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Section II

Pace University School of Law

Summer, 1990

Marc Sophos

Copyright 1990 by the Pace Law Review; Marc Sophos

You can also read this article in pdf format.

II. History of Broadcast Regulation and Establishment of the Public Interest Standard

A.The Genesis of Broadcast Regulation

Regulation of radio (or "wireless," as it was called at the time) began in the United States in 1910 with the amendment of the Interstate Commerce Act,[FN12] bringing interstate and foreign wire and wireless communication under federal jurisdiction. [FN13] Also in 1910, the Wireless Ship Act was enacted.[FN14] This Act required large passenger ships to carry radio equipment capable of exchanging messages at a distance of 100 miles, [FN15] but it did not require ship radio operators to monitor their radio apparatus.

On April 15, 1912, the ocean liner Titanic sank. [FN16] Although another radio-equipped ship, the Californian, was only fifteen miles away, its radio operator had signed off fifteen minutes before the Titanic's operator sent his first distress message. [FN17] More than 1500 people were killed in the disaster, including the Titanic's radio operator, who died at his radio set. [FN18]

As a direct result of this tragedy, [FN19] the Radio Act of 1912 [FN20] was enacted. This was the first comprehensive American radio legislation. Among other things, the Act adopted the international distress signal, [FN21] prohibited interference with distress signals, [FN22] and empowered the Secretary of Commerce and Labor [FN23] to issue licenses [FN24] and specify frequencies. [FN25]

One of the weaknesses of the 1912 Act was that it failed to specify grounds upon which the Secretary could deny applications for radio licenses. Congress had intended the Act simply to prescribe a registration process. [FN26] This became a serious problem as broadcasting stations, dramatically rising in number, [FN27] began increasingly to interfere with one another. [FN28] Many station operators understandably grew frustrated by the interference and, attempting to increase the efficacy of their signals, began to change frequency, power, location, and operating schedule in violation of their licenses. [FN29] One such station was Zenith Radio Corporation's WJAZ in Chicago. The Secretary of Commerce sued Zenith under the Radio Act of 1912, but the court held [FN30] that the Act had given the Secretary no standards under which he could deny a station's license application. [FN31]

With the Secretary thus stripped of what little discretion he may have had in licensing stations, and with increasingly intolerable interference undermining the effectiveness of radio broadcasting, the failure of the Radio Act of 1912 became apparent. More than 200 new stations received licenses and went on the air during the next year, [FN32] making the interference situation even worse. Ultimately, it became difficult for people in many parts of the country to receive any interference-free radio service at all. [FN33]

It was obvious that new radio legislation was needed. The result was the Radio Act of 1927, [FN34] which established the five-member Federal Radio Commission. [FN35] Perhaps the most important departure from the 1912 Act was that the newly created Commission had discretion in licensing stations: it was to award broadcasting licenses only when doing so would serve the "public convenience, interest, or necessity." [FN36]

This public interest standard was not a new concept in governmental regulation in 1927. Starting in the late 1800s, much of Congress' regulation of the railroads focused on the public interest standard. [FN37] Over the years it has been applied in the regulation of two basic and interrelated types of activities: first, activities involving government-granted monopolies; [FN38] and second, use of public resources by private individuals or entities for private gain. [FN39] Its first application to broadcasting was in the Radio Act of 1927.

Under the 1927 Act, however, control of communication by wire and radio was still spread among a number of agencies. [FN40] In 1934, the Communications Act of 1934 [FN41] was enacted. The Act repealed the Radio Act of 1927, [FN42] established the seven member Federal Communications Commission, [FN43] and consolidated the regulation of most wire and radio communication under the Commission's jurisdiction. [FN44] Most importantly, the 1934 Act preserved the public interest, convenience, or necessity standard from the 1927 Act. [FN45]

B.Evolution of the Public Interest Standard

There is good reason for applying a public interest standard in broadcast regulation. Broadcast channels are "scarce" (that is, there are not enough available channels for all of those who wish to broadcast), and the electromagnetic spectrum [FN46] has been deemed, since the beginning of broadcast regulation, to be a publicly owned natural resource. [FN47] This "scarce public resource" rationale formed the foundation on which broadcast regulation was based. [FN48] Furthermore, it is plain that private individuals and entities may apply for and be granted licenses to use the public airwaves; and it is equally plain that unless they are operating on channels reserved for non-commercial use, [FN49] these private individuals or entities are allowed to profit from their broadcasting activities. [FN50] Application of the public interest standard to broadcasting is thus consistent with its traditional application in other governmental regulation.

