NAB reports (Jan-Dec 1941)

the Commission finds that the public interest will be served by the refusal or revocation of such a license. Sec. 310 (b) provides that a license shall not be transferred, assigned or disposed of, voluntarily or involuntarily, directly or indirectly, to any person unless the Commission shall, after securing full information, decide that the transfer is in the public interest and give its consent in writing. Sec. 311 provides for the refusal of licenses and permits in cer¬ tain cases, those cases being those of persons “finally adjudged guilty by a Federal Court” of certain violations of the AntiTrust laws. Such gentlemen, are the limitations of the statute under which your body functions on the holding or transfer of licenses. Solely by reason of being engaged in the newspaper publishing business, a newspaper publisher, whether an individual or a corporation, does not ipso facto become either an alien, a representative of an alien, a foreign government or the representative thereof. Neither does such an individual or corporation become a crim.inal solely by reason of being engaged in the newspaper publishing business. Insofar as the application of the .Anti-Trust Laws to licensees or applicants for licenses is concerned, this Commission does not have any original jurisdiction whatsoever. Proceedings under those laws must originate elsewhere and this Commission is with¬ out power to act until there has been a final judgment of guilt. Then its authority is limited to the person or persons finally ad¬ judged guilty. It cannot be extended to others. As I have pointed out, the limitations on the holding and transfer of licenses and on the refusal of licenses and permits, are specifi¬ cally set forth in the statute. So are the limitations cn the revo¬ cation of licenses and on the application of the Anti-Trust .Acts. This Commission has no power either to exceed or to extend the .Act. It must operate within the confines of its authority. It cannot trespass beyond. Being without authority to extend or increase the limitations of the statute it is without authority to conduct an inquiry to determine whether or not it shall adopt any policy or rules to that end. Therefore it should vacate its Order No. 79 and terminate this proceeding without further ado. It may be argued on behalf of that order that the Commission has general powers of inquiry (a) for the purpose of determining if the public interest will be served in the granting of licenses and (b) for the purpose of making reports to the Congress. .An analysis of the statute and a consideration of the controlling decisions of our courts, however, cannot be otherwise than con¬ vincing that the Commission in its consideration of the public interest must give consideration to that interest, insofar as appli¬ cations for broadcast station licenses are concerned, as the facts are developed in connection with a particular application. There is no statutory authority empowering the Commission on its own motion to make general classifications of persons, otherwise quali¬ fied under the statutes, for the purpose of laying down a policy or adopting rules either for the purpose of prohibiting persons belon.ging to a certain class from holding licenses or limiting the number of persons within a certain class who may hold licenses. Insofar as its reports to Congress are concerned, again the Com¬ mission’s authority is limited. One is a general power to be found in Section 4 (k) of the statute. This section requires the Commission to make an annual report to the Congress, just as similar sections in other statutes require such reports from all other legislative agencies. There is nothing in this section that cither by inference or implication can be construed as authorizing an inquiry such as that initiated by the Commission’s Order No. 79. Two other sections of the statute namely 215 (a) and 307 (c) provide for reports to Congress. The provisions of Section 215 (a) are limited to common carriers engaged in wire and radio com¬ munication and subject to the .Act. It does not extend to broad¬ cast stations of any kind or description. The provisions of Section 307 (c) are limited to non-profit pro¬ grams and activities, on which the Commission was required to report not later than February 1, 1935. The foregoing discussion should satisfy that the Commission does not have any authority under the Communications Act of 1934, as amended, to make the inquiry provided for in its Order No. 79. Consideration of the Commission's Order No. 79-.A out¬ lining the matters concerning which the Commission proposes to take testimony and receive other evidence shows that that order exceeds any power which the Commission has under the .Act and runs into headlong conflict with an adjudication of the powers of the Commission by the Supreme Court of the United States. Nowhere in the Communications Act of 1934, As .Amended, is any power vested in the Commission to regulate the business of any broadcast station licensee, or exercise any supervisory control over any licensee’s programs, business management or policy. The Commission’s powers in respect of broadcast station appli¬ cants are limited to consideration of specific applications for the purpose of determining (a) if there be an available frequency over which the applicant can broadcast without interference to others, (b) if the applicant is financially able to make good use of the assigned channel, (c) if his equipment is adequate and (d) if his proposed program service is competent to serve his listening public. That is not my statement, gentlemen, but a summary of a state¬ ment made by the Supreme Court of the United States in a case which you yourselves asked that Court to review in order to con¬ strue your own powers, when you were not content with a decision in the controversy as rendered by the Linited States Court of .Ap¬ peals for the District of Columbia. I quote a few excerpts from that decision: “The Act does not essay to regulate the business of the licen¬ see. The Commission is given no supervisory control of the programs, of business management cr of policy. In short, the broadcasting field is open to anyone, provided there I e an available frequency over which he can broadcast without inter¬ ference to others, if he shows his competency, the adequac)' of his equipment, and financial ability to m.ake good use of the assigned channel.” .Again, as the Court said: “The Act recognizes that broadcasters are not common carriers and are not to be dealt with as such. Thus the .Act recognizes that the field of broadcasting is one of free competiticn. The sections dealing with broadcasting demonstrate that Congress has not, in its regulatory scheme, abandoned the principle of free cempetitien, as it has done in the case of railroads, in respect of which regulation involves the suppres¬ sion of wasteful practices due to competition, the regulation of rates and charges, and other measures which are unnecessary if free competition is to be permitted. Finally the Court said: ".An important element of public interest and convenience affecting the issue of a license is the ability of the licensee to render the best practicable service to the community reached by his broadcasts.” F. C. C. v. Sanders Bros. Radio Station, 309 U. S. 470. Gentlemen, that case arose when the licensee of a radio station appealed from an order of this Commission granting approval to the application of a newspaper for the construction of another station in the area that the first station served and in the same citv where the newspaper was published. Now' what do we find in respect of your Order No. 79-.A? In that order you set forth 10 specific subjects on which you say that you desire information in order to determine what policy you shall lay down cr what rules you shall adopt concerning applica¬ tions for high frequency broadcast stations cr the future acquisition of standard broadcast stations by new'spaoers. In the order of their presence in Order No. 79-.A your questions are as follows: 1. To what extent broadcast stations are at present associated with persons also associated with publication of one or more newspapers, the classification (in terms of power, location, network affiliation, etc.) of broadcast stations so associated, the circumstances surrounding such association, and the ten¬ dency toward such association in the future. 2. Whether joint association of newspapers and broadcast .stations tends or may tend to prejudice the free and fair presentation of public issues and information over the air, or to cause editorial bias or distortion, or to inject editori d policy or attitude into the public service rendered by broad¬ cast stations as a medium of public communication. 3. Whether joint association of newspapers and broadcast stations tends or may tend to restrict or distort the broad¬ casting of new's. or to limit the sources of news to the public, or to affect adversely the relation between news-gathering services and broadcast stations. 4. Whether the joint association of newspapers and broadcast stations has or may have anv effect upon freedom of acce.ss to the radio forum, for the discussion of public issues. 5. Whether the joint association of newspapers and broadcast stations tends or may tend to lessen or increase competition July 25, 1941 — 627