The joint result was the Communications Act of 1934. This measure created the present Federal Communications Commission and gave it power to regulate all nongovernment wire and wireless communications in the public interest. FCC also participates in the work of the Interdepartment Radio Advisory Committee, which assigns wave lengths for governmental uses.

FCC is responsible to Congress for administering the provisions of the act. Its decisions, like those of other federal bodies, are subject to review by the courts.

There are seven commissioners, each appointed by the president, with the consent of the Senate, for a seven-year term. Appointment is staggered so that, barring death or resignation, one vacancy occurs each year. The statute provides also that no more than four appointees shall be from. one political party so that there are always Democrats and Republicans (often Independents also) as members. A staff of engineers, lawyers, accountants, and other specialists serves the commission in administering the act.

FCC has other jobs besides its major task of regulating commercial radio broadcasting. It also regulates the telegraph, cable, telephone, and radio-telegraph industries to see that the services supplied, the rates charged, and conditions of service are the best available.

Other radio users to watch

In addition to the 900 standard broadcast stations which serve the regular listening public, FCC must issue licenses to, and regulate, some 65,000 transmitters of other kinds. These include amateur, aviation, ship-to-shore, police, forestry, television, facsimile, frequency modulation, and international short-wave broadcasting.

All these different uses of radio must be given plenty of elbowroom on the radio spectrum so that they will not crowd one another. Further, the commission must set aside some frequencies for experiments with new kinds of broadcasting. For instance, television has been assigned some regular broadcasting channels and some experimental frequencies.

The commission’s duties do not end when it has assigned frequencies to each transmitter. It must also police the air waves—“monitoring” it is called—to be sure that all stations keep to their own frequencies and that unauthorized transmitters do not appear on the air waves to cause interference or a traffic jam. This monitoring service was greatly expanded during the war as a constant means of listening for enemy messages transmitted by voice or Morse, in secret code or otherwise. Likewise, for the war period, FCC staff members listened in on foreign propaganda broadcasts in many languages and furnished texts and summaries to various interested war agencies.

The major job

But the part of FCC’s job which concerns us and the millions of radio listeners in the United States is its control over the broadcasting stations. FCC’s powers, though definitely limited, are extensive.

Who is to have the right to use the air for broadcasting? The Communications Act specifies only that broadcasting must be in the hands of American citizens. To make certain of this, the commission requires each station to furnish a complete list of the station’s owners and to keep it up to date.

Otherwise, rather than laying down explicit directions, the act leaves it up to the commission to make such rules in granting licenses as will insure that the licensed stations best serve the “public interest, convenience and necessity.” This is where the rub comes, since many more applications for standard broadcast licenses are received than can be granted.

FCC, therefore, must choose which among the too numerous applicants are to be allowed to engage in the broadcasting business. It has set up certain rules to guide it in making its decisions.

New applicants

A man who wants a license must establish his financial responsibility. He must show that he has (or has hired) the technical skill necessary to station operation. He must also describe his plans for programming so that the commission may judge their general usefulness and practicality.

Each applicant for a license must indicate how powerful a transmitter he plans to use and how many hours daily he plans to broadcast. In some cases FCC grants only reduced power or part-time broadcasting. Conditions in the area will decide. For example, if the area to be served has a widely scattered farm population the commission may approve a powerful “clear channel” station which can be picked up many miles from the point of origin.

Before it will permit the building of anew station, FCC studies the local situation. Open hearings are occasionally held at which all interested parties may present their points of view.

Renewing a license

Originally, broadcast licenses were granted for six months, after which time the owner had to apply for a renewal. The period was first lengthened to one year, then to two, and now to three, Every three years, therefore, every station in America must apply to the commission for a renewal of its license.

This periodic licensing procedure is the basis of FCC’s regulatory power. If it can be clearly demonstrated that the licensee has not used his station properly to serve “public interest, convenience and necessity” the commission can refuse to renew the license. In such an event, it will grant the frequency to another licensee.

All sales or other transfers of stations must be approved by the commission. Complete information concerning ownership must be given, and concealment of ownership may be followed by a revocation of the license.

The Communications Act in so many words forbids FCC to censor any radio broadcasts. The act and regulations do, however, contain certain rules affecting program content. The act prohibits obscenity and profanity on the air and directs the commission to enforce the prohibition. Stations which sell or give time to a candidate for public office are required by law to give equal opportunity to opposing candidates for that office. Transcriptions of speeches or other material sponsored for political purposes must contain plain statements as to who is sponsoring and paying for them. No lotteries may be advertised.

