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ALLEN TULLOS:

Besides the allocation of frequencies and this controversy that was going on over ownership, what other sorts of issues were going on?

CLIFFORD DURR:

Well, when I first went on the Commission, the Communications Act was anti-monopoly oriented, the idea … [Recorder is turned off and then back on.] … when I first went on the Commission, the Commission had already adopted what was called the Chain Broadcasting Regulations. It was trying to maintain a degree of independence of the local stations, a protection from the networks. You know, thenetwork contract was the most valuable assest that a station could have economically. You see, the network was providing your revenue. They were the ones who had access to the big advertisers and they provided the programs. So, more and more time was going to network time and less and less time devoted to the development of local programs, news discussion or forums for art and music of the community. So, the network regulations, in the first place, NBC had one network … there was NBC, CBS and Mutual and NBC was the biggest one and they were required to divest themselves of a lot of their stations and that was when you had the NBC and ABC. ABC was carved off of NBC because NBC's powers were getting too great. Also, there were limitations on the amount of time, in particular prime time, that the networks could contract for. Now, they had a way of getting what they called option time. They would say to a station. "Well, this nine to ten o'clock hour, you've got to give us an option on it, so if we do have a program we want to put in, you can… we can demand that time." Which mean that the local station that may have built up a program of its own would have to cancel it if the network wanted to use that time. So, that was the big issue and the regulations had been adopted. Well, the National Associations of Broadcasters and the networks moved into Congress to get that legislation nullified. Meanwhile, they were challenging the constitutionality of the regulations in the courts. But Frye was a pretty tough character. Again, an illustration of how government works, talk about Congressional pressure. So much power is vested in men on the key committees, the Corporation Committee or the Interstate Commerce Committee, which then had jurisdiction over the FCC. The networks would get to these key guys and win them over, buy them over or what have you, but Frye was tough enough that he continued to fight this thing and we had our appropriations cut two or three times and the battle went on for two or three years. Then, we found that we had more support in Congress than we ever thought. Some of the other members of Congress who were not on the key committees began to understand what was going on, so not only was the case won in the Supreme Court, but Congress ultimately defeated all of the legislation attempting to nullify the Chain Broadcasting Regulations. I don't think that turned out to be too effective, but it helped some on the monopoly standpoint. It was about this time, because of the attacks on the Commission and the chiseling away at appropriations … and they were cut several times to impair our effectiveness … I got interested in trying to meet this … talking about political control and free speech and government intervention and so on, to show where the controls really lay, I began to go into the economic controls and we had a very good guy who was head of the economic section named Dallas Smythe. I wrote an article which was carried in the Public Opinion Quarterly at Princeton, I think the title was "Freedom of Speech for Whom?" I said that we talked about government control, but let's see who really is running the show. Well, here with nine hundred stations on the air, you would think that you would have enough diversifications and controls to get some diversification in programming and ideas. But you take a look at it and 85% of the coverage of these stations was by stations that had a network affiliation contract and the networks not only controlled the times that they used for network programs, but they could bring a lot of pressure to bear on the stations as to other programs they would carry. Let's say for example that one station might have a local program that didn't have too large a listening audience or rating, but it was an enthusiastic audience. Well, "We don't want all the sets turned off when our program comes on. You've got to put a more popular program in there." So, they were doing a lot of dictating of the programs. You had this seemingly diversification between nine hundred stations. There were limitations about ownership. I don't think anyone could own more than seventy-five stations, but 85% of the coverage was coming through the networks. Then, you take a look at the networks and you find that they were not such free agents themselves. Network advertising is per se, national advertising. You take a local newspaper at that time, I don't know what the figures are now, but the advertising revenue was about 85% local and about 15% national or regional. You had the reverse situation in the case of the networks and broadcasting stations generally. You take a look at the revenues of the networks and at that time, as I recall, something like 20% in the case of each network, 20% of the revenues came from one national advertiser and something like six national advertisers provided more than 50% of the revenue. Well, you follow that through into the advertising agencies and you will find even more concentration, because advertising agencies might handle quite a number of accounts and the concentration got even greater. Well, that created some consternation, but it was still on the economic side. I suppose that programwise, the most significant development came with the so called "blue book" from the Public Service Responsibility of Broadcast Licensees, which was issued in a blue cover. That's the reason it was called a blue book and it created quite a bit of consternation. Well, the way these things came about again, Paul Porter was chairman prior to I had left the Commission, he was a very likeable guy but quite a politician and ordinarily, renewals of licenses were brought up by the engineering department in batches of anything from ten to twenty at a time. If we had no interference problems or technical problems with this station, we would recommend that their license be renewed and the Commission would say, "renewed." That was about all there was to it. Well, I had gone along with this, this was the way they did things, for quite awhile and then I just happened to take a look at the Communications Act one day and it said that all renewals shall be governed by the same considerations as original grants. The Commission traditionally, going back to the days of the old Radio Commission, had considered proposed program service as a very important element. They had to be financially, technically, morally qualified and all in their proposed program service. Very often, you might have several applicants for one station and the grant had turned on the proposed program service. The applicants would make a survey of the community, at least they said that they had, and if this was an agricultural community with a good agricultural school, they would try to tie in with them and have farm programs and not just give them the weather reports and market reports, but bring to them the newest developments in seed and fertilizer and so on. Here is a university that has a good music department there would be a proposal giving them time for concerts for their students there or if there was a little theater group that was interested in radio drama, they would give time available for that. It sounded great. So, after I took a look at the provisions of the Act, the next batch of applicants that came along presented by the engineering department, I said, "Well, wait just a minute here, we haven't got enough information. We are entirely acting on engineering reports." The Commission also had required every station once a year to present a composite program log. It was sort of like the comptroller's office requiring a statement from a bank and not letting you know exactly the time. But these composite logs had gone right in the files and nobody had even taken a look at them. So, I said, "We haven't got enough information." Well, the response was, "This is the way that we have always done it." I said, "But that's not what the act says and I want the record to show that I am refraining from voting because of lack of information." So, then everytime a batch of renewals appeared on the agenda, [unclear] was one that I worked with closely and several other members of the staff, well, when a station would come up for renewal, I would say, "Got down and get me the original application and see what their proposed program service was and dig out their latest program log and see if they have any relationship between promise and performance."' There was none whatsoever. The one that had promised all these things about the agricultural programs and the music programs and disucssion programs, well, 85% of their time was devoted to nothing but network programs or plotters, this kind of thing. So, I laid the promise and performance beside each other and said. "Look here, here's what we are doing. In this case, there were three competing applicants and we granted the grant on this proposed program service and look what this guy is doing. We are granting it not to the best applicant, but the biggest. This is not fair to the public or to the competing applicants who may make more modest promises but go about it in a more responsible way.