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Amendments Of Parts 2, 8 And 4 393
BEFORE THE
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON, D.C. 20554
In the Matter of
AMENDMENT OF PARTS 2, 3 AND 4 OF THE
COMMISSION’S RULES AND REGULATIONS
AND THE STANDARDS OF GOOD ENGINEER-
ING PRACTICE CONCERNING FM BROAD-
CAST STATIONS TO PERMIT FM BROAD-
CAST STATIONS TO ENGAGE IN SPECIFIED
NoON-BROADCAST ACTIVITIES ON A SIM-
PLEX AND/OR MULTIPLEX BASIS.
Docket No. 10882
Yr Iaa
REPORT AND ORDER
BY THE COMMISSION: COMMISSIONERS WEBSTER AND DOERFER
DISSENTING AND ISSUING STATEMENTS; COMMISSIONER HEN-
NOCK NOT PARTICIPATING
i. On December 31, 1953, the Commission issued its notice of
proposed rule making in the subject proceeding. In that Notice,
the Commission set forth its views that the functional music
operations: are not broadcasting within the meaning of section
3(0) of the Act but should be authorized as “an adjunct to the
FM broadcast operation” so that the latter may draw financial
sustenance from them. To that end, the Commission proposed to
relax the required minimum hours. of operation of FM broadcast
stations from 42 hours to 36 hours a week during the hours of
6:00 a.m. to midnight; to remove requirements as to the segment
of the broadcast day in which the minimum hours apply and to
permit FM licensees to obtain Subsidiary Communications Au-
thorizations (SCA) to engage in certain types of activities, typi-
fied by the functional music operations, on a simplex basis during
the time not devoted to the required minimum of 36 hours of FM
broadcasting or on a multiplex basis at any time. Comments of in-
terested parties with respect to the proposals were invited. We
turn now to consideration of the comments received.
2. Since the touchstone of the rule changes proposed by the
Commission is the determination that the functional music opera-
tions are predominatly nonbroadeast in nature (par. 9 of the not-
ice), we believe it desirable to take up this aspect first. Although
the Commission explicity invited comments directed to the
views expressed in par. 9 of the notice, only 6 of the 33 parties
1The nature of these operations is described in par, 2-5 of the notice.
394 Federal Communications Commission Reports
commenting addressed themselves to this issue? One party—
WGHP, Inc.—stated that “the Commission’s determination that
the various functional music activities are not of themselves
broadcast activities within the meaning of the Act [is] emi-
nently reasonable.” The other 5—King Broadcasting Co. (KING-
EM), Santa Clara Broadcasting Co. (KSJG-FM), Richard G.
Evans, William Penn Broadcasting Co. (WPEN-FM), and Capi-
tol Broadcasting Co. (WWDC-FM)—contend that the functional
music operation does constitute broadcasting within the Act. n
support thereof, it is argued by these parties that the functional
music programs are intended and are in fact received and enjoyed
by substantial segments of the general public; that since this is
so, the Commission should not attach undue weight to the use of
the supersonic tone; that there is no need for a balanced program
format in a community having many broadcast services, and as
with the “good music” format, the functional musie one is de-
signed to reach a specialized audience; that the transit audience
is “virtually the same” as the home audience; and that the fact
that specialized audiences are being reached by the transitcasting
and storecasting operations is irrelevant since “where people hap-
pen to be listening” has nothing to do with whether “broadcast-
ing” is taking place.
8. We have considered these arguments, but adhere to the con-
clusion set out in par. 9 of the notice. We there recognized that
the functional musie operator has no objection to and indeed
probably desires the reception of his transmissions by the general
public in addition to the special places primarily involved. But as
demonstrated by the format adopted and apparent by the station’s
source of revenues, the service directed to the special points or
subscribers would clearly appear to be the key to the over-all op-
eration. A background music or storecast operation employing tele-
phone wires is concededly providing an industria] point-to-
point service; we cannot conclude that the essential nature of
such an operation is changed because of the use of radio trans-
missions. It is our view that the operation—in so far as the pro-
graming is directed to the special interests of the industrial, mer-
cantile, transportation, or other subscribers and is not primarily
intended for reception by the general public—must be character-
ized as predominantly non-broadcast in nature. The fact that a
large portion of these transmissions—including most of the pro-
gram material—may be received by the general public on home re-
ceivers aS an incidental by-product of the primary intent of the
transmissions does not change this rationale. The argument that
these are specialized services similar to a “good music” service
does not withstand scrutiny. For to sustain this, a showing would
have to be made in each case that the functional music station
2 Because of the nature of their comments, for example, the requests of several] parties
to lift the ban against functional music operation during the 36-hour period required to be
devoted to FM broadcasting, a majority of the other parties would appear to acquiesce in the
Commission's determination of the essentially non-broadeast character of the functional music
Services.
Amendments Of Parts 2, 3 And 4 395
was meeting some specific local demand in a community having
several broadcast services. We have noted, however, that prior to
the advent of the services in question, no FM licensee employed
the functional music format; it was only upon the decision to en-
gage in functional music operations that this singular program-
ing was adopted. Further, in the same area, more than one FM
station can frequently be found engaging in these services. Thus,
in an initial survey of these operations, it was learned that in one
metropolitan area, four FM stations were engaged in functional
music operations, inundating that area with essentially the same
service. In summary, the main effort of these services is directed
not to the general public but to listeners at particular points or
places. It is because of their predominantly non-broadcast nature
that these operations run afoul of so many basic broadcast provi-
sions and policies (e.g, 310(b), 317, 318, maintenance of positive
control over programing, 3.287-3.289 of the rules, etc.) .
