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Mr. HARRIS. That is an indirect approach.
Mr. HARRIS. You of course are not suggesting here that the networks be licensed, then.
Mr. SALANT. No, sir. I think it is unnecessary.
Mr. HARRIS. While we are on that subject and connected with it, I believe CBS has filed with the Senate committee a document as to the criteria you use in determining affiliations; is that correct?
Mr. SALANT. Yes, sir.
Mr. SALANT. I think it is about 50 pages long, on paper about so
Mr. HARRIS. Are you in a position that you can give us any information as to the relative financial positions of your own network station as compared with the nonnetwork or affiliated stations?
Mr. SALANT. Let me attack that this way, sir: You mean television? Mr. HARRIS. Yes, as an example.
Mr. SALANT. We own 4 stations: 1 in New York, 1 in Chicago, 1 in Los Angeles, which are VHF stations, and a UHF station in Milwaukee. We happen to own fewer stations than all the other networks.
Since the VHF stations we own are in the three largest markets New York, Chicago, and Los Angeles—those stations obviously do better than the average affiliate because the average affiliate is not in the same large market. Whether we do better in New York, Los Angeles, and Chicago than the stations owned by NBC and ABC, we don't know, because the figures of other stations are not made available
Mr. HARRIS. Could you give us any information as to the relative financial position of one of your own network-owned stations as compared with an affiliate station on a comparable population basis?
Mr. SALANT. I don't know how to do that.
Mr. HARRIS. As an example, you say you have your own station in New York,
Mr. SALANT. Yes.
Mr. HARRIS. You have a certain population in New York. You have an affiliate here in Washington which has a population much less.
Mr. SALANT. Yes.
Mr. Harris. Considering the size of the market, could you give us any information?
Mr. SALANT. I would have to guess at this.
Mr. SALANT. I am afraid not, sir, because the financial data of stations, affiliates or nonaffiliates, are submitted to the Commission by those stations on a confidential basis. We can't see it. We don't know how much the affiliates make. That you would have to get from the Commission. This is something that we can't get.
Mr. HARRIS. Isn't there consideration being given to this problem now by the Senate committee?
Mr. SALANT. They haven't gotten to that yet, sir.
Mr. SALANT. No, sir. So far they haven't gotten any further than deintermixture.
It is pointed out to me that the Senate committee has asked the Commission for that information. The Commission some time back said it wasn't sure whether under the law it was allowed to give that to the Senate committee, because of the fact that all these financial data are submitted by the stations on a confidential basis. The Attorney General a few months ago ruled that the Commission was allowed to give it to the Senate committee. So far as I know, the Senate committee has not yet asked for it. That comes from the Commission, not from us.
Mr. Harris. I realize that. This only indirectly affects what we have before us here today.
Mr. Salant. I regret that I cannot answer your question but the financial figures of the other stations are not available to us.
Mr. HARRIS. Thank you very much.
Mr. ROGERS. I would like to ask one question. I do not want to prolong this. But could you tell me what the position is now about the charges for political broadcasts as compared with commercial broadcasts?
Mr. SALANT. The law requires—and I am sure that the law is observed that there can be no discrimination in charges, that the charges must be exactly the same for political broadcasts or cannot be more for political broadcasts than for commercial.
Mr. Rogers. Was the law being violated for a while?
Mr. SALANT. There certainly were charges that a number of stations, in order to discourage political business in the sense of oneshot business, charged higher rates.
Mr. HARRIS. Four years ago flagrant abuses were reported to this committee from all over the country. It came to a head in the situation out in California. I could tell you our colleague's name, but I don't think it is necessary. It was brought to the attention of the committee and we looked into it and found that it was so flagrant that we had better do something about it, so we amended the law at that time and the Congress accepted it.
Mr. SALANT. May I make it clear? I don't think the charges were that one candidate was charged more than another candidate.
Mr. ROGERS. No, no.
Mr. SALANT. It was that he was charged more than commercial broadcasts.
Mr. ROGERS. It was a shotgun deal, and I got caught in it.
Isn't there some agreement where they consider certain candidates on a national scale, like certain advertising agencies? They have a certain fee which is charged by the radio stations which fall into this
category? In other words, one station might charge a lower rate than the other for advertising, and the second station be charging-I can't think of the exact name of it, but it is like a syndicate advertising all over the country, and that rate be higher than the local rate for national products. You know what I am talking about.
Mr. SALANT. Let me back up. I think a number of stations have three separate rates. One is a network rate which is charged to network advertisers for the use of that station. The second is what is called a national spot rate which is the rate that that station charges a national advertiser who uses just that station for a particular program or a particular announcement.
There is a third rate which is the local spot rate, which is the rate charged to a local advertiser in the area served by the station, not a national advertiser but a local advertiser.
