Only when these steps will have accomplished reception of channel 17 by a majority of the people in that area-it will take a protracted period of time can this station expect to enjoy advertising acceptance and then at a charge far less than its competitors. Today it is operating at a rate of $200 per hour. UHF was commenced with this undertaking in Jacksonville. No television station signals were being received in any form, from outside, other than the two local existing stations. Nor are any other signals required to expose all network programing today in the city of Jacksonville. No third VHF assignment was to be made to Jacksonville by final Commission order and decision. No serious terrain disadvantages were evident in Jacksonville to add further obstacles to the abnormality of UHF. Nevertheless, no unusual advantages were faced in commencing this station and all of the typical disadvantages prevailed. The beginning was undertaken because there was a confidence that there would be sufficient interest on the part of the public for three television services and the ABC television network. Competitiveness and equality to the established stations was not envisioned for a long period, but there was faith that ultimately the station could be viable under the set of audience conditions that existed and could be projected when this undertaking was begun. No cable system existed in Jacksonville. No outside stations or signals were received. The task that UHF development faced was clearly chartered when we began our operations. It had to develop sufficient audience to be a competitor to the existing stations and thus provide a public service. It did not face the possibility that nonduplication would be meaningless because there was some other way to bring in network programs to render the use of channel 17 unnecessary either by the public or by the advertiser. We will not bore you by a listing of the frustrations, the trials, the discouragements, the financial fortitude that this UHF operation is accepting and will continue to do for the period of development. We can testify with complete honest conscience that by our experience and that of our experienced staff which has operated in UHF, by their knowledge, that this UHF station will have a short life unless it can develop audience under the conditions which prompted its construction; namely, the furnishing of one of only three signals and three television services for the Jacksonville area. Samples of the kind of public education being done to trigger the interest will be submitted along with this exhibit. The material concentrates on conversion and set use to stimulate the public interest in channel 17, a UHF, as the new and third source of programing for Jacksonville. In an undeterminable time and with gigantic underwriting, this UHF is expected to build an audience that survey companies will recognize sufficiently to allow this station to receive advertiser attention to a comparable extent. Only then will this station commence to recoup the losses projected and planned at the time of our commencement. If UHF does not succeed in Jacksonville with this station, with a network affiliation. maximum power, major city classification, suitable terrain conditions, experienced staff, and things support, then the judgment of intermix ing UHF in two VHF established markets and all-band legislation will have proven to be a myth. Duplicated or unduplicated CATV importation of outside of Jacksonville, signals, combined with CATV advocacy of local or distant signal availability to avoid conversion costs on the part of the Jacksonville public, as well as CATV consigning 17 to a different dial position for its reception would do havoc to all-band legislation and it will impair the growth of WJKS-TV consistent with the larger and more effective use of radio in the public interest. This issue has been morassed in a sea of rhetoric. Cable considered as augmenting television sometimes is often characterized as an industry of competitive interest. Cable conceived and represented as fulfilling the need for improved or deficient signal by community stations does not have to demonstrate such fact either initially or continuously to any licensing body that makes a determination of need of service in the similar manner that stations do. Uncompelled to compete in its industry, in its field, and its performance, cable becomes identified as a competitor to stations who face the dual competition among themselves on similar grounds and with cable on a varying ground. Unrequired to compete with any competitor for program material to develop audience and advertising support, cable would seem to deserve different and more realistic consideration than even the present rules now propose. Nevertheless, they do offer a treatment rather than a cure in the approach toward the balancing of the competitive interest they accommodate but they do not integrate both industries in the larger and more effective use of radio. No logical nor lasting conclusion seems to have been reached by the current action that: 1. Grandfathers generally existing cable operations. 2. Permits duplication following the same day network presenta tion. 3. Allows cable opportunity to exclude programing and advertising from a local station. 4. Institutes case-by-case handling of all future conflicts. 5. Distinguishes between the impact of cable upon large as compared with small markets. 