Statutory History

     The Communications Act of 1934 repealed and replaced the earlier Radio Act of 1927, itself the first federal statute dealing with broadcasting. The 1934 Act, a quintessential example of "New Deal" legislation, grew from a 1933 Department of Commerce study aimed at assessing the adequacy of federal regulation of electronic media. Decrying the division of regulatory powers among various agencies, the study recommended that Congress consolidate authority over almost all forms of interstate electronic media in a single regulatory agency. The resulting act abolished the Federal Radio Commission, whose authority had been limited to users of the electromagnetic spectrum (including radio stations) and transferred authority to a reconstructed and enlarged entity, the Federal Communications Commission. It shifted responsibility for interstate wired telephony and telegraphy from the Interstate Commerce Commission to the FCC. Portions of the 1934 Act dealing with broadcasting were, for the most part, unchanged from the earlier Radio Act of 1927. The primary purpose of the new law was to strengthen federal oversight of the telephone and telegraph industries and, by placing authority over radio, telephony, and telegraphy in a single agency, to recognize that the industries overlapped somewhat.

     The act has been frequently amended since 1934. Most revisions modify just a few sections of the law. Congress, for example, has repeatedly changed parts of the act regulating how broadcasters treat candidates for public office. But Congress has also found it necessary to sometimes adapt the law to large changes in the field of telecommunications that were unanticipated in 1934. Major electronic media revisions have dealt with communications satellites (1962, 1999), public broadcasting (1968), and cable television (1984, 1992). Substantial revision with the Telecommunications Act of 1996 reflected congressional recognition that previously distinct parts of the electronic media were converging and sought to enhance competition between and within segments of the electronic media and, through reliance on marketplace-induced discipline, chipped away at the New Deal philosophy that the FCC's notion of what was in the public interest was inherently preferable to relying on what industry players would do in response to consumer demand. Although the act was written when television was in its infancy, it proved unnecessary to substantially amend it when television emerged in the 1940s and 1950s. For the most part, the radio provisions of the act were simply applied to television.

The Act, the FCC, and Related Agencies

In some respects, the act functions as a bare-bones framework for federal control of electronic media. The agency it created, the FCC, is frequently relied upon to fill in details through enactment of rules and regulations that must be consistent with the act. Radio broadcasters must comply with these FCC rules and regulations as well as with the language of the statute. Other federal laws, dealing with matters such as antitrust law, copyright law, and advertising law, also apply to radio, although they are not administered by the FCC. The federal statute preempts most state or local regulation of broadcasting, although general business, taxation, zoning, equal employment opportunity, and labor laws at the state level apply as long as they do not conflict with federal law.

     Under the act, appeals of FCC decisions and actions are usually brought to the U.S. Court of Appeals for the D.C. Circuit, although appeals may sometimes begin in other circuits. Appeals of most FCC enforcement actions not involving licensing go to the U.S. District Courts. The U.S. Supreme Court has occasionally issued significant interpretations of the act. Only twice, however, has the Court found any part of the act unconstitutional: once, in 1996, when Congress tried to regulate indecent internet content, and earlier, in 1984, after Congress prohibited noncommercial educational broadcasters from supporting or opposing candidates for public office.

Major Provisions

     Like the Radio Act of 1927, the 1934 Act mandates that the FCC regulate broadcasting in the "public interest, convenience or necessity'' (Sec. 307[a]).

     The act reenacted the parts of the Radio Act of 1927 that made the FCC a "technical traffic cop" of the air, so it authorizes the commission to set technical standards for radio. The FCC allocates spectrum space to all users except the federal government (whose spectrum use is overseen by the National Telecommunications and Information Administration, a part of the Department of Commerce). In times of national emergency, the act authorizes the president to assume control over all spectrum users, although that has never happened.

      Under the act, radio station licenses can be granted for up to eight years. Since radio in the United States is a mature industry, with most licenses granted years ago, broadcasters rarely enter the industry by starting a new station. Rather, most enter the field by purchasing existing stations, a process that requires FCC approval. The act does not give the FCC power to directly regulate radio networks or program suppliers except insofar as those networks are also licensees of stations.