4. We turn to the Commission’s proposals, summarized briefly
in par. 1 of this report and more fully detailed in the notice. More
than 14 the comments received support the substance and pur-
pose of the proposals: these comments are generally along the
line that the proposals represent “a sound and major step toward
the solution many of the problems now facing [FM].” In sub-
stance, these comments, supported by the operating experience of
the stations, assert that permitting the FM licensee to engage
in these specialized non-broadcast services is necessary because of
FM’s financial status, and will promote FM broadcasting. Accord-
ingly, we have determined that the basic idea behind the out-
standing proposal is sound and should be adopted.
5. In reaching this conclusion, we reject the contentions made
by the National Committee for Utilities Radio, Central Commit-
tee on Radio Facilities of the American Petroleum Institute, the
United States Independent Telephone Association, and Storer
Broadcasting Co. These parties contend that the proposals in ef-
fect constitute a reallocation of the FM band to non-broadcast ser-
vices; that in allocating frequencies among services, the Commis-
sion has consistently evaluated the necessity for utilizing radio to
provide the new service and the needs of other services for the
spectrum space involved; and that these allocation procedures
should be followed here. These objections, however, fail to take
cognizance of our basic purposes of the subject proposals which
were set forth in the notice. In par. 11 of the notice we stated:
“Tt should be emphasized, however, that our aim in this proceed-
ing is not the conversion of the FM broadcast band to some new
specialized non-broadcast service or services: on the contrary,
authorization of such new ventures must be only as an adjunct to
the FM broadcast operation a subsidiary service so that the main
undertaking—the broadcast service to the publie—can draw finan-
cial sustenance from it. The rules applicable to the SCA, set out
in the attached Appendix and described herein, and the provision
that the SCA operation.must be conducted on a multiplex basis at
396 Federal Communications Commission Reports
the end of a one-year period, all demonstrate the subsidiary or
secondary nature of the specialized non-broadcast activity.®”
6. While the comments generally support the proposals, revi-
sions or objections to particular features were put forth. We turn
now to these objections or revisions.
7, Four parties—The American Civil Liberties Union (ACLU),
the Congress of Industrial Organizations (CIO), the Transit Ri-
ders Association, and Messrs. Pollak and Martin—urge that
transitcasting not be authorized by the Commission. These parties
contend that transitcasting is undersirable as a matter of public
policy because the resultant “forced listening” is abhorrent to our
democratic way of life. Two parties—the CIO and Messrs. Pollak
and Martin—argue that transitcasting raises constitutional ques-
tions of the right of free speech under the First Amendment and
the right to liberty under the Fifth Amendment; the ACLU, on
the other hand, concedes that it is “foreclosed from arguing that
forced listening is a violation of the U.S. Constitution” in view of
the Supreme Court’s Decision in Pollak v. P.U.C., 348 U.S. 451
but contends, with respect to the standard of the public interest,
that “transiteasting violates the spirit of the Constitution, de-
creases diversification of communication, and provides no public
service program.” The Transit Riders Association makes the fur-
ther arguments that transitcasting is injurious to the health of
the Association’s members “in that it will result in nervous dis-
turbances and mental anguish;” that it distracts the motorman
and thus increases the hazards of travel; and that transitcasting
is a business activity completely unrelated to the carriage pas-
sengers for hire.
8. The last noted arguments of the Transit Riders Association
need not be considered: they should be addressed to the local reg-
ulatory body having jurisdiction over the Transit Company and
no this Commission.‘ And we agree with the ACLU that the
Supreme Court’s decision in the Pollak case forcloses the issue
of infringement of constitutional rights. The contentions based
on ‘programing are misplaced since the essence of the subject
proposals is that the services are non-broadcast and therefore
need not meet broadcast criteria. We are thus left with the policy
question concerning ‘forced listening.”
9. The forced listening here involved stems from the necessity
of the public to patronize monopolistic transportation facilities.
3 Storer's comments also expressed the fear that these proposals “could be the opening wedge
for conversion of all broadeast bands to non-broadcast uses,” such as subscription radio or TV
The rules here finalized do not contemplate subscription broadcast operations to the extent
that such operations involve transmission of entirely scrambled or coded programs which can
only become intelligible through utilization of special unscrambling or decoding devices at the
receiver. The nature and advisability of such operations—as contrasted with operations in
which a minor portion of the program is specially “beeped” in or out—is expressly reserved
for further consideration in connection with the pending proceeding to authorize such sub-
scription program services.
We note that in this ease they have been presented to such an agency and have been
rejected. 81 P.U.R. (N.S.) District of Columbia, 122. 7 , .
5 Messrs. Pollak and Martin express concern that the transitcasting operation will not result
in “fair presentation” of controversial issues. But we see no reason why the policies laid down
in the Editorializing opinion (part 3, 1 Pike and Fischer, p. 91:201) and in decisions under
section 315 cannot be carried out equally well by the transit operator; the discussion of the
rules in par. 28, infra, and the rules set out in the Appendix, make clear the responsibility of
the holder of the SCA in this respect.
