of injury: The possibility that competition between radio stations‘ may result in detriment to the public by reason of lowered quality of program service‘or the complete elimination of one of the competitors is, as‘a practical matter, a fact which is incapable of proof. Even if these possible effects were capable of proof, it is doubtful whether they should prevent the Commission from issuing a license to an otherwise qualified applicant. However, oral argument will be held on the policy and legal questions raised. Then the Commission dealt with the statement in the Sanders Brothers decision which implied that the effect of com- petition shouki be considered. The Court had said: "This is not to say that the question of competition between a: proposed station and one operating under an existing license is to be entirely disregarded by the Commission, . . ."2 The FCC interpreted the statement as follows: As we see it, the Court at this point in the Sanders opinion was not so much directing the Commission as to what factors it must consider, but rather re- serving the question of whether such factors should be considered--which was not then before the Court—- lCarrol F. Jackson and D. N Jackson, d/b as American Southern Broadcasters (WPWR), 11. R. R. 1054. 2Federal‘Communications Commission V. Sanders Brothers Radio Station, 309 U. S. 470, 475-76. IE 48 for further deliberation by the Commission. Our deliberations lead us to the conclusion that consideration of such factors would, in fact, be contrary to the entire regulatory scheme, as laid down by Congress in the Communications Act, which is designed for a competitive broadcasting industry and not for an industry where government seeks to guarantee a business enterprise greater security than it can obtain by its own protective ability. The Commission elaborated on this interpretation in an answer to a protest from Cleveland, Tennessee. And after a detailed restatement of its belief that broadcasting was intended by Congress to operate on a competitive basis, the Commission declared: "We take this opportunity now to disclaim any power to consider the effects of legal compe— tition upon the public service in the field of broadcasting."2 The Sanders Brothers case had made it clear that injury to a broadcaster was not a reason for refusing a license; now the Commission was saying that it could not consider the public interest harm that might be involved in such competition. That disclaimer lasted 16 months. On July 10, lCarrol F. Jackson and D. N. Jackson, de as American Southern Broadcasters (WPWR), 11 R. R. 1054, 1057. 2R. B. Helms, Carl J. Hoskins, and Jack T. Helms, d/b as Southern Enterprises (WCLE), 22 FCC 605, 612. 49 1958, the Court of Appeals stripped away the rulings in the American Southern and Southeastern Enterprises matters to reaffirm the opposing interpretation of the Sanders Brothers doctrine. The case involved a grant of an AM station in Bremen, Georgia, which was approximately 11 miles from a station in Carrollton. The Carrollton station claimed that it would be forced to give up some of its public service programs if the new station went on the air. After the FCC refused relief, the Court took the case and said: "We hold that, when an existing licensee offers to prove that the economic effect of another station would be detrimental to the public interest, the Commission should afford an opportunity for presentationflflflflmm500 36m ®5G0>®m ®E®HHXWV 05CQ>®M “GOHHM9m WGOflUM#m UGHQUUMS @HHQH WQHQUUM: UGOUQW UCHQUUME umhflh -WCOHUMUW VHHOBUWGIHHOC. mnHHHHUUmNE mUnhm mkrflnvfiUnWOHEOU .anmfi mmwmmmhunvmmV fivfium mmwmmmhfinvnhufi mmmhnmkwm MUQM. HMHVOrH -N mHhHerH. 168 oma.m Now.ma ommmuoomvsmmz mom. How. ommeUCH.Cmoz m¢.oaa ¢N.N@N ommmnumo “oz m©.m mm.m mmmmuocH uoz go.vhm ha.oma mm.mmm mo.m>m mmmwuomn HopOB om.hma mw.mma hh.mmm Hm.oaa owmoHUcH Hopoe mommucounmm Umumuas wmm.a Hmm.H ommmnown.smm2 www. mmm. wmmoMUsHasmoz mm.wm mm¢.©m ommmuoom pmz mm.m ow.© mmmoHUsH #mz oo.md, mh.¢m ww.mm mmm.m¢ ommmuumn Hosea om.hv Xom.mm x&®.®m *ma.ha ommmuosH.HMpOB AQOHonHHOU Asoflpoosuoo AQOHuUmHHOU o5so>mm meuvxmv osco>om_umHHmV ossm>om Ozv macaumum mcoflumpm mGOHpmvw mCOHuMpm homopcooumm mswfiuumz UHHSB msflnoumz tcoomm m>HpHummEOU 3mm msflfloswz umuflm .msOHpMpm Muosposlsos msflsopma Use m>HpflvmmEou How mommmsomp Usm mommmuosfl ommmm>m tam Hmuoe .N magma I. iriwittll ilTrlli [little Ill ‘ .lid} sir-m--. to two financz' ments that co‘ days cited in the four stat the stations stations in p types. The c' the matching compared wit] the matching these compar a difference level , Stations to decrease. 1- would be r e1 mOre in any the Stateme of the firs in which a] This thir d Saw ‘3 revs] its progra] 169 to two financial statements; these were the financial state— ments that covered the years including the majority of the days cited in the two composite weeks used in the study. For the four stations removed by this criterion were substituted the stations that were second in matching the competitive stations in proportion of time devoted to the four program types. The difference between the competitive stations and the matching stations remained substantially the same. As compared with the competitive stations' decrease of 1.391%. the matching stations showed a mean increase of .448%~ Both these comparisons, using the Wilcoxon Signed Rank Test, show a difference which is statistically significant at the 5% level. The third computation altered the matching stations to accord with a more extreme definition of revenue decrease. According to this definition, any matching station would be removed if it showed a revenue decrease of 3% or more in any of three financial statements; these would be the statements for the year in which the majority of the days of the first composite week fell in addition to the two years in which all of the days of the second composite week fell. This third year was used in the belief that if the station saw a revenue decrease in a mid-year, it might have altered its proqramming, and could possibly not have reverted to the pattern that i intervening b of matching 3 stations for creases under file financia disqualified; however, Shot, The computat; criterion in available; f could not be at the end 0 this C0mpar i Stations dis Showed a 811' the matching COmpetitiVe decreaee of lisht of em StatiOn's r Obvious eff, Program typ 170 pattern that would have prevailed if there had not been an intervening bad year before the second composite week. It was not possible to obtain a complete sample of matching stations by this criterion; four matching stations for one competitive station all showed revenue de- creases under this definition; the fourth actually failed to file financial statements for two of the years, and so was disqualified; the financial statements that were available, however, showed that the station had suffered revenue decreases. The computation used matching stations that satisfied the criterion in the eighteen cases in which the stations were 1 available; for the one station for whom a matching station could not be found, the station that was earning more money at the end of the period than at the beginning was used. In g this comparison, the difference between the two groups of stations disappears. Although the competitive stations showed a slightly greater number of decreases (13 to 12), the matching stations showed even greater decreases than the ‘ competitive stations; the matching stations showed a mean decrease of 1.524%“ This comparison must be considered in light of four facts. First, as Table 3 shows, whether a station‘s revenue went up or down seemed to have little obvious effect upon a decision to change the amount of the program types. Second, the third revenue correction removed Table 3. Con for Revenue Change 64.20% 1a 56.94 I 43.03 I 36.06 1 33.19 I 29.99 I 28.30 1 26.65 1 22.71 1 17.07 I 13.59 1 13.21 I 12.65 1 12.52 I 10.75 I \ a signifies de a Station t] two financi. bEtter One. discarded f the intrOdu prOgrams at 171 Table 3. Comparison of revenue changes and program changes for matching stations. Proqram Revenue Program Revenue Change Change Change Change 64.20% Ia 4.90% I 9.76 I 7.30 D 56.94 I 8.12 D 8.70 I 2.20 D 43.03 I 3.32 D 8.21 I .30 D 36.06 I .03 I 8.11 I 1.90 D 33.19 I 2.60 I 3.02 I .66 D 29.99 I 3.60 D 3.00 I 1.50 I 28.30 I 12.00 D 1.40 I 7.00 I 26.65 I 15.40 I 1.09 I 2.30 D 22.71 I .1.60 I 3.53 D 2.02 I 17.07 I 1.70 I 6.50 D 1.00 D 13.59 I 1.00 D 8.21 D ‘9.80 D 13.21 I 2.81 D 10.31 D 6.20 I 12.65 I 1.17 I 15.96 D 4.38 .D 12.52 I 2.75 D 37.50 D 1.32 I 10.75 I .24 D aThe letter ”I” signifies increase; the letter "D" signifies decrease. a station that Showed a 26% revenue increase in comparing the two financial statements because the middle year was an even better one. »It is true that three of the stations that are discarded for the extreme revenue decrease had bad middle years; revenue decreases were 3.1%, 6.2%, and 13.8%. Third, the introduction of the second and third choices of stations brought stations that provided a greater proportion of the programs at the beginning of the period than had the competitive s able to show competitive : comparison 1 matching sta stations as was almost e decrease. 1 not. Tl ins Station: adjust for . The Percent. amth of t “Ewell appii SChedule to My 8% in to be a 20% matching st Stations. °f 13.802% for revenu‘ second gro statements 172 competitive stations; thus these matching stations were better able to show a large decrease in the programs than were the competitive stations. The fourth consideration in citing this comparison lies in the fact that it does not represent the matChing stations when they are considered as a group of 71 stations as a whole. The entire group of matching stations was almost exactly evenly divided in amount of increase and decrease. The third group of matching stations certainly was not. The fourth comparison of the competitive and match— ing stations involved an alteration of the percentages to adjust for inequalities in the prOportion of the decreases. The percentage change was considered as a portion of the amount of time devoted to the program types in the first re- newal application. Thus, if a station devoted 10% of its schedule to the four program types in the first renewal but only 8% in the second renewal, the 2% decrease was considered to be a 20% decrease. Using this method, the three groups of matching stations were again compared with the competitive stations. The competitive stations showed a mean decrease of 13.802%; the matching stations that were not corrected for revenue decreases showed a mean increase of .441%. The second group of matching stations (comparing two financial statements to remove any stations that showed revenue decreases tr -—-w—- A of 3% or more groups, using cance at the Thus, the dil The great differw exteme reven‘ fact that so from the com schedules de 0f the peric Showed a meg With the ext Using the w; tions did n. lP< .20). T COmpetitiVe This Compar equivalent the static (Some C0111< and Omit a have 35 st. 173 of 3% or more) showed a mean increase of .299%. Both these groups, using the altered percentage figures, show signifi- cance at the 5% level, using the Wilcoxon Signed Rank Test. Thus, the differences are again statistically significant. The alteration of the percentage figures makes a great difference in the matching stations containing the exteme revenue correction. The difference stems from the fact that some of the stations in this group differed vastly from the competitive stations in the prOportion of their schedules devoted to the four program types at the beginning of the period. ‘Compared with the competitive stations that showed a mean decrease of 13.802%, the matching stations with the extreme correction showed a mean decrease of 6.130%. Using the Wilcoxon Signed Rank Test, the two groups of stas tions did not differ significantly with respect to decrease. (P< .20). The final comparison must be made between the competitive stations and the matching stations as a Whole. This comparison must be qualified because there are not equivalent numbers of matching stations for all the competi— tive stations. If we cite each matching station only once (some could have matched more than one competitive station), and omit all stations failing to meet the requirements, we have 36 stations that showed decreases in the four program | D . I 1 i l 1 types and 32 change. Inc: divided; thi: The mean dec: the first tw the hypothes stations as matching sta than the mat Ir comparisons tions than 1 Show a great among the c‘ Which a Sta' Significant cant at the W any that te the anSWer tYpes tha t were religj both netwol possible t< 174 types and 32 stations that showed increases; three showed no change. .Increases and decreases are approximately evenly divided; this was not the case with the competitive stations. The mean decrease was .0117%. From this it can be seen that the first two groups of matching stations tend to support the hypothesis a bit more than does the group of matching stations as a whole. 0n the other hand, the third group of matching stations is far less favorable to the hypothesis than the matching stations as a whole. In summary, it may be said that six of the seven comparisons show greater decreases for the competitive sta— tions than for the matching stations. All seven comparisons show a greater proportion of decreases without regard to size among the competitive stations. 0f the six comparisons for which a statistical analysis was done, the difference is significant at the 5% level in four comparisons and is signifi- cant at the 20% level in one other. What of the individual program.types? Were there any that tended to decrease more than others? In the main H the answer must be no.” However, there were two program types that were less likely than the others to increase. These were religion and discussion. Table 4 shows the results for both network and non—network.stations. From this table it is possible to see that no single program type was notably less Table 4. Inc Religion Agriculture Education Discussion likely to s mentioned '1 one of thes CGrning rel decreased 5 likely to < ming Seems Coming of . non‘nEtWOr' Appendix v E of the Olc‘ tYpes’ anc‘ for expect 175 Table 4. Increases and decreases divided by program type. Non-Network Stations 2 Network Stations In— De— No In— ‘De— No crease crease Change crease crease Change Religion 5 13 1 14 19 3 Agriculture 9 7 3 21 12 3 Education 7 10 2 21 12 3 Discussion 6 9 4 13 20 3 likely to suffer than any other, The few broadcasters who mentioned in the questionnaire having increased or decreased one of these program types would support the result con— cerning religious programming; 17 out of 25 mentioned having decreased such programs; in the sample, this seemed more likely to decrease than any other type; agricultural program- ming seemed the type most likely to increase following the coming of the second station. Corrected percentages for the non-network stations and the matching stations are listed in Appendix V. The network.stations.