is to give the anti-trust laws the flexibility to preserve competition in ideas as well to provide economic stability. During arguments before the Supreme Court, Justice Harlan asked the Department of Justice attorney about the validity of the contention that the joint arrangement preserved competition in ideas. The Government lawyer replied: "If an exception is to be made, legislation is the proper course."" In other cases: On September 27, 1968, the Justice Department announced filing of a consent judgment requiring the E. W. Scripps Co. to sell, within 18 months, its majority interest in the Cincinnati (Ohio) Enquirer. On April 22, 1968, the U.S. Supreme Court affirmed a lower court decision that publishers of the Los Angeles (Calif.) Times violated antitrust laws by acquiring the San Bernardino newspapers. The San Bernardino newspapers were sold to the Gannett Co. of Rochester, N.Y. MULTIPLE OWNERSHIP INQUIRY ANPA presented a legal document Feb. 14 to the Federal Communications Commission to show that the FCC has no authority to adopt any rule which would declare newspapers as a class ineligible for granting or renewal of broadcast licenses. Such a suggestion had been advanced by the Department of Justice on Aug. 1. 1968, in FCC Docket No. 18110, a proceeding initiated by the FCC relating to its multiple ownership rules of standard AM, FM and television broadcast stations. FCC itself did not propose in this proceeding any restrictions on newspaper ownership. The ANPA statement, prepared jointly by ANPA General Counsel Hanson and Communications Counsel Donald C. Beeler, presents legislative history to substantiate its main point that the "Judicial branch of government has ruled and the Legislative branch of government has spoken adversely to the suggestion now made by the Department of Justice." The ANPA statement was printed in General Bulletin No. 8, February 19, 1969. During the year, intervention with the FCC by the Department of Justice resulted in cancellation of an acquisition agreement by the Beaumont (Tex.) Enterprise and Journal for a television station; a consent judgment by the Gannett Company to sell its television station in Rockford, Ill., after purchasing newspapers there, and a petition to the FCC involving ownership of broadcast facilities by the publisher of the Cheyenne (Wyo.) newspapers. Illustrating the broad ramifications for newspapers was this Justice Department argument in the Cheyenne petition: "We believe that Frontier's (Cheyenne owner) possession of an exceptional monopoly power here over local mass media communications, particularly with respect to the news and advertising, resulting directly from its ownership of the only local newspapers and only local TV station, and butressed by ownership of an AM station, a prospective FM station, and the CATV franchise, provides sufficient ground for questioning the renewal of the broadcasting license whether or not the applicant has been guilty of Section 2 of the Sherman Act." The suggestion that newspapers should not be allowed to own broadcasting stations poses a threat of enormous proportions to many ANPA members. Such a restriction is not in the public interest, and ANPA is making plans for a strong fight to support its position. CATV OWNERSHIP ANPA is also participating in a Federal Communications Commission inquiry into ownership of CATV systems (Docket No. 18397). Our interest is in preserving the right of newspapers to own CATV systems or to use them in future news dissemination technology. In its proposed rules governing operations of CATV systems, the Commission indicated that it would look into the question of ownership of other local media, including newspapers. FREEDOM OF INFORMATION The Freedom of Information Act was supposed to open up many doors in the Federal Government, but such is still not the case, mainly because the agencies flouting the law are going unchallenged. Before leaving office in January, Sen. Long (Mo.), author of the measure, expressed disappointment that the press had failed to take more advantage of the provisions. Sam Archibald, director of the Freedom of Information Center's Washington office and one of the original proponents of the Federal Public Records law, said a year's experience showed: -The press had made little use of the law. -The Congress has done little to insist on effective administration of the law. -The Government agencies have made every effort to repeal the law by regulation; some have ignored it completely; others have used it as an excuse to hide facts; some have twisted the law to fit their own secrecy system, and only a few have used the law to beef up their own information efforts. "The