6. Characterizes cable and stations as competing interests although a competitor is defined as one who is engaged in selling, buying, or furnishing goods or services in the same market as another. To a very minimum, however, the present action must be supported. After years, the Commission has done something about "the risk of adverse impact on the public interest in the larger and more effective use of radio which accompanies the burgeoning CATV development" in its new field of expansion to 12 to 20 channels and to blanket the Nation. We appreciate the opportunity of appearing. We want to reemphasize that in operating a UHF station, the compulsion upon the television industry to develop is in the capacity to interest people in being able to receive UHF, not to be converted to another channel but to receive UHF and for such stations to be able to begin to attract audience, attract advertising and develop over a period of years. This was the purpose of the all-band legislation. We know that if this and similar stations are faced with the importation of Atlanta and Miami and New York, we know that its development will be stifled. We appreciate the opportunity to appear and to present this information. The CHAIRMAN. Thank you, Mr. Weber. I notice that you support H.R. 13286. Mr. WEBER. Yes, sir. The CHAIRMAN. If this bill does get out, there probably will be many changes but you support the principle? Mr. WEBER. Yes, sir. The CHAIRMAN. I am sorry I have to leave. I am the only remaining one. There is a vote on the floor. Thank you so much for coming. This will be in the record and will be available for every member of the committee. I think it is very helpful. Mr. WEBER. I appreciate being here. (Mr. Weber's prepared statement follows:) STATEMENT OF FRED WEBER, EXECUTIVE VICE PRESIDENT, RUST CRAFT BROADCASTING CO. My name is Fred Weber. It has been my privilege to be employed in broadcasting since 1927 and to have participated before the House committees and Senate committees as well as in Federal Communication Commission proceedings with respect to allocation, network, regulation, and CATV. My position is executive vice president of Rust Craft Broadcasting Co. The Commission's assertion of jurisdiction over cable television and its pursuit of further legislation by Congress to clarify and establish further basic national policy is supported. So, too, are H.R. 13286 and S. 3017 supported in principle. The majority opinion of the Commission, championed by Chairman Henry, has taken one forward step in pursuit of a goal of equitable and appropriate assimilation of cable television with a fully developed television service. We agree with its position in principle but believe it is inadequate as a practical solution. The opinion released by Commissioner Cox deals more realistically with the fundamental and crossroad issue. A clearer decision is compelled as to whether television is to become preponderantly a nationwide wire service of public monthly payment, or of stations augmented by community antenna systems. We support the Commission's present action because it appears as a minimum to have: (1) Advocated a local station's access to its own market. (2) Reserved same day network program rights for an affiliate. (3) Instituted procedures to hear the question of importation of distant signals into the grade A contour of any station in the top 100 markets. (4) Created a procedure for local station presentation of the need to limit unconfined expansion of cable beyond at least a “grandfathered” existence. (5) Provided an opportunity for an interested party to demonstrate the impact of distant signal importation by cable into markets that are classified as smaller than the top hundred. The number of signals from increasingly distant sources being furnished by cable seems to have become completely equated with the number of program sources delivered by existing and potential stations. And, thus, it has seemed to confuse the fundamental concept of allocation and of service to the public. Extending stations beyond their sphere of influence by cabling seems to have become equated with the fostering of the maximum in television service to the public by local and area broadcasting stations. And, thus, the accommodation of cable with station service has become equated with larger and more effective use of the radio in the public interest. Accordingly, pursuit of customers by cable, that do not have to arrange for programs, has become equated with the pursuit of programing, audience popu arity, and advertising support by stations. To complete the apparent fallacy and although engaged in furnishing service on a dissimilar basis, cable has become equated with stations as having a competing interest that must be balinced, undisrupted, and resolved generally on a case-by-case treatment. It is for this reason that we appear to demonstrate why the proposed rules do not appear to insure in practice a larger and more effective use of radio In the public interest. Until February 19, 1966, the Jacksonville television market enjoyed two VHF station services. All efforts by the Commission and any and all parties were futile and unavailing to encourage or produce a third station until Rust Craft commenced channel 17. It made this sizable and speculative investment only after it understood all the conditions that it would and could expect to face. It recognized that this undertaking would require 3 to 5 years of diligent and costly work to become viable under all the existing and anticipatable circumstances. Early experience has already proven the realism of that planning and that the projection may even have been overconfident. An unconventional station had to be built from the ground up. It had to employ the maximum in power and the most costly form of transmission. It has to be equipped with as many of the costly frills as its long established and well entrenched giant station competitors. It had to undertake the entire task of educating and encouraging the public to buy converters, new sets, new antennas, and to learn how to go through a new and unfamiliar tuning process as well as added expenditures. Only when these steps will have accomplished receivability of channel 17 by a majority of the people, and over a protracted period of time, could this new station expect to enjoy advertiser acceptance and then at far lesser charge than its competitors. UHF was, thus, commenced in Jacksonville. No television signals were being received in any form from outside; nor are required to expose all networking. No third VHF assignment was to be made to Jacksonville by final Commission decision. No serious terrain disadvantages were evident in Jacksonville