—eOf the 36 network pairs, 15 of the older stations showed decreases in the four program types, and 21 showed increases, In the rationale, reasons for expecting the network stations to show smaller decreases are given, ; the earlier more importa slightly les types than M during the ] Tabl stations in the nonmet; decreases a the station Station beg Years, The can be seer Stations 8] the OPPOSl‘ tions Show An statiOn Sh part u10011 Here the C OCCUrred 1 176 are given. And it is true that the network stations during the earlier years of the period, when the network was a more important source of audience and revenue, were very slightly less likely to show decreases in the four program types than were the network stations that received competition during the later fifties. Table 5 shows this. It can be seen that the network stations in the late fifties have begun to behave more like the non—network stations in the sample. The stations showing decreases are slightly clustered in the period after 1954; the stations that did not show decreases after the second station began Operations are slightly clustered in the earlier years. The numbers are quite small, but from this table it can be seen that after 1954 almost twice as many network stations showed decreases as showed increases. Before 1954 the opposite is true; more than twice as many network sta— tions showed increases as showed decreases. Another descriptive fact to note is that whether a station showed a decrease or increase seemed to depend in part upon which network affiliation the station possessed. Here the differences are quite small and could easily have occurred by chance. However, it should be mentioned that almost two—thirds of the stations that showed decreases were Year of thy Second Statii Arrival R 1949 1950 1951 1952 1953 1954 1955 1956 1957 I958 \ affiliél’t‘eg ( flan half 01 affiliates. Broadcasting of the Nati( slight majo; Company sho‘ too Small t 177 Table 5. Decreases and increases in the four program types for network stations according to the year the second station began Operations. Year of the Number of 'Number of Second Station's Stations Showing Stations Showing .Arrival Increases Decreases 1949 1950 1951 1952 1953 1954 1955 1956 1957 ‘1958 Hoowwwr—Iwoxb NWOOIbl-‘l-‘ODO affiliates of the Mutual Broadcasting System; slightly less than half of the stations that showed increases were Mutual affiliates, On the other hand, no affiliates of the Columbia Broadcasting System showed decreases, and only one affiliate of the National Broadcasting Company showed a decrease. ~A slight majority of the affiliates of the American Broadcasting Company Showed decreases. As Table 6 shows, the numbers are too small to have meaning. | l Table 6. $126 for __________ __________ Name of Network ABC CBS MBS NBC One majority of Proportion programming decreases i gramming pf: c("T‘Pfifiiitior the four p1 increases ; work PrOgr. was 47.41% of “Etwork decreaSe d gramming n 178 Table 6. Stations divided by increase and decrease in the four program types and by network affiliation. j Name Number of Number of of Stations Showing Stations Showing Network ,Increases *Decreases ABC 3 5 'CBS 3 O MES 10 9 1 NBC 5 One severe qualification must be made here. »A great majority of the network stations in the sample decreased the proportion of their schedules that was devoted to network programming during the period. And the stations thatshowed decreases in the four program types took slightly less pro— gramming from the networks before theyreceived their first competition than did the stations that showed increases in the four program types. For the network stations that showed increases in the four program types, the mean amount of net- work programming broadcast during the first composite week was 47.41%. For stations showing decreases, the mean amount of network programming was 45.11%. Also, the stations that decreased the four program types also decreased network pro— gramming more than did the network affiliates that increased the program types. The mean decrease in network programming for stations 2.96%; the m 1 the program correlation and the incr gramming usi Hyp< radio stati( Commercial ; for the com and discuss quirements Thi the network Stations, c had broadca Pr0vided le the Only s1 It answering _ their prOg; 179 for stations showing increases in the program types was 2.96%; the mean decrease for stations showing decreases in the program types was 7.88%. There is no significant correlation between the decreases or increases in programming and the increases or decreases in the amount of network pro— gramming using the Spearman Rho Correlation. Results for Hypothesis II Hypothesis II predicts: The entry of a commercial AM radio station into a community containing only one other commercial AM radio station will be followed by a net increase for the community of religious, agricultural, educational, and discussion programs, when the stations meet all the re- quirements set out in Hypothesis I. This hypothesis is overwhelmingly supported by both the network and non—network samples. Among the non-network stations, only one pair broadcast less than the older station had broadcast alone; among the network stations, two pairs provided less than the one station had scheduled when it was the only station in the town. It will be remembered that a few of the stations answering the questionnaire mentioned that they had altered their programming because of the programming on the other Station. Another broadcaster mentioned that the rival station copi that among t program type station prom alone. On 1 increases ir the newer 31 the older 3' evidence fo; imply that . increases 0 Provides is A 1: bEen mentic been assign and their 1 Older Statj renewals WC at least re renQWals 01 remQMbered different 2 ground is - 180 station c0pied his programming. It is more than interesting that among the 28 stations that showed decreases in the four program types are only six instances in which the newer station provided more than the older station had offered alone. On the other hand, among the 27 stations that showed increases in the four program types are 12 instances in which the neWer station had offered more of the programstthanlhad the older station when it was alone. This is fragmentary evidence for a theory that needs further testing. This would imply that one of the factors determining whether a station increases or decreases the amount of the four programs it provides is the programming of the other station. A prompt word of caution must be offered here. As has been mentioned before, the classification of programs has been assigned entirely to some 110 broadcasters, their staffs, and their lawyers. In comparing the two renewals of the older station, the ground is somewhat firm in that both renewals would stand some likelihood of being made out--or at least reviewed-—by one person. But in comparing the renewals of the older station with the newerIit must be remembered that the personnel computing one renewal would be different from the personnel computing the other. This ground is very marshy indeed. It In the newer st he supported whether the of these for programs, tl beliefs of 1 multitude 0 making. In the four pr AmOng the nc did the con theSe fOur Commereial, of 36 inst; grams with as a WhOle additiOn 0‘ Program ty the Cases, 31110111“: 0 f 181 It must also be remembered that the programming of the newer station—-even if this tentative theory should later be supported-Awould be only one of many factors determining whether the older station decreased or increased the amount of these four prOgram types. The pOpularity of individual programs, the profit margins of stations, the policies and beliefs of management, the attitudes of the audience, and a multitude of other factors could well affect the decision— making. In Tables 7 and 8 the percentages of time devoted to the four program types have beencomputed as hours and minutes. Amongtflmanon-network stations in only 4 out of 19 instances did the coming of the second station double the amount of these four program types available to the community from commercial, local stations. Among the network pairs in 16 out of 36 instances the town had twice the amount of these pro— grams with two stations as compared with one. For the sample as a whole (both network and non—network stations) the addition of a second station did bring a net increase in the program types in all but 3 instances. But in more than half the cases, doubling the number of stations did not double the amount of these program types available to the community. {I ' Iii. . \ HM3®G®M T:C(QU JII|IUI >HHG5EEOU MOM MCOH#M#W m.GOHUNPm QWMQHUQQ CWMCHUGH m.GOHUMHm w.GOHUMUW OWM0HUCH Qflom 3®Z H®UHO H®UHO db. o WCOflHvANUW VHHOBUQQI. COG mgnv \AOn mmanukAU. EMHNVOHAH H50 N MQU 0U U®U0>®U mfifiu HMUOB u k. manHerH .mco QMHB no mQOHumuw 03» auHB momma Emnooum ommSp m0 #058 mm oUHBD on: GBOp wgu woodpmcw menu CH Dog» mmHMHcmflm a * .mmuscwa m pmoumm: may ou oopsmEoom 182 oono mmum moum omuo omum Oduoa ooum mmuma mvua maua Gonna mmuoa somuoa omuam mvum mouh mwuam o¢"¢H ovum mmumm mvuw monm omnoa mmuam omuw omuma oaum omum OHuOH omuma maum ovuma mane ooum mmnh mmuoa mm“a OM«NH Omufl mvum oaum mmuoa mmum OHHBH mmuoa omub mwuo mmuva oonm omusa omuoa omum oonh omum mmno moumm moum, oaua omuma oauma ovuha omuom omuma oaua OOan oauma mmnm mmnom cone mgua mauoa oouma mmuma omuav omuma ma" owuam mmuam soouaa oauom mauoa me“ mmum oaum mwuaa ovumm mmum oanm monma mmuHH ovna mmum ovum ooum mend mwum amosm omuva omuoa mmua omuw mono mmu ovuma own man oouma m¢uma somumv omumm omuom Omum omuma oouma Hm3ocom HMBooom hDflcSEEoo HMBmdom vacuum umuflm How mCOHDmum w.:OHpmpm ommonoom wmmonooH m.c0Hpmum m.c0HDmum mmmmuozH zoom 3oz Hooao Hooao m.mC0a#mum MHOBDoCIGOQ oflu mm mommp Emumoum Hoom o£# OD oouo>oo oEHu Hmuoe .h QHQMB 183 ON«® u u - mum mm us new mwmw momma cum oouw omuua omuoa aoouoa OMMMM WMMM no" - OHuwH mmuWH OO-H OMHOH OMHm mmnw mmuoa oanma mwnb mans oouNH soouma omuom oauwa om". oouma omuaa oanma mouom oonm omuw mNuHN mmuoa ammum oauoa oaum ma" ooum mono ammuoa mouma mauoa OH" omnw ownd oouw omuba mono mu" mouma. omuma somuma mauwm mmnaa mmua omuma mmuoa ammuam omnmm mmuoa ooum mmumm mmuha mans omuwa moum oaum mauma mouaa mouha omuao omuom mvum owuom mmnwm soouom omumm mmnma mmnma mmuom omuma mmum oanom OHuHH mmun ooum mmnoa mmum omumm mmuma omuw mmuoa mmuva oaum mmumm moan mmua oauoa mwuwa ammumm omuow ooumm mmnm omumm mwuom *mfinom oonmm omuma mm" oauma mHuHH menu omumm mono oonm monmm moumm omum owuam mmuoa mu" mouaa omuaa HMBmcom HMSocom mpacofiaov Hm3ocmm ocoomm “mush How mCOflDMpm m.c0HDMDm mwmouoon ommouocH m.c0Humom m_QOHpmom ommoHUcH 3oz Hopao HmUHO room M .mGOHDMpm MHOBDoG ofip %Q.mom># Emumonm HSOM oSD Op oou0>mo oEHD HMDOB .m OHQMB .oco SDHS mm moospmgm 03¢ omonu mo QOSE mm oUHBp on: GBOD ogu monopmofl mflfiD ca um ##H3_mwQM# Emumouo an moawaomwm - .mopocfl8.m umwnmmc map on owoomfiovm m soauwa sowuwa roauam rovuma ammnma 0000 Done soauma rmanha maum mmuHH mmum moum omum OHam ovuw maum *OOHOH 184 MN"? toouma OHuMH knflufi monmm owumm ooumm 210m ooumm mmnm omum 32%. 013 oouma oausm 00an Sum: 3 "3 oonma oonma oauom omuma mNnmwtn omuom monom oaada OOHOH OmuHH omuNN mmuma mmwoa omum mm" owum mouma Omum omumH omum moan mmum omnma ova. oouo ooum OHuNH O‘Humln O¢uw oanm oonv mHuN oaum 04V"? omum OHuN mmuw mm" oouw OOHH mouma oauwa omum mvum mNHHH mauh mmuh mauma mmuHH owuva ONuNH omum monaa ouum owuo omuva OHuwa Omuoa mmum ooum Omuoa ooumH mmnm Omuoa mouHH mvum mmum mfium mvuma moum mouma mmuHH Omum ONHOH mm«VH Omum oouma omnaa One station, by older static damage the < Table 9 whe: are listed. Table 9 . R n t c R K Newer Stati Provided. at One Hour MC \ 2-92 Incre 1-71 Incre 116 Incre 22_12 6.97 2.67 18,46 10,30 13.65 7.95 3.35 19.52 3.58 13.81 15.60 m \ a Sir Pro flling the SltuatiOns 185 One other question must be answered: Did the newer station, by offering fewer of these program types than the older station provided, gain a mighty weapon with which to damage the older station's revenues? The answer is in Table 9 where the revenue decreases for the older stations are listed. One group of revenue decreases is for the Table 9. Revenue decreases divided according to whether the newer station provided more of the program types than the older station offered during the first composite week. ,Newer Station Provided .Atheast One HOur Less . Difference of;- Less vThah“. Newer Station Provided at Least ; One Hour More .One ~Hour 2.92 Increase 22.11- 10.47 Increase 5.74 1.71 Increase 2.23 13.01 Increase 10.27 1.16 Increase - 8.81 4.13 Increase 2.76 22.12 .40 20.25 16.29 6.97 1.27 21.58 .07 72.67 29.98 14.12 17.38 18.46 6.88 11.19 8.26 10.30 11.78 16.35 12.93 13.65 19.51 11.22 4.51 7.95 1.46 40.80 17 45 3.35 9.02 11.21 5.98 19.52 17.00 14.68 3.58 29.60 .39.53 13.81 6.82 18.68 15.60 21.26 Mean decrease: 8.81% Mean Decrease 12.7d%— éAlso included in this group are instances in which the newer stations either chose their own days to represent their programming or used seven consecutive days just before filing the application. It was felt that either of these situations cbuld allow the-stations to show their prOgram_ ming in a better light than might have been the case. 186 older station whose new competition provided as much as an hour more of the program types than the older station had offered in its first renewal. The second group shows decreases for stations whose competition offered as much as an hour less. In the center are the decreases for stations whose new compe— tition came within an hour of offering the~same amount as the older station. Also listed in the center column are instances in which the newer station either chose its own days to repre- sent its programming or used a consecutive week instead of the standard composite week. .In these instances, it was felt that the management, in an effort to please the FCC, could have broadcast programming that was not typical of its