unless the network is given 50 percent or more interest plus syndication and foreign sales rights, it would not accept an independentlyproduced program. I wonder if the FCC has investigated this? Mr. HYDE. We have made studies in this area and, as a matter of fact, that is included within the study I have just mentioned. Mr. BROYHILL. As the Chairman knows, other committees of the Congress have gone into this in the past. I was a member of that subcommittee, and I recall the hearings. Mr. OTTINGER. This is a part of your proposal? Mr. HYDE. Yes, it is. Mr. OTTINGER. One of the issues I called to your attention last year was the question of network rigging of sports programs to interrupt or suspend the programs to permit broadcasting of advertisements. Is the Commission doing anything about this situation? Mr. HYDE. There were some complaints in specific cases. We did have complaints in this area and we did find it appropriate to get out a public notice to licensees that interruption of a sporting spectacle for the purpose of slugging in a commercial would be inappropriate. I am not aware of any substantial amount of complaint since that time. I think the operators are pretty sensitive about this as of now. Mr. OTTINGER. You issued something? Mr. HYDE. We issued a public notice and cautioned them against what would in effect, in my judgment, would be a distortion of a presentation, you might say a sort of contrived suspense to permit advertising. We have indicated that we thought that was inappropriate. Mr. OTTINGER. This did not have the status of a rule? Mr. HYDE. No; not a rule, but a public notice which we believe has been effective. Mr. OTTINGER. I would like to have a copy of that furnished for the record. Mr. HYDE. I have a few papers here but that is one I failed to bring. We will supply it. (The following letter was received for the record :) FEDERAL COMMUNICATIONS COMMISSION, COLUMBIA BROADCASTING SYSTEM, INC., GENTLEMEN: This will acknowledge receipt of your response to the Commission's letter of May 18 asking your comment on newspaper stories and other reports which quoted Referee Peter Rhodes of the National Professional Soccer League as stating that he had called false fouls during a Toronto-Pittsburgh game because he was requested by CBS to halt play so that commercial messages could be inserted, and that he also had instructed players to feign injury, protest his decisions or kick the ball out of bounds in order to halt play for the same purpose. Your reply dated June 2 pointed out that Referee Rhodes had later been quoted in the press as denying that he had called any false fouls, and you stated that upon publication of the original reports CBS instituted its own investigation of the matter. You further stated that as the result of your investigation, *** we are able to assure the Commission that CBS has not participated, directly or indirectly, in calling false fouls, in telling players to lie down or feign protest or injury or to propel the ball out of bounds, or in telling the referee to call time-outs for pretended injuries, and that CBS has not participated in any plan to mislead the viewing public with respect to athletic contests The Commission accepts the above assurances as consistent with the responsibility of licensees not to mislead the public as to the reason why play is interrupted to permit the insertion of announcements. By direction of the Commission. BEN F. WAPLE, Secretary. Mr. OTTINGER. Could you furnish this for the record? Have you had some time to consider H.R. 10481 which Mr. Dingell and Mr. Moss and I introduced in the last Congress providing for more comprehensive regulation of the networks? Mr. HYDE. It is under examination but we have not completed our study of it. Mr. OTTINGER. You have nothing at this time you can furnish the committee? Mr. HYDE. No, sir; but in view of your interest, I will see what can be done. (The information requested was not available to the committee at the time of printing.) Mr. BROWN. Mr. Chairman, I admire your economy of words in this brief paragraph, but I am not sure I understand it fully here. Let us take the part of the sentence which says "and would provide that no more than 50 percent of prime time with some exceptions may be filled with network-controlled programs." What are you talking about? Mr. HYDE. We are talking about the network affiliates. They could be a local station's affiliates. There would be 200 stations on the typical national network and only five would be owned by that network. What we are talking about here is network programing, and the thrust there is to limit the amount of time that the network will use for its own production. Of course, they have to have a substantial amount of time because typically the national news and information programs are network produced, of course. Mr. BROWN. You are talking about the network-produced program within the schedule of the network? Mr. HYDE. That is right. Mr. BROWN. Rather than within the schedule of what is shown on the local station? Mr. HYDE. That is right, but on a network affiliate Mr. BROWN. They would take the whole network stuff and not worry much about local production. Mr. HYDE. To a substantial extent, they do, but not with complete disregard. We find many stations preempting what would be network time for local presentations but by and large the main service will be network. Mr. BROWN. This is so everything on the network is not produced by the network? Mr. HYDE. That is right. Mr. BROWN. What about everything produced on a network affiliated station not being from the network? Has there been any consideration of that problem? Mr. HYDE. Our network regulations are designed to protect the autonomy and independence of the affiliate to make his program choice. He is responsible for