The application of the standard to broadcasting, however, is perhaps more complex than it is when applied to other industries because of the first amendment considerations involved. [FN51] The search for a manageable standard was difficult. In 1928, the Federal Radio Commission announced its interpretation of the basic principles of the standard:

The commission also believes that public interest, convenience, or necessity will be best served by avoiding too much duplication of programs and types of programs. . . .

In view of the paucity of channels, the commission is of the opinion that the limited facilities for broadcasting should not be shared with stations which give the sort of service which is readily available to the public in another form. For example, the public in large cities can easily purchase and use phonograph records of the ordinary commercial type. A station which devotes the main portion of its hours of operation to broadcasting such phonograph records is not giving the public anything which it can not readily have without such a station. . . . The commission can not close its eyes to the fact that the real purpose of the use of phonograph records in most communities is to provide a cheaper method of advertising for advertisers who are thereby saved the expense of providing an original program.

While it is true that broadcasting stations in this country are for the most part supported or partially supported by advertisers, broadcasting stations are not given these great privileges by the United States Government for the primary benefit of advertisers. Such benefit as is derived by advertisers must be incidental and entirely secondary to the interest of the public. . . .

Advertising should be only incidental to some real service rendered to the public, and not the main object of the program. . . .

In conclusion, the commission desires to point out that the test "public interest, convenience, or necessity" becomes a matter of comparative and not an absolute standard when applied to broadcasting stations. Since the number of channels is limited and the number of persons desiring to broadcast is far greater than can be accommodated, the commission must determine from among the applicants before it which of them will, if licensed, best serve the public. . . . The emphasis must be first and foremost on the interest, the convenience, and the necessity of the listening public, and not on the interest, convenience, or necessity of the individual broadcaster or the advertiser. [FN52]

As radio became increasingly influential in American society, references to first amendment concerns for a vigorous press started to appear in court and Commission decisions. In National Broadcasting Co. v. United States, [FN53] Justice Murphy wrote:

Although radio broadcasting, like the press, is generally conducted on a commercial basis, it is not an ordinary business activity, like the selling of securities or the marketing of electrical power. In the dissemination of information and opinion, radio has assumed a position of commanding importance, rivalling the press and the pulpit. Owing to its physical characteristics radio, unlike the other methods of conveying information, must be regulated and rationed by the government. Otherwise there would be chaos, and radio's usefulness would be largely destroyed. But because of its vast potentialities as a medium of communication, discussion and propaganda, the character and extent of control that should be exercised over it by the government is a matter of deep and vital concern. [FN54]

In 1965, the Commission expressed its view of broadcasters' first amendment responsibilities:

As the Supreme Court has stated, the first amendment to the Constitution of the United States "rests on the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public." That radio and television broadcast stations play an important role in providing news and opinion is obvious. [FN55]

Thus, as broadcasting evolved to play an increasingly important role in American society, the interpretation of the public interest standard as applied to broadcasting grew to take on constitutional proportions. The Commission's concern in this area was manifested through the establishment of a number of rules and procedures intended to ensure that broadcast licensees served the public interest. [FN56]

The public interest standard as it applies to broadcasting has never been interpreted to mean simply what the public wants to hear or view. Rather, much of the scholarly writing on the standard focuses also on what the public ought to hear or view. [FN57] This phrasing perhaps only restates the first amendment concerns of the courts and the Commission that an informed electorate is essential to the effective working of democratic government. [FN58] Unless the electorate has sufficient information to make informed decisions, democratic government cannot work. [FN59]

The theory underlying broadcast regulation is that a broadcast license is a public trust, and that a broadcast licensee is therefore a public trustee. [FN60] A license is temporary authority [FN61] from the federal government to use one of the scarce and publicly owned broadcast channels. [FN62] In exchange for the privilege of using this scarce public resource and for being allowed to profit from such use, the licensee is obligated to serve the public interest, convenience, or necessity. [FN63]

C.FCC Policies to Exact Compliance with the Public Interest Standard

It is beyond question that the electronic mass media have tremendous potential power for disseminating news and information to the public. [FN64] To ensure that stations exercised this power responsibly, the Commission established a number of rules and procedures. Among these were the nonentertainment programming guidelines for both radio and television. [FN65] These guidelines were intended to ensure that stations devoted a specified percentage of their broadcast schedules to news and public affairs programming. [FN66] Stations were also required to maintain their main origination studios within their communities of license, [FN67] and to conduct annual "ascertainment studies." [FN68] The Commission had long put a premium on local programming serving demonstrated public needs. [FN69] These rules were designed to ensure that stations would stay in touch with the problems and needs of their communities, and that they would air programming responsive to those problems and needs. [FN70] The Commission's intention was that stations participate directly in the discussion of issues of public importance.

