Analysis of the

Federal Communications Commission by Fritz Messere



The FCC and Broadcasting

Scholars differ on whether the FCC has used its powers to enforce provisions of the Communications Act wisely. Among the broad responsibilities placed with the FCC under section 303 are the power to classify stations and prescribe services, assign frequencies and power, approve equipment and mandate standards for levels of interference, make regulations for stations with network affiliations, prescribe qualifications for station owners and operators, levy fines and forfeitures, and issue cease and desist orders.

The most important powers granted to the commission are powers to license, short-license, withhold, fine, revoke or renew broadcast licenses and construction permits. The exercise of these powers are based on the commission's own evaluation of whether the station has served in the public interest; however, a provision of the Telecommunications Act of 1996 has made it more difficult for the Commission to withhold the license of a broadcast station that fulfilled its minimum obligations. Much of the debate over the FCC’s wisdom, then, has focused on the determination of what constitutes fulfillment of a broadcast licensee’s responsibilities under the "public interest, convenience and necessity" standard. Definitions and applications of this standard have varied considerably depending upon the composition of the commission and the mandates given by Congress. Though the FCC can wield the life-or-death sword of license revocation as a means of enforcing its regulations, the commission has rarely used this power in its 70 year history.

Indeed, critics of the Federal Communications Commission argue that it has been too friendly and eager to serve the needs of large broadcast interests. Early FCC proceedings, for example, illustrate a pattern of favoring business over educational or community interests in license proceedings. But other scholars point to FCC actions against big broadcast interests by promulgating Duopoly, Prime-Time Access Rules (PTARs), and Syndication and Financial Interest Rules, all aimed at reducing the influence of large multiple license owners. However, recent mergers and acquisitions allowed by the FCC and made possible as a result of ownership changes specified in the Telecommunications Act of 1996, suggest that the Congress is interested in allowing economies of scale to work within the broadcasting and telecommunications industry.

The commission has restated the public interest requirements numerous times over its seventy-year history. The Blue Book, The 1960 Programming Policy Statement, and Policy Statement Concerning Comparative Hearing were examples of FCC attempts to provide licensees with guidance as to what constituted adequate public service. Today, the FCC's reliance on ‘marketplace forces' to create competitive programming options for viewers reflects Congressional beliefs that economic competition is preferable to behavioral regulation in the broadcast industry. Implementation of the Telecommunications Act of 1996 has focused on reducing unnecessary regulation for an industry that is largely regarded as mature. A biennial review process, mandated by Congress, is used to ensure that regulation is not over-burdensome.

Viewed over its seventy-year history, FCC decision making is generally seen as 'ad hoc.' Frequent reversals of policymaking can be seen in commission decisions as the economic and technical conditions warranted changes in regulatory policy. Before the present era of deregulation, the FCC had promulgated extremely complex and detailed technical and operating rules and regulations for broadcasters, but it also gave licensees great latitude to determine what constituted service in the public interest based on local needs under its Ascertainment Policy. Once a station was licensed, the operator was required to monitor the technical, operational and programming aspects of the station. Files on all aspects of station operations had to be kept for several years. Today, under the general guidance of the "market," filing and renewal requirements for broadcasters are greatly reduced. Previously, when two or more applicants competed for the same license or when a Petition to Deny challenge was mounted, the commission made a determination as to which of the competing applicants was best qualified using a comparative hearing process. In the past, license challenges and competing applications frequently dragged on for years, costing interested parties thousands in legal fees. In 1993, the courts ruled the comparative process was arbitrary and capricious and in 1997, Congress mandated that the FCC utilize a competitive bidding process in awarding broadcast licenses.

Reliance on "the marketplace rationale" began under Chairman Charles D. Ferris (1977–81), when the FCC embraced a new perspective on regulation and began licensing thousands of new stations in an effort to replace behavioral regulation with the forces of competition. Chairman Mark Fowler (1981–87) endorsed the marketplace model even more willingly than his predecessor. Yet, despite the flood of new stations, the Scarcity Rationale, based on limitations of the electromagnetic spectrum remained a primary premise for government regulation over electronic media. New technologies have reduced the validity of the scarcity principle in recent years although the federal government still warehouses a large portion of the electromagnetic spectrum.

Broadcast licensees do not enjoy the same First Amendment rights as other forms of mass media. Critics have charged that entry regulation—either through utilizing the concept of "natural monopoly" or severely limiting the number of potential licenses available—effectively uses the coercive power of government to restrict the number of parties who benefit from involvement in telecommunications. Recently broadcasters have sought to limit the introduction of new broadcast, such as low-power FM, citing spectrum crowding and increased competition from other non-broadcast services. Breyer and Stewart note that, "Commissions operate in hostile environments, and their regulatory policies become conditional upon the acceptance of regulation by the regulated groups. In the long run, a commission is forced to come to terms with the regulated groups as a condition of survival." Critics say both the FRC and the FCC became victims of client politics as these two regulatory agencies were captured by the industries they were created to regulate; however, recent analysis suggests political influence is also an important factor in decisionmaking.

Analysis of the Federal Communications Commission - page one

Analysis of the Federal Communications Commission - page three

Further Readings for Understanding the FCC - page four

Link to The Federal Radio Commission Archives

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