national broadcasting co., inc. v. united states et al ... · 190 october term, 1942. syllabus. 319...

190 OCTOBER TERM, 1942.

Syllabus. 319 U. S.

NATIONAL BROADCASTING CO., INC. ET AL. V.

UNITED STATES ET AL.*

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATESFOR THE SOUTHERN DISTRICT OF NEW YORK.

No. 554. Argued February 10, 11, 1943.-Decided May 10, 1943.

1. The regulatory powers of the Federal Communications Commis-sion are not limited to the engineering and technical aspects of radiocommunication. P. 215.

2. Regulations adopted by the Federal Communications Commission,as "in the public interest," touching the relations between licensedbroadcasting stations on the one hand, and network organizationsfurnishing programs to such stations on the other hand, are sus-tained as within the powers conferred upon the Commission by theFederal Communications Act, viz.:

(1) A regulation providing that no license shall be granted to astandard broadcast station having any contract, arrangement, or un-derstanding with a network organization under which the stationis prevented or hindered from, or penalized for, broadcasting theprograms of any other network organization. P. 198.

(2) A regulation providing that no license shall be granted to astandard broadcast station having any contract, etc., with a net-work organization which prevents or hinders another station servingsubstantially the same area from broadcasting the network's pro-grams not taken by the former station, or which prevents or hindersanother station serving a substantially different area from broad-casting any program of the network organization; but not prohibit-ing any contract between a station and a network organization pur-suant to which the station is granted the first call in its primaryservice area upon the programs of the network organization. P. 200.

(3) A regulation declaring that no license shall be granted to astandard broadcast station having any contract, etc., with a net-work organization which provides for the affiliation .of the stationwith the network organization for a period longer than twoyears. P. 201.

*Together with No. 555, Columbia Broadcasting System, Inc. v.United States et al., also on appeal from the District Court of theUnited States for the Southern District of New York,-argued Febru-ary 11, 1943.

NAT. BROADCASTING CO. v. U. S.

190 Syllabus.

(4) A regulation providing that no license shall be granted to astandard broadcast station which options for network programsany time subject to call on less than 56 days' notice, or more timethan a total of three hours within each of four segments of thebroadcast day, as described in the regulation, and that such optionsmay not be exclusive as against other network organizations andmay not prevent or hinder the station from optioning or selling anyor all of the time covered by the option, or other time, to other net-work organizations. P. 202.

(5) A regulation providing that no license shall be granted toa standard broadcast station having any contract, etc., with a net-work organization which (a), with respect to programs offeredpursuant to an affiliation contract, prevents or hinders the sta-tion from rejecting or refusing network programs which the sta-tion reasonably believes to be unsatisfactory or unsuitable; orwhich (b), with respect to network programs so offered or alreadycontracted for, prevents the station from rejecting or refusingany program which, in its opinion, is contrary to the public in-terest, or from substituting a program of outstanding local or na-tional importance. P. 204.

(6) A regulation providing that no license shall be granted toa network organization, or to any person directly or indirectlycontrolled by or under common control with a network organiza-tion, for more than one standard broadcast station where one ofthe stations covers substantially the service area of the otherstation, or for any standard broadcast station in any locality wherethe existing standard broadcast stations are so few or of such un-equal desirability (in terms of coverage, power, frequency, or otherrelated matters) that competition would be substantially re-strained by such licensing. P. 206.

(7) A regulation providing that no license shall be granted toa standard broadcast station having any contract, etc., with a net-work organization under which the station is prevented or hin-dered from, or penalized for, fixing or altering its rates for thesale of broadcast time for other than the network's programs.P. 208.

3. Section 311 of the Federal Communications Act, by 'authorizingthe Commission to withhold broadcasting station licenses frompersons who have been convicted of violating the Antitrust Laws,does not imply that, in the absence of such conviction, conduct ofthe applicant amounting to such violation may not be consideredby the Commission in determining whether the granting of hisapplication would be contrary to the "public interest." P. 222.

OCTOBER TERM, 1942.

Counsel for Parties. 319 U. S.

4. The standard of "public interest" governing the exercise of thepowers delegated to the Commission by the Act is not so vague andindefinite as to create an unconstitutional delegation of legislativeauthority. P. 225.

5. The Commission by announcing that it will refuse station licensesto persons who engage in specified network practices contrary tothe public interest, convenience or necessity does not thereby denyto such persons the constitutional right of free speech. P. 226.

6. In a suit to enjoin the enforcement of regulations promulgatedby the Federal Communications Commission, the District Courtproperly disposed of the case upon the pleadings and the recordmade before the Commission, without trial de novo. P. 227.

47 F. Supp. 940, affirmed.

APPw.Ls from judgments of the District Court dismiss-ing suits to enjoin enforcement of chain broadcastingregulations promulgated by the Federal CommunicationsCommission.

Mr. John T. Cahill, with whom Messrs. A. L. Ashby,Harold S. Glendening, and JohnW. Nields were on thebrief, for the National Broadcasting Co.; and Mr. E. Wil-loughby Middleton, with whom Mr. Thomas H. Mid-dleton was on the brief, for the Stromberg-Carlson Tele-phone Manufacturing Co. (Mr. David M. Wood was onthe Statement as to Jurisdiction, for the Woodmen ofthe World Life Insurance Society),-appellants in No.554. Mr. Charles E. Hughes, Jr., with whom Messrs.Allen S. Hubbard, Harold L. Smith, and John J. Burnswere on the brief, for appellant in No. 555.

Solicitor General Fahy, with whom Messrs. Richard S.Salant, Charles R. Denny, Harry M. Plotkin, and MaxGoldman were on the brief, for the United States et al.;and Mr. Louis G. Caldwell, with whom Messrs. Leon Lau-terstein and Percy H. Russell, Jr., were on the brief, forthe Mutual Broadcasting System, Inc.,-appellees.

Briefs of amici curiae were filed by Mr. Isaac W. Diggeson behalf of the Association of National Advertisers,


190 Opinion of the Court.

Inc., and by Mr. George Link, Jr., on behalf of the Ameri-can Association of Advertising Agencies,-in support ofappellants; and by Messrs. Homer S. Cummings, MorrisL. Ernst and Benjamin S. Kirsh on behalf of the Ameri-can Civil Liberties Union,-in support of appellees.

MR. JUSTICE FRANKFURTER delivered the opinion of theCourt.

In view of our dependence upon regulated private enter-prise in discharging the far-reaching r6le which radio playsin our society, a somewhat detailed exposition of the his-tory of the present controversy and the issues which itraises is appropriate.

These suits were brought on October 30, 1941, to enjointhe enforcement of the Chain Broadcasting Regulationspromulgated by the Federal Communications Commissionon May 2, 1941, and amended on October 11, 1941. Weheld last Term in Columbia System v. United States, 316U. S. 407, and National Broadcasting Co. v. United States,316 U. S. 447, that the suits could be maintained under§ 402 (a) of the Communications Act of 1934, 48 Stat.1093, 47 U. S. C. § 402 (a) (incorporating by reference theUrgent Deficiencies Act of October 22, 1913, 38 Stat. 219,28 U. S. C. § 47), and that the decrees of the District Courtdismissing the suits for want of jurisdiction should there-fore be reversed. On remand the District Court grantedthe Government's motions for summary judgment anddismissed the suits on the merits. 47 F. Supp. 940.The cases are now here on appeal. 28 U. S. C. § 47.Since they raise substantially the same issues and wereargued together, we shall deal with both cases in a singleopinion.

On March 18, 1938, the Commission undertook a com-prehensive investigation to determine whether special reg-ulations applicable to radio stations engaged in chain

OCTOBER TERM, 1942.

Opinion of the Court. 319 U. S.

broadcasting 1 were required in the "public interest, con-venience, or necessity." The Commission's order directedthat inquiry be made, inter alia, in the following specificmatters: the number of stations licensed to or affiliatedwith networks, and the amount of station time used orcontrolled by networks; the contractual rights and obliga-tions of stations under their agreements with networks;the scope of network agreements containing exclusive affil-iation provisions and restricting the network from affiliat-ing with other stations in the same area; the rights andobligations of stations with respect to network advertisers;the nature of the program service rendered by stationslicensed to networks; the policies of networks with respectto character of programs, diversification, and accommoda-tion to the particular requirements of the areas served bythe affiliated stations; the extent to which affiliated sta-tions exercise control over programs, advertising contracts,and related matters; the nature and extent of networkprogram duplication by stations serving the same area;the extent to which particular networks have exclusivecoverage in some areas; the competitive practices of sta-tions engaged in chain broadcasting; the effect of chainbroadcasting upon stations not licensed to or affiliated withnetworks; practices or agreements in restraint of trade,or in furtherance of monopoly, in connection with chainbroadcasting; and the scope of concentration of controlover stations, locally, regionally, or nationally, throughcontracts, common ownership, or other means.

On April 6, 1938, a committee of three Commissionerswas designated to hold hearings and make recommenda-

Chain broadcasting is defined in § 3 (p) of the CommunicationsAct of 1934 as the "simultaneous broadcasting of an identical programby two or more connected stations." In actual practice, programs aretransmitted by wire, usually leased telephone lines, from their point oforigination to each station in the network for simultaneous broadcastover the air.



tions to the full Commission. This committee held pub-lic hearings for 73 days over a period of six months, fromNovember 14, 1938, to May 19, 1939. Order No. 37, an-nouncing the investigation and specifying the particularmatters which would be explored at the hearings, waspublished in the Federal Register, 3 Fed. Reg. 637, andcopies were sent to every station licensee and networkorganization. Notices of the hearings were also sent tothese parties. Station licensees, national and regional net-works, and transcription and recording companies were in-vited to appear and give evidence. Other persons whosought to appear were afforded an opportunity to testify.96 witnesses were heard by the committee, 45 of whomwere called by the national networks. The evidence covers27 volumes, including over 8,000 pages of transcript andmore than 700 exhibits. The testimony of the witnessescalled by the national networks fills more than 6,000 pages,the equivalent of 46 hearing days.