These rules and procedures were an attempt by the Commission to ensure that stations used the frequencies they had been allowed to use for the dissemination of local news and public affairs at least some of the time (and to establish minimum standards against which stations could be measured when their licenses came up for renewal [FN71]). However, there was also a number of more or less technical rules intended to ensure that the broadcasting industry as a whole served the public interest. Among these was the "anti-trafficking rule," [FN72] which regulated the transfer of broadcast licenses. The Commission believed that trafficking in licenses (buying and then quickly selling stations for profit) undermined service to the public interest because the station owners never developed a sense of responsibility to the community of license. [FN73] The anti-trafficking rule strongly discouraged the sale of a station unless the station owner had held the license for at least three years. [FN74]

Recall that there are two basic rationales for applying a public interest standard in broadcast regulation. First, frequencies in the electromagnetic spectrum have always been considered to be a scarce and publicly owned natural resource. [FN75] It was apparent even in the 1920s that there was a far greater number of people who wanted to broadcast than there were available frequencies. [FN76] Second, this scarce public resource was being used by private users for private gain. [FN77]

Consistent with and even necessary to both of these rationales were the Commission's rules regarding multiple ownership. The Commission always had a strong policy favoring diversity of viewpoints and programming in the communications marketplace. [FN78] It endeavored through several rules to promote this policy by maximizing the number of owners of media outlets.

First, the multiple ownership rule [FN79] limited the number of stations a single entity could own to seven AM, seven FM, and seven television stations, no more than five of which could be VHF ("rule of sevens"). [FN80] This rule was intended to prevent a single group owner from becoming overly dominant in the national marketplace of ideas.

Second, the radio duopoly rule [FN81] established minimum geographic distances between commonly owned stations in the same service. [FN82] This rule was an attempt to minimize the local geographic areas in which two different stations in the same service under common ownership could be heard; it was intended to reduce the possibility of an undue concentration of media control within a particular local marketplace of ideas.

Third, the one-to-a-market rule [FN83] prohibited cross-ownership of radio and television stations in the same market, excepting grandfathered radio-television combinations. [FN84] Like the radio duopoly rule, the one-to-a-market rule was intended to reduce the likelihood that a single entity would become overly dominant within a local market.

These three rules reflected both the first amendment concern that broadcasting serve the public interest and the desire to distribute equitably and fairly the limited number of broadcast licenses among the greatest possible number of applicants. [FN85] The vigor of the Commission's commitment to maximum diversification of ownership was evident in its 1965 Policy Statement on Comparative Broadcast Hearings. [FN86] The Commission stated:

We believe that there are two primary objectives toward which the process of comparison [in comparative hearings [FN87]] should be directed. They are, first, the best practicable service to the public, and, second, a maximum diffusion of control of the media of mass communications. The value of these objectives is clear. Diversification of control is a public good in a free society, and is additionally desirable where a government licensing system limits access by the public to the use of radio and television facilities. . . . [FN88] 1. Diversification of control of the media of mass communications. Diversification is a factor of primary significance since, as set forth above, it constitutes a primary objective in the licensing scheme. [FN89]

The Commission then discussed other factors it would consider in comparative hearings:

2. Full-time participation in station operation by owners. We consider this factor to be of substantial importance. It is inherently desirable that legal responsibility and day-to-day performance be closely associated. . . . This factor is . . . important in securing the best practicable service. It also frequently complements the objective of diversification, since concentrations of control are necessarily achieved at the expense of integrated ownership.

. . . .