usual oper- ation. The stations whose competition offered more showed a mean decrease of 8.81%. The stations whose competition offered less showed a mean decrease of 12.70%. Among the 15 stations whose competition broadcast more of the program types than they themselves had broadcast while alone in their markets, only 7 showed decreases of 10% or more; among the 29 stations whose competition broadcast less are 19 with revenue decreases of 10% or more. The large differences among individual stations resulted in an insignificant statistical difference between the two groups, according to a t—test (t = 1.12). A comparison of the stations by the- same criteria using the renewal of the older station after the arrival of the second station shows that the difference between the two 187 groups tends to disappear. Some of the stations with large revenue decreases also decreased the amount of the program types so that the older stations were broadcasting less than the newer station. By this comparison ten of the 17 instances in Which the newer station was broadcasting more are cases in which the older station saw a revenue decrease of 10% or more. .Also, 19 of the 27 instances in which the newer station was broadcasting less than the older station are cases in which the older station saw a revenue decline of 10% or more. ,What has happened is simple; 7 stations—-6 of which showed sizable revenue decreases-—decreased the amount of the four program types enough that the newer station was broad— casting more than the older station. Three of these stations were originally within one hour of broadcasting the same amount as the newer station. On the other hand, four sta— tions—~that experienced revenue decreaSes of 6.88% or more—— increased the amount of the program types so that in the second composite week the older stations were broadcasting more than the newer stations. The tendency-—if such a small number of instances can be called a tendency—-seems to be for stations with.large revenue decreases to "out—do” the newer station, either in going below the amount of the programs broadcast by the newer station or in going above. Table 10 shows the shift. The stations with large revenue decreases 188 are now almost entirely out of the center column which shows revenue decreases for pairs that were broadcasting almost identical amounts of the program types. The difference was one hour or less. Also included in this center column are instances in which the newer station either chose its own days for the composite week or in which the newer station reported on seven consecutive days.. Table 10. Revenue decreases divided according to whether the newer station provided more of the program types than the older station offered during the second composite week. Newer Station Provided at Least Difference of Less Than Newer'Station Provided at Least One Hour More One Hour One Hour Less 13.01% Increase 2.23% 10.47 Increase 6.88 2.92; Increase 8.81 4.13 Increase 4.51 1.71 Increase 5.74 20.25 17.45 1.16 Increase 2.67 21.58 5.98 22.12 .40* 14.12 11.78 22.11 .07 11.19 14.68 6.97 1.27* 11.22 39.53 16.35 18.46 40.80 18.68 21.26 1.46* 11.21 13.81 16.29 9.02* 17.00 15.60 10.30 3.35 29.60 13.65 6.82 29.98 10.27 7.95 2.76 19.51 17.38 19.52 8.26 3.58 12.93 Mean decrease: 11.22%. Mean decrease: 13.69% , * . . Signifies that the newer station either chose its days for the composite week or used seven consecutive days. 189 Results of Hypothesis III Hypothesis III predicts that among the stations showing proportionate decreases in the four program types, the stations with the larger revenue decreases will also show relatively larger decreases in the program types. The stations with smaller revenue decreases will show relatively smaller decreases in the four program types. Before discussing the results, it is necessary to question whether the revenue decreases can indeed be attributed to the start of operations by a second station. There are two bits of evidence to indicate that there may be a relationship. Among the stations that showed revenue decreases, 32 showed revenue increases during the last two years they were alone in their communities; only 15 showed revenue decreases during the last two years they were alone. The two figures do not total 55 because six stations did not show revenue decreases, 2 stations were not in operation for two full years before the start of the second station, and financial statements for two of the stations (one of which did not show a revenue decrease) were not available for one of the years. There is one other bit of evidence that would seem to relate the revenue decrease to the start of the new station. Among the stations that Showed revenue decreases, 190 21 actually received greater total broadcast revenues for the year the second station began operations than during the last year the stations were alone. This seems to imply no relation— Ship until we note that in 16 of these instances the second station started Operations in the second half of the year; in the other five instances, the second station went on the air in May or June. On the other hand, among the stations that showed revenue decreases for the year the second station went on the air, 14 newer stations went on the air during the first half of the year, as compared with 12 that went on the air during the second half. Among these 12 were 8 that went on the air not later than September. Thus, there seems to be some relationship between the time of the year that the second station went on the air and whether the Older station showed a revenue decrease for that year. Two stations not cited in the above calculations include one in which the financial statement for the year the second station went on the air was apparently not filed and one for which the financial statement for the last year the station was alone was missing. For these two stations the revenue decrease was computed using the available statements. In the instance in which the revenue decrease was computed by comparing the year the second station went on the air with the first full 191 year that both operated, the second station did not begin program tests until December; thus we are comparing a full year Of Operations by two stations with a year in which the older station was alone fOr 11 months. It is neceSsary to make one strong qualification con— cerning the results of this hypothesis. It is obvious that many stations showed revenue decreases but did not show decreases in the four program types. It is not possible to support a hypothesis, with the data available, saying that a station showing a decrease in revenue will also show a decrease in the four program types. However, there are some small indications that the stations showing increases in the four program types did suffer slightly smaller revenue de- creases than did the stations that showed decreases in the four program types. Whereas 12 of the stations showing prO— gram decreases also showed revenue decreases of more than 15%, only 7 Of the stations showing increases had revenue decreases of 15% or larger. Also interesting is the information that the average revenue decrease for the stations showing decreases in the four program types was 12.16%; the average revenue decrease for the stations showing increases in the four program types was 10.13%. Using a t—test, this difference is not statistically significant at the 5% level. 192 Another very faint indication that the size of the revenue decrease may bear some relationship to the decision to increase or decrease the four program types may be seen when we take a second look at the non-network stations. Two of these stations showed decreases in the four program types but did not show decreases in revenue. One of these two stations lengthened its schedule by more than forty hours; thus although the station decreased the prOportion Of time it devoted to the program types (and proportion is the criterion in this study), it actually increased the amount of time devoted to the program types by about 15 minutes. Thus, the station does not in one sense violate the concept that revenue ,. _ . “.11 decrease is followed by a decrease in the program types. This is the only station in either sample for which a pro- portionate decrease was not also a decrease in clock hours of the program types. The other non-network station that showed a decrease in the four program types but did not show a decrease in revenue actually showed a revenue increase of 2.92% for the first full year the second station was on the air; however, during the previous two years (including the year the second station went on the air in August) this station had suffered a revenue decline of 29.4%. Thus, although it is not possible to say that this station suffered a revenue decrease after a competition increase, it is 193 obvious that the station suffered both a revenue decrease and a competition increase. It is also true that the two smallest revenue decreases occurred to stations that showed no decrease in the four program types. Even after this explanation there are four stations out of 19 that do not fit the pattern that would emerge if it were possible to support the hypothesis that revenue decreases are followed by decreases in these programs. Another factor may have some slight relationship to the decision to decrease the four program types. This factor is the total broadcast revenue of the station before the second station began operations. If we compare a ranking of the stations that showed decreases with a ranking of the stations that showed increases, it becomes noticeable that the median revenue for the stations that showed increases was considerably higher than the median for the stations that showed decreases. The figure is the total broadcast revenue for the last year before the second station began program tests. Figures are given in thousands in an effort to make the stations more difficult to identify. The median revenue for stations showing increases in the four program types was 113 thousand dollars; the median revenue for the stations showing decreases was between 99 thousand and 96 thousand. -fi—__v ._...H_.‘__.~. -- .1 194 Because of the wide variation in revenues, this figure is not significant at the 5% level using a t—test, and little sig— nificance should be attached to it. One thing that can be seen from Table 11 is the fact that among the 15 stations that earned the greatest broadcast revenues before the second station's entry, only 4 showed decreases in the program types following the entry of the second station; on the other hand, among the 15 stations that earned the smallest revenues before the second station's entry, a slight majority (nine) showed decreases following the entry of the second station. -Also, the non—network stations (which were more prone than the net— work stations to decrease the amount of the program types) were less prosperous than the network stations; 11 network stations had revenues greater than the revenues of the most money-making non-network station; the network station with lowest total revenues earned more than the bottom three non- network stations. The figure for the one station whose financial statement for the last year it was alone was not available is included in the table; the figure cited is the one for the year in which the new station went on the air in November. If a tendency for stations with higher revenues to be less likely to show decreases in the four program types does 195 Table 11. Total broadcast revenue for stations showing increases and decreases in the four program types. (In thousands of dollars) Network, Network. ’Non-Network ‘Non-Network Stations Show— Stations Show- Stations Show— Stations Show- ing Increase ing Decrease ing Increase ing Decrease in Program in Program in Program ' in Program Types Types Types Types 265 225 182 161 158 145 144 143 139 133 122 129 122 121 118 115 116 116 114 113 114 100 107 104 103 97 99 94 96 94 81 84 83 80 81 79 79 76 74 73 71 71 69 69 2: 59 52 51 47 45 34 33 ' 196 indeed exist, the tendency is also worthy of an attempt at explanation. The difference may possibly be accounted for by the simple fact that the stations with greater revenues were better able to retrench without making this alteration in programming. They were not immune to revenue decreases; the 7 network stations with the greatest revenues ranged in revenue changes from an increase of 1.16% to a decrease Of 19.51%; the 7 network stations with the lowest total revenues ranged from an increase of 4.13% to a decrease Of 18.68%. Table 12 shows the data that was used to test Hypothesis III to learn whether a positive correlation exists between the size of the revenue decrease and the size ofthe program decrease. Using the altered percentage figures (in which the decrease was computed as a percentage of the pro— portion devoted to the program types in the first renewal), the result of a Spearman Rho Correlation shows Significance at the 5% level; the raw percentage figures did not show such significance even though the stations with revenue decreases greater than the median also showed program decreases almost twice as great as the decreases for stations whose revenue decreases were less than the median. The raw percentage figures showed a correlation of .159. The altered percentages ShOWed a significant correlation of .396. 197 Table 12. Stations showing decreases in.program types ranked according to revenue decrease. Program Decreases for Program Decreases for Stations Showing Small Stations Showing Large Revenue Decreases Revenue Decreases a (Corrected Percentages) (Corrected Percentages) 30.720 26.086 25.233 14.096 21.379 45.714 20.888 54.857 15.471 23.076 15.434 31.412 9.848 21.949 8.179 25.675 28.225 65.050 24.675 .370 , 32.926 56.521 g 6.896 67.727 1 6.097 27.338 F 25.818 .30.273 ' Mean program decrease for Mean program decrease for stations showing small stations showing large revenue decrease (Raw revenue decrease (Raw percentages): 2.22% 4percentages): 4.12% a . ‘. 