The committee submitted a report to the Commission onJune 12, 1940, stating its findings and recommendations.Thereafter, briefs on behalf of the networks and other in-terested parties were filed before the full Commission, andon November 28, 1940, the Commission issued proposedregulations which the parties were requested to considerin the oral arguments held on December 2 and 3, 1940.These proposed regulations dealt with the same mattersas those covered by the regulations eventually adopted bythe Commission. On January 2, 1941, each of the na-tional networks filed a supplementary brief discussing atlength the questions raised by the committee report andthe proposed regulations.

On May 2, 1941, the Commission issued its Report onChain Broadcasting, setting forth its findings and conclu-sions upon the matters explored in the investigation,together with an order adopting the Regulations here as-sailed. Two of the seven members of the Commission dis-



sented from this action. The effective date of the Regu-lations was deferred for 90 days with respect to existingcontracts and arrangements of network-operated stations,and subsequently the effective date was thrice again post-poned. On August 14, 1941, the Mutual BroadcastingCompany petitioned the Commission to amend two of theRegulations. In considering this petition the Commissioninvited interested parties to submit their views. Briefswere filed on behalf of all of the national networks, andoral argument was had before the Commission on Sep-tember 12, 1941. And on October 11, 1941, the Commis-sion (again with two members dissenting) issued a Sup-plemental Report, together with an order amending threeRegulations. Simultaneously, the effective date of theRegulations was postponed until November 15, 1941, andprovision was made for further postponements from timeto time if necessary to permit the orderly adjustment ofexisting arrangements. Since October 30, 1941, when thepresent suits were filed, the enforcement of the Regula-tions has been stayed either voluntarily by the Commis-sion or by order of court.

Such is the history of the Chain Broadcasting Regula-tions. We turn now to the Regulations themselves, illu-mined by the practices in the radio industry disclosed bythe Commission's investigation. The Regulations, whichthe Commission characterized in its Report as "the expres-sion of the general policy we will follow in exercising ourlicensing power," are addressed in terms to station licen-sees and applicants for station licenses. They provide, ingeneral, that no licenses shall be granted to stations or ap-plicants having specified relationships with networks.Each Regulation is directed at a particular practice foundby the Commission to be detrimental to the "public in-terest," and we shall consider them seriatim. In doing so,however, we do not overlook the admonition of the Com-mission that the Regulations as well as the network prac-



ices at which they are aimed are interrelated: "In con-sidering above the network practices which necessitate theregulations we are adopting, we have taken each practicesingly, and have shown that even in isolation each war-rants the regulation addressed to it. But the various prac-tices we have considered do not operate in isolation; theyform a compact bundle or pattern, and the effect of theirjoint impact upon licensees necessitates the regulationseven more urgently than the effect of each taken singly."(Report, p. 75.)

The Commission found that at the end of 1938 therewere 660 commercial stations in the United States, andthat 341 of these were affiliated with national networks.135 stations were affiliated exclusively with the NationalBroadcasting Company, Inc., known in the industry asNBC, which operated two national networks, the "Red"and the "Blue." NBC was also the licensee of 10 sta-tions, including 7 which operated on so-called clear chan-nels with the maximum power available, 50 kilowatts; inaddition, NBC operated 5 other stations, 4 of which hadpower of 50 kilowatts, under management contracts withtheir licensees. 102 stations were affiliated exclusivelywith the Columbia Broadcasting System, Inc., which wasalso the licensee of 8 stations, 7 of which were clear-chan-nel stations operating with power of 50 kilowatts. 74stations were under exclusive affiliation with the MutualBroadcasting System, Inc. In addition, 25 stations wereaffiliated with both NBC and Mutual, and 5 with bothCBS and Mutual. These figures, the Commission noted,did not accurately reflect the relative prominence of thethree companies, since the stations affiliated with Mutualwere, generally speaking, less desirable in frequency,power, and coverage. It pointed out that the stationsaffiliated with the national networks utilized more than97% of the total night-time broadcasting power of all the



stations in the country. NBC and CBS together con-trolled more than 85% of the total night-time wattage,and the broadcast business of the three national networkcompanies amounted to almost half of the total businessof all stations in the United States.

The Commission recognized that network broadcastinghad played and was continuing to play an important partin the development of radio. "The growth and develop-ment of chain broadcasting," it stated, "found its impetusin the desire to give widespread coverage to programswhich otherwise would not be heard beyond the receptionarea of a single station. Chain broadcasting makes pos-sible a wider reception for expensive entertainment andcultural programs and also for programs of national orregional significance which would otherwise have coverageonly in the locality of origin. Furthermore, the access togreatly enlarged audiences made possible by chain broad-casting has been a strong incentive to advertisers to financethe production of expensive programs . .. But the factthat the chain broadcasting method brings benefits andadvantages to both the listening public and to broadcaststation licensees does not mean that the prevailing prac-tices and policies of the networks and their outlets, aresound in all respects, or that they should not be altered.The Commission's duty under the Communications Act of1934 is not only to see that the public receives the advan-tages and benefits of chain broadcasting, but also, so faras its powers enable it, to see that practices which ad-versely affect the ability of licensees to operate in the pub-lic interest are eliminated." (Report, p. 4.)

The Commission found that eight network abuses wereamenable to correction within the powers granted it byCongress:

Regulation 3.101-Exclusive affiliation of station. TheCommission found that the network affiliation agreementsof NBC and CBS customarily contained a provision which



prevented the station from broadcasting the programs ofany other network. The effect of this provision was tohinder the growth of new networks, to deprive the listen-ing public in many areas of service to which they wereentitled, and to prevent station licensees from exercisingtheir statutory duty of determining which programs wouldbest serve the needs of their community. The Com-mission observed that in areas where all the stations wereunder exclusive contract to either NBC or CBS, the publicwas deprived of the opportunity to hear programs pre-sented by Mutual. To take a case cited in the Report:In the fall of 1939 Mutual obtained the exclusive rightto broadcast the World Series baseball games. It offeredthis program of outstanding national interest to stationsthroughout the country including NBC and CBS affiliatesin communities having no other stations. CBS and NBCimmediately invoked the "exclusive affiliation" clausesof their agreements with these stations, and as a resultthousands of persons in many sections of the countrywere unable to hear the broadcasts of the games.

"Restraints having this effect," the Commission ob-served, "are to be condemned as contrary to the publicinterest irrespective of whether it be assumed that Mutualprograms are of equal, superior, or inferior quality. Theimportant consideration is that station licensees are de-nied freedom to choose the programs which they believebest suited to their needs; in this manner the duty Qf a sta-tion licensee to operate in the public interest is defeated..... Our conclusion is that the disadvantages resultingfrom these exclusive arrangements far outweigh any ad-vantages. A licensee station does not operate in the publicinterest when it enters into exclusive arrangements whichprevent it from giving the public the best service of whichit is capable, and which, by closing the door of opportunityin the network field, adversely affects the program struc-ture of the entire industry." (Report, pp. 52, 57.) Ac-


Opinion of the Court. 319 U.S.

cordingly, the Commission adopted Regulation 3.101,providing as follows: "No license shall be granted to astandard broadcast station having any contract, arrange-ment, or understanding, express or implied, with a net-work organization under which the station is prevented orhindered from, or penalized for, broadcasting the programsof any other network organization."

Regulation 3.102-Territorial exclusivity. The Com-mission found another type of "exclusivity" provision innetwork affiliation agreements whereby the network bounditself not to sell programs to any other station in thesame area. The effect of this provision, designed to pro-tect the affiliate from the competition of other stationsserving the same territory, was to deprive the listeningpublic of many programs that might otherwise be avail-able. If an affiliated station rejected a network program,the "territorial exclusivity" clause of its affiliation agree-ment prevented the network from offering the programto other stations in the area. For example, Mutual pre-sented a popular program, known as "The AmericanForum of the Air," in which prominent persons discussedtopics of general interest. None of the Mutual stationsin the Buffalo area decided to carry the program, and aBuffalo station not affiliated with Mutual attempted toobtain the program for its listeners. These efforts failed,however, on account of the "territorial exclusivity" pro-vision in Mutual's agreements with its outlets. The resultwas that this program was not available to the people ofBuffalo.

The Commission concluded that "It is not in the publicinterest for the listening audience in .an area to be de-prived of network programs not carried by one stationwhere other stations in that area are ready and willing tobroadcast the programs. It is as much against the publicinterest for a network affiliate to enter into a contractualarrangement which prevents another station from carrying



a network program as it would be for it to drown out thatprogram by electrical interference." (Report, p. 59.)

Recognizing that the "territorial exclusivity" clause wasunobjectionable in So far as it sought to prevent duplica-tion of programs in the same area, the Commission limiteditself to the situations in which the clause impaired theability of the licensee to broadcast available programs.Regulation 3.102, promulgated to remedy this particularevil, provides as follows: "No license shall be granted toa standard broadcast station having any contract, arrange-ment, or understanding, express or implied, with a networkorganization which prevents or hinders another stationserving substantially the same area from broadcasting thenetwork's programs not taken by the former station, orwhich prevents or hinders another station serving a sub-stantially different area from broadcasting any program ofthe network organization. This regulation shall not beconstrued to prohibit any contract, arrangement, or un-derstanding between a station and a network organizationpursuant to which the station is granted the first call in itsprimary service area upon the programs of the networkorganization."