. . . Thus, local residence complements the statutory scheme and Commission allocation policy of licensing a large number of stations throughout the country, in order to provide for attention to local interests, and local ownership also generally accords with the goal of diversifying control of broadcast stations. [FN90]

Thus, under traditional regulation of broadcasting by the Commission, the goal of maximizing diversity of control of broadcasting stations at both the national and local levels was consistently seen as an element of prime importance as it related to both the scarcity of frequencies concern and the first amendment concern of the public interest, convenience, or necessity standard. Importantly, the Commission's goal was not to secure some amount of diversification; rather, it was to secure the maximum possible amount of diversification. In its First Report and Order amending rules concerning multiple ownership of standard, FM, and television broadcast stations, [FN91] the Commission stated:

A proper objective is the maximum diversity of ownership that technology permits in each area. We are of the view that 60 different licensees are more desirable than 50, and even that 51 are more desirable than 50. In a rapidly changing social climate, communication of ideas is vital. If a city has 60 frequencies available but they are licensed to only 50 different licensees, the number of sources for ideas is not maximized. It might be the 51st licensee that would become the communication channel for a solution to a severe local social crisis. No one can say that present licensees are broadcasting everything worthwhile that can be communicated. [FN92]

In its Second Report and Order, [FN93] the Commission underscored the importance of diversification of control:

Our diversification policy is derived from both First Amendment and anti-trust policy sources. The Federal Courts have consistently upheld our use of these grounds in efforts to promote diversity of control over the electronic media of mass communications. In its earliest opinions construing the Communications Act, the Supreme Court recognized that regulation of broadcasting was designed to preserve competition and prevent monopoly. The Supreme Court said in Red Lion Broadcasting Co. v. FCC: "It is the purpose of the First Amendment to preserve an uninhibited market place of ideas in which truth will ultimately prevail, rather than to countenance monopolization of that market, whether it be by the Government itself or a private licensee." The Court then concluded: "It is the right of the public to receive suitable access to social, political, aesthetic, moral, and other ideas and experiences which is crucial here. . . ." [FN94]

The concerns involved in the public interest, convenience, or necessity standard thus evolved steadily during the period from 1927 through the 1970s. [FN95] The Commission's primary concern at the outset was with fair and equitable distribution of broadcast facilities in light of the fact that there were not enough frequencies available for all of those who wanted to broadcast. [FN96] As the broadcasting industry developed into a major force in American society, the scarcity rationale remained, as indeed it had to, [FN97] and the public interest standard took on constitutional dimensions. The primary focus of the first amendment concern became the right, and really the need, of the public to receive a wide range of information so that our democratic form of government would work most effectively. [FN98] Maximum diversification of control of broadcast facilities, nationally and regionally, was a key policy in fulfilling this goal. A broadcast licensee was a public trustee, given temporary authority by the Commission to use the publicly owned airwaves to serve the public interest. This was the way things stood until the 1980s.


FN12. 36 Stat. 539 (1910).

FN13. S. HEAD, supra note 3, at 127.

FN14. 36 Stat. 629 (1910).

FN15. Id. 1.

FN16. Ballard, How We Found Titanic, NAT'L GEOGRAPHIC 696, 704 (December 1985).

FN17. S. HEAD, supra note 3, at 127.

FN18. Id.

FN19. W. BITTNER, BROADCAST LAW AND REGULATION 5 (1982). See also S. HEAD, supra note 3, at 94, 127.

FN20. Pub. L. No. 62-264, 37 Stat. 302 (1912).

FN21. Id. 4 (Sixth). (The Radio Act was divided into subsections denoted "First," "Second," and so forth.)

FN22. Id. 4 (Ninth).

FN23. The Secretary of Commerce and Labor became known as the Secretary of Commerce in 1913. S. HEAD, supra note 3, at 128.

FN24. Radio Act of 1912, Pub. L. No. 62-624, 1, 37 Stat. 302, 302-03 (1912), repealed by ch. 169, 39, 44 Stat. 1162, 1174, which was repealed by Communications Act of 1934, ch. 652, 602(a), 48 Stat. 1064, 1102.

FN25. Id. 2.

FN26. S. HEAD, supra note 3, at 128.

FN27. There were only "about three" stations providing regular service in 1920. W. EMERY, BROADCASTING AND GOVERNMENT 23 (1971). By the end of 1925 there were almost 600 stations on the air and 175 applications for new stations. National Broadcasting Co. v. United States, 319 U.S. 190, 211 (1943).