Amendments Of Parts 2, 3 And 4 397
In every situation, therefore, there is either a regulatory body es-
tablished to supervise the activities of the transportation com-
pany or the latter is municipally owned and regulated directly by
the community legislative council. We believe such regulatory
agencies are in closer contact with the situation and, therefore,
can better decide the policy questions involved. Thus, it is con-
ceivable in a small community to have a survey or referendum
vote which reveals overwhelming or total support of a transit-
casting operation: In such a situation, it is difficult to see how a
broad rule of this Commission proscribing such an operation
could be justified. Accordingly, we conclude that this aspect of the
transitcasting operation may be adequately safeguarded by the
regulatory agency which is more closely attuned to the local situ-
ation than this Commission. _
10. We shall now take up the comments directed to the require-
ment of 36 hours of FM broadcasting per week. First, a few
parties are apparently laboring under the mistaken belief that
the proposal would permit the FM licensee to engage in func-
tional music operations only on a multiplex basis. To allay such
confusion, we repeat that, during the first year, FM broadcast sta-
tions would be permitted to engage in the specialized non-broad-
cast activities on a simplex basis during all times not devoted to
the 36 hours required for FM broadcasting, and on a multiplex
basis at all times without restriction.
11. Five parties—Atlantic Broadcasting Co., Inc., Field Enter-
prises, Inc., Capitol Broadcasting Co., Santa Clara Broadcasting
Co., and King Broadcasting Co.—urge the Commission to reconsi-
der its 36-hour requirement and to permit full-time functional
music operations on a simplex basis. The argument put forth by
several of these parties is that to be successful, a background
music service must commence operation approximately at 8:00
a.m. each day and terminate at approximately 3:00 a.m. the fol-
lowing day; that an FM licensee could not devote the 36 hours a
week required by the proposed rule for FM broadcasting and at
the same time provide on a simplex basis specialized services for
the number of hours required for an economically sound opera-
tion; that it is therefore essential that the FM licensee be able to
turn to multiplexing and have available at reasonable costs multi-
plex receiving and transmitting equipment; and that there is
presently insufficient data to indicate whether such equipment
will be available. Because of this lack of knowledge concerning
multiplex equipment, it is urged that the Commission permit
full-time functional music operations on a simplex basis until
such time as full data has been obtained with respect to the tech-
nical and economic feasibility of multiplexing—or at least for a
period one year, with review by the Commission at the end of the
year.
12. On the other extreme stand 4 other parties—The Good
Music Station, Inc., James Broadcasting Co., Inc., Music Crafts-
men of Los Angeles, and Robert P. Adams, licensee of station
KUTE. These parties point out that the principal objective of the
398 Federal Communications Commission Reports
proposal is furtherance of the FM broadcast service, and that
they are, therefore, opposed to that part of the proposal which
will reduce the minimum broadcast period to 36 hours per week.
In the language of the comment submitted by KUTE, a back-
ground music station in Los Angeles: “This will tend to relegate
FM broadcast service in general to a subordinate position in the
broadcast field.” KUTE notes that a station could broadcast 36
hours between 6:00 a.m. and midnight on Saturday and Sunday,
utilizing the 5 week days for the non-broadcast specialized ser-
vices and that since some professional offices, manufacturing
plants and wholesales houses use background music only 5 days a
week, this is not an impossible situation. Further, it points out
that the “station might broadcast only from 6:00 a.m. to 12:00
noon and still meet the minimum broadcast hours while engaging
in functional music broadcast service for the rest of the time.”
The same objection to allowing the licensee such freedom in the
spacing of the required hours is made by The Good Musie Station.
18. In between these extremes are Great South Bay Broadcast-
ing Co., Inc., McClatchy Broadcasting Co., Pittsburgh Radio Sup-
ply House, Inc., and WGHF, Inc. All these parties express blan-
ket approval of the Commission’s proposals. Thus, Great South
Bay Broadcasting Co., Inc., states that “reduction of the number
of hours required for minimum operations each week will be of
great economic advantage to FM stations and will permit flexibil-
ity of operation.” The comments of WGHF are even more ex-
plicit: “The requirement of a %6-hour per week minimum period
of broadcast operation appears to be a reasonable method of bal-
ancing [competing] equities, since it allows a licensee ample pe-
riods of time within which to strengthen his station financially
through functional music activities. At the same time, it is a suf-
ficiently substantial period as to be a constant reminder to the li-
censee that his station was authorized primarily for the public in-
terest.”
14. The argument that the Commission’s proposal rests upon
the technical and economic feasibility of multiplexing miscon-
ceives the situation and the Commission’s goal. There are here
two competing or conflicting interests. On the one hand, we have
determined that the functional music operations are of a non-
broadcast nature on the other, that limited authorization of such
operations will be of aid to the FM broadcaster. But it is funda-
mental that such authorization be limited along the lines of the
proposal since no conversion or reallocation of the FM band is
contemplated. Here we stress that if the multiplex technique were
not fully developed and had to be totally discounted at this
time, we should still issue the subject proposal with its hours
limitation. For the only alternative to such a proposal, in view of
our determination that the operations are non-broadcast in nature
and that no reallocation of the FM band should be effected, would
6 In this connection, we point out that while we belive the contrary to be more likely (see
par. 20), we recognize that there is a possibility of some short delay with respect to the
availability of multiplex equipment.