Regulation ,3.103-Term of affiliation. The standardNBC and CBS affiliation contracts bound the station fora.period of five years, with the network having the exclu-sive right to terminate the contracts upon one year's no-tice. The Commission, relying upon § 307 (d) of the Com-munications Act of 1934. under which no license to operatea broadcast station can be granted for a longer term thanthree years, found the five-year affiliation term to be con-trary to the policy of the Act: "Regardless of any changesthat may occur in the economic, political, or social life ofthe Nation or of the community in which the station islocated, CBS and NBC affiliates are bound by contractto continue broadcasting the network programs of onlyone network for 5 years. The licensee is so bound even

OCTOBER TERM, 1942.


though the policy and caliber of programs of the networkmay deteriorate greatly. The future necessities of thestation and of the community are not considered. Thestation licensee is unable to follow his conception of thepublic interest until the end of the 5-year contract." (Re-port, p. 61.) The Commission concluded that under con-tracts binding the affiliates for five years, "stations becomeparties to arrangements which deprive the public of theimproved service it might otherwise derive from competi-tion in the network field; and that a station is not operat-ing in the public interest when it so limits its freedom ofaction." (Report, p. 62.) Accordingly, the Commissionadopted Regulation 3.103: "No license shall be granted toa standard broadcast station having any contract, arrange-ment, or understanding, express or implied, with a networkorganization which provides, by original term, provisionsfor renewal, or otherwise for the affiliation of the stationwith the network organization for a period longer than twoyears: 2 Provided, That a contract, arrangement, or under-standing for a period up to two years, may be entered intowithin 120 days prior to the commencement of suchperiod."

Regulation 3.104-Option time. The Commissionfound that network affiliation contracts usually containedso-called network optional time clauses. Under theseprovisions the network could upon 28 days' notice callupon its'affiliates to carry a commercial. program duringany of the hours specified in the agreement as "networkoptional time." For CBS affiliates "network optionaltime" meant the entire broadcast day. For 29 outlets ofNBC on the Pacific Coast, it also covered the entire broad-cast day; for substantially all of the other NBC affiliates,

2 Station licenses issued by the Commission normally last two years.Section 3.34 of the Commission's Rules and Regulations governingStandard and High-Frequency Broadcast Stations, as amended October14. 1941.

202



it included 8 hours on weekdays and 8 hours on Sundays.Mutual's contracts with about half of its affiliates con-tained such a provision, giving the network optional timefor 3 or 4 hours on weekdays and 6 hours on Sundays.

In the Commission's judgment these optional time pro-visions, in addition to imposing serious obstacles in thepath of new networks, hindered stations in developing alocal program service. The exercise by the networks oftheir options over the station's time tended to prevent reg-ular scheduling of local programs at desirable hours. TheCommission found that "shifting a local commercial pro-gram may seriously interfere with the efforts of a [local]sponsor to build up a regular listening audience at a defi-nite hour, and the long-term advertising contract becomesa highly dubious project. This hampers the efforts of thestation to develop local commercial programs and affectsadversely its ability to give the public good program serv-ice. . . . A station licensee must retain sufficient freedomof action to supply the program and advertising needs ofthe local community. Local program service is a vitalpart of community life. A station should be ready, able,and willing to serve the needs of the local community bybroadcasting such outstanding local events as communityconcerts, civic meetings, local sports events, and other pro-grams of local consumer and social interest. We concludethat national network time options have restricted thefreedom of station licensees and hampered their efforts tobroadcast local commercial programs, the programs ofother national networks, and national spot transcriptions.We believe that these considerations far outweigh any sup-posed advantages from 'stability' of network operationsunder time options. We find that the optioning of timeby licensee stations has operated against the public in-'terest." (Report, pp. 63, 65.)

The Commission undertook to preserve the advantagesof option time, as a device for "stabilizing" the industry,

531559-44-17

OCTOBER TERM, 1942.


without unduly impairing the ability of local stations todevelop local program service. Regulation 3.104 calledfor the modification of the option-time provision in threerespects: the minimum notice period for exercise of theoption could not be less than 56 days; the number of hourswhich could be optioned was limited; and specific re-strictions were placed upon exercise of the option to thedisadvantage of other networks. The text of the Regula-tion follows: "No license shall be granted to a standardbroadcast station which options for network programs anytime subject to call on less than 56 days' notice, or moretime than a total of three hours within each of four seg-ments of the broadcast day, as herein described Thebroadcast day is divided into 4 segments, as follows: 8:00a. m. to 1:00 p. m.; 1:00 p. m. to 6:00 p. m.; 6:00 p. m. to11:00 p. m.; 11:00 p. m. to 8:00 a. m. Such options maynot be exclusive as against other network organizationsand may not prevent or hinder the station from optioningor selling any or all of the time covered by the option, orother time, to other network organizations."

Regulation 8.105-Right to reject programs. The Com-mission found that most network affiliation contracts con-tained a clause defining the right of the station to rejectnetwork commercial programs. The NBC contracts pro-vided simply that the station "may reject a network pro-gram the broadcasting of which would not be in the publicinterest, convenience, and necessity." NBC required alicensee who rejected a program to "be able to support hiscontention that what he has done has been more in thepublic interest than had he carried on the network pro-gram." Similarly, the CBS contracts provided that if thestation had "reasonable objection to any sponsored pro-gram or the product advertised thereon as not being in thepublic interest, the station may, on 3 weeks' prior noticethereof to Columbia, refuse to broadcast such program,



unless during such notice period such reasonable objec-tion of the station shall be satisfied."

While seeming in the abstract to be fair, these provi-sions, according to the Commission's finding, did not suffi-ciently protect the "public interest." As a practical mat-ter, the licensee could not determine in advance whetherthe broadcasting of any particular network program wouldor would not be in the public interest. "It is obvious thatfrom such skeletal information [as the networks sub-mitted to the stations prior to the broadcasts] the stationcannot determine in advance whether the program is inthe public interest, nor can it ascertain whether or notparts of the program are in one way or another offensive.In practice, if not in theory, stations affiliated with net-works have delegated to the networks a large part of theirprogramming functions. In many instances, moreover,the network further delegates the actual production ofprograms to advertising agencies. These agencies are farmore than mere brokers or intermediaries between thenetwork and the advertiser. To an ever-increasing extent,these agencies actually exercise the fuj nction of programproduction. Thus it is frequently neither the stationnor the network, but rather the advertising agency, whichdetermines what broadcast programs shall contain. Un-der such circumstances, it is especially important that in-dividual stations, if they are to operate in the public inter-est, should have the practical opportunity as well as thecontractual right to reject network programs. ...

"It is the station, not the network, which is licensedto serve the public interest. The licensee has the duty ofdetermining what programs shall be broadcast over hisstation's facilities, and cannot lawfully delegate this dutyor transfer the control of his station directly to the net-work or indirectly to an advertising agency. He cannotlawfully bind himself to accept programs in every case

OCTOBER TERM, 1942.


where he cannot sustain the burden of proof that he hasa better program. The licensee is obliged to reserve tohimself the final decision as to what programs will bestserve the public interest. We conclude that a licensee isnot fulfilling his obligations to operate in the publicinterest, and is not operating in accordance with the ex-press requirements of the Communications Act, if heagrees to accept programs on any basis other than his ownreasonable decision that the programs are satisfactory."(Report, pp. 39, 66.)

The Commission undertook in Regulation 3.105 to for-mulate the obligations of licensees with respect to super-vision over programs: "No license shall be granted to astandard broadcast station having any contract, arrange-ment, or understanding, express or implied, with a networkorganization which (a), with respect to programs offeredpursuant to an affiliation contract, prevents or hinders thestation from rejecting or refusing network programs whichthe station reasonably believes to be unsatiqfactory orunsuitable; or wiich (b), with respect to network pro-grams so offered or already contracted for, prevents thestation from rejecting or refusing any .program which, inits opinion, is contrary to the public interest, or from sub-stituting a program of outstanding local or nationalimportance."

Regulation 8.106-Network ownership of stations. TheCommission found that NBC, in addition to its networkoperations, was the licensee of 10 stations, 2 each in NewYork, Chicago, Washington, and San Francisco, 1 inDenver, and 1 in Cleveland. CBS was the licensee of 8stations, 1 in each of these cities: New York, Chicago,Washington, Boston, Minneapolis, St. Louis, Charlotte,and Los Angeles. These 18 stations owned by NBC andCBS, the Commission observed, were among the mostpowerful and desirable in the country, and were perma-nently inaccessible to competing networks. "Competi-

206



tion among networks for these facilities is nonexistent,as they are completely removed from the network-stationmarket. It gives the network complete control over itspolicies. This 'bottling-up' of the best facilities has un-doubtedly had a discouraging effect upon the creation andgrowth of new networks. Furthermore, common owner-ship of network and station places the network in a posi-tion where its interest as the owner of certain stations mayconflict with its interest as a network organization serv-ing affiliated stations. In dealings with advertisers, the,network represents its own stations in a proprietary capac-ity and the affiliated stations in something akin to anagency capacity. The danger is present that the networkorganization will give preference to its own stations at theexpense of its affiliates." (Report, p. 67.)

The Commission stated that if the question had arisenas an original matter, it might well have concluded thatthe public interest required severance of the business ofstation ownership from that of network operation. Butsince substantial business interests have been formed onthe basis of the Commission's continued tolerance of thesituation, it was found inadvisable to take such a drasticstep. The Commission concluded, however, that "thelicensing of two stations in the same area to a single net-work organization is basically unsound and contrary tothe public interest," and that it was also against the "pub-lic interest" for network organizations to own stations inareas where the available facilities were so few or of suchunequal coverage that competition would thereby besubstantially restricted. Recognizing that these con-siderations called for flexibility in their application toparticular situations, the Commission provided that "net-works will be given full opportunity, on proper applica-tion for new facilities or renewal of existing licenses, tocall to our attention any reasons why the principle shouldbe modified or held inapplicable." (Report, p. 68.)