law is an excellent tool of democracy,: Archibald said, "and it may be too soon to object that the press and Congress are letting the tool rust. But it is not too soon to report that the edge of the tool of democracy has been blunted by the government agencies." JOB OPPORTUNITIES ADVERTISING Will it be "Help Wanted-Male", "Help Wanted-Female", or "Help WantedMale and Female"? Whatever it is, the decision is up to the newspaper. The right has been clearly established that newspapers may continue placement of helpwanted advertisements under separate "Male" and "Female" headings while the ANPA lawsuit, challenging the Equal Employment Opportunity Commission's guidelines on the subject, is pending. Language to that effect appeared in the U.S. Court of Appeals decision of January 24. It was again substantiated when Federal District Court Judge Oliver Gasch on Feb. 10 signed an order denying motions of the EEOC for dismissal of the suit and summary judgment. Since institution of the ANPA-Washington Star suit challenging the Commission, ANPA General Bulletins have carried the results and the meaning of all decisions rendered thus far in the case. COOPERATIVE ADVERTISING RULES The Federal Trade Commission March 5 adopted revised guides affecting cooperative advertising which tell suppliers what they must do to conform to the U.S. Supreme Court decision in the Fred Meyer case. Although the guides were called "final", the FTC reserved the right to change them. Comments were invited until April 15 and if no changes are made, the guides will become effective on May 1. Additionally, the FTC promised to review the guides 18 months after implementation. Because there was a great deal of controversy attached to the originally proposed guides, which many major users of cooperative advertising said would be impossible to comply with, ANPA prepared and gave wide distribution to its position paper and background memorandum mailed Dec. 5, to members, editors, and advertising directors as well as to the FTC. The position paper outlined the problems confronting cooperative advertising programs under the FTC proposals and recommended a “rule of reason" as a solution. More than 5,000 copies of the position paper were distributed. Full text of all the guides adopted on March 5, as well as copies of the position paper are available from ANPA. Robert B. Atwood, Anchorage (Alaska) Times T. V. Bihler, New York (N.Y.) Journal of Commerce J. Hart Clinton, San Mateo (Cailf.) Times W. H. Cowles, Spokane (Wash.) Spokesman-Review and Chronicle Francis L. Dale, Cincinnati (Ohio) Esquirer Selene R. Foellinger, Fort Wayne (Ind.) News-Sentinel Carter Glass, III, Lynchburg (Va.) News and Advance Carl A. Jones, Johnson City (Tenn.) Press-Chronicle John H. Kauffmann, Wahington (D.C.) Star Dean S. Lesher, Merced (Calif.) Sun-Star David Lindsay, Jr., Sarasota (Fla.) Herald-Tribune and Journal Frank W. Mayborn, Temple (Tex.) Telegram Robert I. McCracken, Portland (Ore.) Oregonian T. Eugene Worrell, Bristol (Va.) Herald Courier and Virginia-Tennessean JOHN H. COLBURN, MORRISON, FOERSTER, HOLLOWAY, CLINTON & CLARK, San Francisco, June 9, 1969. Mr. STANFORD SMITH, American Newspaper Publishers Association, DEAB STAN: In discussions with counsel for the Senate Subcommittee on Antitrust and Monopoly, I was asked about my position in connection with the Federal Laws Committee Report which was published at the Convention. I advised counsel that I had dissented from the report although my name appears on the printed copy of the report. I was then asked if I would forward for the record of the Committee a copy of my dissent which I have done. With kindest regards. Sincerely yours, J. HART CLINTON. TELEGRAM TO SENATOR PHILIP A. HART FROM STEPHEN R. BARNETT, ESQ., DATED JUNE 19, 1969 BERKELEY, CALIF., June 19, 1969. Senator PHILIP A. HART, Chairman, Subcommittee on Antitrust and Monopoly, DEAR SENATOR HART: As a citizen of the San Francisco metropolian area and a teacher of law, I am dismayed by the way in which the president of the San Francisco Chronicle has reacted to the charges made before your subcommittee last week by Albert Kihn and Blanche Streeter. Mr. Kihn, a former employee of San Francisco television station KRON-TV, testified that he has been trailed by private investigators for more than six months since he petitioned the Federal Communications Commission to deny renewal of the Chronicle's license to operate that station. Mrs. Streeter, a former employee of the Chronicle, testified that the Chronicle has had her investigated by private detectives since she initiated a lawsuit charging violations of the antitrust laws through the joint operating agreement between