Amendments Of Parts 2, 83 And 4 399
be the cessation of such operation. It is for this reason that we
believe the effectiveness of the proposal should not be postponed
until positive assurance can be obtained on the availability of
multiplex equipment.
15. We believe the 36 hour figure coupled with some require-
ments as to the spacing of these hours, represents the minimal
restriction possible from the standpoint of the basic objectives in-
volved and that under it, the FM licensee, without too great dim-
inution of revenues, will be enabled to engage in the background
music operation. We have decided to provide that the 36 hours of
minimum FM broadeasting must be broken up over the week,
with at least 5 hours daily. We recognize that in view of the num-
ber of hours required and the freedom of spacing accorded with
respect to such hours, there is a danger that FM broadcasting:may
be too severely contained—that the licensee, having secured prof-
itable non-broadcast arrangements outside of the 36-hour period,
may restrict its business commitment to this minimum. It is tour
view, however, that such minimal restrictions are in order at ithe
present time because of F'M’s financial condition, and we have de-
termined upon a revision which will give assurance against the
noted undesirable situation coming to pass. In line with the find-
ings of the succeeding paragraphs on the feasibility of multiplex-
ing, we have decided to limit the permission to engage in these
specialized non-broadcast activities on a simplex basis to a peridd
of one year from the effective date of this report and order; fol-
lowing this period, all such operation must be conducted on a
multiplex basis. We believe that the 1-year period will permit the
immediate undertaking of functional music or other specialized
operations on a simplex basis will allow licensees who have in-
vested in special equipment to get back some return on their in-
vestment; and will insure an adequate period for the devolopment
and manufacture at reasonable prices of multiplex equipment.
16. We come now to the multiplex aspects of the proposal. The
comments of Multiplex Development Corp. and Crosby Laborator-
ies, Inc. are particularly pertinent here since they include reports
on laboratory and field tests of multiplex operation. These tests,
conducted over a 6-year period, include measurement of transmit-
ter performance under a normal simplex operation and under
multiplex operation, and provide comprehensive data on trans-
mission characteristics of the main channel and the subchannels.
The signals were observed on a variety of FM receivers of the
type ordinarily used in home reception; Multiplex Development
Corp. states that in all cases, no trace of the multiplex signals
could be detected under any tuning conditions of the receivers.
Indeed, the Corp asserts that in all its tests commencing in 1948
on multiplex facsimile transmission, no interference with the
main channel has ever been observed, and that this has been
true even when 2 or 3 subchannels are multiplexed. Thus, tests
of a 3-channel multiplex system in the summer of 1953 at FM
Station WTOP--FM, Washington, D.C. demonstrated that multi-
plex signals from multiple-channe] teletype, facsimile, and voice
400 Federal Communications Commission Reports
communication circuits impressed, respectively, on three sub-
channels could be superimposed on the main carrier of WTOP_FM
without interfering with main-channel broadcast transmission,
and could be received successfully at a number of receiving sta-
tions within 60 miles of Wash. The public broadcast transmissions
of the station retained their normal high fidelity transmission
capabilities within the audio program range to 15,000 cycles,
in aceordance with the existing engineering standards of the
Commission relating to FM broadcast stations. Laboratory
measurements show that with 90 percent modulation on the
main channel and 10 percent on the subchannel, a signal to
noise ratio of 50 db may be realized in the sub channel of 2-chan-
ne! systems within the 1 mv./m. contour and 26 db within the 50
uv./m. contour, while the main channel signal programs contin-
ued to meet all Commission requirements. In all tests, the subear-
riers were between 20 and 75 ke and frequency modulated.
17. Station WGHF conducted field tests using a frequency mod-
ulated subcarrier of 45 kec., modulating the main channel at vari-
ous values between 20 and 40 percent. The subchannel frequency
swing was up to + 15 ke. No deterioration of the main channel
performance and no cross modulation was observed by measure-
ment.
18. We have studied the reports of these parties. It is our con-
clusion, based on these reports and our knowledge of the multi-
plex facsimile operation, that multiplex operation by FM broad-
cast stations is feasible. Feasibility depends on satisfaction of 2
criteria: that the subchannel operation not interfere with the
main channel signal and that the subchannel signal be of usable
quality. The tests which have been made give assurance that no
degradation of the main channel system need result and that the
subchannel operation can be successfully carried on. In this con-
nection, it is important to note that multiplex operation will be
authorized with appropriate conditions to insure the maintenance
of the present quality of the main channel signal (see par. 30,
infra.)
19. The question remains as to the availability of multiplex
transmitting and receiving equipment. The Multiplex Develop-
ment Corp. has assured the Commission that its research and
development program “has been directed to encouraged wide com-
mercial use of low level multiplex techniques within the broad-
cast and radio communications industry” and that it is its inten-
tion “to make the results of its developmental program available
on reasonable and equal terms to all licensees of the Commission
and other responsible organizations.” It comments indicate the
“ availability of multiplex broadcast transmitting receiving equip-
ment at reasonable prices within a short period after approval of
use of multiplex methods by the Commission.” l
Crosby Laboratories, Inc. has also submitted prints which indi-
cate the particular pieces of equipment which “it is prepared to
supply to users of FM multiplexing.” The equipment thus availa-
Amendments Of Parts 2, 3 And 4 401
ble includes essential transmitting and receiving mechanisms
needed to engage in multiplexing.