Regulation 3.106 reads as follows: "No license shall begranted to a network organization, or to any person di-rectly or indirectly controlled by or under common con-trol with a network organization, for more than one stand-ard broadcast station where one of the stations coverssubstantially the service area of the other station, or forany standard broadcast station in any locality where theexisting standard broadcast stations are so few or of suchunequal desirability (in terms of coverage, power, fre-quency, or other related matters) that competition wouldbe substantially restrained by such licensing."

Regulation 3.107-Dual network operation. This reg-ulation provides that: "No license shall be issued to astandard broadcast station affiliated with a network or-ganization which maintains more than one network:Provided, That this regulation shall not be applicable ifsuch networks are not operated simultaneously, or if thereis no substantial overlap in the territory served by thegroup of stations comprising each such network." In itsSupplemental Report of October 11, 1941, the Commis-sion announced the indefinite suspension of this regula-tion. There is no occasion here to consider the validity ofRegulation 3.107, since there is no immediate threat of itsenforcement by the Commission.

Regulation 8.108-Control by networks of station rates.The Commission found that NBC's affiliation contractscontained a provision empowering the network to reducethe station's network rate, and thereby to reduce the com-pensation received by the station, if the station set a lowerrate for non-network national advertising than the rateestablished by the contract fQr the network programs.Under this provision the station could not sell time to anational advertiser for less than it would cost the adver-tiser if he bought the time from NBC.. In the words ofNBC's vice-president, "This means simply that a nationaladvertiser should pay the same price for the station



whether he buys it through one source or another source.It means that we do not believe that our stations shouldgo into competition with ourselves." (Report, p. 73.)

The Commission concluded that "it is against thepublic interest for a station licensee to enter into a contractwith a network which has the effect of decreasing itsability to compete for national business. We believe thatthe public interest will best be served and listeners sup-plied with the best programs if stations bargain freelywith national advertisers." (Report, p. 75.) Accord-ingly, the Commission adopted Regulation 3.108, whichprovides as follows: "No license shall be granted to. astandard broadcast station having any contract, arrange-ment, or understanding, express or implied, with a net-work organization under which the station is prevented orhindered from, or penalized for, fixing or altering its ratesfor the sale of broadcast time for other than the network'sprograms."

The appellants attack the validity of these Regulationsalong many fronts. They contend that the Commissionwent beyond the regulatory powers conferred upon it bythe Communications Act of 1934; that even if the Com-mission were authorized by the Act to deal with the mat-ters comprehended by the Regulations, its action is never-theless invalid because the Commission misconceived thescope of the Act, particularly § 313 which deals with theapplication of the anti-trust laws to the radio industry;that the Regulations are arbitrary and capricious; thatif the Communications Act of 1934 were construed toauthorize the promulgation of the Regulations, it wouldbe an unconstitutional delegation of legislative power;and that, in any event, the Regulations abridge the appel-lants' right of free speech in violation of the First Amend-ment. We are thus called upon to determine whetherCongress has authorized the Commission to exercise the

OCTOBER TERM, 1942.

Opinion of the Court. 319 U. s

power asserted by the Chain Broadcasting Regulations,and if it has, whether the Constitution forbids the exerciseof such authority.Federal regulation of radio 8 begins with the WirelessShip Act of June 24, 1910, 36 Stat. 629, which forbade anysteamer carrying or licensed to carry fifty or more personsto leave any American port unless equipped with efficientapparatus for radio communication, in charge of a skilledoperator. The enforcement of this legislation was en-trusted to the Secretary of Commerce and Labor, who wasin charge of the administration of the marine naviga-tion laws. But it was not until 1912, when the UnitedStates ratified the first international radio treaty, 37 Stat.1565, that the need for general regulation of radio com-munication became urgent. In order to fulfill our obliga-tions under the treaty, Congress enacted the Radio Actof August 13, 1912, 37 Stat. 302. This statute forbadethe operation of radio apparatus without a license fromthe Secretary of Commerce and Labor; it also allocatedcertain frequencies for the use of the Government, andimposed restrictions upon the character of wave emis-sions, the transmission of distress signals, and the like.

The enforcement of the Radio Act Of 1912 presented noserious problems prior to the World War. Questions ofinterference arose only rarely because there were morethan enough frequencies for all the stations then in exist-ence. The war accelerated the development of the art,however, and in 1921 the first standard broadcast stations

'The history of federal regulation of radio communication is sum-marized in Herring and Gross, Telecommunications (1936) 239-86;Administrative Procedure in Government Agencies, Monograph of theAttorney General's Committee on Administrative Procedure, Sen. Doe.No. 186, 76th Cong., 3d Sess., Part 3, dealing with the Federal Com-munications Commission, pp. 82-84; 1 Socolow, Law of Radio Broad-casting (1939) 38-61; Donovan, Origin and Development of RadioLaw (1930).

210



were established. They grew rapidly in number, and by1923 there were several hundred such stations throughoutthe country. The Act of 1912 had not set aside any par-ticultr frequencies for the use of private broadcast sta-tions; consequently, the Secretary of Commerce selectedtwo frequencies, 750 and 833 kilocycles, and licensed allstations to operate upon one or the other of these chan-nels. The number of stations increased so rapidly, how-ever, and the situation became so chaotic, that the Sec-retary, upon the recommendation of the National RadioConferences which met in Washington in 1923 and 1924,established a policy of assigning specified frequencies toparticular stations. The entire radio spectrum was di-vided into numerous bands, each allocated to a particularkind of service. The frequencies ranging from 550 to 1500kilocycles (96 channels in all, since the channels were sep-arated'from each other by 10 kilocycles) were assigned tothe standard broadcast stations. But the problemscreated by the enormously rapid development of radiowere far from solved. The increase in the number ofchannels was not enough to take care of the constantlygrowing number of stations. Since there were more sta-tions than available frequencies, the Secretary of Com-merce attempted to find room for everybody by limitingthe power and hours of operation of stations in order thatseveral stations might use the same channel. The num-ber of stations multiplied so rapidly, however, that by No-vember, 1925, there were almost 600 stations in the coun-try, and there were 175 applications for new stations.Every channel in the standard broadcast band was, bythat time, already occupied by at least one station, andmany by several. The new stations could be accommo-dated only by extending the standard broadcast band, atthe expense of the other types of services, or by imposingstill greater limitations upon time and power. The Na-tional Radio Conference which met in November, 1925,



opposed both of these methods and called upon Congressto remedy the situation through legislation.

The Secretary of Commerce was powerless to deal withthe situation. It had been held that he could not deny alicense to an otherwise legally qualified applicant on theground -that the proposed station would interfere withexisting private or Government stations. Hoover v. In-tercity Radio Co., 52 App. D. C. 339, 286 F. 1003. Andon April 16, 1926, an Illinois district court held that theSecretary had no power to impose restrictions as to fre-quency, power, and hours of operation, and that a station'suse of a frequency not assigned to it was not a violation ofthe Radio Act of 1912. United States v. Zenith RadioCorp., 12 F. 2d 614. This was followed on July 8, 1926, byan opinion of Acting Attorney General Donovan that theSecretary of Commerce had no power, under the Radio Actof 1912, to regulate the power, frequency or hours of op-eration of stations. 35 Ops. Atty. Gen. 126. The nextday the Secretary of Commerce issued a statement aban-doning all his efforts to regulate radio and urging that thestations undertake self-regulation.

But the plea of the Secretary went unheeded. FromJuly, 1926, to February 23, 1927, when Congress enactedthe Radio Act of 1927, 44 Stat. 1162, almost 200 new sta-tions went on the air. These new stations used any fre-quencies they desired, regardless of the interference there-by caused to others. Existing stations changed to otherfrequencies and increased their power and hours of opera-tion at will. The result was confusion and chaos. Witheverybody on the air, nobody could be heard. The situa-tion became so intolerable that the President in his mes-sage of December 7, 1926, appealed to Congress to enacta comprehensive radio law:

"Due to the decisions of the courts, the authority ofthe department [of Commerce] under the law of 1912has broken down; many more stations have been operat-

NAT. BROADCASTING CO. v. U. S. 213


ing than can be accommodated within the limited numberof wave lengths available; further stations are in course ofconstruction; many stations have departed from thescheme of allocations set down by the department, and thewhole service of this most important public function hasdrifted into such chaos as seems likely, if not remedied,to destroy its great value. I most urgently recommendthat this legislation should be speedily enacted." (H. Doc.483, 69th Cong., 2d Sess., p. 10.)

The plight into which radio fell prior to 1927 was at-tributable to certain basic facts about radio as a means ofcommunication-its facilities are limited; they are notavailable to all who may wish to use them; the radiospectrum simply is not large enough to accommodateeverybody. There is a fixed natural limitation upon thenumber of stations that can operate without interferingwith one another.' Regulation of radio was therefore asvital to its development as traffic control was to the de-velopment of the automobile. In enacting the Radio Actof 1927, the first comprehensive scheme of control overradio communication, Congress acted upon the knowledgethat if the potentialities of radio were not to be wasted,regulation was essential.

The Radio Act of 1927 created the Federal Radio Com-mission, composed of five members, and endowed the Com-mission with wide licensing and regulatory powers. Wedo not pause here to enumerate the scope of the RadioAct of 1927 and of the authority entrusted to the RadioCommission, for the basic provisions of that Act are in-corporated in the Communications Act of 1934, 48 Stat.1064, 47 U. S. C. § 151 et seq., the legislation immediatelybefore us. As we noted in Federal CommunicationsComm'n v. Pottsville Broadcasting Co., 309 U. S. 134, 137,

,'See Morecroft, Principles of Radio Communication (3d ed. 1933)355-402; Terman, Radio Engineering (2d ed. 1937) 593-645.

OCTOBER TERM, 1942.