the Chronicle and the San Francisco Examiner. A reply by the president of the Chronicle Publishing Company, Charles Thieriot, was published in the Chronicle on June 13. In his reply Mr. Thieriot carefully avoided either admitting or denying that the Chronicle is responsible for trailing and investigating Mr. Kihn and Mrs. Streeter. He stated vaguely that the Chronicle had not “done anything improper,” and relied on the dependency of proceedings in court and before the FCC as a reason for not "commenting further on these allegiations." When Ralph Nader made similar allegations of being trailed and investigated as the result of criticisms he had made against the General Motors Corporation. the president of General Motors appeared before a committee of the Senate and publicly apologized. The president of the San Francisco Chronicle, in contrast, feels no need even to admit or deny these serious charges made before your subcommittee. That the Chronicle can display such callous arrogance to important and newsworthy allegations made against it before a committee of the United States Senate is due to the newspaper monopoly in which San Francisco finds itself. This monopoly, brought about by the presently illegal joint operating agreement between the Chronicle and the Examiner, assures that no other daily news paper will investigate, report, or criticize the actions and statements of the Chronicle Publishing Company on this subject of significant interest to the San Francisco public. It is argued by defenders of the monopoly that the Chronicle and the Examiner at least provide the city with "two newspaper voices." The validity of this argument may be judged from the fact that the Examiner, far from objectively reporting the charges by Mr. Kihn and Mrs. Streeter and the response by Mr. Thieriot, did not carry a single word of coverage relating to the session of the hearings before your subcommittee at which those charges-and other important statements concerning the newspaper situation in San Francisco-were made. The bill before your subcommittee, Senator Hart, would legalize and perpetuate the existing newspaper monopoly shared by the Chronicle and the Examiner. It would do so to the great and lasting disadvantage of public information and free press in San Francisco. STEPHEN R. BARNETT, STATEMENT OF PROF. JOHN J. FLYNN Mr. Chairman and Members of the Committee, I am John J. Flynn, a Professor of Law at the University of Utah College of Law. As in the past, I come before this Committee with no client or vested interest to represent other than what I conceive to be the public policy of the antitrust laws. In addition, I come before this Committee as a citizen of a state dominated by a communications cartel that S. 1520 would legitimize. I have also been involved in research and writing in the field of antitrust and the newspapers; and, participated in this Committee's Hearings on S. 1312, the predecessor of S. 1520. To the extent this Committee may deem it justifiable, I should also like to be heard as representative of the unknowing public; if that be possible among the clamor of vested interests exerting undue pressure upon elected representatives sworn to represent all the public. As my introductory comments may indicate, I intend to speak against S. 1520; against the Amendments proposed thereto by Senator Dirksen and Senator Brooke; and, as befits my Irish heritage, to be blunt and direct about it regardless of injured sensibilities. S. 1312 AND S. 1520 During the last session of Congress, this Committee held extensive and exhaustive hearings on S. 1312. Those Hearings not only revealed glaring weaknesses in the proposed legislation, but they also revealed the truly byzantine economic state of the newspaper industry and the related fields of electronic communication. I think it only honest to state, and I do so without rancor but with a sense of bewilderment, that the ordinary human mind would find it truly incredible to believe that rational men would persist in attempting to pass legislation of the type proposed here in light of the information revealed by those Hearings. Perhaps, as a simple-minded citizen concerned about the economic and political viability of my community, the obvious political and economic dangers of concentration in the mass media, and the larger problem of a viable national legislative branch, I am so unsophisticated that some economic, social or political justification other than the political preservation of incumbent elective representatives has been put forward in support of this bill. I have read all the published Hearings on S. 1312 and, from my study of antitrust, I must confess that I am