FN28. Part of the problem was that there was a very limited number of frequencies (channels) available for stations to use. The 1912 Act had not specified which frequencies were to be used for broadcasting. The Secretary of Commerce initially selected two frequencies (750 and 833 kHz) on which all broadcasting stations were to operate. National Broadcasting Co., 319 U.S. at 211. Later, with the number of stations growing rapidly, he assigned 96 frequencies between 550 and 1500 kHz (roughly the same as today's AM band) to standard (AM) broadcasting. Id. Unfortunately, this was not enough to solve the problem. The interference situation was exacerbated by the instability of the stations' transmitters; among other things, the transmitters were incapable of remaining precisely on their assigned frequencies. An amusing example was the radio station of Aimee Semple McPherson, a popular evangelist of the 1920s. The station, operated from McPherson's "temple" in Los Angeles, was closed down by a government inspector because it "wandered all over the wave band." S. HEAD, supra note 3, at 129. McPherson then sent a telegram to the Secretary: "PLEASE ORDER YOUR MINIONS OF SATAN TO LEAVE MY STATION ALONE. YOU CANNOT EXPECT THE ALMIGHTY TO ABIDE BY YOUR WAVELENGTH NONSENSE. WHEN I OFFER MY PRAYERS TO HIM I MUST FIT INTO HIS WAVE RECEPTION. OPEN THIS STATION AT ONCE." Id. McPherson was persuaded to hire a competent engineer and the station was allowed to reopen. Id.

FN29. S. HEAD, supra note 3, at 129.

FN30. United States v. Zenith Radio Corp., 12 F.2d 614 (N.D. Ill. 1926).

FN31. Id. at 618.

FN32. S. HEAD, supra note 3, at 130.

FN33. Id. at 130-31.

FN34. Radio Act of 1927, Pub. L. No. 69-169, 44 Stat. 1162 (1927), repealed by Communications Act of 1934, ch. 652, 602(a), 48 Stat. 1064, 1102.

FN35. Id. 3.

FN36. Id. 9.

FN37. See Munn v. Illinois, 94 U.S. 113 (1877), in which the United States Supreme Court upheld Congress' right to regulate the use of private property when the use was "affected with a public interest." Id. at 130. Private property became "clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large." Id. at 126.

FN38. Among these are telephone companies and power utilities, where monopolies may be necessary because of the impracticability of separate telephone and electrical wires installed by different companies in the same area; also included are railroads, where limited rights-of-way preclude the operation of more than one company's railroad. See, e.g., Essential Communications v. American Tel. & Tel., 610 F.2d 1114, 1118 (3d Cir. 1979).

FN39. Again, telephone companies and power utilities are included here because they use public land for the installation of wires; likewise, railroad tracks run on public land. Of course, these industries are allowed to profit from their use of publicly owned resources, as long as there is a corresponding public benefit. See, e.g., United States v. Joint Traffic Assoc., 171 U.S. 505, 570 (1898).

FN40. Jurisdiction of wire and wireless communication was split among the Federal Radio Commission, the Interstate Commerce Commission, and the Postmaster General. S. HEAD, supra note 3, at 133.

FN41. 47 U.S.C. 151-805 (1982 & Supp. V 1987).

FN42. Id. 602(a).

FN43. Id. 151.

FN44. Id. 601. Jurisdiction over government-owned stations was excluded. Id. 305.

FN45. The language regarding the public interest standard is essentially the same in both Acts. Compare 47 U.S.C. 307(a) (1982) with 9 of the Radio Act of 1927, Pub. L. No. 69-169, 9, 44 Stat. 1162 (1927). The objectives of both Acts were substantially the same. See FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 137 (1940) (in essence, the 1934 Act repealed the 1927 Act and reenacted its provisions); 47 U.S.C.A. 601, 603, 604 (1962 & Supp. 1989).

FN46. The spectrum of electromagnetic radiation includes all television and radio channels, both broadcast and nonbroadcast (aviation, police, fire, and mobile telephone, to name a few). For a more detailed explanation of the nature of electromagnetic radiation, see S. HEAD, supra note 3, at 21-57.

FN47. See, e.g., Communications Act of 1934 301, 47 U.S.C. 301 (1982) ("It is the purpose of this Act . . . to provide for the use of [the airwaves], but not the ownership thereof . . . ."); FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 475 (1940) ("The policy of the Act is clear that no person is to have anything in the nature of a property right as a result of the granting of a [broadcast] license.").