     Prior to amendments in 1996, the act allowed for another party to file a competing application against a renewal applicant, and this often led to hearings in which the FCC compared the incumbent to the challenger. In 1996, however, Congress amended the act and eliminated such comparative hearings. Now, the FCC cannot entertain competing applications unless it first finds the incumbent unqualified for renewal. Under the act, broadcasters must be renewed if the station has "served the public interest, convenience, and necessity,.., if the station has not committed "serious violations ... of [the] Act or the rules and regulations of the Commission; and ... there have been no other violations by the licensee of [the] Act or the rules and regulations of the Commission which, taken together, would constitute a pattern of abuse" (Sec. 309[k][1]). It remains possible for outsiders to intervene in the licensing process, however, because the statute still allows anyone to file a Petition to Deny with the FCC, arguing that the incumbent's application for renewal should not be granted. Absent grievous misbehavior, however, incumbents are nearly automatically renewed.

     The licensing standards are a mixture of statutory requirements and regulatory requirements created by the FCC. Licensees must be legally, financially, and technically qualified. Under the statute, the ownership of radio licenses by foreigners remains strictly limited to no more than 20 percent of total stock.

     The act has been amended to require that most users of the electromagnetic spectrum (e.g., cellular phone systems and common-carrier satellite services) pay spectrum use fees, usu­ally set through spectrum auctions. Congress, however, generally prohibits the FCC from charging broadcasters for spectrum. The theory is that, in exchange for free use of the spectrum, broadcasters provide free over-the-air broadcast services that promote the public interest. Broadcasters do pay small regulatory fees for such things as the processing of license applications by the FCC. Congress expects the FCC, through such fees, to recover annually an amount equal to its own cost of operation. In an economic sense, the FCC is expected to be minimally self-sustaining and, through spectrum auctions where they do apply, to generate substantial surplus revenue for the U.S. treasury.

     In 1996 Congress amended the act and greatly liberalized radio ownership. It prohibited the FCC from setting any national limit on the number of stations owned and directed the commission to study (and presumably relax) within-market radio ownership limits.

Regulating Content

     The act has long been schizophrenic about the regulation of radio content. Concerned about how they were treated by radio broadcasters, Congress directed in the Radio Act of 1927 that broadcasters provide equal opportunities for opposing candidates for public office to use stations. These provisions, sometimes erroneously called "equal-time" laws, were reenacted in the 1934 Act and, with some modifications, continue today. The provisions stipulate that radio (and television) broadcasters must treat legally qualified opposing candidates for all elected political offices alike. If a broadcaster, for example, sells advertising time to one candidate, the radio station must, within certain time limits, be prepared to sell equal amounts of time, with comparable audience potential, to opposing candidates at the same rate charged the first candidate. In 1959, however, Congress amended Sec. 315 of the act to exempt most news-related programming from these requirements. In 1971, Congress mandated in a new Sec. 312 [a] [7] that radio stations must provide for "reasonable access" to their stations by legally qualified candidates for federal elective office only-state and local offices such as governor or mayor are excluded-but commercial radio stations can fulfill this requirement exclusively through paid advertising time (Sec. 312[a][7]). During the 45 days before a primary election and the 60 days before a general election, the act specifies that candidates for any office cannot be charged more than the "lowest unit charge" for advertising on stations, and they can never be charged more than other commercial advertisers are charged for comparable uses. When candidates make use of stations under these sections of the act, broadcasters are powerless to censor what candidates say, even if their uses may be libelous, obscene, or offensive to viewers-and thus cannot be held legally liable for what a candidate says.

     Despite this regulation of political content, the act's Sec. 326, in language from the Radio Act of 1927, prohibits the FCC from exercising "censorship over the radio communications or signals transmitted by any radio station" and states that "no regulation or condition shall be promulgated or fixed by the commission which shall interfere with the right of free speech by means of radio communication." But, in possibly contradictory terms, it also requires the FCC to regulate radio in the public interest. Between 1934 and 1984, the FCC-relying on the generic public-interest standard-exercised broad, categorical regulation of radio content. Congress has not interfered in the commission's modern pursuit of marketplace­ based deregulation and has agreed with the FCC that relying on the marketplace is consistent with the public-interest standard of the act.

     The Radio Act of 1927 and the Communications Act of 1934 as originally enacted by Congress forbade the broadcast of "obscene, indecent or profane utterances" by radio. In 1948, however, these sections were moved by Congress from the Communications Act to the United States Criminal Code (18 U.S.C. sec. 1464). Acting under the public-interest portions of the act, however, the FCC continues to enforce regulations that prohibit obscene radio broadcasts and that attempt to channel indecent broadcasts to times of day when few children are listening.

     The statutory framework created by Congress in 1927 and 1934 has proven to be durable and flexible. Without major modification, it accommodated the displacement of AM radio by FM and the creation of satellite-delivered digital radio services. In the early 21st century, it appears that analog terrestrial radio broadcasting, a technology of the r 920s, can be replaced with DAB without major changes to this long-lived statute.