it even though he is a network affiliate. Mr. BROWN. Let me talk about the local station which is affiliated with the network, not owned by the network, is there any limitation on the amount of network programing that that local station can carry or really, conversely, what concerns me is whether or not there is anything in the regulations to encourage that local station to initiate its own programing? Mr. HYDE. We had certain limitations on the amount of time that an affiliate could commit to a network. There is a good deal of history and background on this. There was a case, I believe the call letters were WARR, where an operator said he would present solely network programings. The Commission decided against him, and this was some years ago, finding that he should not relegate his responsibility to the network. We do have a proposal out that will limit the amount of time which an affiliate can give to the network, yes, sir. I can have counsel here give you a more specific description of it if you wish. Mr. BROWN. I would like to have it later but I do not want to take more time at this point. Mr. MACDONALD. Supply a statement on that. Mr. HYDE. These are very technical rules and I think it would be helpful if you would give me an opportunity to present a paragraph on it. (The following information was received for the record :) PROPOSED LIMITATION ON AMOUNT OF TIME AN AFFILIATE CAN COMMIT TO A NETWORK On September 20, 1968, the Commission issued an Order for Oral Argument and to Invite Further Comment in Docket No. 12782, in the Matter of Amendment of Part 73 of the Commission's Rules and Regulations with Respect to Competition and Responsibility in Network Television Broadcasting. (Familiarly known as the 50-50 proceeding.) The Commission in 1965 had proposed, in general, to (1) restrict the direct financial and proprietary control exercised by networks over their evening programming in order to open up some prime time (appoximately one hour per evening) on each network for programs produced and controlled by independents and sold or licensed directly to advertisers; (2) prohibit networks from engaging in domestic syndication and from distribution in foreign markets of programs which were produced by others; (3) prohibit networks from acquiring syndication and foreign distribution rights in network programs not produced by them and (4) require networks to divest themselves of the present syndication and foreign distribution rights and interests of the types they would be prohibited from acquiring under the new rules. The proposed rule would prohibit a network operation from offering a weekly evening program schedule in which more than 50% of the time or a total of fourteen hours per week, whichever is greater, is occupied by programs (exclusive of newscasts, news interviews, special news programs, on-the-spot coverage of news events and sustaining programs) either produced by the network corporation or in which it has acquired the first-run license directly from an independent producer. This rule would thus limit economic and creative control of the programming which a network made available to its affiliates in the evening hours; but it does not propose to limit directly the amount of time an affiliate can commit to a network. Networks would retain editorial control of their programs and would continue to have final say as to the composition of their schedules. The objective of the proposed rule is to multiply diverse competent and independent sources for television programming. However, the September 20 Order also invited comments specifically on a proposal put forward by Westinghouse Broadcasting Company as an alternative or complement to the 50-50 proposal, which, in general, would prohibit a television station in any of the top 50 markets in which there are three or more operating television stations from contracting with a network to carry any regularly scheduled network programs more than a total of three hours between 7 p.m. and 11 p.m. excluding news and public affairs programs and certain other programs. Comments in this proceeding are to be filed by May 17, 1969; reply comments are due by June 17, 1969; and the Commission will hear oral argument July 21, 1969. Persons desiring to appear in oral argument may do so whether or not they have filed comments. Mr. BROWN. Is there any policy within the Commission regarding the encouragement of the development of additional commercial networks? Mr. HYDE. We would be very much interested in the development of additional networks. We solidly supported the concept of a public television corporation network, and our support of the all-channel legislation in the interest of the development of more stations in UHF is evidence of our continuing interest in providing additional services. An additional national network would be welcome. Mr. BROWN. I used the term "national network." Mr. HYDE. We are likewise interested in the development of an additional national network whenever that is possible. Mr. BROYHILL. Do the rules that you are proposing limit the network control over programs? Does that include the educational networks? Mr. HYDE. No; this is commercial. Mr. BROYHILL. It would not apply to education? Mr. HYDE. No; it does not apply to education. Mr. BROYHILL. Is there any reason why you would not apply this to educational networks? Mr. HYDE. Educational stations do get programs from other sources but we have not had a problem anything like the one we have with commercial networks. I am told that NET, National Educational Television Network, supplies something like 10 hours a week, so there is nothing like suggesting preemption of the local stations. Mr. BROWN. May I ask the chairman to supply further data as to what decisions or rulings have been made by the Commission to