FN48. See National Broadcasting Company v. United States, 319 U.S. 190, 213 (1943). Note that this scarcity rationale, used to justify the application of a public interest standard in government regulation, is consistent with the government-granted monopoly rationale. See supra note 38 and accompanying text. An entity licensed to broadcast on a frequency has exclusive control, granted by the government, over that frequency in that geographic area; simultaneous use of the frequency by another user would cause objectionable interference. It was just this kind of interference which led to chaos on the airwaves during the 1920s and the subsequent enactment of the Radio Act of 1927. See supra note 28 and accompanying text; text accompanying note 33; Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 375-77 (1969).

FN49. The Commission has reserved FM channels 200-220 (87.9-91.9 MHz) for non-commercial educational use. 47 C.F.R. 73.501 (1988). Additionally, a number of television assignments are reserved for non-commercial educational use. 47 C.F.R. 73.606 (1988).

FN50. This is the public-resource/private-user/private-gain rationale, which also justified application of a public interest standard. See supra note 39 and accompanying text.

FN51. The application of the first amendment here concerns not as much the broadcasters' rights of free speech as the public's right to be informed. See infra notes 52-55 and accompanying text; text accompanying note 98; note 185; Red Lion, 395 U.S. at 386-92.

FN52. Statement Made by the [Federal Radio] Commission on Aug. 23, 1928, Relative to Public Interest, Convenience, or Necessity, 2 F.R.C. Ann. Rep. 166 (1928), reprinted in DOCUMENTS OF AMERICAN BROADCASTING 52-55 (F. Kahn ed. 3d ed. 1978). See also In re Great Lakes Broadcasting Co., F.R.C. Docket No. 4900, cited with approval in Public Service Responsibility of Broadcast Licensees (the FCC's "Blue Book," Mar. 7, 1946, reprinted in DOCUMENTS OF AMERICAN BROADCASTING, supra, at 132):

Broadcasting stations are licensed to serve the public and not for the purpose of furthering the private or selfish interests of individuals or groups of individuals. The standard of public interest, convenience, or necessity means nothing if it does not mean this. . . . The emphasis should be on the receiving of service and the standard of public interest, convenience, or necessity should be construed accordingly . . . . In a sense a broadcasting station may be regarded as a sort of mouthpiece on the air for the community it serves, over which its public events of general interest, its political campaigns, its election results, its athletic contests, its orchestras and artists, and discussion of public issues may be broadcast.

Id. at 155-56 (emphasis in original). It is important to note that these articulations of the public interest standard established criteria against which stations could be evaluated. As important as these criteria were when two or more applicants were battling for a new license, they became even more important when one or more applicants challenged an incumbent broadcaster's license. See infra notes 87, 90, and 157 for a brief description of the comparative hearing process.

FN53. 319 U.S. 190 (1943).

FN54. Id. at 228 (Murphy, J., dissenting).

FN55. Policy Statement on Comparative Broadcast Hearings, 1 F.C.C.2d 393, 394 n.4 (1965) (citation omitted). See infra text accompanying note 94.

FN56. For a discussion of these rules and procedures, see infra notes 64-98 and accompanying text.

FN57. See, e.g., Irion, FCC Criteria for Evaluating Competing Applicants, 43 MINN. L. REV. 479, 481 (1959) ("a broadcaster must not merely cater to existing tastes and interests but must make at least a modest effort toward improving and widening them"); J. TUNSTALL, COMMUNICATIONS DEREGULATION 151 (1986) ("critics were . . . comparing U.S. radio with junk food 20 different kinds of fast food, but no nourishing meals . . . .").

FN58. See infra note 232.

FN59. See, e.g., Deregulation of Radio, 84 F.C.C.2d 968, 980-82 (1981).

FN60. See McIntire v. William Penn Broadcasting Co. of Philadelphia, 151 F.2d 597, 599 (3d Cir. 1945), cert. denied, 327 U.S. 779 (1946).

FN61. The maximum license term was originally three years. Communications Act of 1934, ch. 652, 307(d), 48 Stat. 1083, 1084 (1934) (redesignated and amended 1981). In 1987 it was increased to seven years for radio stations and five years for television stations. Order, 2 F.C.C. Rec. 3805 (1987). See infra note 157.

FN62. See supra note 48 and accompanying text.

FN63. 47 U.S.C. 307(a) (1982).