to add further obstacles to the abnormality of UHF. Nevertheless, no unusual advantages were faced in commencing this station and all of the typical disadvantages prevailed. But the beginning was undertaken because there was confidence that there would be sufficient interest on the part of the public for three television services and ABC programs. Competitivenesss and equality to the established stations was unenvisioned for a long period, if ever; but there was faith that ultimately the station could be viable under the set of audience conditions that existed and could be projected. No cable system existed. No outside stations or signals were received. The task that UHF development faced was clearly charted. It had to develop sufficient audience to be a competitor only to stations. It did not face the possibility that nonduplication would be meaningless because there was another way to bring in its network programs to render the use of channel 17 unnecessary. You will not be bored by a listening of the frustrations, trials, discouragements, and financial fortitude this UHF operation is accepting and will continue to do for a long time. But we can testify with honest conscience and by our experience and that of our capable staff's devotion and knowledge that this UHF will have a short life unless it can develop audience under the condition which prompted its construction; namely, the furnishing of one of only three signals and three television services for the Jacksonville area. Samples of the kind of expensive and extensive public education being done to trigger interest is exhibited. The material concentrates on conversion and set use to stimulate the public's interest in channel 17 as the new and a third source of programs for Jacksonville. In an undeterminable time and with gigantic underwriting, this UHF may build an audience that the survey companies will recognize sufficiently to allow this station to receive advertiser attention. Only then may this station commence to recoup the losses projected for a long period. If UHF does not succeed in Jacksonville with a network affiliation, peak power, major city classification, suitable terrain, experienced and devoted staff, and financial support; then the judgments of intermixing UHF in two VHF established markets, and all band legislation will have been proven to be a myth. Duplicated or unduplicated CATV importation of outside of Jacksonville signals, combined with CATV advocacy of distant and local signal availability to avoid conversion costs for the Jacksonville public, as well as CATV consigning 17 to a different dial position for its reception would do havoc to all band legislation and impair the growth of WJKS-TV, consistent with "the larger and more effective use of radio in the public interest." This issue has become morassed in a sea of rhetoric. Cable considered as augmenting television is often characterized as an industry of competitive interest. Cable conceived and represented as fulfilling the need for improved or deficient signal by community stations does not have to demonstrate such fact either initially or continuously to the licensing body that makes a determnation of need of service by stations. Uncompelled to compete in its industry. field, and performance, cable becomes identified as a competitor to stations who face the dual competition among themselves on similar grounds and with cable. Unrequired to compete with any competitor for program material to develop audience and advertising support, cable should receive different and more realistic consideration than the rules propose. Nevertheless, they do offer a treatment rather than a cure in the approach toward the balancing of the competing interests. They accommodate but do not integrate both industries "in the larger and more effective use of radio in the public interest." Accordingly no solid conclusion seems to have been reached by the current action that: (1) Grandfathers generally existing cable operations. (2) Permits duplication following same day network presentation. (3) Allows cable opportunity to exclude programing and advertising from a local station. (4) Institutes case-by-case handling of all future conflicts. (5) Distinguishes between the impact of cable upon large as compared with small markets. (6) Characterizes cable and stations as competing interests although a competitor is defined as one who is engaged in selling, buying, or furnishing goods or services in the same market as another. To a very minimum, the present action must be supported. After years, the Commission has done something about "the risk of adverse impact on the public interest in the larger and more effective use of radio which accompanies the burgeoning CATV development." The CHAIRMAN. I would like to state to you gentlemen who are waiting here, if you do not mind, the Chair will take a recess for 15 minutes. I will have more members with me when I come back. They had to go over to the floor. I understand one or two of you have to go home tonight. We will give you the opportunity to present your statement before the committee. We will come back to accommodate you. It is either that or you have to come back tomorrow morning. I understand some of you have to leave town. With that, the committee will stand in recess until 25 minutes to 6. (Brief recess.) Mr. ADAMS (presiding). Gentlemen, we will continue and the members who are voting will be returning. I understand there are a number of witnesses, or several left who have come from a great distance and who would like to testify prior to leaving. So we will keep the hearings open for that purpose. Is Mr. Holben here? Mr. HOLBEN. Yes. Mr. ADAMS. Mr. Holben, will you come forward, please? STATEMENT OF ROBERT G. HOLBEN, MANAGER, BROADCAST DIVI- Mr. HOLBEN. Thank you for staying beyond normal hours. I will reward you with equal courtesy by being brief. I will not read my statement. I should identify myself. My name is Robert Holben. I am manager of the broadcast division of Sarkes Tarzian, Inc., Bloomington, Ind. We have three tele |