I should clarify the title.. the first big scandal. There had already been little ones. Any ratings system that raises any station or programs standing inherently lowers another. It's a zero sum game. So for every step forward there was a flurry of back room deals, bribes, and sabotage to attempt to stop progress. Within the context of the resistance to Arbitron's PPM I am reminded of the previous hullabaloo in 1963. But it was the radio networks that invited statisticians into the fray in the first place. they were hiring them to debunk any system that was a detriment to their ad revenues.
I am reminded of a quote from the film A Few Good Men "You can't handle the truth!" That was truly that was the issue. The networks really didn't give a crap about accuracy. They just wanted to validate higher ad rates. When it began to backfire with the possibility of lower ad rates they shit a collective brick. They all complained but only Stanley Breyer had the cajones to pick a fight. In 1950 with the growing use of the multiple ratings systems it became clear that they were all generating conflicting data. This data determined ad rates which determined ad revenues. Some ad buyers tried to correlate listenership to sales to measure ad effectiveness. Instead of working, it just made everybody look bad. The listenership numbers sometimes outright defiedthe sales numbers.
It was radio station 1100 KJBS-AM that bitch-slapped the entire industry. They used both the Hooper and Pulse data and were furious about the discrepancies between them. Station Manager Stanley Breyer ran a full-page advertisement in the trade magazine Broadcasting-Telecasting, headed, “Two Umpires Behind the Plate Isn’t Any Good in Broadcasting, Either.” (If anyone has a scan of that ad, or there whereabouts of Stanley Breyer please fill me in.)
NAB formed a "Special Test Survey Committee" to investigate radio ratings. Essentially every business attached to marketing, advertising an media chimed on on the issue. The Advertising Research Foundation (ARF) polled its members in 1952, on the issue. Their members asked for an “ending [to] confusion in radio and TV audience ratings." A bigger uglier committee was formed. They took in hundreds of pages of testimony. Then as they were abotu ready to issue a report the chairman of the committee Dr. E. L. Deckinger actually said "This study will be the Kinsey Report of the TV industry.” The scandal actually really hurt some agency's. For some that had been already losing companies to the already dominant Arbitron and Nielsen it was the beginning of the end.
But somehow in 1954 the Recommended Standards for Radio and Television Audience Size Measurements report lacked the promised Kinsey-level of punch. Both NAB and ARF really failed on their own to produce any action beyond printing thick reports and thinning out the industry. So they took a shot at congressional action. It wasn't' the first time they'd tried to flex that lobbyist money but it was probably the first time they went the brute force method. (It began a long-standing tradition)
Senator A. N. "Mike" Monroney, chairman of the Senate Interstate and Commerce Committee. It was a smaller but far meaner and uglier committee. It was 1956 and they had already been having hearings on TV. Monroney prodded Senator Warren Magnuson (pictured) into investigating the ratings topic. Magnuson sent perfunctory letters to the ratings companies inquiring as to their techniques. Magnuson then held a hearing on June 26th 1958. The concepts were so academic, and the elected officially so ignorant that the hearing degenerated into an educational briefing. Nielsen, Sindlinger, Roslow, and and Seiler escaped unharmed. Later that year the TV quiz show scandal seemed to distract everyone and the stink under the porch settled down. Ultimately I think the consensus was that the ratings systems were imperfect not rigged. More here.
So history repeats itself. The dissenters of PPM are the stations who incur losses under the more granular data. thankfully the Senate Interstate and Commerce Committee is pretty disinterested in ratings. They're much more focused on white space auctions, satellite radio mergers and cross-ownership regulations...