'Raw percentages are nOt given because of the-p0551— bility that the stations might be identified with such figures. The extreme difference between the two correlations .1 can be accounted for by the wide variation in the proportion of time that was devoted to the four program types at the beginning of the period. The largest decrease was almost 10%; three stations that showed larger revenue decreases were incapable of showing such a large decrease because they had 198 devoted less than this proportion Of their schedules to the program types during the first composite week. The altered percentage figures compensate for these differences, but it can be argued that the compensation is not entirely just. If two stations Operate 90 hours per week each, a 2% decrease for one is equivalent in hours to a 2% decrease for the other, despite the variations in the amount of the four program types during the first composite week. The logical solution would be to use a tntest which would compare the mean decreases for two groups of stations: those who did not suffer a revenue decrease or suffered a decrease less than the median, and those that suffered a revenue decrease of more than the median. The temptation had to be foregone; a t—test requires interval data, and this author does not wish to defend the proposition that the renewal application percentages offered such exact- ness. Thus, it cannot be said with confidence that the hypothesis is supported. The correlation using the altered percentage figures revealed something that is fairly Obvious from a close look at the table; other factors account for a large part of the change. The correlation of .396 shows that the relationship between revenue decreases and program decreases accounts for about 16% Of the variability. Some of the other factors that 199 could account for the change are the programming of the new station, the popularity of individual programs, the beliefs of management, the tastes of the audience, the profitability of the station before the second station's entry, and certainly the way the programs are classified in filling out the renewal applications. If there is a relationship between the amount of revenue decrease and the amount of program.decrease, would there also be a relationship between the amount of program increase and the revenue decreases? In other words, would the stations that showed the smallest decreases in revenue also show the largest increases in the four program types? Table 13 shows that the Opposite is true. Using the Spearman Rho Correlation, there is a significant difference at the 5% level using both the raw.and the altered percentage figures. The correlation; for the raw percentage figures was .379; the altered percentage figures gave another significant correlation of .384. The relationships account for approxi- mately 14% of the variability. Results of Hypothesis IV Of Hypothesis IV it may safely be said that no signifi- cant results whatever were discovered. Only twelve of the stations that received their first local.broadcast competition 200 Table 13. Stations showing increases in program types ranked according to revenue decrease. Program Increases for Program Increases for Stations Showing Small Stations Showing Large Revenue Decreases Revenue Decreases (Corrected Percentages) (Corrected Percentages) 3.06 .63 7.18 7.39 104.76 26.31 18.95 4.36 17.33 55.19 6.48 50.00 11.80 46.37 5.74 27.74 18.42 48.81 2.94 17.56 10.26 19.07 101.30 38.36 4.54 43.33 5.13 Mean program increase for 14 Mean program increase for small revenue decrease stations 13 large revenue decrease (Raw percentage): 2.15% stations (Raw percentages): 3.30% answered the questionnaire. Of these, two broadcast no prO— grams of the four types in the extreme early morning or in the evening during either the week before receiving competition or the week after. Three others showed no Change in the pro- portion. Of the seven remaining stations, three Showed the predicted change and in the second week placed a greater proportion Of their education, agriculture, religion, and discussion in the early morning hours and in the evening hours. 201 Four showed the opposite change and placed a greater pro— portion Of these program types in the daytime hours during the second period. But a greater number of the stations that remained alone in their communities showed the predicted change than did the stations that received local broadcast competition; 5 of the stations that remained alone showed an increase in the proportion of these programs broadcast in the extreme early morning and in the evening. Three of the stations that got no competition placed a greater proportion in the daytime: four showed no change. Two stations that remained alone broadcast no programs of the types in the early morning and evening during either of the two weeks included in the sample. Table 14 shows the comparison of the stations that received local broadcast competition with stations that did not. In part, the lack of change may stem from the fact that relatively small amounts of these program types were broad— cast during the day in the first weeks. Thus, the stations had little in this category to shift to the evening hours. Most of the discussion programs were being broadcast in the evening hours before the Second station began operations. The majority of the programs broadcast during the day were devotional programs of various types scheduled usually in the morning in addition to agricultural programs scheduled 202 s.6 ms mass 0 o mam o o omm o o omm o o omm o 0 ma m.H 6 ems 04 so a.mmm a.mm m.aon m.mmv m.6m oms m.osa m.m mm mas m.m mm mas m.mm mam m.mmm a.mo 66H m.mmm m.wm «NH mam 6.sm mm mos a.mm mos mam m.om mm own m.sa a.mm a.amH m.6m m.m6 m.mma 6.4m om oom 6.4m om osm a.ma am has m.om as oma m.mm oma mow a.mm. oma coo H.sm mam m.mm6 m.Hs mom m.aom a.m m.mm m.mmm o o m.mam om cm can om, me as o o msm_ o 0 «mm o 0 mas o o mma 6.6m oma mom 6.6m omH mom a.mm m.mma m.smm a.mm m.mma m.oam m.oa ooa mam a.mm as mam a.mm oma omm a.mm oma com o 0 man a.ma omn mms a.mH m.man m.4ms 6.ms m.4om m.m64 .cfls .sfis .caz .sas .m>m .cflz .o>m, .cflz .o>m .QHS .o>m .GHE X. .cuoz Hopoa X .CHOS Hosea X. .QHOZ Hmuoe X. .CHOS HODOB Nwma CH Mmoz coma as #003 coapflpomEOU.Hm00A on SsflB mQOBumsm coapfleomsou umpmd, coflpflpomsov onomom coapflpom6007oo>flooom umflp woospmpm oooH>HU momhp Hoom oflp mo mEmumonm pmmopmonfl mSOHpmpm £0fl£3 no mnsom .QOHpfleomEoo Hmooa OMS uncappem mflp Hofiuonk om moflonouom .wH OHQmB CE b. 203 around the noon hour and in the early morning. Nine of the twelve stations broadcast——by their c1asSifications——no edu- cational programs during weekdays (between 7 a.m. and 6 p.m.) even before the second station began operations. The other three aired a total of 85 minutes of education on weekdays before the second station began program tests. Six of the twelve stations broadcast no discussion programs during week- days before the second station arrived. The other six stations broadcast a total of 6 hours and 28 minutes of dis— cussion programs during weekdays. Two hours and 20 minutes of this discussion was a program entitled "Morning With .” -Agricultural and religious programs were broadcast during weekdays; two broadcasters said they scheduled religious programs only on weekends; one broadcaster‘said that his agricultural programs were aired only on Saturday. Thus, Perhaps the results would have been different if the question— naire had requested information concerning Saturday and Sunday. The agricultural programs were, many of them, early morning programs——many scheduled for periods earlier than 7 a.m. even before the second station arrived. A large pro— Portion of the other programs were brief market reports Scheduled at noon. For these, the station might well have been able tO find a sponsor; thus, the coming of competition 204 would not have necessitated moving these programs. Some of the religious programs were apparently recorded hymns that might well have been as acceptable as other types of recorded music. At any rate, the hypothesis is certainly not supported by the small bit of evidence available. The insignificance of the results is increased through the recognition that the matching stations had slightly less nighttime hours than did the competitive stations; even with this lack of time, the matching stations showed a greater shift to the nighttime hours than did the competitive stations. Omitted from the calculations were the hours devoted to a Nixon-Kennedy debate which was broadcast by two stations and a four hour polio drive program. It was felt that these programs would not represent the stations“ regular schedules. One station submitted information concerning its programming in 1961 instead of 1960; the station was included because the 1961 week represented a period before the second station began program tests. CHAPTER VI SUMMARY: TOWARD A RATIONALE FOR STUDIES TO COME This chapter represents an attempt to summarize and interpret the findings of the study. More numerous than the findings are the tendencies that appear in this sample with insufficient strength for even tentative conclusions but with sufficient force to lead to speculation. The clearest conclusion is that in most cases the addition Of a second AM radio station does bring a net increase for the community of the total of the four program types; But the increase, in a slight majority of cases, did not amount to the doubling of the amount of these pro— grams. And the two stations did not always provide—-accord- ing to their calculations--more of the program types than had the one station alone. The amount of increase that the community could expect seems to vary considerably With the stations' network status. For the non-network stations only 4 out Of 19 communities had twice as many of the programs with two stations as with one; for the network stations, 16 out of 36 communities had twice as many programs 205 206 with two stations as with one. It is impossible, with the available data, to know how much of the increase represented programs that were broadcast at the same time Over both stations. If the two stations broadcast Sunday religious programs at the same hour, for example, the amount of increase would be altered so that the community would have a choice Of two programs but not as much of an increase in hours devoted to the program types. Competition may or may not be related to the small net increase for the towns through the coming of the second station. The communities may have had too few program sources for doubling the program types; the number of churches, schools, public officials, and civic groups is not unlimited. Further, the new station's executives could have been, in some instances, newcomers to the town, people unacquainted with program sources and thus unable to build as many programs using local people as could the older station, whose personnel had lived longer in the town. But if we rank the towns' populations, as given in the Sales Management Survey Of Buying Power for the year of the new station's entry, and divide the stations into a high population group (all above the median population) and a low population group (all below the median, including the four towns for which 207 no population figure was given), there is little support for the theory that availability of program sources was related to the failure to double the program types. In the high population group are 12 Of the stations that doubled the amount Of these program types; in the low population group are 8. Some measurements would support a conclusion to the effect that the non-network stations do decrease the amount of education, agriculture, religion, and discussion after the entry of a second station. Other tests would not give significant support to this hypothesis. The majority of the network stations did not Show this decrease. Why would network stations behave differently? Three reasons have been given in the rationale: The network stations during the late forties and early fifties (when the majority Of the network stations that did not show decreases received their competition) had the popular network programs that aided the stations in attracting audiences and sponsors who wanted to capitalize on the audiences attracted by these programs. Second, the network stations had a source Of revenue that the non—network stations did not possess. Finally, the network stations had a ready source of some programs that could be classified as education, agriculture, religion or discussion. 208 One form of measurement would support the hypothesis that among the stations showing decreases in the four program types there is a positive correlation between the size of the revenue decrease and the size of the program decrease. Another form of measurement would not support the hypothesis. In analyzing the program decreases of the network stations, it is important to remember that the stations that showed decreases used less network programming at the beginning of the period than did the network stations that showed increases. The difference in the average amounts of network programming used during the first composite weeks is quite small and could easily occur by chance. Too, the network stations that showed decreases in the four program types also decreased the amount of programming they took from the networks more than did the network stations that showed increases in the four program types. There is no significant correlation between the changes in the proportion Of the program types and the changes in the proportion of network programming, but it must be remembered that if the network decreased the amount of education, agriculture, religion or discussion that it provided for the affiliate, the station may have found it impossible to fill the period with a program Of a similar type. Under 209 this circumstance, the decrease in the four program types could have occurred through a circumstance having nothing to do with competition. On the other hand, the statiOn may have decided, under the pressure of cOmpetition, that a network program of one of the four types would not draw the audience that a local program of another type would bring. The factors are very much intertwined here, and with the infor— mation available it seems impossible to separate them. It cannot be said that the large increases in the four program types are a relic of the days when the networks gave stations power over competition. Of the 13 stations showing the largest program increases, 9 received their competition in 1952 or later. Of the 13 stations with the smaller program increases, 9 received their competition in 1951 or before. Thus, the stations that showed the great increases in the four program types received their first local competition relatively recently. How can the relationship between program increases and revenue decreases be explained? First, perhaps the stations showing increases began to broadcast paid religion. Of the 19 stations that showed increases in the amount Of religion, 15 are among the stations