"In its essentials the Communications Act of 1934 [sofar as its provisions relating to radio are concerned] de-rives from the Federal Radio Act of 1927. . . . By thisAct Congress, in order to protect the national interest in-volved in the new and far-reaching science of broadcasting,formulated a unified and comprehensive regulatory sys-tem for the industry. The common factors in the ad-ministration of the various statutes by which Congress hadsupervised the different modes of communication led tothe creation, in the Act of 1934, of the CommunicationsCommission. But the objectives of the legislation haveremained substantially unaltered since 1927."

Section 1 of the Communications Act states its "purposeof regulating interstate and foreign commerce in com-munication by wire and radio so as to make available, sofar as possible, to all the people of the United States arapid, efficient, Nation-wide, and world-wide wire andradio communication service with adequate facilities atreasonable charges." Section 301 particularizes this gen-eral purpose with respect to radio: "It is the purpose of thisAct, among other things, to maintain the control of theUnited States over all the channels of interstate and for-eign radio transmission; and to provide for the use of suchchannels, but not the ownership thereof, by persons forlimited periods of time, under licenses granted by Federalauthority, and no such license shall be construed to createany right, beyond the terms, conditions, and periods of thelicense." To. that end a Commission composed of sevenmembers was created, with broad licensing and regulatorypowers.

Section 303 provides:"Except as otherwise provided. in this Act, the Commis-

sion from time to time, as public convenience, interest, ornecessity requires, shall-

(a) Classify radio stations;



(b) Prescribe the nature of the service to be renderedby each class of licensed stations and each station withinany class;

(f) Make such regulations not inconsistent with law asit may deem necessary to prevent interference between sta-tions and to carry out the provisions of this Act ... ;

(g) Study new uses for radio, provide for experimentaluses of frequencies, and generally encourage the larger andmore effective use of radio in the public interest;

(i) Have authority to make special regulations appli-cable to radio stations engaged in chain broadcasting;

(r) Make such rules and regulations and prescribe suchrestrictions and conditions, not inconsistent with law, asmay be necessary to carry out the provisions of thisAct. . ....

The criterion governing the exercise of the Commission'slicensing power is the "public interest, convenience, ornecessity." §§ 307 (a) (d), 309 (a), 310, 312. In addi-tion, § 307 (b) directs the Commission that "In consider-ing applications for licenses, and modifications and renew-als thereof, when and insofar as there is demand for thesame, the Commission shall make such distribution oflicenses, frequencies, hours of operation, and of poweramong the several States and communities as to provide afair, efficient, and equitable distribution of radio serviceto each of the same."

The Act itself establishes that the Commission's powersare not limited to the engineering and technical aspectsof regulation of radio communication. Yet we are askedto regard the Commission as a kind of traffic officer, polic-ing the wave lengths to prevent stations from interferingwith each other. But the Act does not restrict the Com-



mission merely to supervision of the traffic. It puts uponthe Commission the burden of determining the composi-tion of that traffic. The facilities of radio are not largeenough to accommodate all who wish to use them. Meth-ods must be devised for choosing from among the manywho apply. And since Congress itself could not do this,it committed the task to the Commission.

The Commission was, however, not left at large in per-forming this duty. The touchstone provided by Con-gress was the "public interest, convenience, or necessity,"a criterion which "is as concrete as the complicated factorsfor judgment in such a field of delegated authority permit."Federal Communications Comm'n v. Pottsville Broadcast-ing Co., 309 U. S. 134, 138. "This criterion is not to beinterpreted as setting up a standard so indefinite as toconfer an unlimited power. Compare New York CentralSecurities Co. v. United States, 287 U. S. 12, 24. The re-quirement is to be interpreted by its context, by the natureof radio transmission and reception, by the scope, charac-ter and quality of services . . ." Federal Radio Comm'nv. Nelson Bros. Co., 289 U. S. 266, 285.

The "public interest" to be served under the Communi-cations Act is thus the interest of the listening public in"the larger and more effective use of radio." § 303 (g).The facilities of radio are limited and therefore precious;they cannot be left to wasteful use without detriment tothe public interest. "An important element of publicinterest and convenience affecting the issue of a licenseis the ability of the licensee to render the best pradticableservice to the community reached by his broadcasts."Federal Communications Comm'n v. Sanders Radio Sta-tion, 309 U. S. 470,475. .The Commission's licensing func-tion cannot be discharged, therefore, merely by findingthat there are no technological objections to the grantingof a license. If the criterion of "public interest" werelimited to such matters, how could the Commission



choose between two applicants for the same facilities, eachof whom is financially and technically qualified to operatea station? Since the very inception of federal regulationby radio, comparative considerations as to the services tobe rendered have governed the application of the stand-ard of "public interest, convenience, or necessity." SeeFederal Communications Comm'n v. Pottsville Broadcast-ing Co., 309 U. S. 134,138 n. 2.

The avowed aim of the Communications Act of 1934 wasto secure the maximum benefits of radio to all the peopleof the United States. To that end Congress endowed theCommunications Commission with comprehensive powersto promote and realize the vast potentialities of radio.Section 303 (g) provides that the Commission shall "gen-erally encourage the larger and more effective use of radioin the public interest"; subsection (i) gives the Commis-sion specific "authority to make special regulations appli-cable to radio stations engaged in chain bioadcasting";and subsection (r) empowers it to adopt "such rules andregulations and prescribe such restrictions and conditions,not inconsistent with law, as may be necessary to carry outthe provisions of this Act."

These provisions, individually and in the aggregate, pre-clude the notion that the Commission is empowered todeal only with technical and engineering impediments tothe "larger and more effective use of radio in the publicinterest." We cannot find in the Act any such restrictionof the Commission's authority. Suppose, for example,that a community can, because of physical limitations,be assigned only two stations. That community might bedeprived of effective service in any one of several ways.More powerful stations in nearby cities might blanket outthe signals of the local stations so that they could not beheard at all. The stations might interfere with each otherso that neither could be clearly heard. One station mightdominate the other with the power of its signal. But

OCTOBER TERM, 1942.


the community could be deprived of good radio servicein ways less crude. One man, financially and technicallyqualified, might apply for and obtain the licenses of bothstations and present a single service over the two stations,thus wasting a frequency otherwise available to the area.The language of the Act does not withdraw such a situa-tion from the licensing and regulatory powers of theCommission, and there is no evidence that Congress didnot mean its broad language to carry the authority itexpresses.

In essence, the Chain Broadcasting Regulations repre-sent a particularization of the Commission's conceptionof the "public interest" sought to be safeguarded by Con-gress in enacting the Communications Act of 1934. Thebasic consideration of policy underlying the Regulationsis succinctly stated in its Report: "With the number ofradio channels limited by natural factors, the public inter-est demands that those who are entrusted with the avail-able channels shall make the fullest and most effectiveuse of them. If a licensee enters into a contract with anetwork organization which limits his ability to make thebest use of the radio facility assigned him, he is not serv-ing the public interest. . . . The net effect [of the prac-tices disclosed by the investigation] has been that broad,casting service has been maintained at a level below, thatpossible under a system of free competition. Having sofound, we would be remiss in our statutory duty of en-couraging 'the larger and more effective use of radio inthe public interest' if we were to grant licenses to personswho persist in these practices." (Report, pp. 81, 82.). We would be asserting our personal views regarding the

effective utilization of radio were we to deny that the Com-mission was entitled to find that the large public aims ofthe Communications Act of 1934 comprehend the consid-erations which moved the Commission in promulgatingthe Chain Broadcasting Regulations. True enough, the



Act does not explicitly say that the Commission shall havepower to deal with network practices found inimical tothe public interest. But Congress was acting in a field qfregulation which was both new and dynamic. "Congressmoved under the spur of a widespread fear that in theabsence of governmental control the public interest mightbe subordinated to monopolistic domination in the broad-casting field." Federal Communications Comm'n v. Potts-ville Broadcasting Co., 309 U. S. 134, 137. In the contextof the developing problems to which it was directed, theAct gave the Commission not niggardly but expansivepowers. It was given a comprehensive mandate to "en-courage the larger and more effective use of radio in thepublic interest," if need be, by making "special regula-tions applicable to radio stations engaged in chain broad-casting." § 303 (g) (i).

Generalities unrelated to the living problems of radiocommunication of course cannot justify exercises of powerby the Commission. Equally so, generalities empty of allconcrete considerations of the actual bearing, of regula-tions promulgated by, thq Commission. to the Subject-matter entrusted to it, cannot strike down exercises .ofpower by the Commission. While Congress did not givethe Commission unfettere' discretion to regulatephases of the radio in dustry, it did not frustrate the pur-poses for which the Communications Act of 1934 wasbrought into being by attempting an itemized catalogueof the specific manifestations of the general problems forthe solution of which it was establishing a regulatoryagency. That would have stereotyped the powers of theCommission to specific details in regulating a field of enter-prise the dominant characteristic of which was the rapidpace of its unfolding. And so Congress did what experi-ence had taught it in similar attempts at regulation, evenin fields where the subject-matter of regolation was farless fluid and dynamic than radio. The essence of that

5315; 59-44----s

OCTOBER TERM, 1942.


experience Y4is to define broad areas for regulation and toestab1is fitafidards for judgment adequately related intheir rjolication to the problems to be solved.

