Motion Picture Herald (May-Jun 1943)

28 MOTION PICTURE HERALD May 15, 1943 Court says FCC Can Rule Radio Deals Decision in Washington Holds Congress Gave Commission All Power Washington Bureau Disposing of an issue raised more than 18 months ago, the Supreme Court on Monday upheld the authority of the Federal Communications Commission to issue its chain broadcasting regulations. The court, however, withheld comment on the wisdom of the regulations themselves or their likelihood to accomplish the objectives of the commission, holding that those matters were the responsibility of the Congress and the FCC. Taking but one week short of three months to reach its decision, the court by a vote of five to two, with Associate Justices Black and Rutledge not participating, affirmed the action of the New York Federal District Court in dismissing the suits brought on October 30, 1941, by the National Broadcasting Company and Columbia Broadcasting System to enjoin the enforcement of the regulations promulgated by the commission on May 2, 1941, and amended on October 11 of that year. A dissenting opinion, holding that the Communications Act did not give the commission authority to regulate the business practices of licensees, was delivered by Associate Justice Murphy, with Associate Justice Roberts concurring. The 27-page majority opinion, delivered by Associate Justice Frankfurter, dismissed seriatim the specific contentions of the networks that the commission lacked authority, that it sought to enforce the anti-trust statutes, that the regulations were arbitrary and capricious and that they abridged the right of free speech. "The avowed aim of the Communications Act of 1934 was to secure the maximum benefits of radio to all the people of the United States," Justice Frankfurter declared. "To that end Congress endowed the communications commission with comprehensive powers to promote and realize the vast potentialities of radio. * * * "These provisions, individually and in the aggregate, preclude the notion that the commission is empowered to deal only with technical and engineering impediments to the 'larger and more effective use of radio in the public interest'. * * * "In essence, the chain broadcasting regulations represent a particularization of the commission's conception of the 'public interest' sought to be safeguarded by Congress in enacting the Communications Act of 1934." "New and Dynamic," Says Frankfurter Admitting that the act does not explicitly say that the commission shall have power to deal with network practices found inimical to the public interest, the court pointed out that Congress was acting in a field of regulation "which was both new and dynamic." "While Congress did not give the commission unfettered discretion to regulate all phases of the radio industry, it did not frustrate the purposes for which the Communications Act of 1934 was brought into being by attempting an itemized catalogue of the specific manifestations of the general problems for the solution of which it was establishing a regulatory agency," Justice Frankfurter stated. . . . Congress did what experience had taught it in similar attempts at regulation, even in fields where the subject matter of regulation was far less fluid and dynamic than radio. The essence of that experience was to define broad areas for regulation and to establish standards for judgment adequately related in their application to the problems to be solved." Act Drawn to Protect Public Interest The fact that the commission may refuse a license to persons found guilty by the courts of the violation of the anti-trust laws, he continued, does not involve the connotation that licensees charged with violation of the standards of public interest, convenience, or necessity because of his practices can not be refused a license because he has not yet been convicted in the courts. "The Communications Act of 1934 authorized the commission to promulgate regulations designed to correct the abuses disclosed by its investigation of chain broadcasting," he said — it was not a matter of the commission attempting to enforce the antitrust statutes. Refusing to pass on the wisdom of the regulations themselves, Justice Frankfurter denied there was anything "arbitrary and capricious" in their adoption by the commission "based upon findings supported by evidence." Set Up of Licensing System Proper The final contention, that the regulations invaded the right of free speech, also was found untenable by the Justice, who pointed out that the limited radio facilities and the licensing system itself are an abridgment of that right. "The question here," he said, "is simply whether the commission, by announcing that it will refuse licenses to persons who engage in specified network practices (a basis for choice which we hold is comprehended within the statutory criterion of 'public interest'), is thereby denying such persons the constitutional right of free speech. The right of free speech does not include, however, the right to use the facilities of radio without a license. The licensing system established by Congress in the Communications Act of 1934 was a proper exercise of its power over commerce. The standard it provided for the licensing of stations was the 'public interest, convenience or necessity'. Denial of a station license on that ground, if valid under the act, is not a denial of free speech." In the dissemination of information and opinion radio has assumed a position of commanding importance, rivalling the press and the pulpit, it was poirit I out by Justice Murphy in his dissent, and because of its vast potentialities "the character and extent of control that should be exercised over it by the Government is a matter of deep and vital concern." Wherein Justice Murphy Dissents "Events in Europe show that radio may readily be a weapon of authority and misrepresentation, instead of a means of entertainment and enlightenment," he said. "It may be even an instrument of oppression. "In pointing out these possibilities, I do not mean to intimate in the slightest that they are imminent or probable in this country, but they do suggest that the construction of the instant statute should be approached with more than ordinary restraint and caution, to avoid an interpretation that is not clearly justified by the conditions that brought about its enactment, or that would give the commission greater powers than the Congress intended to confer." The communications act, he declared flatly, does not in term give the commission power to regulate the contractual relations between the stations and the networks. "The power to control network contracts and affiliations by means of the commission's licensing powers cannot be derived from implication out of the standard of 'public convenience, interest or necessity' * * * Not Within FCC Scope To Remedy Conditions "It is quite possible, of course, that maximum utilization of the radio as an instrument of culture, entertainment, and the diffusion of ideas is inhibited by existing network arrangements. Some of the conditions imposed by the broadcasting chains are possibly not conducive to a freer use of radio facilities, however essential they may be to the maintenance of sustaining programs and the operation of the chain broadcasting business as it is now conducted. But I am unable to agree that it is within the present authority of the commission to prescribe the remedy for such conditions. It is evident that a correction of these conditions in the manner proposed by the regulations will involve drastic changes in the business of radio broadcasting which the Congress has not clearly and definitely empowered the commission to undertake." There is nothing in the communications, act authorizing the FCC to regulate the business practices of licensees, he held, and if network practices may have run counter to the anti-trust laws, the express means for dealing with that problem has been provided by Congress. Barrows in Army Intelligence Sidney Barrows, a member of Warners' legal staff, will shortly leave for Ann Arbor to receive an instruction course in Army military intelligence. Rogers Photos In Demand More than 2,000,000 four-color photographs of Roy Rogers have been distributed to exhibitors, Republic Pictures announced this week.