encourage the formation of an additional network? Mr. HYDE. Yes; I will give you a further response on that. (The following information was received for the record :) ENCOURAGING ADDITIONAL NETWORK OPERATION One of the Commission's functions is to "[m]ake available so far as possible, to all the people of the United States a rapid, efficient, Nation-wide, and worldwide wire and radio communications service with adequate facilities at reasonable charges ***". For the past several years, one of the considerations which the Commission has taken into account in several of its actions has been providing encouragement for a possible fourth television network. While we have never taken action to encourage any specific group or individual to form an additional competitive network, this has been an important consideration in some of our general actions. Perhaps the most important of these has been encouraging the development of UHF stations, to provide more potential outlets which an additional network could use (since the number of VHF stations operating “independently" and thus potentially available is quite small). Consistent with that purpose the Commission urged Congress to enact legislation to require all newly-manufactured television sets be equipped to receive both UHF (Channels 14-83) and VHF (Channels 2-13) television signals. A law was enacted in 1962 requiring all sets manufactured after April 30, 1964, to be so equipped. (P.L. 87-529, 76 Stat. 151.) We believe this legislation has had the effect of increasing the number of commercial UHF television stations. There were 171 operating commercial UHF stations in early 1969 compared to 77 in 1960. Any increase in the number of unaffiliated stations provides a fertile milieu from which another network could grow. In addition, the Commission has proposed a rule which if adopted may encourage existing UHF television stations to join together for the purpose of creating an additional network, In Docket No. 12782, the Commission proposed to encourage and increase competitive forces--both creative and economic--in television production and procurement through limitations on the capacity of network corporations to confine network schedules to programs in which they have financial and proprietary interests and through divorcement of networks from domestic syndication and, to some extent, foreign distribution. The proposed rule is directed toward strengthening of independent program production. A further benefit from the strengthening and development of independent program producers may well be the development of new program sources available for additional UHF television stations. Additional UHF stations might in turn provide a basis for a fourth network. Since the proposed rule defines chain broadcasting as the distribution of programs to a substantial number of stations during a substantial period of the day (and we specifically seek comments on the precise terms of this definition), and since, in addition, the rule would not affect any person distributing less than 14 hours a week between 6 and 11 p.m. of programing he controlled, the restrictions in the rule clearly would not impede the development of any proposed additional networks. This proposal is considered more fully in the prior discussion of limitations upon the amount of time an affiliate may commit to a network. In the complete reallocation of UHF channels which took place in 1965 and 1966, one of the important considerations was that of providing at least four nonreserved, or "commercial," channels (VHF and UHF) in as many as possible of the larger markets, to provide fourth network potential. Thus, of the top 25 markets, all have at least 5 unreserved VHF and UHF assignments, and of the top 75 markets all but one have at least 4 such assignments, as do 23 of the next 25 markets (76 to 100). Also, this was one of the reasons why, in 1968 (Docket 16068), we decided not to impose a complete prohibition on acquisition of more than three stations in the top 50 markets; we stated that we hoped the UHF development which would be possible in the absence of such a restriction would lead to a fourth network. Mr. TIERNAN. Mr. Chairman, you have spoken with regard to having oral hearings on this question of network-supplied programs and whatnot. This is getting close to a question of control of the networks themselves; is it not? Mr. HYDE. Yes, but we regulate in this area in terms of what programs can be shown over our licensed stations or what agreements they can make with them. We call them network regulations but they are always in terms that no station shall make a network contract for longer than a fixed period, and so forth. They regulate network practices but they are directed to stations. Mr. TIERNAN. You have no present desire to regulate networks directly? Mr. HYDE. There is some difference of opinion among Commissioners on that, but the Commission has heretofore taken the view that we do not have such authority. Mr. TIERNAN. You know we have pending some legislation in this area. Could you give the subcommittee the benefit of your feelings in that regard? Mr. HYDE. I was asked about that. We are examining that legislation and we will be submitting comments on it. (The information requested was not available to the committee at the time of printing.) Mr. MACDONALD. Thank you. You may proceed. POLITICAL BROADCAST REPORTS Mr. HYDE. All networks, radio and television stations were required to provide information on political matters broadcast by them during the year 1968. Specifically, each was required to list all program time and announcements paid for by candidates or supporters, time given free of charge to candidates or supporters, and total amount of gram time devoted to political matters. The voluminous data received pro |