For the crarhping construction of the Act pressed uponus, support cannot be found in its legislative history.The principal argument is that § 303 (i), empowering theCommission "to make special regulations applicable toradio stations engaged in chain broadcasting," intendedto restrict the scope of the Commission's powers to thetechnical and engineering aspects of chain broadcasting.This provision comes from § 4 (h) of the Radio Act of1927. It was introduced into the legislation as a Senatecommittee amendment to the House bill (H. R. 9971, 69thCong., 1st Sess.) This amendment originally read asfollows:

"(C) The commission, from time to time, as publicconvenience, interest, or necessity requires, shall-

(j) Wh e n s fions are connected ;by. wire for chainbroadcastigj d trmine th6 power 'each 'station shall use

.and the wave lengths to be used during the time stationsare so coniected and so operated, and make all other reg-.u1ti0.tih ,necessary in the interest of 'equitable radio serv-ice f 'the'listeners in the communities or areas affected by6hinibroadcasting.1"The report of the Senate-C6mmittee on Interstate Com-

me ce, which submitted this amendment, stated that un-der the' bill the Commission was given "complete au-thority ... to control chain broadcasting." Sen. Rep.No. 772, 69th Cong., 1st Sess., p. 3. The bill as thusamended was passed by the Senate, and then sent to con-ference. The bill that emerged from the conference com-mittee, and which became the Radio Act of 1927, phrasedthe amendment in the general terms now contained in§ 303 (i) of the 1934 Act: the Commission was authorized"to make special regulations applicable to radio stations

NAT. BROADCASTING CO. v. U. S..


engaged in chain broadcasting." The conference reportsdo not give any explanation of this particular change inphrasing, but they do state that the jurisdiction conferredupon the Commission by the conference bill was substan-tially identical with that conferred by the bill passed bythe Senate. See Sen. Doc. No. 200, 69th Cong., 2d Sess.,p. 17; H. Rep. 1886, 69th Cong., 2d Sess., p. 17. We agreewith the District Court that in view of this legislative his-tory, § 303 (i) cannot be construed as no broader than thefirst clause of the Senate amendment, which limited theCommission's authority to the technical and engineeringphases of chain broadcasting. There is no basis for as-suming that the conference intended to preserve the firstclause, which was ofd limited scope, and abandon the sec-ond clause, which was of general scope, by agreeing upona provision which was broader and more comprehensivethan those it supplanted.'

5 In the course of the Senate debates on the conference report uponthe bill that became the Radio Act of 1927, Senator Dill, who was incharge- of the bill, said: "While the commission would have the powerunder'the general terms of the bill, the bill specifically sets out as oneof the special powers of the commission the right to make specificregulations for governing chain broadcasting. As to creating a mon-opoly of radio in this country, let me say that this bll absolutely pro-tects the public, so far as it can protect them, by giving. the commis-sion full power to refuse a license to anyone who it believes will notserve the public interest, convenience, or necessity. It specifically pro-vides that any corporation guilty of monopoly shall not only not re-ceive a license but that its licerfse may be revoked; and if after a cor-poration has received its license for a period of three years it is thendiscovered and found to be guilty of monopoly, its license will be re-voked. . , . In addition to that, the bill contains a provision that nolicense may be transferred from one owner to another without thewritten consent of the commission, and the commission, of course, hav-ing the power to protect against a monopoly, must give such protec-tion. I wish to state further that the only way by which monopoliesin the radio business can secure control of radio here, even for a lim-ited period of time, will be by the commission becoming servile tothem. Power must be lodged somewhere, and I myself am unwilling

OCTOBER TERM, 1942.


A totally different source of attack upon the Regula-tions is found in §,311 of the Act, which authorizes theCommission to withhold licenses from persons convictedof having violated the anti-trust laws. Two contentionsare made-first, that this provision puts considerationsrelating to competition outside the Commission's concernbefore an applicant has been convicted of monopoly orother restraints of trade, and second, that, in any event,the Commission misconceived the scope of its powers un-der § 311 in issuing the Regulations. Both of these con-tentions are unfounded. Section 311 derives from § 13of the Radio Act of 1927, which expressly commanded,rather than merely authorized, the Commission to refusea license to any person judicially found guilty of havingviolated the anti-trust laws. The change in the 1934Act was made, in the words of Senator Dill, the managerof the legislation in the Senate, because "it seemed fairto the committee to do that." 78 Cong. Rec, 8825. TheCommission was thus permitted to exercise its judgmentas to whether violation of the anti-trust laws disqualifiedan applicant from operating a station in the "public in-terest." We agree with the District Court that "Thenecessary implication from this [amendment in 1934] wasthat the Commission might infer from the fact that theapplicant had in the past tried to monopolize radio, or hadengaged in unfair methods of competition, that the dispo-sition so manifested would continue and that if it did itwould make him an unfit licensee." 47 F. Supp. 940,944.

That the Commission may refuse to grant a license topersons adjudged guilty in a court of law of conduct inviolation of the anti-trust laws certainly does not render

to assume in advance that the commission proposed to be created willbe servile to the desires and demands of great corporations of thiscountry." 68 Cong. Rec. 2881.

NAT. BROADCASTING CO. v. U. S. 223


irrelevant consideration by the Commission of the effectof such conduct upon the "public interest, convenience,or necessity." A licensee charged with practices in con-travention of this standard cannot continue to hold hislicense merely because his conduct is also in violation ofthe anti-trust laws and he has not yet been proceededagainst and convicted. By clarifying in § 311 the scopeof the Commission's authority in dealing with persons con-victed of violating the anti-trust laws, Congress can hardlybe deemed to have limited the concept of "public interest"so as to exclude all considerations relating to monopolyand unreasonable restraints upon commerce. Nothing inthe provisions or history of the Act lends support to theinference that the Commission was denied the power torefuse a license to a station not operating in the "publicinterest," merely because its misconduct happened to bean unconvicted violation of the anti-trust laws.

Alternatively, it is urged that the Regulations consti-tute an ultra vires attempt by the Commission to enforcethe anti-trust laws, and that the enforcement of the anti-trust laws is the province not of the Commission but of theAttorney General and the courts. This contention mis-conceives the basis of the Commission's action. TheCommission's Report indicates plainly enough that theCommission was not attempting to administer the anti-trust laws:. "The prohibitions of the Sherman Act apply to broad-

casting. This Commission, although not charged withthe duty of enforcing that law, should administer itsregulatory powers with respect to broadcasting in the lightof the purposes which the Sherman Act was designed toachieve. . . While many of the network practices raiseserious questions under the antitrust laws, our jurisdictiondoes not depend on a showing that they do in fact consti-tute a violation of the antitrust laws. It is not our func-



tion to apply the antitrust laws as such. It is our duty,however, to refuse licenses or renewals to any person whoengages or proposes to engage in practices which will pre-vent either himself or other licensees or both from makingthe fullest use of radio facilities. This is the standard ofpublic interest, convenience or necessity which we mustapply to all applications for licenses and renewals ...We do not predicate our jurisdiction to issue the regula-tions on the ground that the network practices violatethe antitrust laws. We are issuing these regulations be-cause we have found that the network practices preventthe maximum utilization of radio facilities in the publicinterest." (Report, pp. 46, 83, 83 n. 3.)

We conclude, therefore, that the Communications Actof 1934 authorized the Commission to promulgate regu-lations designed to correct the abuses disclosed by its in-vestigation of chain broadcasting. There remains forconsideration the claim that the Commission's exercise ofsuch authority was unlawful.

The Regulations are assailed as "arbitrary and capri-cious." If this contention means that the Regulationsare unwise, that they are not likely to succeed in accom-plishing what the Commission intended, we can say onlythat the appellants have selected the wrong forum for sucha plea. What was said in Board of Trade v. United States,314 U. S. 534, 548, is relevant here: "We certainly haveneither technical competence nor legal authority to pro-nounce upon the wisdom of the course taken by the Com-mission." Our duty is at an end when we find that theaction of the Commission was based upon findings sup-ported by evidence, and was made pursuant to authoritygranted by Congress. It is not for us to say that the"public interest" will be furthered or retarded by theChain Broadcasting Regulations. The responsibility be-longs to the Congress for the grant of valid legislativeauthority and to the Commission for its exercise.


190 , Opinion of the Court.

It would be sheer dogmatism to say that the Commis-sion made out no case for its allowable discretion in for-mulating these Regulations. Its long investigation dis-closed the existences of practices which it regarded as con-trary to the "public interest." The Commission knewthat the wisdom of any action it took would have to betested by experience: "We are under no illusion that theregulations we are adopting will solve all questions of pub-lic interest with respect to the network system of programdistribution. . . . The problems in the network field areinterdependent, and the steps now taken may perhaps op-erate as a partial solution of problems not directly dealtwith at this time. Such problems may be examined againat some future time after the regulations here adoptedhave been given a fair trial." (Report, p. 88.) Theproblems with which the Commission attempted to dealcould not be solved at once and for all time by rigid rules-of-thumb. The Commission therefore did not bind itselfinflexibly to the licensing policies expressed in the Regu-lations. In each case that comes before it the Commis-sion must still exercise an ultimate judgment whether thegrant of a license would serve the "public interest, con-venience, or necessity." If time and changing circum-stances reveal that the "public interest" is not served byapplication of the Regulations, it must be assumed thatthe Commission will act in accordance with its statutoryobligations.

Since there is no basis for any claim that the Commis-sion failed to observe procedural safeguards required bylaw, we reach the contention that the R2gulations shouldbe denied enforcement on constitutional grounds. Here,as in New York Central Securities Corp. v. United States,287 U. S. 12, 24-25, the claim is made that the standard of"public interest" governing the exercise of the powers dele-gated to the Commission by Congress is so vague and in-definite that, if it be construed as comprehensively as the

OCTOBER TERM, 1942.

Opinion of the Court. 319 U.S.

words alone permit, the delegation of legislative authorityis unconstitutional.' But, as we held in that case, It is amistaken assumption that this is a mere general ref6rento public welfare without any standard to guide deter-minations. The nurpose of the Act, the requirements itimposes, and the context of the provision in quest6 'showthe contrary.".- id. See Federal Radio Comm'n v. 'el-son Bros. Co., 289'U. S .266, 285; Federal Conzmu i-n7tinsComm'n v. PottstsilleBroadcasting Co., 309 V. S. 134,1,37-38. Compare Panama Refining Co. v. Ryan, 293 U. S.388, 428; Intermountain Rate Cases, 234 U. S. 476, 486-89; United State'v. Lowden, 308 U. S. 225.

