(This has always been our method and is detailed as such in catego "Method of obtaining information from sample families.") Category: Periods covered by each survey and frequency of surveysread: "First 7 days of every month except where major holidays fall.' (This has always been our period used and is not the same as listed the chart due to variations between first 7 calendar days as opposed first Sunday-Saturday week of a month.) We hope that you will be able to schedule Videodex on the Thursday agen as you suggested might be possible. Sincerely, Mr. NICHOLAS ZAPPLE, VIDEODEX, INC., TRENDEX, INC., New York, N. Y., June 12, 1958 Communications Counsel, Senate Interstate and Foreign Commerce Commit Washington, D.C. DEAR MR. ZAPPLE: This will acknowledge receipt of Senator Magnuson's let of June 9, 1958, with the attached comparative analysis of television rat services. There are a few corrections which I would like to make at this time under heading of "Trendex, Inc." Item No. 2: There it states "15 cities." In February 1958, Trendex adde additional cities; so this should now read "20 cities." Item No. 3: One thousand calls per half hour for all network programs for e individual evening, 6 to 11 p.m., is correct. However, as we report daytime quarter hours, Monday through Friday, averaged, the sample here for each qu ter hour is approximately 1,500 calls. Item No. 4: Choosing of sample now reads, "new sample each month." Ac ally we use a random sample of telephone homes so that the sample is c stantly changing Item No. 9: Method of obtaining information from sample families. In mation is obtained by the telephone coincidental method. This means that are only interested in the television activity of the household at the time of call. I wonder why they have underlined the word "not" when talking ab tabulating the results as those people who are not at home and awake a therefore, could not possibly be watching television are certainly just as portant as those who are. Item No. 13: Information (in addition to ratings) reported monthly. Tr dex now publishes a bimonthly report called the "Television Advertiser's port." This report shows 1. An index of audience composition. 2. An index of program selectivity (that is, who in the family chose particular program being viewed). 3. A breakdown of the ages of the men, women, and children viewing work television. 4. An index of sponsor identification. I believe that these are the only changes made in our service. EDWARD G. HYNES, Jr., FEDERAL TRADE COMMISSION, Hon. WARREN G. MAGNUSON, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: This is in further reference to your letter of June 1958. A file search made just prior to the time I mailed my letter to you dated J 21, 1957, disclosed no complaints involving program rating services. Howe since receipt of your letter dated June 11, 1958, a more exhaustive search been made of our records, which disclosed three files involving compla relative to such rating organizations. Both of those matters were filed after some preliminary consideration for the reason they did not present a substantial basis for investigation. The investigation mentioned in my letter dated June 21, 1957, which involved alleged misrepresentations by a radio station of its geographic and audience coverage, was closed for the reason that the station voluntarily discontinued use of the questioned claims. Stipulations of discontinuance have been accepted from several radio stations which were misrepresenting their geographic coverage. Copies of some of these stipulations are enclosed. As was pointed out in my previous letter, a question exists as to whether this service phase of the operations of service rating concerns are subject to the Commission's jurisdiction under the Federal Trade Commission Act. Aside from the jurisdictional question, it appears that investigative problems of the first magnitude are presented in endeavoring to determine the approximate number of persons in a geographic area that have listened to a particular radio or television station at any given time. In any proceeding involving claims based on the accuracy of such an audience coverage report, the Commission's staff must bear the burden of proof in demonstrating the deceptive character of those claims. This might require the conducting of a survey of such magnitude that it could not be undertaken without seriously affecting the Commission's discharge of its responsibilities in areas of established jurisdiction. The Commission does not currently have any specific investigative program covering alleged misrepresentations of audience coverage by radio or television stations or rating service organizations. With best wishes, I am Sincerely yours, Enclosures. JOHN W. GWYNNE, Chairman. 3191. Radio Communications—Qualities, Properties, or Results.-The Sunshine Broadcasting Co., a corporation, engaged in interstate commerce in communication by radio and dissemination of such communications including commercial and other programs by and through its broadcasting station designated by the call letters "KTSA" to persons located within the State of Texas and other States of the United States, in competition with other corporations, individuals, and partnerships likewise engaged, entered into the following agreement to cease and desist from the alleged unfair methods of competition in commerce as set forth therein. The Sunshine Broadcasting Co., in connection with the dissemination of such communications in commerce, as defined by said act, agreed to cease and desist from using the slogan or words "KTSA San Antonio, Texas, 5,000 WATTS, DOING A 50,000 WATT JOB" (Aug. 4, 1941). 03086. Radio Broadcasting Facilities-Unique, and Qualities, Properties, or Results.