Report on Chain Broadcasting: May, 1941

REPORT

CHAIN BROADCASTING

[SEAL.]

FEDERAL

COMMUNICATIONS

COMMISSION

COMMISSION ORDER No. 37 • DOCKET No. 5060

MAY 1941

This is an HTML version of the original U.S. government document, Report on Chain Broadcasting: May, 1941, issued by the Government Printing Office in Washington, D.C. for the Federal Communications Commission [CC1.2:B 78/18].

This HTML version is based on a photocopy of the original 153-page publication. It includes all the original contents (except for some minor elements, such as page number references), keeping as much as possible the layout of the original document.

FEDERAL COMMUNICATIONS COMMISSION

______

JAMES LAWRENCE FLY, Chairman

PAUL A. WALKER

NORMAN S. CASE

T. A. M. CRAVEN

GEORGE HENRY PAYNE

FREDERICK I. THOMPSON

RAY C. WAKEFIELD

For sale by the Superintendent of Documents, Washington, D. C.

Pages iii-iv
TABLE OF CONTENTS _________
Introduction
        A.  History of proceedings
        B.  Scope of this report
        C.  Nature and significance of chain broadcasting
I.  Early History of Network Broadcasting (1923-26)
        A.  The A.  T.  & T.  network
        B.  The RCA network
        C.  Sale of WEAF and the Telephone Company network to RCA
        D.  Formation of the National Broadcasting Company
II.  The Radio Corporation of America and the National Broadcasting Company
        A.  History and activities of RCA
                1.  Communications activities of RCA
                2.  RCA's radio manufacturing and selling activities
                3.  RCA's interest in the motion-picture industry
                4.  RCA's phonograph and recording business
        B.  The National Broadcasting Co.
                1.  Increase in number of NBC outlets
                2.  Stations owned or controlled by NBC
                3.  Increase in business and income of NBC
                4.  NBC artists' bureau and concert service
                5.  Transcription business of NBC
        C.  Summary of RCA's scope of operations
III.  The Columbia Broadcasting System
        A.  Formation and early history
        B.  Growth of CBS network
        C.  Management of artists by CBS
        D.  CBS' phonograph and transcription business
IV.  The Mutual Broadcasting System
        A.  Formation of Mutual
        B.  Development of the Mutual network
V.  Regional Networks
VI.  Scope and Manner of Operation of the Nation-Wide Networks
        A.  Predominance of NBC and CBS in the broadcasting field
                1.  Stations affiliated with NBC and CBS
                2.  Ownership of stations by NBC and CBS
                3.  Proportion of broadcasting business handled bv NBC and CBS
                4.  Payments to stations affiliated with NBC and CBS
                5.  Proportion of industry income received by NBC and CBS
                6.  Income and investment of NBC and CBS
                7.  Disposition of NBC and CBS profits
        B.  Contractual arrangements between national networks and affiliates
                1.  Length of affiliation contracts
                2.  Exclusivity
                3.  Time options
                4.  Rejection of network commercial programs
                5.  Sustaining programs
                6.  Station compensation
                7.  Network control over station rates
        C.  NBC's two networks--Red and Blue
VII.  The Effect of Network-Affiliate Relations on Competition in the Radiobroadcast Industry
        A.  Exclusive affiliation
                1.  Licensee allowed to broadcast programs of only one network
                2.  Network allowed to send programs to only one station
        B.  Long-term affiliation contracts
        C.  Network optional time
        D.  Rejection of network programs
        E.  Network ownership and operation of stations
        F.  NBC's Red and Blue networks
        G.  Limitation of competition between network and outlet
        H.  Interrelations among network practices
        I.  Status of network-stations relationships under these regulations
        J.  Application of regulations to regional networks
VIII.  Jurisdiction
        A.  Jurisdiction under the commission's licensing power
                1.  The power to deny applications
                2.  The power to issue rules and regulations
        B.  Jurisdiction under the commission's power to make special regulations respecting chain broadcasting
IX.  Conclusion
Order Containing Regulations
Appendices
        A.  Order instituting chain broadcasting investigation
        B.  Memorandum of submittal and conclusion of chain broadcasting committee report
        C.  Procedure for oral argument on network inquiry report
        D.  Regional networks
Additional views of Commissioners T.  A.  M.  Craven and Norman S.  Case
        Tables