that showed increases in the four program types as a whole. Such a 210 majority is not found in a survey of the other 3 program types. Only 18 of the 30 stations that increased the amount of agriculture also increased the total proportion Of the program types; only 16 of the 28 that increased the amount of education showed increases for the program types as a whole: only 13 of the 19 that increased the proportion of discussion showed increases for the program types as a whole. Second, it may be that some Of the stations unable to sell their time gave it away to civic, educational, and religious groups. Third, perhaps some of the stations filled their unwanted time with sustaining programs from their networks. Sustaining programs have traditionally been considered the ones designed for minority groups,1 and among these could be found some of the programs of the four types; the definitions cannot be said to coincide in all-— or perhaps even most—-instances. In the financial statements, Stations included among their sustaining network programs those that were available for local sponsorship. At any rate, 12 of the 21 network stations that inoreased the total amount of the four program types also increased the —_ _V 1U. S., FCC, Public Service . . ., op. cit., passim. .211 amount of network sustaining programs they carried. Only 4 of the 15 stations showing decreases in the total program types increased the amount Of network sustaining programs in their schedules. In speculating upon some of the factors that may have contributed to the decision to decrease the amount of the four program types, we have some elements that appear as indistinct shapes hidden under a blanket: it is hoped that these factors may be separated later for testing. A first factor influencing the deciSion to decrease the amount of education, agriculture, religion, and discussion may be the amount Of these programs on the newer station. Among the 28 stations that showed decreases in the four program types, only 6 had new local competition that broad- cast more Of these programs than the older station had broad- cast when it was alone. One other fact must be emphasized: The relationship is far from invariable. Almost half the stations that increased the amount of the four program types also had competition that broadcast less than the Older station had broadcast when it was alone. There is some highly tentative evidence indicating that the Older station may suffer a larger revenue decrease 212 if the new station provides less agriculture, education, religion, and discussion. It seems logical that a station with less of the four program types may in some cases be able to promise advertisers larger audiences and may have more Spaces into which commercials can be fitted. A wisp Of information—~scarcely deserving the term -"evidence"-—exists pointing to the possibility that the amount Of revenue the station was receiving before the arrival of the second station may be related to the decision to decrease the amount of the four program types. It seems possible that a station with ahigh revenue might be able to retrench without lowering the amounts Of these programs more easily than could a station with low revenue. Some fragmentary hints were found indicating that the stations that decreased the four program types also suffered slightly greater revenue decreases than did the stations that increased the programs. In the sample, how— ever, were almost as many exceptions to this rule as there were stations supporting the finding. Another factor that may contribute to the decision to change the proportion of the program types could be the network affiliation that the station possesses. As was noted in the previous chapter, CBS and NBC affiliates were 213 less likely to show decreases than were affiliates of ABC and MBS. This is very flimsy evidence, indeed, but the range does fit the usual hierarchy of desirability given to the networks. The most desirable network to national adver- tisers. from 1949 to 1954, according to gross billings, was CBS; second was NBC; considerably below either of these networks was ABC, and much lower was MBS.l It is also true—- either in support of the theory or as an alternate explanation-- that the CBS affiliates suffered relatively small revenue decreases (.40, 6.88, and 11.78%). Further, we can note that the NBC affiliates suffered less than some stations. The five NBC stations that showed increases in the program types ranged from a revenue increase of 1.16% to a decrease of 17.38%. The largest revenue decrease for an NBC station was for the only such affiliate to show a decrease in the program types; that station's revenue decrease was 19.52%. One other factor-—for which there is no real evidenceé-must be mentioned as a possible contributing cause: the belief that this is the way broadcasters are supposed to behave upon the advent of competition. The economic injury cases including pleas that the public interestiwould‘suffer' lHead, op. cit., p. 165. 214 if the additional station began operations have been duly reported in Broadcasting Magazine. That some broadcasters believe that their programming will be harmed when another station enters their town is witnessed by the questionnaires cited above. A general manager who told the FCC that his programming would suffer—-as two in the sample did—-might be downright sheepish abOut-submitting a renewal application after the advent of competition.showing a more balanced program schedule than the station had offered without local broadcast’competition. No evidence was found to support the belief that stations schedule more Of their education, agriculture, religion, and discussion in the early morning and evening hours after the coming of competition than before. The lack of difference may stem in part from the fact that so little of these programs was broadcast during the popular daytime hours before the coming Of competition. How may the information in this study he used? Although the results should never lead the FCC to change its policies, it is hoped that the study in conjunction with later ones, may help the Commission to predict with some reliability the effects that various licensing policies might produce. A knowledge of the behavior of stations 215 under varying conditions of competition may give the Commission some knowledge to weigh along with all the other factors that must be considered in determining policy. The programming offered by stations is a major element in deciding where the best interests of the public lie. Second, it is hoped that this study may provide some specific information for the discussion of the relation- -ship between prosperity and programming. The argument has been long, but the evidence has been lacking. Third, had this study found no relationships, the prospects for later studies would have been dimmer. Perhaps this study can provide a base for the later ones that will determine first if the relationships found here exist among other stations of similar type, and, second, if the relationships may be found among stations under different conditions. Suggestions for Further Research With such a flawed sample as was used in this re— search, with such mixed statistical results, and with such imprecise program classifications, the findings are open to question. Therefore, the first suggestion for further research is the expression of a hope that the hypotheses in 216 this study will be tested again to determine whether the results will be repeated. ~Earlier in this chapter have been mentioned a number of variables that need to be sorted out for study: How much does the newer station's programming affect the programming of the Older station? Are stations with greater revenue less likely to decrease certain program types follow— ing the entry of a second station? What aspects of a newer station's programming affect the revenue decrease Of an older station? Also, it seems necessary to find out whether stations that are less exposed to competition will show greater amounts of these program types. The matching stations gave a slight indication that this may not be the case. What role does a revenue decrease--without a competition increase-—play in changing the amounts of these program types in station schedules? In addition to studying the amount of these program types in station schedules, it seems necessary to learn about changes in program quality. How does station policy change as a town's broadcast revenues are split among more and more stations? Three broadcasters answering the questionnaire 217 discussed in the rationale are now in towns that contain three radio stations. They stated that the effect upon programming was greater when the third station was added. To what extent is this true? What happens in the market with many stations? What is the role of the transfer as far as program balance is concerned? One broadcaster predicted that the greatest decreases in the four program types would occur immediately after a station had changed hands——especially when thestation had previously been losing money. What Of the revenues of the second station? If the amount of these four program types that the newer station provides is related tO the newer station's revenue, and if the newer station's programming affects the programming of the older station, is the programming the town will receive the result Of a chain reaction starting with the revenues Of the newer station? . This study has carefully excluded those stations that changed network affiliation; it is possible that the j Stations changed or dropped a network through concern over competition. DO the conclusions in this study apply to Stations that do not remain network affiliates throughout 1 l a period or that change netWOrk affiliation? 1 l 218 What happens to the Older station's programming over a longer period of time? Two of the stations in this sample that showed great increases in the four program types showed decreases of approximately 15% in the second renewal after the entry Of the second station. Finding a sample for a long; period of time will be difficult because of the problems of changes in wattage and ownership. ‘Nevertheless, this is a pertinent matter. And after all these studies of AM radio, equivalent studies can be done using FM radio and television. The relationship between profits and programming has as many facets as a sapphire. APPENDIX I FEDERAL COMMUNICATIONS COMMISSION DECISIONS AND COURT VERDICTS PERTINENT TO A STUDY OF ECONOMIC INJURY _ _‘_- .__-_.—— --——- APPENDIX I FEDERAL COMMUNICATIONS COMMISSION DECISIONS AND COURT VERDICTS PERTINENT TO A STUDY OF ECONOMIC INJURY It cannot be said that all the cases cited in this list concern pleas of economic injury. A few are concerned with the FCC and courtsv consideration of economic criteria in determining whether a community needed a new station. A few others are cases in which the courts or the Commission made statements pertinent to economic injury even though the case did not involve a plea of economic injury. A third group involves precedents that were later used in economic injury cases. A final caution must be made: A plea Of economic injury can assume many shades; some of the cases do not concern damage done directly through the grant of an additional station to a community. Other Commission actions have, from time to time, been held by broadcasters to work economic damage. T. E. Allen and Sons, Inc. 9 R. R. 197. Carrol F. Jackson and D. N. Jackson d/b as American Southern Broadcasters (WPWR). 11 R. R. 1054. Ansley v. Federal Radio Commission. 46 F. (2d) 600. 220 221 F. W. Atkinson. 3 FCC 137. Atom Broadcasting Corp. (WAUB) et a1., 17 R. R. 560d. Beaumont Broadcasting Association. 5 FCC 139. Dages I. Boyle (WEKY). 9 R. R. 885. Camden Radio, Inc., v. Federal Communications Commission et al. 220 F. (2d) 191. Carroll Broadcasting Co., Appellant, v. Federal Communications Commission, Appellee. 258 F. (2d) 440. Carter Mountain Transmission Corp. 22 R. R. 193, 194h. Channel 16 of Rhode Island, Inc. 10 R. R. 377. Clarksburg Publishigg Co., Appellant, v. Federal Communications Commission, Appellee. 225 F. (2d) 511. Coastal Bend Television Co., Appellant, et al. v. Federal Communications Commission, Appellee. 231 F. (2d) 498. Colonial NetWOrk, Inc. 5 FCC 654. Colorado Radio Corp. v. Federal Communications Commission. 118 F. (2d) 24. Community Broadcasting Co. et a1. 4 FCC 422. Courier Post Publishing Co. v. Federal Communications Commission. 104 F. (2d) 213. Cumberland Valley Broadcasting Co., Inc. (WBMC). 11 R. R. 840. Curtis Radiocasting Corp. 6 FCC 7. Deep South Broadcasting Co. (WSLA). 14 R. R. 1001. Deep South Broadcasting Co. (WSLA). 26 FCC 605. Democrat Printing Co. v. Federal Communications Commission et al. 202 F. (2d) 298. Durham Broadcasting Enterprises, Inc. (WTVD). 17 R. R 296. Eastland CO. v. Federal Communications Coppission. 92 F. (2d) 467. 222 Elm City Broadcasting Corp. v. United States et a1. 13 R. R. 2199. Eugene Television, Inc. 9 R. R 601. Evening News Association (WWJ). 8 FCC 552. P. K. Ewing, Jr. and F. C. Ewing, a Partnership, Doing Business as Ewing Broadcasting Co. 10 FCC 393. Fall River Herald News Publishing Co. 5 FCC 377. Florida Broadcasting CO. v. Federal Communications Commission et al. 109 F. (2d) 668. Walter T. Gaines (WGAV). 25 FCC 1387. Gerico Investment Co., Appellant, v. Federal Communications Commission, Appellee. 240 F. (2d) 410. G053 v. Federal Radio Commission. 67 F. (2d) 507. Great Western Broadcasting Association, Inc., v. Federal Communications Commission et a1. 94 F. (2d) 244. Sam Klaver and Nathan Belzer d/b as The Great Western Broadcasting Co. 6 FCC 536. Greenville Television Co., Appellant, v. Federal Communications Commission, Appellee. 221 F. (2d) 870. Greylock Broadcasting Co., Petitioner, v. United States of America and Federal Communications Commission, Respondents. 231 F. (2d) 748. Gulf Coast Broadcasting Co. 4 FCC 103. Havens and Martin, Inc. et a1. 6 FCC 237. Hazelwood, Inc. 7 FCC 443. George A. Hormel, II (KQAQ). 16 R. R. 274a. Independent Broadcasting Co. 9 FCC 40. 223 Walter A. Duke, QZb as Iredell Broadcasting Co. (WDBM). 12 R. R 573, and 13 R. R. 996. R. R. Jackman, et a1. (WREN). 5 FCC 496. Sykgg et al. v. Jenny Wren Co. 78 F. (2d) 729. Journal Co. 2 FCC 180. Kaiser Hawaiian Village Radio, Inc. 22 FCC 941. Martin Karig. 19 R. R. 1084, 1086. Kentucky Broadcasting Corp. 6 FCC 776. KWK, Inc. 10 R. R. 489. Lebanon Broadcasting CO. et a1., Transferors, and Triangle Publications, Inc. (Radio and Television Division), Transferee. 