Field Enterprises, Inc. has also undertaken studies to deter-
mine the technical and economic feasibility of multiplex opera-
tion. It asserts that these initial investigations “indicate substan-
tial promise that, eventually, [multiplex] operation * * * will
prove to be feasible,” but that “it appears that equipment capable
of operating on a multiplex basis will not be available generally
for another year.” It is not clear, however, upon what factors or
considerations the latter conclusion is based.
20. The Commission believes that multiplex transmitting and
receiving equipment will be available to the broadcaster and
public within a relatively brief period after authorization of the
multiplex operation. As noted, the functional music operation can
be carried on a simplex basis above the 86-hour broadcast re-
quirement for the 1-year period following the effective date of the
rules. We believe, in view of the comments filed in this proceeding
with respect to the present state of the art, that the 1-year
change-over date assures adequate time for the development and
quantity manufacture of such equipment.
21. The Commission’s proposal would confine the subsidiary or
secondary authorization to limited types of non-broadeast ser-
vices. The notice described these services as involving specialized
programing consisting of news, music, time, weather, etc., and
cited as an example of such service the functional music opera-
tion. Four parties—Cerritos Broadcasting Co., Nicholas M. Brazy
(KFMU), Music Craftmen of Los Angeles, and Joseph Brenner-—
have requested that the Commission remove this restriction on
the uses of the SCA. They argue that in most communities two, or
at most three, functional music operations will be all that will be
economically feasible and that, therefore, it would be more desir-
able to impose no restriction upon the type of secondary service
which an FM station can render in any given community; in-
stead, the rules should provide that the Commission will deter-
mine on a case-to-case basis and as demand is made and need
shown, the particular subsidiary communications service that
should be authorized. As an example, the need for additional 2-
way mobile communication services or taxi dispatching services is
pointed to.
22. We have considered these arguments but believe the limita-
tion of the notice should be adhered to at this time. The revisions
here adopted are novel ones: we feel it best to proceed slowly. As
presently set up, the SCA is limited to transmissions similar to
those conducted under present functional musie operations. We
believe it desirable at the inception of this service that the char-
acter of the specialized operation not run completely counter to
that of a broadcast operation. In reaching this result we want to
make it clear that should the need be shown, we may permit
wider use of the SCA at some later date—perhaps on a multiplex
basis or only after the passage of the 1-year period. For the pre-
sent, however, we adhere to the limitation set out in the notice.
402 Federal Communications Commission Reports
23. We do not in this discussion or in the attached rules at-
tempt to spell out every operation which comes within that limi-
tation: to do so would be impossible. Fringe or close cases will
accordingly be decided as they arise. A broadcast licensee must, in
its application for an SCA, set out in full the purpose or purposes
for which it will be employed. If granted, the licensee will be lim-
ited to those purposes or uses and must apply for and obtain a
modification if additional uses are desired.
24, Several parties—KUTE, Cerritos Broadcasting Co., and
Joseph Brenner—have expressed concern about the statement in
the notice that “The FM broadcast licensee would be required to
provide the material transmitted under this special authorization
and could not delegate or ‘lease’ the authorization conferred by
the SCA.” It is feared that this would prevent the station from
entering into contractual commitments whereby the sales, instal-
lation and operational services required would be rendered by
outside functional musie operators instead of the station. It is
pointed out that many stations cannot meet the substantial outlays
for the purchase, installation and maintenance of the special
equipment needed in the functional music operation.
25. The statement in question was not meant in any way to
proscribe agreements between licensees and functional musie op-
erators whereby the latter install and maintain the equipment,
engage in sales promotion, and even supply a record library of
suitable music. What is intended is that the licensee maintain con-
tinuous control over all the material transmitted We have in-
serted language in the attached rules to make clear this responsi-
bility: all contracts involving these specialized services must
have a provision that the licensee is to have complete control over
and pass on all material to be transmitted, and can, on a simplex
transmission, substitute a broadcast program at any time when it
deems it in the public interest to do so.”
26. WGHF, Inc., urges the Commission to make clear that sec-
tion 605° of the Act applies to signals issued pursuant to an
SCA. It points out that many industrial and business concerns
presently make use of the functional music signal without author-
ization, and that if FM stations are to derive substantial financial
support from these services, this practice must stop. It asserts
that the methods presently available for dealing with this prob-
lem (private actions for injunction or damages on the basis of vi-
t The latter provision is suggested by the comments of WGHF, Inc. That party also suggests
that the Commission prohibit a licensee from entering into any éxelusive agency functional
music agreement. It argues that there is 2 disparity in the bargaining position of the FM
broadcaster and the functional music company and that this proscription of exclusive agency
agreements is needed in order to insure that the functional music licensee will derive sufficient
revenue from his operation and will be in contro! of its economic destiny. A
The matter would appear to us to be one best left to the negotiation of the parties. It could
be argued with equal force that the Commission should prescribe minimum rates per subscriber
because of the alleged disparity in the parties’ bargaining positions, Such interference with
normal station operation through the erection of artificial, governmentally imposed standards
is clearly inappropriate.
8 The pertinent portion of section 605 reads as follows: , pate hg .
“® * * no person not being entitled thereto shall receive or assist in receiving any inter-
state or foreign communication by wire or radio and use the same or any information
therein contained for his own benefit or for the benefit of another not entitled thereto
* © * Provided, That this section shall not apply to the receiving, divulging, publishing, or
utilizing the contents of any radio communication broadcast, or transmitted by amateurs
or others for the use of the general public, or relating to ships in distress.