Some stations have 3 different rates for those 3 purposes. just reading an opinion of the Commission yesterday on Galveston and Houston, where I noticed the Galveston station charges only half to a Galveston advertiser what it charges to a Houston advertiser, a national spot advertiser. I think that is the situation you are referring to.
Mr. Mack. Yes, sir. My question is, Would a radio station be entitled to charge a candidate for Congress on a national rate?
Mr. SALANT. I can only give you my opinion. My opinion would be that a Congressman, if he were using a station which covered his district, would have to be charged the local rate. Otherwise, since the local advertiser would be entitled to the local rate, if that national rate were higher and the Congressman were charged the national rate he would be discriminated against.
Mr. Mack. Then you think that they couldn't legally charge a higher rate; they could not project a candidate into this national area? Is there any possibility of the local station charging a candidate for the President of the United States a higher rate than a candidate for the country coroner?
Mr. SALANT. Yes, sir; there is.
Mr. Mack. Then they could, by some stretch of the imagination, put the candidate for Congress in the same level as the candidate for President.
Mr. SALANT. I would like to defer this to the General Counsel for the Commission. My guess is no, they couldn't do that without violating the law.
Mr. WARREN E. BAKER (General Counsel, Federal Communications Commission). Congress directed us to put out rules with respect to that. The codification which was submitted for the record the other day contains those rules. We interpreted it that the coverage which determined whether a local rate or a national rate was charged an advertiser would have to be applied to the region within which the voters reside.
The mere fact that you serve in Congress, which is a national office in a sense, does not mean that you would necessarily be charged a national rate. It would depend on the size of your district and whether or not an advertiser who was covering that district would get one rate or the other. I think you will find those interpretations.
Mr. Mack. I think the excuse they use is that a candidate for Congress would be using several radio stations or TV stations over a
general area, and this one particular station projected the candidate for Congress into the national picture at the national rate.
Mr. BAKER. All that the Commission did was to apply what it considered the law to be and to make sure that comparable treatment was given as to the advertiser and make the rules which the Commission used for determining the rate to an advertiser and his coverage apply to the rate which would be given to the candidate, using the coverage to be coextensive with the district within which the voters would be.
In other words, there might be quite a difference between a Senator and a Congressman on the rate you would get out of the same station.
Mr. Mack. It would have to be determined whether he was a candidate for a local office or an office on a large scale. I think this one particular station that I have in mind—and I am rather vague on the details now because it has been quite some time ago—charged the national rate because the general area stretched over a 200-mile area and was served by 5 or 6 television stations and 25 or 30 radio stations.
I have no further questions.
Thank you very much. I am sure we took more time than you anticipated, but you see the interest is pretty high.
Mr. SALANT. I suppose I ought not to admit it, but I have enjoyed it.
(Whereupon, at 12:30 p. m., the committee was recessed, to reconvene at 10 a. m., Tuesday, February 7, 1956.)
COMMUNICATIONS ACT AMENDMENTS
TUESDAY, FEBRUARY 7, 1956
HOUSE OF REPRESENTATIVES,
Washington, D.C. The subcommittee met, pursuant to adjournment, at 10:15 a. m., in room 1435, New House Office Building, Hon. Oren Harris (chairman of the subcommittee) presiding.
Mr. HARRIS. The committee will come to order.
In resuming hearings on various proposals to amend the Federal Communications Act of 1934, we are glad to welcome this morning as a witness our colleague, a member of this committee, Mr. Beamer, who is the sponsor of H. R. 6968. Incidentally, I might say I have a companion bill to his. I do not recall just what the number is.
STATEMENT OF HON. JOHN V. BEAMER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF INDIANA
Mr. BEAMER. H. R. 6977
Mr HARRIS. H. R. 6977, relating to newspaper ownership of broadcasting stations.
We had last week testimony before this committee on these bills from the Federal Communications Commission.
We are glad to have Mr. Beamer in support of his bill and shall be glad to hear his statement at this time.
Mr. BEAMER. Mr. Chairman and colleagues, I appreciate the opportunity of appearing before my own committee. Although this is not the subcommittee of which I have the privilege to serve I always consider it a privilege to be a member of the Interstate and Foreign Commerce Committee.
I learned when I first came on the committee that it had very wide jurisdiction and as a result that makes it a more interesting committee on which to work.
I also remember when I first came into the Congress that we had before us the McFarland bill, and it seemed rather technical at the time, and probably it still seems technical and involved to a degree. I remember also
Mr. HARRIS. It not only seems that way, but it is.
I remember also that certain statements were made at that particular time and I wondered why the committee did not insist upon, or why the House did not insist upon, having all these statements carried out in legislation.