In reaching a decision on a license renewal, FCC doesn’t go into the content of particular broadcasts over that station. It does, however, take into account the over-all record of programming during the preceding period. Its aim is to make sure that those applicants which offer the best and most balanced radio diet get the licenses.

Checkrein on the networks

Many stations had network contracts that bound them to a certain network for five years, but bound the network for only one. Under the new rule a station can sign with a network for only two years, so that it can change networks for better service if it likes. The commission reasoned that the networks will provide better programs if they know their contracts are good for only two years. Also, it figured that new networks can get started more easily if they don’t have to wait five years for existing contracts to run out.

The commission also banned “exclusivity.” A station affiliated with one network can now carry some programs of another network as well. “Territorial exclusivity” was also forbidden. This means that if a network station in, say, Toledo does not want a certain program, the program can be sent to another station in Toledo or the surrounding area.

Networks formerly required stations to “option time” to them, that is, give the network the right to a certain number of hours each week. FCC felt that these hours, set aside for network programs, “restricted the freedom of [local] station licensees and hampered their efforts to broadcast local programs, the programs of other networks, and national spot transcriptions.” Option time is now limited to certain proportions of each part of the broadcast day.

Some network contracts had made it difficult for stations to reject programs. Such practice is illegal, according to FCC, which maintains that the station is licensed to have control of its programs, not to delegate it “directly to the network, or indirectly to an advertising agency.” Therefore, the commission ordered stations to keep their freedom to cancel network programs on occasion. Nor can stations transfer to a network power to fix their own prices.

If FCC is satisfied that a new applicant will run a radio station—or that an existing operator has run a radio station—in the best interest of the local community and the national radio system, the commission will grant or renew his license. Call letters will be assigned, power and hours of broadcast will be specified, and one of the limited number of channels given. Actually, stations once licensed are almost without exception relicensed at the end of each three-year period. But no licensee has any legal vested interest in renewal. The frequencies are used, not owned, by the stations.

Can government enforce competition?

The Communications Act and the debates preceding its passage make clear that Congress wished to maintain as wide competition as possible in the broadcasting field. FCC, especially in recent years, has tried to discover and discourage trends away from free competition. From 1938 to 1940 it investigated “chain broadcasting” to see whether the great networks had too much control over the stations.

By its physical nature, radio is limited to a few stations in each locality. FCC has felt that control of radio should be in the hands of many owners rather than few in order to make it more difficult for any group to interfere with freedom of expression by radio.

The commission has no written power to control networks. It can only regulate the stations that are parts of the networks. Following its investigation and public hearings, the commission issued an order to the radio industry. The broadcasters at first fought and then accepted these new rules.

Because radio facilities are limited, the commission feared that ownership of two stations in a community would prevent the kind of competition it wanted to encourage. FCC ordered that no one could own more than one station serving a single community. He may, however, own an FM and a television station in the same community.

Two networks under one ownership inevitably came under the ban. As we have seen, the Blue Network. was separated from NBC and is now an independent system. In granting licenses for FM broadcasting, FCC is limiting to only six the number of stations anywhere that may be under the same ownership.

Newspapers and radio stations

The commission also investigated the increasing number of stations owned by the publishers of newspapers. At the time of its investigation, about one of every three radio stations was completely or partly newspaper-owned.

The following three major concerns moved FCC to hold this inquiry

1. Whether the association of radio stations and newspapers affected “the free and fair presentation of public issues and information over the air.”
2. Whether joint ownership of radio and press interfered with the public’s right to the news by limiting the public’s sources of news.
3. Whether the fact that many stations were tied to newspapers resulted in local monopolies of broadcasting and whether efficient operation was helped or hindered thereby. In short, was the public being properly served?

Objections to the inquiry were raised on many grounds. The commission was accused of unfairly singling out newspapers as a special group of owners. FCC had no legal authority, it was said, to go into this matter. Moreover, declared the objectors, any rules it issued forbidding papers from going into radio would interfere with the freedom of the press. Finally, it was asserted that newspapers were particularly well equipped to run radio stations because of their special work in a similar field.

After taking a great deal of testimony, FCC decided not to issue any special regulations about newspapers in radio. But it pointed out the danger to democratic freedoms if all the major agencies of public expression in any community were owned or controlled by one man or group. It also noted an important fact: Stations managed by newspapers tend to be the most powerful and the most profitable ones in their localities—which might mean that their tie with the press gives them a special economic advantage over others. The commission said it was taking no action because action did not seem necessary, but warned that it might become so.

From EM 28: How Far Should the Government Control Radio? (1946)