22 FCC 949. Apthur Lucas. 5 FCC 464. , Magnolia Petroleum Co. et al. v. Federal Communications Commission. 76 F. (2d) 439. Metropolitan Television Co., Petitioner, v. United States of America, Federal Communications Commission, Commission, Respondents. 221 F. (2d) 879. Mansfield Journal Co. v.Federal Communications Commission. 173 F. (2d) 646. Mason City Broadcast CO. et a1. 3 FCC 116. Wow 7 FCC 544, 551. w P. Michels (WAUB). 17 R. R. 557. Egglgpg_ggpire Broadcasting Co. 22 FCC 753. MidWest Television, Inc. 9 R. R. 611. Montana NetWOrk (KOOK). 14 FCC 1179. 224 National Broadcasting Co., Inc. 15 R. R. 965. New Britain Broadcasting Co. (WKNB—TV) et a1. 13 R. R. 915. Ohio Valley Broadcasting Corp. 10 R. R. 452. Eugene DeBogory trading as The Paris Broadcasting CO. 2 FCC 422. Juan Piza. 5 FCC 327. Edwin G. Polan, Albert S. Polan, and Lake Polan, Jr., a Partnership, dba Polan Industries. 8 R. R. 398. Pote (Station WLOE) V. Federal Radio Commission. 67 F. (2d) 509. Presque Isle Broadcasting Co. 8 FCC 3. Pulitzer Publishing Co. v. Federal Communications Commission _______._________________________ et a1. 94 F. (2d) 249. J A. Gallimore tr/as Radio Cleveland (WCLE). 11 R. R. 348. Charlie H. Parish, Jr., and Charlie H. Parish, Sr., d/b as Radio Tifton (WTIF). 11 R. R. 1167. Radio Wisconsin, Inc. et a1. 10 R. R. 1224. Red Oak Radio Corp., (KICK), et a1. 1 FCC 163. Red River Broadcasting Co., Inc. (KGFK). 1 FCC 215. Dorrance D. Roderick. 3 FCC 616, 623. Hyman Rosenblum, et a1., Transferors, and Lowell J. Thomas et a1., Transferees. 22 FCC 1432. Saginaw Broadcasting Co. et a1. 4 FCC 110. Salinas Broadcasting Corp. et a1. 9 R. R. 192. Sanders Brothers Radio Station v. Federal Communications Commission. 106 F. (2d) 321. 225 Federal Communications Commission v. Sanders Brothers Radio Station. 309 U. S. 470. Y. W. Scarborough and J. W. Orvin. 6 FCC 186. South Bend Tribune (WSBT) et a1. 6 FCC 783. R. B. Helms, Carl J. Hoskins, and Jack T. Helms, dgb as Southeastern Enterprises (WCLE). 22 FCC 605, 13 R. R. 139. gpgrtan Radiocasting CO. 10 R. R. 177. §partanburg Advertising Co. 7 FCC 498. Summit Radio Corp. 7 FCC 619. Sunshine Broadcasting CO. v Fly et a1., as Federal Communications Commission. 33 F. Supp. 560. Telegraph Herald et a1. 4 FCC 392. Telegraph Herald (KDTH). 8 FCC 389. Tri—State Broadcasting Co., Inc., v. Federal Communications Commission. 96 F. (2d) 564. Tri—State Broadcasting CO. (Station KTSM) v. Federal Communications Commission. 107 F. (2d) 956. Tri—State Television, Inc. 10 R. R. 1049. Union Tribune Publishing Co. 3 FCC 451. United Theatres, Inc., et a1. 8 FCC 489. Valdosta Broadcasting Co. et a1. 11 FCC 769- Leon S. Packard, Lewis H. Stebbins, and Alden C. Packard, doing business as Valley Broadcasting CO. 4 FCC 288. Valley Telecastinngo. (WFRV—TV). 12 R. R. 196e. Van Curler Broadcasting Corp., Petitioner, v. United States of America and Federal Communications CommisSion, Respondents. 236 F. (2d) 727. 226 Versluis Radio and Television, Inc. 9 R. R. 102, 104. Video Independent Theatres, Inc. (KVIT). 17 R. R. 150a. L. E. Duffey and B. C. Eddins, d/b as The Voice of Cullman. 14 FCC 417, 770, and 1076. Ward v. Federal Communications Commission. 108 F. (2d) 486. West Georgia Broadcasting Co. (WWCS). 23 FCC, 255, 27 FCC 161. WGN, Inc., v. Federal Radio Commission et a1. 68 F. (2d) 432. WHAS, Inc. 31 FCC 273, 286. WHEC, Inc., et a1. 9 R. R. 172. WJR, The Goodwill Station, Inc. 13 R. R. 763. WMBD, Inc., et a1. 11 R. R. 533. WMIE—TV, Inc.,Assignor, and Storer Broadcasting Co., Assignee. 11 R. R. 1091. WOKO, Inc. v. Federal Communications Commission. 109 F. (2d) 665. Woodmen of the World Life Insurance Association (Station WOW) v. Federal Radio Commission et a1. 65 F. (2d) 484. Wrather—Alvarez Broadcasting, Inc. 14 R. R. 213. WWSW, Inc. 14 R. R. 492. Yankee Network, Inc. (WAAB). 7 FCC 209. Yankee Network,Inc. v. Federal Communications Commission. 107 F. (2d) 212. APPENDIX II ANSWERS TO QUESTIONNAIRE CONCERNING ATTITUDES TOWARD COMPETITION APPENDIX II ANSWERS TO QUESTIONNAIRE CONCERNING ATTITUDES TOWARD COMPETITION The questionnaire was sent to 101 broadcasters; 65 answered. The totals presented below represent the total anSWers received; some of the broadcasters who answered are from stations that were later excluded from the sample. Some questions have responses that do not total 65 because some broadcasters did not answer all the questions. Be— cause the additional responses were often illuminating, they are included along with the totals. Numbers in parentheses and comments marked with an asterisk signify the totals and comments from stations in the sample. 1. Do you think it was wise for the Federal Communications Commission to permit a second AM radio station to operate in your city? Yes: 30 (9) *"But very unwise to permit a third station to Operate here." *"A second station, yes, but a third station, which now exists, Nol" . "We now have three; then it Would be no.I NO: 33 (16) 228 229 "Too small: 10,000 population." "If the public gained anything, the action would be fine." No answer: 2 (1) 2. How many AM radio stations do you think your city can support financially? One: 32 (13) "If the station is to do the public service job expected of it, it certainly cannot devote the major portion of its time to meeting competition for revenue." Two: 32 (12) *"Very definitely two are all that are desirable and two are all that can be supported." "There are three here." "A 3 station town: Two good ones; three or more lousy ones." *"It can support two by adding an increase in operating costs of radio time buyers. It was not necessary as few advertisers use only one of the stations." Three or more: 0 No answer: 1 (1) 3. Excluding network and national spot accounts, to what extent does your station depend for advertising revenue upon nearby towns or cities that have radio stations located at least ten miles from the city limits within which your station operates? 10% or less: 53 (23) 10 to 25%: 8 (1) 25 to 50%: l (0) 4. 230 More than 50%: 2 (1) *"No stations": 1 (1) Have you gained a larger percentage of your revenue from nearby towns like those mentioned in the preceding question since a second station began operating in your city? 5. Yes: 6 (2 and 10% or less in both cases) No: 54 (23) "They all try to sell here." No answer: 5 (1) Did you conduct or commission any audience survey(s) before the second station started operating in your city? 6. Yes: 40 (15) "We do not and have never sold on basis of surveys or ratings. We have always felt they were unreliable." No: 24 (11) "We have never bought a survey as we do not feel they give a true picture. However, several of our large accounts have had surveys before signing contracts with us, and thatkind of a survey means something as we in no way will influence by reason our money doesn't pay the bill." "Don't know": 1 Since a second station began operating in your city, is an audience survey more useful to you? Yes: 36 (12) 231 "And with a third station more so." *"Regional, yes; local, no.": 1 (1) No: 23 (12) "Except our own indices." *"Can't depend on small market surveys." "No surveys": 3 (1) No answer: 2 7. Did a survey show a change Of as much as 5% in the size Of your audience during the first two years after a second station started operating in your city? YES: 32 (15) No: 17 (5) "Not to the best of our observation." "Don't know": 2 ?: 2 (1) *"Cannot recall?: 1 (1) "Not applicable": 1 "NO surveys”: 1 "None made": 2 (2) "Surveys before and after were not comparable": 1 No answer: 6 (2) ._.~_.._-..-—_-..-. 2 e ,_ 8. 232 During the first two years after the second station started operating in your city, did the size of your audience decrease? 9. Yes: 32 (15) *Itsome . II *"We assume there was some decrease." "Dropped, then swung back to norm." No: 24 (9) Those answering "yes" to both questions 7 and 8 indi— cating a decrease of as much as 5%: 24 (11) Those who answered "yes" to question 7 but "no" to question 8 indicating a decrease of less than 5%: 8 (4) Those who answered "no"to both questions 7 and 8 indicating an increase of less than 5%: 16 (5) Six broadcasters answered one question but not the other (4). No answer, "don't know," "?" and "Not applicable": 9 (2) Was the fact that a second station was operating in your city a cause Of concern to you? Yes: 53 (23) "But not as great as when two more were added." "Probably." No: 11 (3) "Business went up. On number 3 went down." No answer: 1 233 10. If the answer to the preceding question is "yes," what was the basis Of your concern? Possible loss of advertising revenue: 10 (4) *"Deterioration of rate structure:" "Our rates for advertising are at our 1940 level; our cost of operation with a reduced staff is greater." "Lack of revenue to maintain quality programming." "We have subsequently come to realize that two stations were feasible." Possible loss of advertising revenue and possible loss of audience: 32 (16) "Change in character image of radio." "Price cutting-—unfair competition." *"Loss of revenue forced economy and lower standard of programs." "Deterioration of service." *"Lower rates, decrease in profit." *"Severe rate cutting-—as much as 50% below our established rate." "Feared we might have two mediocre stations instead of one good one." "Rate cutting." *"Rate cutting on prices of radio advertising; copying of our programs; lowering of broadcasting standards because of low calibre operations." *"Second station is race station--mine standard." Possible loss of audience: 1 Other reason(s): 9 (4) "You must always be concerned about cOmpetition." *"Competition for advertising dollar prevented use of personnel for useful public service activities." "Because we had built a good, clean, strong operation, rates stabilized, and it's a proven fact that a second station or more muddies the water, and when that happens, rate cutting starts, and while we have ignored this, it is a serious problem, and then the government still expects public service." 234 "Rate cutting by the new station." *"Dividing audience to make it necessary for advertisers to spend more money for same total tune—in." "Unethical methods of operation." t'=‘"We had to cut down on public service time to combat entertainment shows on competitive station." "Operates on reduced rates making it difficult to main- tain our rates." *"Lack of funds for continued public service programs." No answer: 13 (2) 11. Did the revenue of your station change as much as 5% during the first two years after the second station started operating in your city? Yes: 49 (19) "Upward." '5'?!" Up. II . *"Net revenue." "Increased 15%." *”Increase." "Up 10% per year." "More." NO: 12 (7) No answer or'don't know": 4 12. During the first two years after the second station started operating in your city, did the revenue of your station show any decrease? Those who answered "yes" to both questions 11 and 12 indicating a decrease of 5% or more: 33 (16) One in the sample specified "net revenue.‘' Those who answered "yes" to question 11 but."no" to question 12 indicating an increase of 5% or more: 16 (3). 235 Those who answered "no" to both questions 11 and 12 indicating an increase Of less than 5%: 12 (7) No answer: 4. (0) 13. DO you feel that the presence Of the second station in your city contributed to a decline in revenue? Yes: 31 (16) "And, Of course, the advent of TV that reduced our share of national advertising." *"Some." *"Through rate cutting." No: 27 (10) ”Just meant more work and longer hours." "It caused harder sell. Number 3, however, did hurt like hell." *”But it has (through cut rates) prevented us from raising our rates——as needed--to meet increasing overhead." *“NOt in first two years." "At first": 1 No answer and "not applicable": 6 14. DO you feel that the presence of a second station in your city contributed to a decline in audience? Yes: 36 (16) *"Audience was stable in numbers. Had to decline if second station had any audience." "Of course." *"Some." No: 22 (9) "Some": 1 "Don't Know": 1 (1). No answer: 5 15. After the second station began operating, did you increase your effort to reduce costs? Yes: 42 (20) "Reduced employees from 12 to 7 then added 2 salesmen. Sales gained 2; program lost 3." "Not at once, but as revenues fell and operating cost increased, We had to cut back." *“Nominally as always." No: 19 (6) "Continued to grow. On Number 3 We finally automated to live." Yes and no: 1 "Always working on this because the government places an image that causes increase Of expense.": 1 No answer: 2 16. After the second station began operating, did you hire additional salesmen? Yes: 26 (10) *"Not immediately, but within 3 years.” '\—~'r>\' - No:/ 37 (16) "Had to increase expense in travel and return calls, etc." No answer: 2 17. During the first two years after the second station came into your city, did you find it harder to earn the same profit you earned before the new station's arrival? 237 Yes: 47 (20) *"Because of power increase and increased overhead." "Impossible. Market too small. Listening audience split so merchants split budgets. No increase in total dollars." "Competitor does not spend as much as we do on staff, net service, news, program tools, has lower overhead, undersells on rates, thereby causing some deterioration in our own rates, less revenue." No: 17 (6) "Up on 2: down on Number 3 tO a loss." NO answer: 1 18. Did you make changes in your program schedule because there was a second station operating in your community? Yes: 37 (16) "Some." NO: 27 (10) *"Not because of its presence, but to meet changing appetites for radio programming--yes, we have gradually changed." "Not necessarily--we for 22 years have continuously made changes in programming, hoping to better our fare." *"We merely intensified our efforts to improve what we were already doing." *"NO basic changes." No answer: 1 19. If the answer to the preceding question is "yes," what was the nature of the change in programming? Increase in the number of contests: 22 (9) 238 Inclusion Of more local news: 29 (11) Broadcasting of more sports: 13 (5) "Joined a sports network." Increase in the amount of religious programs: 8 (5) Decrease in the amount Of religious programs: 17 (9) Increase in the amount of music: 20 (11) Decrease in the amount of music: 2 (1) In addition, one broadcaster specified that recorded music was increased, but live music was decreased. Increase in the amount of agricultural programs: 9 (3) "Arranged for three adjacent county extension service agents in addition to those already carried." Decrease in the amount of agricultural programs: 8 (6) Inclusion of more national news: 13 (7) Inclusion of less national news: 8 (2) "Dropped national network to cut costs:" "Dropped Mutual network?" Increase in the amount of educational programs: 10 (5) Decrease in the amount of educational programs: 6 (2) Increase in the amount of discuSsion programs: 12 (3) Decrease in the amount of discussion programs: 11 (4) Increase in the number of remotes: 20 (7) *"Including mobile unit." "By wire and 3 shortwave mobile units." Decrease in the number of remotes: 7 (4) 239 "Do not have program staff." "Program costs are flexible and are the first to suffer in a retrenchment program. Instead of one good station you have two poor ones." *"Decreased the number of operating hours daily by three and increased the number of hours of combination operation." *"Second station is more of a record and news*station, which favored above changesP(increase in contests, decrease in religion, agriculture, education, and, discussion, decrease in remotes, and increase in music), "In general, we Isharpened up“ in all phases of operation." "Greater emphasis upon news and special events." *"Change in type of music; change in school spots covered." "Definite switch to 'good music“ formatt" * ' *"Faster paced programming. 