Amendments Of Parts 2, 3 And 4 403
olation of copyrights) do not appear to be satisfactory. It argues
that since the Commission has determined the functional music
operation to be non-broadcast, they come within the protection of
section 605, and that a Commission declaration to this effect
would be a considerable aid inasmuch as what is “needed here is
not a remedy but a deterrent.”
27. Although we have considered the application of section 605
in this matter, we wish to note that the question of the applicabil-
ity of this Section will, in all probability, be determined by court
actions. However, it is our opinion that section 605 would be con-
travened by the unauthorized reception of the FM signal only
when such signal is being transmitted only for reception by the
special interests of the industrial, mercanitle, transportation or
other subscribers without any intention of reception by the gen-
eral public. This would be the case with all transmissions on a
multiplex basis. However, as we have pointed out in par. 3, supra,
the functional music operation when conducted, as it now is, on a
simplex basis, transmits a signal capable of being received by the
ordinary FM receiver. The circumstances of such operation are
such that it must be held that these simplex transmissions are
intended to be received at least incidentally by the general
public. It cannot be considered, therefore, that the reception
of such simplex transmissions would constitute an unauthor-
ized reception within the meaning of section 605, and we do not
believe that the reception of such transmissions is violative of
this provision. The supersonic tone frequently employed in the
functional music operation to “mute” the subscriber’s specially
equipped receiver is not intended in any way for reception by the
general public; its unauthorized use would therefore contravene
section 605.
28. We have decided to adopt rules along lines indicated by the
foregoing discussion: these rules are set out in the attached Ap-
pendix. In summary, we wish to emphasize the subsidiary or sec-
ondary nature of the SCA. The FM broadcast license or permit is
completely independent of the SCA.’ Its initial grant or renewal
cannot be promoted by the SCA operation: the licensee must es-
tablish that its broadcast operation ‘is in the public interest,
wholly apart from the SCA. On the other hand, the SCA cannot
exist apart from the FM broadcast license or permit. No transfer
or assignment can be made separate from the license nor can the
license be transferred with the former licensee retaining the
SCA. The SCA’s renewal period will be geared to that of the FM
broadcast license, the failure to renew the latter automatically
terminates the SCA.
29. The attached rules spell out the many conclusions reached
in the prior discussion. As stated, the application for the SCA
must set out in full the purpose or purposes for which it is to be
employed; if the application is found to be within the limited cat-
egory noted in par. 21 and granted, the holder will be restricted
® Violation of rules applicable to the SCA would, of course, reflect on the licensee's qualifi-
cations to hold its broadcast license or permit.
404 Federal Communications Commission Reports
to the requested uses, a modification being necessary for any addi-
tional use. The necessary control over the material transmitted
and the right of substitution of broadcast programs on a simplex
basis—described in par. 25~-must be contracted for. The Com-
mission’s policies on fairness with respect to controversial issues
and on Section 315 situations (political broadcasts) must be ob-
served by the SCA operator; however, the latter when operating
on a multiplex basis, need not meet the requirements of sections
3.288 (announcement of mechanical records), and 3.289 (sponsor-
ship). On a simplex basis, the announcements must be made ?° but
can, of course, be “beeped” out by use of the supersonic signal.
30. On the multiplex aspect of the rules, we first repeat our
basic findings derived from the engineering data submitted in
these proceedings: That multiplex programing is possible without
degrading the existing performance requirements for main chan-
nel transmission, and that while sub-channel performance varies
with the operating parameters, it is useful for subsidiary pur-
poses. In deciding upon appropriate modifications of the rules
concerning technical operation to provide for multiplexing, we
have considered the engineering data and/or recommendations of
Multiplex Development Corp., station WGHF, Inc., Crosby Labo-
ratories, and Mercantile Broadcasting Co. We have concluded
that the present operating and performance requirements for the
main channel should not be changed except to permit a reduction
of approximately 3 db in the program level.
31. It is also concluded that operating parameters for sub-
channels should not be rigidly specified. The limitations we have
decided upon are as follows:
(a) Frequency modulation of subcarrier shall be used.
(b) The instantaneous frequency of the subcarriers shall
at all times lie within the range 20 to 75 kilocycles.
(c) The arithmetic sum of the modulation of the main car-
rier by the subcarriers shall not exceed 30 percent.
(d) The total modulation of the main carrier, including
the subcarriers, shall meet the requirements of section 3.268.
(e) Frequency modulation of the main carrier caused by
the subearrier operation shall, in the frequency range 50 to
15,000 cycles, be at least 60 db below 100 percent modulation.
32. As stated in our notice, April 8, 1950, Raymond M. Wil-
motte filed a petition seeking Commission authorization “to per-
mit FM broadcast stations to use any means available to transmit
an additional service without affecting the listeners of the present
broadcast service.” Mr. Wilmotte filed no comment in the subject
proceeding. His petition contains insufficient technical data and
information to make a determination as to whether the parame-
ters adopted herein are broad enough to include the multiplex
systems contemplated by him. In the event they do not, Mr. Wil-
motte and others may at some future date petition for amendment
of the standards here adopted to incorporate any new methods of
9 The functional music operator may meet the requirements of section 3.289 by announcing
that the programing is being transmitted for a fee to commercial subscribers.