FN64. A recent study by the Roper Organization indicated that 65 percent of the American public turn to television as the source of most of their news, and 49 percent consider television to be the most believable news source. Roper Organization, America's Watching: Thirtieth Anniversary Report at 14-15 (1989). See also 67 CONG. REC. 5558-59 (bound ed. Mar. 13, 1926) (statement of Rep. Johnson):

There is no agency so fraught with possibilities for service of good or evil to the American people as the radio. As a means of entertainment, education, information, and communication it has limitless possibilities. The power of the press will not be comparable to that of broadcasting stations when the industry is fully developed. . . . [Broadcasting stations] can mold and crystallize sentiment as no agency in the past has been able to do. If the strong arm of the law does not prevent monopoly ownership and make discrimination by such stations illegal, American thought and American politics will be largely at the mercy of those who operate these stations. For publicity is the most powerful weapon that can be wielded in a Republic, and when such a weapon is placed in the hands of one, or a single selfish group is permitted to either tacitly or otherwise acquire ownership and dominate these broadcasting stations throughout the country, then woe be to those who dare to differ with them. It will be impossible to compete with them in reaching the ears of the American people.

FN65. 47 C.F.R. 0.281(a)(8) (1982).

FN66. Id.

FN67. 47 C.F.R. 73.1125 (1986).

FN68. 61 F.C.C.2d 1 (1976); 57 F.C.C.2d 418 (1975); 53 F.C.C.2d 3 (1975); 27 F.C.C.2d 650 (1971). The Commission first required commercial stations to conduct ascertainment studies in the Report and Statement of Policy Re: Commission en banc Programming Inquiry, 44 F.C.C. 2303, 2314, 2316 (1960). In 1971 the Commission issued its detailed Primer on Ascertainment of Community Problems by Broadcast Applicants, 27 F.C.C.2d 650, 682-87 (1971), and in 1975 its Primer on Ascertainment of Community Problems by Broadcast Renewal Applicants, 57 F.C.C.2d 418, 441-46 (1975), amended by 61 F.C.C.2d 1 (1976). Under the Commission's procedure, each commercial broadcast licensee was required to conduct annual interviews with members of the general public, 57 F.C.C.2d at 444-45, and with leaders of significant community groups, id. at 442-44; 27 F.C.C.2d at 682-85. From these interviews, the licensee was to list significant community problems and needs, 57 F.C.C.2d at 419, and then develop and air programming addressing at least some of those problems and needs. 27 F.C.C.2d at 685-86. The written records of the interviews, the list of problems and needs, and the descriptions of the programming were reviewed when the station's license came up for renewal (every three years). For details of these procedures, see Ascertainment of Community Problems by Broadcast Applicants, 53 F.C.C.2d 3 (1975).

FN69. See, e.g., Report and Statement of Policy Re: Commission en banc Programming Inquiry, supra note 68, at 2312-16; the Commission's "Blue Book," reprinted in DOCUMENTS OF AMERICAN BROADCASTING, supra note 52, at 183-88; National Broadcasting Co. v. United States, 319 U.S. 190, 203 (1943).

FN70. Report and Statement of Policy Re: Commission en banc Programming Inquiry, supra note 68, at 2312-18.

FN71. See infra notes 87, 90, 157, and accompanying text for a brief discussion of license renewal procedures, challenges, and comparative hearings.

FN72. 47 C.F.R. 73.3597 (1982).

FN73. See Report and Order, 32 F.C.C.2d 689, 690 (1962).

FN74. Id. at 691.

FN75. See supra text accompanying notes 46-48.

FN76. See Remarks of Secretary of Commerce Herbert Hoover, Fourth National Radio Conference, Proceedings and Recommendations for Regulation of Radio 6 (November 9-11, 1925), quoted in W. EMERY, supra note 27, at 28: "We can no longer deal on the basis that there is room for everybody on the radio highways. There are more vehicles on the roads than can get by, and if they continue to jam in, all will be stopped."

FN77. See supra notes 39, 50, and accompanying text.

FN78. See, e.g., Policy Statement on Comparative Broadcast Hearings, 1 F.C.C.2d 393, 394-96 (1965).

FN79. 47 C.F.R. 73.3555(d) (1984).

FN80. An entity that owns more than one broadcast station in a single service (Standard (AM), FM, and television are the three broadcast services) is commonly referred to as a group owner.

FN81. 47 C.F.R. 73.3555(a) (1988).