We come, finally,to ai appeal to the First Amendment.The Regulations, even if valid in all other respects, mustfall because they abridge, say the appellants, their rightof free speech. If that be so, it would follow that everyperson whose application for a license to operate a sta-tion is denied by the Commission is thereby denied hisconstitutional right of free speech. Freedom of utteranceis abridged to many who wish to use the limited facilitiesof radio. Unlike other modes of expression, radio inher-ently is not available to all. That is its unique character-istic, and that is why, unlike other modes of expression, itis subject to governmental regulation. Because it cannotbe used by all, some who wish to use it must be denied.But Congress did not authorize the Commission to chooseamong applicants upon the basis of their political, eco-nomic or social views, or upon any other capricious basis.If it did, or if the Commission by these Regulations pro-posed a choice among applicants upon some such basis,the issue before us would be wholly different. The ques-tion here is simply whether the Commission, by announc-ing that it will refuse licenses to persons who engage inspecified network practices (a basis for choice which wehold is comprehended within the statutory criterion of


190 MuRPHY, J., dissenting.

"public interest"), is thereby denying such j ersons 1teconstitutional right of free speech. The right 0f freespeech does not include, however, the right to use the ta-cilities of radio without a license. The licensing systemestablished by Congress in the Communications Act of1934 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." Denialof a station license on that ground, if valid under the Act,is not a denial of free speech.

A procedural point calls for just a word. The DistrictCourt, by granting the Government's motion for summaryjudgment, disposed of the case upon the pleadings andupon the record made before the Commission. The courtbelow correctly held that its inquiry was limited to reviewof the evidence before the Commission. Trial de novo ofthe matters heard by the Commission and dealt with in itsReport would have been improper. See Tagg Bros. v.United States, 280 U. S. 420; Acker v. United States, 298U. S. 426.

Affirmed.

MR. JUSTICE BLACK and MR. JUSTICE RUTLEDGE took nopart in the consideration or decision of these cases.

MR. JUSTICE MURPHY, dissenting:

I do not question the objectives of the proposed regula-tions, and it is not my desire by narrow statutory interpre-.tation to wcaken the authority of government agencies

.',to deal efficiently with matters committed to their juris-diction by the Congress. Statutes of this kind should beconstrued so that the agency concerned may be able tocope effectively with problems which the Congress in-tended to correct, or may otherwise perform the func-tions given to it. But we exceed our competence whenwe gratuitously bestow upon an agency power which the

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MupiHY, J., dissenting. 319 U. S.

Congress has not granted. Since that is what the Court insubtnce does today, I dissent.In the present case we are dealing with a subject ofextreme importance in the life of the nation. Althoughradio broadcasting, like the press, is generally conductedon a commercial basis, it is not an ordinary business ac-tivity, like the selling of securities or the marketing ofelectrical power. In the dissemination of information andopinion, radio has assumed a position of commanding im-portance, rivalling the press and the pulpit. Owing to itsphysical characteristics radio, unlike the other methodsof conveying information, must be regulated and rationedby the government. Otherwise there would be chaos, andradio's usefulness would be largely destroyed. But be-cause of its vast potentialities as a-medium of communi-cation, discussion and propaganda, the character and ex-tent of control that should be exercised over it by the gov-ernment is a matter of deep and vital concern. Events inEurope show that radio may readily be a weapon of au-thority and misrepresentation, instead of a means of en-tertainment and enlightenment. It may even be an in-strument of oppression. In pointing out these possibili-ties I do not mean to intimate in the slightest that theyare imminent or probable in this country, but they dosuggest that the construction of the instant statute shouldbe approached with more than ordinary restraint andcaution, to avoid an interpretation that is not clearlyjustified by the conditions that brought about its enact-ment, or that would give the Commission greater powersthan the Congress intended to confer.

The Communications Act of 1934 does not in termsgive the Commission power to regulate the contractualrelations between the stations and the networks. Colum-bia System v. United States, 316 U. S. 407, 416. It is onlyas an incident of the power to grant or withhold licenses toindividual stations under § §307, 308, 309 and 310 that this


190 MuRPnz, J., dissenting.

authority is claimed,' except as it may have been pro-vided by subdivisions (g), (i) and (r) of § 303, and by§§ 311 and 313. But nowhere in these sections, takensingly or collectively, is there to be found by reasonableconstruction or necessary inference, authority to regulatethe broadcasting industry as such, or to control the com-plex operations of the national networks.

In providing for regulation of the radio, the Congresswas under the necessity of vesting a considerable amountof discretionary authority in the Commission. The taskof choosing between various claimants for the privilegeof using the air waves is essentially an administrative one.Nevertheless, in specifying with some degree of particular-ity the kind of information to be included in an applica-tion for a license, the Congress has indicated what generalconditions and consideratbno aq o govern the grantingand withholding of statio'n licenses. Thus an applicantis required by § 308 (b) to subxfif ihformation bearingupon his citizenship, charactl . and technical, financialand other qualifications to p*per tihe proposed station,as well as data relating 't.the ownersh andlocation ofthe proposed station, the po Ver and fre uencies desired,operating periods, intended ise, and such other informa-tion as the Commission may require. ! Licenses, frequen-cies, hours of operation and power are to be fairlydistributed among the several States and communities toprovide efficient service to each. § 307 (b). Explicitprovision is made for dealing with applicants and licensees

'The regulations as first proposed were not connected with denial

of applications for initial or renewal station licenses but provided in-stead that: "No licensee of a standard broadcast station shall enterinto any contractual arrangement, express or implied, with a net-work organization," which contained any of the disapproved provisions.After a short time, however, the regulations were cast in their presentform, making station licensing depend upon conformity with theregulations.

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MuRPHry, J., dissenting. 319 U. S.

who are found guilty, or who are under the control ofpersons found guilty of violating the federal anti-trustlaws. §§ 311 and 313. Subject to the limitations definedin the Act, the Commission is required to grant a stationlicense to any applicant "if public convenience, interest,or necessity will be served thereby." § 307 (a). Nothingis said, in any of these sections, about network contracts,affiliations, or business arrangements.

The power to control network contracts and affiliationsby means of the Commission's licensing powers cannot bederived from implication out of the standard of "publicconvenience, interest or necessity." We have held that:"the Act does not essay to regulate the business of thelicensee. The Commission is given no supervisory con-trol of the programs,'of business management or of policy.In short, the broadcasting field is open to anyone, pro-vided there be an available &quency over which he canbroadcast without intlerence to others, if he shows higcompetency, the adequacy o his equipment, and financialability to make g . od use'of -the assigned channel." FederalCommunica~iSr'W mn744 v.' Sin ders Radio Station, 309U. S. 470, 475. he criteriA of "public convenience, in-terest or necessity" is not an. indefinite standard, but oneto be "ihterpreted by its context, by the nature of radiotransmission and reception, by the scope, character andquality of services, ..." Federal Radio Comm'n v. Nel-son Bros. Co., 289 U. S. 266, 285. Nothing in the contextof which the standard is a part refers to network contracts.It is evident from the record that the Commission is mak-ing its determination of whether the public interest wouldbe served by renewal of an existing license or licenses, notupon an examination of written applications presented toit, as required by §§ 308 and 309, but upon an investiga-tion of the broadcasting industry as a whole, and generalfindings made in pursuance thereof which relate to thebusiness methods of the network companies rather than


190 MuRPHr, J., dissenting.

the characteristics of the individual stations and the pecu-liar needs of the areas served by them. If it had been theintention of the Congress to invest the Commission withthe responsibility, through its licensing authority, of ex-ercising far-reaching control-as exemplified by the pro-posed regulations-over the business operations of chainbroadcasting and radio networks as they were then or arenow organized and established, it is not likely that theCongress would have left it to mere inference or implica-tion from the test of "public convenience, interest or ne-cessity," or that Congress would have neglected to includeit among the considerations expressly made relevant tolicense applications by § 308 (b). The subject is one ofsuch scope and importance as to warrant explicit mention.To construe the licensing sections (§§ 307, 308, 309, 310)as granting authority to require fundamental and revolu-tionary changes in the business methods of the broad-casting networks--methods which have been in existencefor several years and which have not been adjudged un-lawful-would inflate and distort their true meaning andextend them beyond the limited purposes which they wereintended to serve.

It is quite possible, of course, that maximum utilizationof the radio as an instrument of culture, entertainment,and the diffusion of ideas is inhibited by existing networkarrangements. Some of the conditions imposed by thebroadcasting chains are possibly not conducive to a freeruse of radio facilities, however essential they may be tothe maintenance of sustaining programs and the opera-tion of the chain broadcasting business as it is now con-ducted. But I am unable to agree that it is within thepresent authority of the Commission to prescribe theremedy for such conditions. It is evident that a cor-rection of these conditions in the manner proposed bythe regulations will involve drastic changes in the busi-ness of radio broadcasting which the Congress has not

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MuRPHY, J., dissenting. 319 U.S.

clearly and definitely empowered the Commission toundertake.

If this were a case in which a station license had beenwithheld from an individual applicant or licensee becauseof special relations or commitments that would seriouslycompromise or limit his ability to provide adequate serv-ice to the listening public, I should be less inclined tomake any objection. As an incident of its authority todetermine the eligibility of an individual applicant in anisolated case, the Commission might possibly consider suchfactors. In the present case, however, the Commissionhas reversed the order of things. Its real objective is toregulate the business practices of the major networks, thusbringing within the range of its regulatory power the chainbroadcasting industry as a whole. By means of theseregulations and the enforcement program, the Commis-sion would not only extend its authority over businessactivities which represent interests and investments of avery substantial character, which have not been put underits jurisdiction by the Act, but would greatly enlarge itscontrol over an institution that has now become a rival ofthe press and pulpit as a purveyor of news and entertain-ment and a medium of public discussion. To assume afunction and-responsibility of such wide reach and im-portance in the life of the nation, as a mere incident of itsduty to pass on individual applications for permission tooperate a radio station and use a specific wave length, isan assumption of authority to which I am not willing tolend my assent.