Amendments Of Parts 2, 3 And 4 405
multiplexing. And the Commission will, of course, entertain any
requests for experimental authorizations along these lines for the
development and testing of such systems.
83. Authority for the adoption of the attached rules is con-
tained in sections 301 and 303(b), (g), and (r) of the Communi-
cations Act of 1934, as amended.
34, It is ordered, This 16th day of March, 1955, that, effective
May 2, 1955, the Commission’s rules are amended to read as set
forth in the attached Appendix.
Released March 22, 1955.
PARTIAL DISSENT OF COMMISSIONER F. M. WEBSTER
I have long been troubled by the fact that FM radio as a
national broadcasting service has failed to develop to the extent
that the service merits. And I have unhesitatingly exhibited this
concern in public addresses and private conversations. Because I
have openly stated that I would not be adverse to reallocating
the broadcast FM frequencies if more efficient use thereof is not
made in the near future, I feel that I owe it to myself to point out
that some time ago, in an effort to stimulate the growth of FM
broadcasting in this country, I went so far as to prepare and pre-
sent to the Commission for consideration a proposal which, if
adopted, would have permitted FM broadcast stations to substan-
tially reduce their power, coverage and operating time so as to re-
duce operating costs to a minimum, thereby, I hoped, enabling ex-
isting stations to continue to operate and inducing newcomers to
the field. This proposal was not adopted by the Commission and it
may well be that my plan was not the solution to the problem.
But it does serve to demonstrate that I am anxious to breathe life
into FM broadcasting if there is a feasible way of doing so.
And it is because of my keen interest in FM broadcasting and
my sincere desire to see it achieve the acceptance the service mer-
its that I concurred in the Commission decision to issue a notice
of proposed rule making looking toward the amendment of Com-
mission rules which would permit FM broadcast stations to en-
gage in specefic nonbroadcast activities on simplex and/or mul-
tiplex basis.
After considering the facts at hand as well as the comments
and arguments of interested parties participating in this proceed-
ing I agree with the Commission’s report and order to the extent
that it requires FM broadcasters to ultimately utilize multiplex-
ing rather than simplexing when they desire to engage in non-
broadcast activities. However, I fear that the Commission’s rules,
as amended here, fail to accomplish their purpose, namely, to
stimulate the growth of FM as a broadeast service. For, these
rules do not require the FM. broadcast stations to increase the
number of broadcast hours beyond the minimum of 36 required
thereunder, And in my opinion nonbroadcast operations over FM
channels on a multiplex basis will foster the growth of FM, broad-
casting only if the licensees are required to broadcast simulta-
406 Federal Communications Commission Reports
neously with their nonbroadcast activities from 6 a.m. to 12 mid-
night, retaining the 86-hour minimum requirement.
Since it is logical to assume that the vast majority of FM broad-
casters would not voluntarily increase their broadcasting ‘day
when it would possibly add nothing but expense to their opera-
tions, we may find the stations engaging in nonbroadcast activi-
ties 18 to 24 hours per day and broadcasting 6 hours, thereby
placing the greater emphasis on their nonbroadcast operations. In
fact, it is probable that we will soon awaken to the fact that we
have authorized a reallocation of frequencies without first provid-
ing the general public with the opportunity of appearing and tes-
tifying as to whether it would have been in the public interest to
allocate these frequencies for some other service or services.
Accordingly, I must dissent from the report and order to th
extent that it fails to require simultaneous broadcasting and non-
broadcasting operations.
PARTIAL DISSENT OF COMMISSIONER JOHN C. DOERFER
I feel constrained to dissent from the majority opinion because
the premise upon which it is founded is, in my opinion, erroneous.
In reaching its conclusion, the majority has applied too literal an
interpretation upon that portion of the Act defining broadcasting.
The Commission’s finding that functional music programing is
not intended for general public reception ignores the fact that
such programs are receivable by the public and, in fact, large seg-
ments thereof listen to the programs with receivers on which the
supersonic tone has no effect because they prefer the program
content. I submit that the mere fact that a station employs a
supersonic tone effective only to a small percentage of listener-cus-
tomers who wish it and pay for it or does not mean that the pro-
grams are not intended for public reception. Actually the broad-
caster intends all of the public to receive all of his programs. He
merely has found a small portion of the public actually receiving
such programs (the subscribers), such as stores, hotels, restau-
rants, factories, etc., willing to have equipment installed which
will “beep out,” by a supersonic tone, certain announcements.
It is inconceivable to me that 43,000 persons who listened at
least once during an average week to the programs of
WWDC-FM in the Washington, D.C. area do not constitute “the
public intended to be reached.” Broadcasting intended for the
public does not mean broadcasting acceptable to every single
member of the public but must of necessity recognize that the
public is made up of many people with different tastes and moods
at different times of the day and different days of the week whose
needs cannot be met by any standardization of a program format.
Obviously, a portion of the public with a difference in taste and
mood is and should be recognized as a legitimate classification
within the meaning of the statutory definition of broadcasting. To
provide for flexibility and ingenuity in broadcasting is not incon-
sistent with the intent of the Communications Act. The produc-
Amendments Of Parts 2, 3 And 4 407
tion of programs designed to meet différent needs should be per-
mitted and encouraged. Substantial segments of the public, the
functional music broadcasters, and the functional music purchas-
ers have no objection to the manner in which those programs of
background music are transmitted. It appears to me that only an
apparent imminent danger to our overall concept of broadcasting
should compel the Commission to conclude that functional music
Siete is a non-broadcasting service. I see no signs of such
anger.