not aware of a more shocking catalogue of industry-wide abuses-with the possible exception of this Committee's investigations of the drug industry-anywhere in modern antitrust literature. Of even greater interest to the unsophisticated, is the remarkable absence of hard factual information on the key factual assumption behind this bill—the financial plight of newspapers in general or in particular cases. Perhaps it is being overly legalistic to suggest that antitrust policy has long been the heart of our government's economic policy; that traditionally and presently exemptions or immunity from antitrust policy are not lightly given nor freely applied; that those industries seeking an exemption or immunity from antitrust policy carry a heavy burden of proof in the legislative process before the legislative branch makes a deliberate and cautious judgment to grant the ex theory has given the Antitrust Division no concern so far as past newspaper joint arrangements are concerned. It remains to be seen whether the Department of Justice will seek to apply the same approach enunciated in the du Pont 1957 case to past complete newspaper mergers. Whatever the case may be, it is beyond doubt that both past newspaper total mergers and joint arrangements, if and when attacked, face the current stringent burden of proof requirements for coming within the failing company defense. (3) The majority opinion appears to rule that if the burden of proof requirements now prescribed by the Court are met, the failing company defense is absolute for a total merger "or in any other case" i.e., a joint arrangement or venture. Note that in United States v. Penn-Olin Co., 378 U.S. 287 (1948), the Supreme Court held that a joint venture is covered by amended Section 7 of the Clayton Act. This point is not articulated in Justice Douglas' opinion and therefore leaves apparent ambiguities. If the defense is absolute, the implication appears to be that the joint arrangement can lawfully continue without any limitation as to time or the profitability of the arrangement. While Justice Harlan's concurring opinion rests on different reasoning than that of the majority, it is possible that his qualifications on the failing company doctrine may be applied in a future case. (4) It is clear beyond a peradventure of doubt that if the failing company defense is not established, a complete newspaper merger is subject to successful antitrust attack. Likewise, it is crystal clear that unless the defense is proved, the per se illegality rules under the Sherman Act apply automatically to a joint newspaper operating agreement providing for joint establishment of circulation and advertising rates, pooling of profits according to an agreed ratio and allocation of the market between the parties or any one of them. (5) The majority opinion makes no distinction in the application of the requirements of proof with respect to particular types of businesses or industries. The result is that the failing company requirements apply uniformly to all enterprises. (6) This comes to the unwarranted manner in which the majority of the Court failed to take judicial cognizance of the relevance of the unique structural and behavioral characteristics of the daily newspaper publishing business, to the realities of a failing newspaper situation as distinguished from industrial enterprises as presented in the ANPA Amicus Brief, with tables of irrefutable empirical data in support thereof. The ANPA Brief, as well as the brief of the appellants and certain publishers' Amicus brief, presented the argument that as of 1940 the Citizen met the International Shoe test of a failing company. The Amicus Brief at pp. 58-69 fully explicated this argument based on record evidence in the Tucson case and on the difference between the "point of no return" from failure in the case of a daily newspaper and the failure of a shoe factory, for example. The Brief also argued that as of 1940 there was no prospective purchaser for the Citizen, and moreover that unless a failing paper can resort to a joint operating agreement, it either must enter into a complete merger or discontinue publication. In that event there would either be a sole daily newspaper in the community or two papers under common ownership through a complete merger. The alternative of a joint operating agreement, the Brief argued, better serves the public interest and preserves separate and independent news and editorial competition compatible with the political and social values contemplated by the First Amendment. It is unfortunate that the majority of the Court failed to recognize the above considerations and their relevance to applying to the |