Again I do not question the need of regulation in thisfield, or the authority of the Congress to enact legislationthat would vest in the Commission such power as it re-quires to deal with the problem, which it has defined andanalyzed in its report with admirable lucidity. , It is pos-

'sible that the remedy indicated by the proposed regula-tions is the appropriate one, whatever its effect may be on


190 MuRPHY, J., dissenting,.

the sustaining programs, advertising .ontracts, and athercharacteristics of chain broadcastingasri, is now co4ducLtdin this country. I do not believe, however, that.the Com-mission was justified in claiming the responsibility andauthority it has assumed to exercise without a clear man-date from the Congress.

An examination of the history of this legislation, con-vinces me that the Congress did not intend by anythingin § 303, or any other provision of the Act, to confer on theCommission the authority it has assumed to exercise bythe issuance of these regulations. Section: 303 is con-cerned primarily with technical matters, and the subjqctsof regulation authorized by most of its subdivisions are 9x-ceedingly specific-so specific in fact that it is reasonableto infer that, if Congress had intended to cover the sub-ject of network contracts and affiliations, it would not haveleft it to dubious implications from general clauses, liftedout of context, in subdivisions (g), (i) and (r). I amunable to agree that in authorizing the Commission in§ 303 (g) to study new uses for radi6, provide for experi-mental use of frequencies, and' "generally encourage thelarger and more effective use of radib in the public inter-est," it was the intention or the purp6se of the Congressto confer on the Commission the regulatory powers nowbeing asserted. Manifestly that subdivision dealt withexperimental and development work-technical and scien-tific matters, and the construction of its concluding clauseshould be 'accordingly limited to those considerations.Nothing in its legislative history suggests that it had anybroader purpose.

. It was clearly not the intention of the Congress by theenactment of§ 303 (i), authorizing the Commission "tomake special regulations applicable to radio stations en-gaged in chain broadcasting," to invest the Commissionwith the authoriy now claimed over network contracts.This sectionis a verbatim reenactment of § 4 (h) of the

233

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MURPHY, J., dissenting. 319 U. S.

Radio Act of 1927,: dnd had its origin in a Senate amend-ment to the bill which became that Act. In its originalform it provided that the Commission, from time to time,as' public -convenience, interest, or necessity required,should: -

"When stations are connected by wire for chain broad-casting, [the Commission should] determine the powereach station shall use and the wave lengths to be used dur-ing the time stations are so connected and so operated, andmake all other regulations necessary in the interest ofequitable radio service to the listeners in the communitiesor hreas affected by chain broadcasting."

It was evidently the purpose ofthis provision to remedya' situation that was described as follows by Senator Dill(who was in charge of the bill in the. Senate) in qp~estion-ing a witness at the hearings of the Senate Committee onInterstate Commerce:

During the past few months there has grown up asystem of chain broadcasting, extending over the UnitedStates a great deal of the, time. I say a great deal of thetime--many nights month-and the stations that areconnected are of such wide.y varying meter lengths thatthe ordinary radio set that reaches out any distance is un-able to get anything but that one program, and so, in effect,that one program monopolizes the air. I realize it is some-what of a technical engineeringproblem, but ii has seemedto many people, at least many who have written to me,that when stations are carrying on chain programs thatthey might be limited to the use of wave lengths adjoiningor near enough to one another that, they would not coverthe entire dial. I do not know wheth iegilation ought

to restrict that or whether it had better be doht by regula-tions of the department. I want to g~V your opinion as tothe advisability in some way protecting'people who wantto hear some other program than the one being bro~id-casted by chain broadcast." (Report of .- arihg9 Before

234


190 MURPHY, J., dissenting.

Senate Committee on Interstate Commerce on S. 1 and S.1754, 69th Cong., 1st Sess. (1926) p. 123.)

In other words, when the same program was simultane-ously broadcast by chain stations, the weaker independentstations were drowned out because of the high power ofthe chain stations. With the receiving sets then com-monly in use, listeners were unable to get any program ex-cept the chain program. It was essentially an interfer-ence problem. In addition to determining power andwave length for chain stations, it would have been the dutyof the Commission, under the amendment, to make otherregulations necessary for "equitable radio service to thelisteners in the communities or areas affected by chainbroadcasting." The last clause should not be interpretedout of context and without relation to the problem atwhich the amendment was aimed. It is reasonably con-strued as simply authorizing the Comnmission to remedyother technical problems of interference involved in chainbroadcasting in addition to power and wave length by re-quiring special types of equipment, controlling locations,etc. The statement in the Senate Committee Report thatthis provision gave the Commission "complete author-ity . . . to control chain broadcasting" (S. Rep. No. 772,69th Cong., 1st Sess., p. 3) must be taken as meaning thatthe provision gave complete authority with respect to thespecific problem which the Senate intended to meet, aproblem of technical interference.

While the form of the amendment was simplified in theConference Committee so as to authorize the Commis-sion "to make special regulations applicable to radio sta-tions engaged in chain broadcasting," both Houses wereassured in the report of the Conference Committee that"the jurisdiction conferred in this paragraph is substan-tially the same as the jurisdiction conferred upon the Com-mission by . . . the Senate amendment." (Sen. Doc.No. 200, 69th Cong., 2d Sess., p. 17; H. Rep. No. 1886,

.5,UW,.59--44-19


MuRPHY, J., dissenting. 319 U. S.

69th Cong., 2d Sess., p. 17). This is further borne out bya statement of Senator Dill in discussing the conferencereport on the Senate floor:

"What is happening to-day is that the National Broad-casting Co., which is a part of the great Radio Trust, tosay the least, if not a monopoly, is hooking up stationsin every community on their various wave lengths withhigh powered stations and sending one program out,and they are forcing the little stations off the board sothat the people cannot hear anything except the oneprogram.

"There' is no power to-day in the hands of the Depart-ment of Commerce to stop that practice. The radio com-mission will have the power to regulate and prevent itand give the independents a chance." (68 Cong. Rec.3031.). Section 303 (r) is certainly no basis for inferring that

the Commission is empowered to issue the challenged reg-ulations. This subdivision is not an independent grantof power, but only'an authorization to: "Make such rulesand regulations and prescribe such restrictions and con-ditions, not inconsistent with law, as may be necessary tocarry out the provisions of this Act." There is no pro-vision in the Act for the control of network contractualarrangements by the Commission, and consequently§ 303 (r) is of no consequence here.

To the extent that existing network practices may haverun counter to the anti-trust laws, the Congress has ex-pressly provided the means of dealing with the problem.The enforcement of those laws has been committed tothe courts and other law enforcement agencies. In addi-tion to the usual penalties prescribed by statute for theirviolation, however, the Commission has been expresslyauthorized by § 311 to refuse a station license to any per-


190 MURPHY, J., dissenting.

son "finally adjudged guilty by a Federal court" of at-tempting unlawfully to monopolize radio communication.Anyone under the control of such a person may also berefused a license. And whenever a court has ordered therevocation of an existing license, as expressly provided in§ 313, a new license may not be granted by the Commis-sion to the guilty party or to any person under his control.In my opinion these provisions (§§ 311 and 313) clearlydo not and were not intended to confer independentauthority on the Commission to supervise network con-tracts or to enforce competition between radio networksby withholding licenses from stations, and do not justifythe Commission in refusing a license to an applicant other-wise qualified, because of business arrangements that mayconstitute an unlawful restraint of trade, when the appli-cant has not been finally adjudged guilty of violatingthe anti-trust laws, and is not controlled by one soadjudged.

The conditions disclosed by the Commission's investiga-tion, if they require correction, should be met, not by theinvention of authority where none is available or by di-verting existing powers out of their true channels andusing them for purposes to which they were not addressed,but by invoking the aid of the Congress or the serviceof agencies that have been entrusted with the enforce-ment of the anti-trust laws. In other fields of regula-tion the Congress has made clear its intentions. It hasnot left to mere inference and guess-work the existenceof authority to order board changes and reforms in thenational economy or the structure of business arrange-ments in the Public Utility Holding Company Act, 49Stat. 803, the Securities Act of 1933, 48 Stat. 74, the Fed-eral Power Act, 49 Stat. 838, and other measures of simi-lar character. Indeed the Communications Act itself con-tains cogent internal evidence that Congress did not in-


MURPHY, J., dissenting. 319 U. S.

tend to grant power over network contractual arrange-ments to the Commission. In § 215 (c) of Title II, deal-ing with common carriers by wire and radio, Congressprovided:

"The Commission shall examine all contracts of com-mon carriers subject to this Act which prevent the otherparty thereto from dealing with another common carriersubject to this Act, and shall report its findings to Con-gress, together with its recommendations as to whetheradditional legislation on this subject is desirable."

Congress had no difficulty here in expressing the possibledesirability of regulating a type of contract roughly simi-lar to the ones with which we are now concerned, and inreserving to itself the ultimate decision upon the mattersof policy involved. Insofar as the Congress deemed itnecessary in this legislation to safeguard radio broadcast-ing against arrangements that are offensive to the anti-trust laws or monopolistic in nature, it made specific pro-vision in §§ 311 and 313. If the existing network contractsare deemed objectionable because of monopolistic or otherfeatures, and no remedy is presently available under theseprovisions, the proper course is to seek amendatory legis-lation from the Congress, not to fabricate authority byingenious reasoning based upon provisions that have notrue relation to the specific problem.

MR. JUSTICE ROBERTS agrees with these views.

national broadcasting co., inc. v. united states et al ... · 190 october term, 1942. syllabus. 319...

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