I am, therefore, of the opinion that functional music operations
are broadcasting; that the deletion of announcements by super-
sonic signals does not convert functional music transmission into
a non-broadcasting service, and that the other criteria applicable
to programing in the public interest can be tailored to comply
we the basie requirements of a broadcast licensee’s responsibil-
ities.
The effect of the Commission’s decision is to compel all opera-
tors concerned with this operation to rely on the Commission’s re-
newing this method of transmission on a year-to-year basis with
no certain grounds upon which to make definite commitments of
capital or equipment in the future. I appreciate the Commission’s
hope that its action will create an incentive for the quick develop-
ment of multiplexing. However, there will be time enough for
this when the art of multiplexing becomes a practical reality.
But, whatever the notice, broadcasting should not be construed as
narrowly as was here done.
ORDER STAYING EFFECTIVENESS OF NEW RULES
1. The Commission has before it for consideration the petition
of WWDC, Inc., filed on April 22, 1955, requesting the Commis-
sion to (1) stay the effective date of the Commission’s new rules
promulgated in the above-entitled proceeding and which are
scheduled to become effective on May 2, 1955, or (2) to waive the
rules, pending consideration and decision on a petition for recon-
sideration and modification to be filed by petitioner in this pro-
ceeding. On April 26, 1955, William Penn Broadcasting Co., Inc.,
licensee of station WPEN-FM, Philadelphia, Penn., filed a peti-
tion supporting the above request of WWDC, Inc.
2. On March 22, 1955, the Commission issued a report and
order (FCC 55-340) in the above-entitled proceeding amending
its rules and regulations with respect to functional music opera-
tions of FM broadcast stations. The new rules are scheduled to
become effective on May 2, 1955. By its report and order, the
Commission amended its rules to permit FM broadcast stations to
‘conduct functional music operations on a multiplex basis without
limitation as to time, and to permit FM broadeast stations to en-
gage in functional music operations on a simplex basis during all
hours not devoted to the 36 hours per week (at least 5 hours per
day) specified for regular FM broadcasting. i
3. WWDC, Inc., licensee of station WWDC-FM, Washington,
408 Federal Communications Commission Reports
D.C., filed the subject petition on April 22, 1955, advising that it
will file a petition for reconsideration and modificaion of the Com-
mission’s new rules by May 2, 1955, and requesting the Commis-
sion (1) to stay the effectiveness of the new rules or (2) to waive
them, pending consideration and decision on its forthcoming peti-
tion for reconsideration and modification. WWDC, Inc. is pres-
ently engaged in widespread functional music activities. In this
connection, petitioner notes that in order to meet the require-
ments of the Commission’s new rules, it must either multiplex the
programs of station WWDC-FM or, because of its present com-
mitments with subscribers for background music and drugeasting
services, must reduce the number of hours of its functional music
operations. WWDC, Inc. submits that multiplexing is not possible
at this time because of the unavailability of equipment. And with
respect to simplexing, petitioner states that to operate in such
manner, it would have to eliminate 27 hours of functional music
operations from its current weekly schedule to meet the 36-hour
minimum weekly requirement for regular broadcast operation. It
is urged that elimination of these 27 hours will increase the sta-
tion’s operating losses and might thereby force the station to
leave the air or to change its format to a mere duplication of the
programs of its AM station. WWDC, Inc. submits, therefore, that
failure to stay the effectiveness of the new rules or to waive them
pending consideration of its petition for reconsideration and mod-
ification would cause irreparable injury.
4. William Penn Broadcasting Co., Inc. states that it is pres-
ently engaging in a functional music operation. station
WPEN-FM operates on a full schedule with background music
furnished various business establishments throughout the entire
day. William Penn Broadcasting Co, states that it has been una-
ble to secure any firm quotations or firm delivery dates for multi-
plexing equipment and therefore would be unable to continue its
functional music operations on a multiplex basis. And it is stated
that it will be unable to continue its present operations on a sim-
plex basis without interrupting the service it is now furnishing
subscribers. William Penn therefore urges that the Commission’s
new rules would cause irreparable damage to WPEN-FM and
may necessitate the discontinuance of its background music serv-
ice. Petitioner states that it is also preparing a petition for re-
consideration, and requests that the Commission stay the effec-
tiveness of its action pending consideration and decision upon its
petition for reconsideration.
5, The Commission is aware that certain FM broadcasters are
presently engaging in functional music operations and have vari-
ous contractual arrangements with respect to such operations.
The Commission believes, therefore, that the public interest
would be served by staying the effectiveness of its new functional
music rules pending a final determination in this proceeding. We
have, therefore, decided to stay the effectiveness of our new rules
for a period of 30 days. ;
6. In view of the foregoing, It is ordered, That the effective
Amendments Of Parts 2, 3 And 4 409
date of the amendments to the Commission’s rule and regula-
tions issued pursuant to its report and order (FCC 55-340) in the
above-entitled proceeding on March 22, 1955, and which are pres-
ently scheduled to become effective on May 2, 1955, is hereby ex-
tended to June 1, 1955.
Adopted April 27, 1955.
Released April 29, 1955.