'Pace' throughout the'day rather than many individual programs——music, news, sports, special features." *"Network change from Mutual to NBC." "We find increased program refinement and expanded program facility much, much more difficult because of the business—-however small--decrease in a very restricted small market--rural area. However, we have never sacrificed programwise." *"More dramatic local news coverage." "Yes, we tossed them out. (Religion, education, and discussion.) All audience killers had to go." "With Number 3 chopping US'tO death, we full-automated, layed off six, replaced all but the salesmen with top people. Nine-total do what we used to do with 18 to 20." ' ' ‘ ‘ - "Cancelled network contract; went muSic—news (Top 40 type):" "Accent on music, news, sports, and civic service!" "Eliminate some good but costly programs." "Editorials." "Principal change was in nature of music—-deletion of -country music, specializing in better music, leaving country and rock and roll to other stations." Final Comments from the questionnaire: *"The profit squeeze on radio stations comes primarily from cut-rates by many stations plus the depreciation 240 of the dollar." ”We have always programmed in the public interest—— operating a broadcast service to the area served. We are a 23—year-old operation known as a pioneer station in this state, with same ownership and management since inception. In recent years the FCC has granted nothing but what are termed as 'licensed juke boxes.I The present dilemma concerning too many AM stations is the fault of the FCC." *"This station tried to copy our format——good music,’ heavy news, and community events. Greatest concern with me the owner and manager is cheap rates, 30 cent Spots which deteriorate-the image of radio as a medium." "We have built our operation on strong local coverage of events and news and good music. we“ve never been a so-called top 40 station, but we direct our' efforts to the adults. If the FCC is going to press for long ownership, public service, and strong local coverage in every way, it is going to have to reciprocate and give the good stations protection and help--instead of continually adding more stations to muddy the waters. The point of no return is here." "Saturation of radio stations has decreased radio's stature in eyes of merchants who figure audience is obviously sliced into small pieces. In a small market, one station with reasonable revenue can deliver better service than two stations having to trim operational costs to stay in business." "With a greater staff it was possible to generate more local live musical programs. Such activities require a lot of local promotion. We have an auditorium studio that seats 400 that has not been used for two years." *"Our station (the first station) has been on the air here for 28 years. The second station has been here 10 years. The second station changed management every year for the first five years of operation. The third station has been here 2 years and has been for sale for the past year. There is no justification for the existence of the third station." *"The facts on two and three stations definitely change the picture." 241 "I estimate it takes 10,000 people in a town to support a shirttail radio station. A town with 20,000 people plus plus an agricultural area will support one good one one low cost." "Obviously it is a good two station market. However, it happens there are three stations here and that cuts when .time what what into the revenue some for all concerned. Naturally there is competition, it does force one from to time to make program changes depending on the opposition is doing and also depending on the surveys show. Audiences do switch from time to time again depending on the type of fare being offered." APPENDIX III QUESTIONNAIRES AND LETTERS Department of Television and Radio Journalism Building Michigan State University East Lansing, Michigan October 16, 1962 Mr. Radio Station Dear Mr. : The enclosed is a 2 minute questionnaire for a doctoral thesis concerning the current freeze on AM radio allocations. You can do me a great favor by checking the blanks after each of the questions and then sliding the questionnaire into the enclosed stamped envelope. Please do not sign the questionnaire; your station will not be identified in any way with the results. Only a summary of the answers from about 75 stations will be included in the thesis, and I shall throw away the envelope with the postmark after receiving your answers. If you would like a copy of the results, please include this letter with your answers. And to you, of course, will go my hearty thanks for your help. Very truly yours, (Miss) Mickie Newbill _ ;... 7.. _v-n.—-r?y": 244 QUESTIONNAIRE FOR Please return to: BROADCASTING EXECUTIVES Mickie Newbill Department of Television and Radio Michigan State University East Lansing, Michigan 1. Do you think it was wise for the-FederalJCommunications Commission to permit a second AM radio station to operate in your city? Yes No 2. How many AM radio stations do you think your city can support financially? One Two Three or more 3. Excluding network and national spot accounts, to what extent does your station depend for advertising revenue upon nearby towns or cities that have radio stations located at least ten miles from the city limits within which your station operates? 10% or less____ 10 to 25%L___ 25 to 50%____ More than 50%____ 4- Have you gained a larger percentage of your revenue from nearby towns like those mentioned in the preceding question since a second station began operating in your city? Yes____ No 5. Did you conduct or commission any audience survey(s) before the second station started operating in your city? Yes No 10. ll. 12. 245 Since a second station began operating in your city, is an audience survey more useful to you? Yes____ No Did a survey show a change of as much as 5% in the size of your audience during the first two years after a second station started operating in your city? Yes No During the first two years after the second station started operating in your city, did the size of your audience decrease? Yes No Was the fact that a second station was operating in your city a cause of concern to you? Yes No If the answer to the preceding question is "yes," what was the basis of your concern? Possible loss of advertising revenue Possible loss of audience Other reason(s) Did the revenue of your station change as much as 5% during the first two years after the second station started operating in your city? Yes No _ During the first two years after the second Stati0n1* Started operating in your city, did the revenue of your station show any decrease? Yes No l3. 14. 15. l6. 17. 18. 19. out—mg- unmana- gw- m;< --q.-: u- _ -. 246 Do you feel that the presence of the second station in your city contributed to a decline in revenue? Yes No Do you feel that the presence of a second station in your city contributed to a decline in audience? Yes No After the second station began operating, did you increase your effort to reduce costs? Yes _No After the second station began operating, did you hire additional salesmen? Yes No During the first two years after the second station came into your city, didyou find it harder to earn the same profit you earned before the new station's arrival? Yes No Did you make changes in your program schedule because there was a second station operating in your community? Yes No .If the answer to the preceding question is "yes," what was the nature of the change in programming? Increase in the number of contests Inclusion of more local news Broadcasting of more sports Increase in the amount of religious programs Decrease in the amount of religious programs (RELIGIOUS PROGRAMS include all sermons, religious news, music and drama, etc.) Increase in the amount of music Decrease in the amount of music 247 Increase in the amount of agricultural programs Decrease in the amount of agricultural programs (AGRICULTURAL PROGRAMS include all programs containing farm or market reports or other information specifically addressed to the agricultural population.) Inclusion of more national news Inclusion of less national news Increase in the amount of educational programs Decrease in the amount of educational programs (EDUCATIONAL PROGRAMS include programs prepared by or in behalf of educational organizations, exclusive of discussion programs.) Increase in the amount of discussion programs Decrease in the amount of discussion programs (DISCUSSION PROGRAMS include forum, panel, and round—table programs.) Increase in the number of remotes Decrease in the number of remotes Other change (Please specify.) For your convenience, I have used the familiar program definitions formulated by the FCC. Again, thank you very much. MiCkie Newbill 248 Department of Television and Radio P Journalism Building Y Nfichigan State University East Lansing, Michigan September 20, 1962 This letter is an offer of 5 dollars to you or to some staff member you select for about 30 minutes of very important help with a doctoral thesis concerning schedule changes in certain types of programs. You can do me a great favor by returning the completed questionnaire in the enclosed stamped envelope. Please do not sign the questionnaire; your station will not be identified in any way with the results. Only a summary of the answers from about 60 stations will be included in the thesis. If you would like a copy of the results, please put an "x" after the statement below, and enclose this letter. As soon as I receive the questionnaire, I shall send a check to you. If you choose to have someone other than yourself fill out the questionnaire, the check will be made out to the person whose name you write in the blank below. If possible, the person who fills out the question- naire should be someone highly familiar with your pro- gramming back to 1960. And to you, of course, will go my hearty thanks. Very truly yours, (Miss) Mickie Newbill I would like a.copy of the results-. The check should be made out to I prefer that you not send a check. 249 Department of Television and Radio Journalism Building' ‘ \ Michigan State University East Lansing, Michigan December 5, 1962 Mr. , General Manager Radio Station P. O. Box fi_ I Dear Mr. : Enclosed is a copy of a letter I sent you some weeks ago. You could have two perfectly good reasons for not answering my questionnaire. Perhaps you were bothered by such a brazen offer of money for a kind of help that you usually give as a favor. I offered you that five dollars only because station executives are notoriously busy; I knew you would not have time to dig through logs yourself, but I hoped you might be willing to impose upon a staff member if you knew that he would get something out of it._ Or perhaps you were hesitant to give out this infor— mation without knowing more about why I need it. This doctoral thesis is an attempt to find out if stations with their first local competition find it necessary to cut down on educational, agricultural, religious, or discussion programs or to schedule them at different times. It may be that the traditional attitude toward the benefits of competition needs to be changed. Your answer is especially important; to compute this, I have to check the difference between stations that do have new local competition and stations as similar as possible that do not. So, every questionnaire that is not returned means two that cannot be used for the thesis. You might be interested in knowing which of all the stations in like United States is most similar to yours according to nine characteristics. But I can't tell you. Even people reading the thesis won't be able to figure it out. Please do not sign the questionnaire; the offer 250 Mr. 2 , General Manager Page 2 December 5, 1962 to keep everything completely confidential still stands. So does the offer of five dollars to the person on your staff who fills out the questionnaire. The check will be sent to you--unless you tell me otherwise by checking the blank below. Two other offers still stand: my willingness to send you a summary of the results, and earnest gratitude for your help. Sincerely yours, (Miss) MickieNewbill I would like a copy of the results. Please do not send a check. 251 March 14, 1963 m. Radio Station P. O. Box Dear Mr. : A few weeks ago one of my graduate students sent you a-questionnaire that is part of a doctoral study. Miss Newbill is trying to find out if stations with their first local competition find it necessary to cut down on educational, agricultural, religious, or discussion programs or to sche- dule them at different times. A copy of Miss Newbill's letter to you is enclosed. I would appreciate it veg] much if you would take a: little time to fill out the questionnaireand return it to me. While Miss Newbill is doing_a study to meet her doctoral requirements, let me say that the University is very much interested in the outcome of the study. Numerous leaders in broadcasting are interested in the research, and our purpose is to do a study that will serve the interests of the industry. Your answer is especially important; Miss Newbill must check the difference between stations that do-have new local competition and stations as similar as possible that do not. So, every questionnaire that is not returned means two that cannot be used for the study. we will be glad to Send you a copy of the results. She and I ask that you not sign the questionnaire. And your answers will be kept completely confidential; no station's call letters or location will be mentioned in the study. Won't you please reply promptly? Many thanks for your assistance. ' Sincerely yours, Walter B. 