Sequels

Since last May the National Broadcasting Co., pricked by FCC (TIME, May 12, Oct. 20), has swelled gently in two directions like a cell about to divide. Last week the outlines of approaching division became clearer. NBC announced separate staffs for its Red and Blue networks, announced further that the Blue Network Co. would provisionally become a subsidiary of RCA on the same footing as NBC, and more importantly let it be known that various prospective buyers were dickering for the Blue. If such a deal goes through, NBC's Red and the Blue Network Co. will be genuine competitors --one of the objectives of FCC's campaign for the improvement of radio.

This was not the only sequel to the anti-trust suits the Government filed fortnight ago against NBC and CBS (TIME, Jan. 12). Mutual last week hopped into the mix-up with its long-rumored suit against NBC, asked $10,275,000 damages for the disadvantages it claims to have suffered at NBC's hands. To NBC lawyers this, on the face of it, posed a chilling question. If they fought the Government suits and lost, Mutual's case for triple damages under the Sherman Act would be hard to beat. Mutual, which had complained much of its bad competitive position, seemed to be competing fairly well.

The climax, however, was yet to come. On Sunday NBC turned on Mutual like a thoroughly enraged elephant, trumpeted its defiance. Declared NBC's President Niles Trammell:

"It should now be revealed that about two years ago the dominant interests in Mutual, R. H. Macy & Co. and the Chicago Tribune sought to purchase parts of the Blue network from us, which would have destroyed the Blue as a coast-to-coast network. By such elimination of the Blue these interests sought to diminish rather than to increase network competition. There would have been three nationwide networks instead of four as at present. We refused to dismember the Blue network. . . .

"These powerful and wealthy stockholders of Mutual represent an aggregation of assets, business and profits greatly exceeding those of NBC and RCA. . . . This new suit by Mutual provides an opportunity to expose the motives behind the campaign to break down the networks of the National Broadcasting Co. . . . [Mutual] entered the field only after others risked their capital and demonstrated that broadcasting could be conducted as a sound business enterprise. . . . Despite all the so-called restrictions in the competitive network field from which Mutual claims to suffer, it has increased its revenue in 1941 over 1940 by 53%.

"This harassing litigation and the unjustified demand for the absurd sum of $10,000,000 . . . are not in key with the American war effort."

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