-Scranton Broadcasters, Inc., a corporation operating Radio Station WGBI, 1000 Wyoming Avenue, Scranton, Pa., vendor-advertiser, was engaged in selling the use of its radio-transmittal facilities and power and agreed, in connection with the dissemination of future advertising, to cease and desist from representing directly or by implication: (a) That Radio Station WGBI is the only radio station heard in the Scranton-Wilkes-Barre market area. (b) That outside radio stations are not heard in the Scranton-WilkesBarre market area. (c) That Radio Station WGBI is the only regional or clear channel station serving the Scranton-Wilkes-Barre market area. (d) That Radio Station WGBI covers the entire territory of northeastern Pennsylvania. (e) That a survey shows that 98 percent of the daytime listeners or 96 percent of the nighttime listeners in Scranton's home county of Lackawanna regularly listen to Radio Station WGBI, or from misrepresenting in any manner the station's audience or coverage as shown by surveys or otherwise. 89567-59-pt. 7-2 Scranton Broadcasters, Inc., further agreed to cease and desist from misrepresenting through exaggeration the number of prospective purchasers who listen to Radio Station WGBI, or the territory which it covers (Dec. 17, 1942). 03047. Radio Transmittal Facilities and Power-Success, Use or Standing, and Qualities, Properties, or Results.-Liberty Broadcasting Corp., a corporation, operating Radio Station WAGA, 56 Marietta Street NW., Atlanta, Ga., vendoradvertiser, was engaged in selling the use of its radio transmittal facilities and power and agreed, in connection with the dissemination of future advertising, to cease and desist from representing directly or by implication: (a) That Radio Station WAGA has more listeners in Atlanta than any other radio station. (b) That Radio Station WAGA can, when operating as authorized in its construction permit, be heard without interference over the entire State of Georgia. Liberty Broadcasting Corp. further agreed to cease and desist from misrepresenting through exaggeration the number of prospective purchasers who listen to Radio Station WAGA (Aug. 21, 1942). 02392. Radio Station Services-Power.-Intermountain Broadcasting Corp., a corporation, Tribune-Telegram Building, Salt Lake City, Utah, operating a radio station designated KDYL, was engaged in selling the facilities, power, and energy of its station and agreed, in connection with the dissemination of future advertising to cease and desist from representing, directly or by implication, that the power of said station is 5,000 watts unless and until such power is actually authorized for use and used by the said radio station during its entire broadcasting period, or unless it is clearly explained in direct connection with such representation that such power is authorized and used only during certain specified hours (June 26, 1939). 02393. Radio Station Services-Power.-Lamar Life Insurance Co., a corporation, Lamar Life Building, Jackson, Miss., operating a radio station designated WJDX, was engaged in selling the facilities, power, and energy of its station and agreed, in connection with the dissemination of future advertising to cease and desist from representing in published advertisement or otherwise, that the power of said station is 5,000 watts unless and until such power is actually authorized for use and used by the said radio station during its entire broadcasting period, or unless it is clearly explained in direct connecton with such representation that such power is authorized and used only during certain specified hours (June 26, 1939). 02394. Radio Station Services-Power.-Mosby's, Inc., a corporation, Missoula, Mont., operating a radio station designated KGVO, was engaged in selling the facilities, power, and energy of its station and agreed, in connection with the dissemination of future advertising to cease and desist from representing directly or by implication that the power of said station is 5,000 watts, unless and until such power is actually authorized for use and used by the said radio station during its entire broadcasting period, or unless it is clearly explained in direct connection with such representation that such power is authorized and used only during certain specified hours (June 26, 1939). 02395. Radio Station Services-Power.-Woodmen of the World Life Insurance Society, a corporation, Omaha, Nebr., operating a radio station designated WOW, was engaged in selling the facilities, power, and energy of its station and agreed, in connection with the dissemination of future advertising to cease and desist from representing in published advertisements or otherwise, that the power of said station is 5,000 watts unless and until such power is actually authorized for use and used by the said radio station during its entire broadcasting period, or unless it is clearly explained in direct connection with such representation that such power is authorized and used only during certain specified hours (June 26, 1939). 02975. Radio Broadcasting-Qualities, Properties, or Results. Southern Broadcasting Stations, Inc., a corporation operating Radio Station WGST, Forsyth Building, Atlanta, Ga., vendor-advertiser, was engaged in selling to vendors of various commodities for advertising purposes the facilities, radio power, and energy of Radio Station WGST and agreed, in connection with the dissemination of future advertising, to cease and desist from representing directly or by implication, that the power of said station is 5,000 watts unless and until such power is actually authorized for use and used by said radio station during its entire broadcasting period, or unless it is clearly explained in direct connection with such representation that such power is authorized and used only during certain specified hours, and further that its radio station WGST has more listeners than any other radio station in Atlanta unless and until such be the fact (Apr. 27, 1942). UNITED STATES OF AMERICA, BEFORE FEDERAL TRADE COMMISSION IN THE MATTER OF SPRINGFIELD BROADCASTING COMPANY, INC., A CORPORATION, SPRINGFIELD, MISSOURI STIPULATION AS TO THE FACTS AND AGREEMENT TC CEASE AND DESIST Pursuant to the provisions of the Federal Trade Commission Act (38 Stat. 717; as amended 52 Stat. 