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Disposable income for Distance from nearest station Second composite week dates for older station Date of first application Percentages in first renewal application Religious Agricultural Educational Discussion TOTAL year of newer station's entry First composite week dates for older station 259 Newer Station Call letters Location Wattage Duplicating FM Program tests began FCC says program tests began Network Educational FM Educational AM Television Date of second application Percentages in second renewal application Religious Agricultural Educational Discussion TOTAL 260 OLDER STATION Call letters Location Program tests began Older application Name of applicant Date of application Power:tNight___;Day Hours: Unlimited Daytime only Limited_____Share time Minimum weekly schedule of operation Total hours NUmber of l4-l/2 minute periods Actual broadcast hours (per week) What year's composite week? _._4_ c What network affiliation? __ Program Types Religious Agricultural Educational Discussion TOTAL: Newer application Name of applicant Date of application Power: Night_____Day Hours: Unlimited Daytime only Limited_____Sharefitime Minimum weekly schedule of operation Total hours Number of 14-1/2 minute periods Actual broadcast hours (per week) What year's composite week? What network affiliation? Program Types Religious Agricultural Educational Discussion TOTAL: Is there any reason for not including this station in the sample?” If so, state: Comments“ Any transfers during period? 261 NEWER STATION Call letters Location Program tests began Name of licensee Date of application Power: Night Day Hours of operation: Unlimited Daytime only Limited Share time Minimum weekly schedule of operation: Total hours Number of 14-1/2 minute periods Actual broadcast hours (per week) PROGRAM TYPES Religious _41 Agricultural Educational Discussion TOTAL Did a transfer result in the use of days other than the customary composite week? Is this station unusable for any reason? If so, state: , c ( III] ll‘ix . Disp. Income Distance 262 t 1948 1949 Call letters Call letters Frequency Frequency Wattage Wattage Dup. FM TV Dup. FM TV Network Network Transfer Transfer .— Owner Owner 1. Ed. or Rel. Ed. or Rel. 1...... Disp. Income DiSp- Income 7“—-'“f :Distance ' Distance“ 1 V ' (I " t—CZEt 1952Call letters 1953Call letters __——- Wattage ' Wattage 1_.——~— Dup. FM TV Dup. FM TV_________————/ Network Network 1___,——~’ Transfer Transfer 1__._——#” Owner Owner H——~*'*’”’ Ed. or Rel. Ed. or Rel. C__———”" Disp. Income Disp. Income H———~r’”” Distance Distance ._:::::::::j 1956 1957 Call letters Call letters_____...—~*”/ Wattage Wattage 1__.———”’/’ Dup. FM TV Dup. FM . Tv______/ Network Network ———-""”/ Transfer TranSfer _1_.—»~r”// Owner Owner .————*”"”’ -“"~”,,/’ Ed. or Rel. Ed. or Rel. ___.—n’“’// Disp. Income________.—-*”’// Distance .4—-"”/// \ I 1950 Call letters Frequency Wattage Dup. FM TV Network Transfer Owner Ed .' or Rel. Disp. Income Distance 1954 Call letters Wattage Dup. FM TV Network Transfer Owner Ed. or Rel. Disp. Income 263 LOCATION 1951 Call letters Frequency__ Wattage Dup. FM TV Network Transfer Owner Ed. or Rel. DiSp. Income Distance 1955Ca11 letters Wattage Dup. FM TV Network Transfer Owner Ed. or Rel. Disp.mIncome Distance \\\\\\\\\\\]\\\\\\\\1,\ Distance 1958 1959 Call letters Call letters Wattage Wattage Dup. FM TV Dup. FM TV Network Network Transfer Transfer Owner Owner Ed. or Rel. Ed. or Rel. Disp. Income Distance Disp. Incomeyy Distance 264 LOCATION _ 1960 1961 1962-63 Call letters___ Call letters___ Call letters____ Wattage Wattage Wattage Dup. FM TV Dup. FM TV Dup. FM TV Network Network Network Transfer Transfer Transfer Owner Owner Owner Ed. or Rel. Ed. or Rel. Ed. or Rel. Disp. Income Distance DiSp. Income Distance Disp. Income Distance -u. ...., “.1... .- _...:._. 265 MATCHING STATION For what station is this a match? Call letters Location Call letters Location Program tests began Any transfers during period Older Application Checked?‘ Date of application Name of applicant Newer Application Checked? Date of application Name of applicant Power: Night Day Hours: Unlimited Daytime only Limited Share time Minimum weekly schedule of operation Power: Night Day Hours: Unlimited Daytime only Limited Share time Minimum weekly schedule of operation NUmber of 14-1/2 minute periods Actual broadcast hours per week What composite week? What network affiliation? NUmber of 14—1/2 minute periods Actual broadcast hours per week What composite week? What network affiliation? Are network columns filled in? Do percentages total lOO?___. Program Types Religious Agricultural Are network columns filled in? Do percentages total 100? Program Types Religious Agricultural __ 266 MATCHING STATION.--Continued. Educational Educational Discussion Discussion TOTAL: TOTAL: Is there any reason for not including this station in the sample? If so, state: COMMENTS: APPENDIX V PROGRAM CHANGES FOR NON-NETWORK STATIONS THAT RECEIVED COMPETITION AND FOR MATCHING STATIONS THAT DID NOT RECEIVE COMPETITION PROGRAM CHANGES FOR NON-NETWORK STATIONS THAT RECEIVED COMPETITION AND FOR MATCHING STATIONS THAT DID NOT RECEIVE COMPETITION (Altered Percentages) Stations Receiving Competition Stations Without Competition (No revenue correction) Amount of Increase or Amount of Increase or Change Decrease Change Decrease 38.36 I 9.49 I 25.23 D 5.79 D 20.89 D 24.44 I 56.52 D 15.43 I 19.07 I 40.49 I 6.48 I .25 I .37 D 54.80 I 14.10 D 6.06 D 6.10 D 13.48 I .63 I 11.18 D 24.67 D 51.71 D 54.86 D 15.99 D 26.09 D 16.50 I 30.27 D 20.00 I 25.82 D 2.00 D 23.08 D 37.63 D 43.33 I 38.89 I 2.94 I 70.00 D 65.05 D 25.02 D Number of Decreases: 13 Number of Decreases: 9 268 Stations Without Competition (First Revenue Correction) Stations Without Competition (Extreme Revenue Correction) Amount of Increase or Amount of Increase or Change Decrease Change Decrease 9.49 I 32.45 D 5.79 D 5.79 D 2.45 D 26.00 I 15.43 I 15.43 I 40.49 I 40.49 I ".25 I .25 I 54.80 I 37.50 D 6.25 D 6.25 D 12.15 D 12.15 D 11.18 D 11.18 D 51.71 D 51.71 D 15.99 D 15.99 D 16.50 I 16.50 I 20.00 I 20.00 I 2.00 D 18.37 D 37.63 D 37.63 D 38.89 I 38.89 I 20.00 D 20.00 D 25.02 D 25.02 D Number of decreases: 11 Number Of decreases: 12 f 269 BIBLIOGRAPHY Decisions of the Federal Communications Commission and the Courts Abilene Broadcasting Co. et a1. 12 FCC 576. Aladdin Radio and Television, Inc., et al. 9 R. R. 1. Ashbacker Radio Corp. v. Federal Communications Commission. 326 U. S. 327. Bamberger Broadcasting Service, Inc., et al. 11 FCC 211, 1242. Bay State Beacon, Inc., etsal. 12 FCC 567. Beaumont, Sour Lake and Western Railway Co. et al. v. United States et al. 282 U; S. 74. Bell Broadcasting Co. 3 FCC 90. Biscayne Television Corp. et a1. 11 R. R. 1113, 15 R. R. 317. BroadcastingSerVice Organization, Inc. (WORL). 3 R. R. 979. Sherwood B.'Brun'ton, Mott Q; Brunton, and Ralph R. Brunton, as Individuals and Trustees, and C. L. McCarthy, Transferors and Columbia Broadcasting System, Inc., Transferee. ll FCC 407.' Cannon System, Ltd. (KIEV). 8 FCC 207. Capitol Broadcasting Co., Inc., et al. 11 FCC 859. Carolina Advertising Corp. et al. 6 FCC 230. Cherry and Webb Broadcasting Co. 11 R. R. 859. Chicago Federation of Laborv. Federal Radio Commission. 41 F. (26) 422. 270 271 Columbia Empire Telecasters, Inc., Appellant, v. Federal Communications Commission, Appellee. 228 F. (2d) 459. L. L. Coryell, Sr., and L. L. Coryell, Jr., d/b as L._L. Coryell and Son et a1. 6 FCC 282. Powel Crosley, Jr., Transferor, and The Aviation Corp., Transferee. '11 FCC 3. Crosley Corp., formerly The Crosley Radio Corp. (WLW). 6 FCC 796. Denver Television Co. 10 R. R. 771. East Texas BroadcastingCo. (KGKB)et a1. 2 FCC 402. Easton Publishing Co. v. Federal Communications Commission. ' 175 F. (2d) 344. El Paso BroadcastingCo., et a1. 6 FCC 86. Enterprise Co. et a1. 9 R. R. 816. Enterprise Co., Appellant, v. Federal Communications Commission, Appellee. 231 F. (2d) 708. Evansville Television, Inc., et al. 11 R. R. 411. Federal Broadcasting Systemalnc.,‘v. American Broadcasting COO! InCOI et alo 167 F0 (2d). 3490 Harold M. Finlay and Eloise Finlay. 4 FCC 356. Lawrence W. Harry trZas Fostoria Broadcasting Co. et al. 3 R. R. 2014a. Four State Broadcasters, Inc. et al. 3 R. R. 1545. Genesee Radio Corp. 5 FCC 183. Hampden-Hampshire Corp. (WHYN) et a1. 4 R. R. 504. Hartford Broadgasting Co., Inc., et a1. 2 FCC 330. 272 Havens and Martin, Inc., v. Federal Radio Commission. 45 F. (2d) 295. Head of the Lakes Broadcasting Co. et a1. 9 R. R. 801. Hearst Radio, Inc. (WBAL). 6 R. R. 994. Heitmeyer V. Federal Communications Commission. 95 F. (2d) 91. Huntington Broadcasting Co. et a1. 5 R. R. 721. Birney Imes, Jr. 10 R. R. 1192._ Indianapolis Broadcasting, Inc., et a1. 22 FCC 421. Jefferson Standard Broadcastinngo. 11 R. R. 1059. Johnston Broadcasting Co. v. Federal Communications Commission. 175 F. (2d) 351. Journal Co. v. Federal Radio Commission. 48 F. (2d) 461. Journal Co. et al. 5 FCC 201. Kansas City Star Co., Appellant, v. United States of America, Appellee. 240 F. (2d) 643. Kansas State College of Agpiculture and Applied Science. 8 R. R. 229. Kentucky Broadcasting Corp., Inc., v. Federal Communications Commission. 174 F. (2d) 38. Keystone Broadcasting Corp. et a1. 4 R. R. 575. W. T. Knight, Jr., et a1. 4 FCC 182. KORD, Inc. 31 FCC 85. KTBS, Inc., et a1. 10 R. R. 811. Thomas S. Lee Enterprises, Inc., d/b as Don Lee Broadcasting System. 5 R. R. 1179. 273 Louisville Times Co. et a1. 5 FCC 554. Lgyola University et a1. 12 R. R. 1017. Lubbock County Broadcasting_Co. et a1. 4 R. R. 493. Mackay Radio and Telegraph Co., Inc. v. Federal Communications Commission. 97 F. (2d) 641. Macon Television Co. 8 R. R. 897. Mansfield Journal Co. (FM) v. Federal Communications Commission.. 180 F. (2d) 28. William C. Barnes and Jonas weiland, Copartners, trading as Martinsville BroadcastingCo. et a1. 8 FCC 46. McClatchy Broadcastinngo. et a1. 9 R. R. 1190. McClatchy Broadcasting Co., Appellant, V. Federal Communications 7Commission, Appellee. 239 F. (2d) 15. McKeesport Radio Co. et a1. 11 FCC 494. Mid-American Broadcasting Conp._et al. 12 FCC 282. Missouri Broadcasting Cogp. v. Federal Communications Commission. 94 F. (2d) 623. Federal Radio Commission v. Nelson Brothers Bond and Mortgage Co. (Station WIBO). 289 U. s. 266. New York Central Securities Cogp. v. United States et al. 287 U. S. 12. A. E. Newton_(WOCL). 2 FCC 281. Northeastern Indiana Broadcasting Co., Inc., et a1. 9 R. R. 261. Revocation of License of Ocala Broadcasting Co., Inc. ngmc). 9 FCC 223. Okmulgee Broadcasting_C0rp. 4 FCC 302. Oregon Teleyision, Inc., et a1. 9 R. R. 1401. 274 Orlando Daily Newspapers, Inc., et a1. 11 FCC 760. Revocation of License of Panama City Broadcasting Co. (WDLP). 9 FCC 208. Pinellas Broadcasting Co., Appellant, v. Federal Communications Commission, Appellee. 230 F. (2d) 204. Pittsburgh Radio Snpplngouse (WJAS) v. Federal Communications Commission. 98 F. (2d) 303. ‘ Plains Radio Broadcasting Co. szederal Communications Commission. 175 F. (2d) 359. John H. Poole tr/as John Poole Broadcasting Co. et a1. 9 R. R. 387. Harmon Lerpy Stevens and Herman LeroyStevensg/b as Port Huron Broadcasting Co. et a1. 5 FCC 177. _Bgttsville Broadcasting Co. v.Federal Communicationspgommission. 98 F. (2d) 288. Pottsville Broadcasting Co. v. Fedegal Communications Commission. 105 F. (2d) 36. Federal Communications Commission v. Pottsville Broadcasting 92. 309U. S. 134. Premier Television, Inc. 9 R. R. 397. Federal Communications Commission v. RCA Communications, Inc. 346 U. S. 86. United States of America v. Radio Conporation of America et al. 158 F. Supp. 333. United States-of America, Appellant, v. Radio Corporation of America et a1. 79 S. Ct. 457. Radio Fort Wayne, Inc.,et a1. 9 R. R. 1221. Radio Station KFH Co. et a1. 11 R. R. l. 275 Radio Wisconsin, Inc., et a1. 10 R. R. 361. Reading Broadcasting Co. v. Federal Radio Commission. 48 F. (2d) 458. Richmond NeWSpapgrs, Inc., et a1. 11 R. R. 1234. Stephen R. Rintoul (Assignor) The Western Connecticut Broadcast Co. (Assignee). ~11 FCC 108. Scripps-Howard Radio, Inc. v. Federal Communications Commission. 1316 U. S. 4. Scripps-Howard Radio, Inc. et al. 4 R. R. 525. _Scripps:fibward Radio, Inc. v. Federal Communications Commission et al. 189 F. (2d) 677. Allen T. Simmons (WADC) et a1. 11 FCC 1160. Simmons v. Federal Communications Commission. 4 R. R. 2023. Sioux Falls Broadcast Association, Inc. (KSOO). ll FCC 91. South Bend Tribune. 8 FCC 387. Southern Newspapers, Inc. 10 R. R. 59. Southern Tier Radio Service, Inc" et a1. 11 R. R. 143. Stahlman v. Federal Communications Commission. 126 F. (2d) 124. Hobart Stephenson, Milton Edge,'and Edgar J. Korsmeyer, doing business as Staphenson, Edge and Korsmeyer, et a1. 8 FCC 497. Storer Broadcastinngo., Petitioner, v. United States of America, and the Federal Communications Commission, Respondents. 220 F. (2d) 204. United States et al. v. Storer Broadcasting Co. 351U. S. 192. Stuart v. Federal Communications Commission. 105 F. (2d) 788. 276 Patrick Henry,David D. Larsen, Stewart B. Kett, and James B. Glenn, Jr., dba Suburban Broadcasters. 20 R. R. 951. Sunbeam Television Copp., Appellant, v. Federal Communications Commission, Appellee. 243 F. (2d) 26. Tampa Times Co. et a1. 10 R. R. 77. Technical Radio Laboratory v. Federal Radio Commission. 36 F. (2d) 111. Telegraph Herald Co. v. Federal Radio Commission. 66 F. (2d) 220. Travelers Broadcasting Service Corp. 6 FCC 456. Travelers Broadcasting_Service Corp, et a1. 12 R. R. 689. United Broadcasting Co. (WHKC). 10 FCC 515. United States Broadcasting Corp. (WARD) et a1. 2 FCC 208. _United Television, Inc., (KMGMeTV). 16 R. R. 259. Wabash Vallgy Broadcasting Corp. et a1. 11 FCC 341. Western Gateway Bngadcastinngorp, et a1. 9 FCC 92. WHDH, Inc., et a1. 22 FCC 761, 767. WIBC, Inc., et a1. 31 FCC 835. Wisconsin Broadcasting System, Inc., et a1. 10 R. R. 1253. WJPS, Inc., et a1. 3 R. R. 1314. WKRG—TV, Inc., et a1. 10 R. R. 225. WMAK, Inc., et a1. 3qR. R. 694. Federal Communications Commission v. WOKO, Inc. 329 U. S. 223. 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