CONTENTS 3. Annual report to Congress by Federal Trade Commission on com- petition, concentration, and ownership in newspaper and radio Table I. How composing costs vary- Table II. Newsprint paper-- TABLES Table III. Production of newsprint paper by three large companies, com- Table IV. Production of newsprint paper by three large companies, com- Table V. Basic data on publishers' second-class mail, Division of News- 48 Table VI. Revenues, expenditures, allocated deficits of publishers' second- 49 Table VII. Thirty leading magazines of the United States.. 52 28 33 V Chart II. Literate population, dailies, weeklies, daily paper circulation 11 CHAPTER I AN ACTION PROGRAM FOR CONGRESS The ominous picture of a high mortality rate and a decline of local competition among local daily and weekly newspapers is outlined in a series of charts in the next section of this report. Darkening that background picture are immediate postwar threats like the newsprint shortage. They endanger more than the already weakened competition and growth in this industry; they even endanger the continued existence of papers which have no local competition. It had been my hope that this committee would hold preliminary hearings to lay the ground work for the extended study required. With the establishment of the new Small Business Committee, I offer these proposals for the consideration of the committee and the Congress as a whole: 1. NEWSPRINT SHORTAGE An immediate, full-scale study to determine: (a) Whether it is a temporary or a continuing problem. (b) If, as seems most likely, there will be a continuing shortage, what international action, if any, is required to guarantee our papers and magazines their fair share-neither more nor less-of the world's supply. (c) What steps the newsprint or publishing industries are taking to see that small consumers and new ventures are given their fair share of what is available. (d) Whether antitrust violations exist in the setting of prices and in the allocation of available supplies in the regular newsprint market, and in the spot newsprint market. (e) How much newsprint is being diverted from the open market by exclusive contracts of publishers with mills for the sale of "total output of mill" or for production of "what the user shall require" or by the direct ownership and control of forest rights or mills by large publishers. (f) Whether new legislation or international agreements are necessary to control the monopolistic practices of newsprint corporations in other lands, particularly those alleged to be doing United States business from Canada to avoid antitrust actions. (g) How the development of an Alaskan newsprint industry can be speeded, and how newsprint consumers with no other sources of supply, and all small users can be guaranteed the first and fullest benefits from the development. (h) The quickest way for the Eightieth Congress to establish a regional Alaska Authority to provide the large volume of cheap power which a newsprint industry will need. 1 (i) Whether the price and allocations patterns are likely to become so difficult for small consumers because of large users' indifference or greed, that some resumption of Government controls will need to be considered. (2) The prospects for new processes using new raw materials. (k) If there is any prospect that higher prices for newsprint will induce mills, which have converted to the production of heavier stocks, to reconvert. 2. TECHNOLOGICAL CHANGE Technological change which may relieve the small papers from their high and still rising mechanical production costs, must also be studied: (a) Present state of competition in the manufacture of printing and typesetting equipment. (b) Duration of the present war-born shortage of equipment. (c) Prospects of applying war-developed techniques and processes to the manufacture of printing, typesetting, folding, mailing, and other equipment especially appropriate to the small publisher. (d) Status of research into small paper technology by the equipment manufacturing industry, to determine whether a Government research program by the Bureau of Standards of the Department of Commerce is necessary. (e) Study, with the consultation of union and industry leaders in the printing trades, of necessary private and Government action necessary to cushion possible technological unemployment in the industry, or the smaller units. (f) The impact of facsimile (the FM radio broadcasting of newspapers directly into homes) on the small newspaper business; the development of a national licensing policy by the Federal Communications Commission which will enhance local competition rather than monopoly (thus it might be possible to split frequency modulation licenses so that at least two papers under different ownerships would use each frequency). 3. ANNUAL REPORT TO CONGRESS BY FEDERAL TRADE COMMISSION ON COMPETITION, CONCENTRATION, AND OWNERSHIP IN NEWSPAPER AND RADIO INDUSTRIES Over the next decade, many of the laws to be considered by the Congress will have a sharp impact on the state of competition in the newspaper and radio industries. To make certain that its actions foster the kind of economic and political diversity in which we all believe, the Congress will need a systematic, annual report on: (a) The number and size of newspapers, periodicals, and radio stations in the country and the various States. (b) The extent of horizontal concentration in these industries, that is the stringing together of papers under one ownership, and radio stations under one network. (c) The extent of vertical combination, that is the extent of the interests of some newspapers and periodicals in forests, newsprint mills, shipping facilities, etc. (d) The extent of cross-channel combination, that is the extent of the interests of papers in radio stations, facsimile ventures, feature syndicates, book-publishing houses, etc. (e) The concentration in control and distribution of the advertising revenue which makes the profitable survival of small papers, magazines, and stations possible. The complaints-whether actionable or not-made to the Federal Trade Commission or the Department of Justice's Antitrust Division about practices in restraint of trade in any area affecting concentration in the newspaper industry. (g) The trends in new newspaper and radio ventures and deaths and factors affecting them. (h) The state of competition and monopoly in the local and national publishing industries. (i) The ownership statements filed by the licensees of radio broadcasting stations with the Federal Communications Commission should be published as supplement to the document. (j) The ownership statements filed in the Post Office Department by daily newspapers, and periodicals above a certain size should be published as a supplement to the document. This report should be made on the basis of the information collected by the various executive agencies, as well as whatever supplemental information is made available by industry sources. It should be prepared by the Federal Trade Commission and submitted for publication to the President of the Senate. The Commission should be directed at once to prepare an estimate of the budget required for this work. 4. GOVERNMENT FORMS AND DATA To cut down the number of forms which the Government requires or asks small newspapers to fill out: (a) The review authority of the Bureau of the Budget ought to be extended to the matter mailed out by the Treasury Department and the War and Navy Departments. (b) A study should be authorized to see whether a single form could be devised which would provide all of the information required by all of the agencies at once. The data could be filed in a central office, and duplicate sets of punch cards turned over to each of the agencies affected. Confidential information could be requested on a perforated sheet attached to the single questionnaire, and kept by the responsible agency. (c) The Bureau of the Budget should be requested to work out, with the advice of congressional, agency and industry specialists, standard definitions of terms such as "publication," "newspaper,' "periodical," "printing," and publishing establishment or concern, etc. In this way the various data collected could be made comparable. 96840-47- -2 |