111; 15 U.S.C.A., Sec. 41), the Federal Trade Commission caused an investigation to be made of the acts and practices used by Springfield Broadcasting Company, Inc. in commerce as defined by the Act, and based on such investigation believes that the said corporation has been or is using in commerce certain acts and practices which are violative of the provisions of said Act. It now appearing that Springfield Broadcasting Company, Inc. is willing to stipulate as to the facts and enter into an agreement to cease and desist from the use of the acts and practices as hereinafter set forth in such agreement, and that the Federal Trade Commission may be willing to accept such stipulation and agreement to cease and desist without prejudice to its right to issue a complaint and institute formal proceedings against Springfield Broadcasting Company, Inc. if at any time the Commission shall deem that such action is warranted; IT IS HEREBY STIPULATED by and between the Federal Trade Commission and Springfield Broadcasting Company, Inc. that the following is a true statement of the facts: Springfield Broadcasting Company, Inc. is a corporation organized and existing under the laws of the State of Missouri with its principal place of business located in the City of Springfield, the State of Missouri. It is now and has been for more than one year last past engaged in offering for sale and selling in commerce as defined by said Act radio broadcasting facilities. In the course and conduct of its business, Springfield Broadcasting Company, Inc., has made, published, and caused to be published, certain advertising matter, including the following statements, claims, and representations, for the purpose of inducing and which is likely to induce to purchase of said commodity: "Since KGBX came to Springfield as this city's First Radio Station * * *. ** our 30 years of service." By publication of the aforesaid advertising matter, statements, claims, and representations, Springfield Broadcasting Company, Inc., has directly and implied represented that Radio Station KGBX was the first radio station licensed to operate in Springfield, Missouri, and has operated there for 30 years, when, as a matter of fact, other radio stations were licensed to operate before KGBX began operating in Springfield and it has not been operating there for 30 years. IT IS HEREBY AGREED by Springfield Broadcasting Company, Inc., that in connection with the offering for sale and sale of radio broadcasting facilities, in commerce as defined by the said Act, it will forthwith cease and desist from representing, directly, or by implication; (1) That Radio Station KGBX was the first radio station to operate in Springfield, Missouri, or otherwise representing the relative position of that station with other radio stations not in accordance with the facts; (2) That Radio Station KGBX has served Springfield, Missouri, for any period in excess of the time it has actually been operating in that city. This stipulation is entered into pursuant and subject to Sections 1.54 and 1.55 of the Rules of Practice of the Federal Trade Commission. It does not constitute an admission by Springfield Broadcasting Company, Inc., that it has engaged in any method, act, or practice violative of law. Witness the following signatures this 18th day of June 1957. Chairman, Committee on Interstate and Foreign Commerce, DEAR Mr. CHAIRMAN: This is in reference to your letters of May 22 and June 4, 1957, transmitting information concerning the operations of radio and television program rating services and inquiring whether the Commission has established any procedure for following and weighing such services. An examination of our records discloses that to date the Commission has received no complaints or other information charging or indicating that concerns so engaged may be employing unfair or deceptive practices in connection with the promotion and sale of such measurement services. Accordingly, no procedures have been established for analyzing or evaluating such services. The Federal Trade Commission Act declares illegal "unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce." This act requires, first, that the methods or practices in question be in commerce and, second, that such commerce be interstate in character. From information available concerning the operations of such concerns, it is apparent that they are engaged in rendering advice to their clients, particularly concerning the calculated number of persons listening to or viewing the programs of different stations. Such an activity takes on the aspect of a service of a professional character. Without excluding the Federal Trade Commission from taking jurisdiction over certain types of business activities in the nature of services, there is serious doubt that the law can be made applicable to the supplying of this data by the rating services to their clients. Related to the problem is a matter which the Commission now has under consideration involving the use by a radio station of a report which is alleged to misrepresent the extent of the station's audience coverage. Quite clearly the reliability of claims for coverage or listening audience becomes a material issue in this type of case from whatever source secured. Your interest in bringing this matter to the attention of the Commission is appreciated. Sincerely yours, Senator WARREN G. MAGNUSON, Senate Office Building, Washington, D.C. JOHN W. GWYNNE, Chairman. TPI RATINGS, INC.. DEAR SENATOR MAGNUSON: I understand that your committee will discuss the subject of television ratings starting Thursday, June 26. I think you will be interested in the attached report which shows the highlights of a test conducted by me in Syracuse, N.Y. This test is based on personal coincidental interviews conducted with people in the room in which the television set is located. It is an idea devised by George Abrams, chairman of the Radio and TV Committee of the ANA, and vice president, advertising of Revlon, Inc., and myself. |