FN82. Standard (AM), FM, and television are the three broadcast services; therefore, the rule required a certain minimum distance between two commonly owned AM stations, two commonly owned FM stations, or two commonly owned television stations. The minimum distance was not specified in miles, but rather in terms of the signal strength from each station. The rule prohibited overlap of the 1 mv/m signal strength contours for the commonly owned stations. The strength of any station's signal at a particular point is measured in millivolts of radio frequency energy induced by the station's signal in a wire that is one meter long ; hence, the unit millivolts per meter, or mv/m. R.H. KINLEY, STANDARD RADIO COMMUNICATIONS MANUAL 31 (1985). A 1 mv/m contour is the set of all points surrounding the station's antenna, on the surface of the earth, at which the signal strength is 1 mv/m. The higher the number of mv/m, the stronger and therefore clearer the signal. A signal strength of 1 mv/m produces a good signal for FM radios and a fair signal for AM radios. Telephone interview with Edward F. Perry, Jr., Technical Consultant, Educational FM Associates, Duxbury, Mass. (Apr. 10, 1990).

FN83. 47 C.F.R. 73.3555(b) (1988).

FN84. 22 F.C.C.2d 306, 309 (1970). The radio duopoly and one-to-a-market rules were known together as the local (or regional) concentration rules.

FN85. The rule of sevens was something of a compromise of the Commission's policy of maximum diversification. For a discussion of this policy, see infra notes 86-94 and accompanying text. The compromise was adopted to avoid undue disruption of multiple station holdings at the time the rule was promulgated. Report and Order, 18 F.C.C. 288, 295 (1953). The Commission granted waivers of the local concentration rules from time to time when such waivers were found to be in the public interest. See, e.g., Hawaiian Broadcasting System, 8 F.C.C. 379 (1941). However, the rule of sevens was inflexible. See W. EMERY, supra note 27, at 249-50 (regardless of the facts, no entity could own more than seven AM, seven FM, and seven television stations, no more than five of which could be VHF). See also infra note 127.

FN86. 1 F.C.C.2d 393 (1965).

FN87. A comparative hearing is a hearing, held before an FCC administrative law judge, at which two or more applicants for a single license are represented. The hearing may occur when two or more applicants apply for a single new license, or when one or more applicants challenge an incumbent broadcaster's license renewal application. S. HEAD, supra note 3, at 348.

FN88. 1 F.C.C.2d at 394. The Commission's footnote at this point is reproduced in part as the text accompanying note 55, supra.

FN89. 1 F.C.C.2d at 394.

FN90. Id. at 395-96 (emphasis added). The four other factors the Commission said it would review were: proposed program service, id. at 397-98; past broadcast record, id. at 398; efficient use of frequency, id. at 398-99; and character, id. at 399. The Commission also noted that it might review other factors if warranted. Id.

FN91. 22 F.C.C.2d 306 (1970).

FN92. Id. at 311.

FN93. 50 F.C.C.2d 1046 (1975).

FN94. Id. at 1048-49 (citations omitted).

FN95. The public interest standard was first applied to broadcasting in 1927. See supra notes 34-36 and accompanying text. The Commission began deregulating the broadcasting industry in the 1970s. J. TUNSTALL, supra note 57, at 29. The deregulatory pace accelerated tremendously under the Reagan administration in the early 1980s. Id. at 30. All of the deregulatory actions considered in this Comment took place during the 1980s. See infra notes 99-143 and accompanying text.

FN96. See First Report and Order, 22 F.C.C.2d 306 (1970):

[O]ne person should not be licensed to operate more than one broadcast station in the same place, and serving substantially the same public, unless some other relevant public interest consideration is found to outweigh the importance of diversifying control. It is elementary that the number of frequencies available for licensing is limited. In any particular area there may be many voices that would like to be heard, but not all can be licensed.

Id. at 311. See also the discussion of this scarcity rationale, supra notes 46-48 and accompanying text.

FN97. With more commercial broadcasting stations on the air now than ever before (4966 AM, 4251 FM, and 1088 television stations, Summary of Broadcasting & Cable, BROADCASTING, Dec. 25, 1989, at 11, col. 1), there are obviously fewer available frequencies now on which new stations can be authorized. The available spectrum space cannot simply be expanded to allow a greater number of broadcast stations to go on the air; to do so would displace other licensed users, including aircraft, police and fire departments, and shortwave international broadcasting, among others. There are fewer available channels than ever before, and almost invariably there are numerous applicants for each. See infra note 157.

FN98. See supra text accompanying notes 51-55 and 94; infra note 232.

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