The Concept That Would Not Die:
Scarcity As a Justification for Broadcast Regulation
By
Anthony L. Fargo
Doctoral Student
University of Florida
AEJMC Law Division
National Convention 1997
2001 S.W. 16th St., Apt. D-1
Gainesville, FL 32608
Home: (352) 375-7455
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The Concept That Would Not Die:
Scarcity As a Justification for Broadcast Regulation
I. Introduction
It may seem strange to talk of a "scarcity" in broadcasting, or any medium, in
an age when Time magazine can devote a series of cover stories to the issue of
whether there is too much information bombarding Americans.[1] Therein lies the
paradox between a concept that goes back to the dawn of broadcasting and today's
reality.
The concept that the airwaves constitute a scarce resource that must be
regulated in the public interest is rooted in the early days of radio and the
first broadcast regulations. It has survived the arrival of broadcast, cable,
and satellite television, the development of thousands of radio stations, and
the advent of the computer as a communications tool.
Although the Federal Communications Commission (FCC or Commission) often stated
in the last fifteen years that scarcity was a dead issue, the U.S. Supreme Court
has continued to use scarcity as a justification for regulating broadcast media
differently than print media. Recently, the current FCC chairman, Reed Hundt,
also has said that scarcity still exists and has pledged new efforts to hold
broadcasters accountable to the public interest, particularly in the content
areas of indecency, children's television and violent programming.[2] Congress
has shown a willingness to legislate in program content matters, even as both
Congress and the FCC have backed off from efforts to regulate the business side
of broadcasting.
This paper will attempt to sort out the up-and-down history of the scarcity
rationale as a justification for the regulation of broadcasters. Part II will
explore the history of scarcity from the 1920s through the late 1970s. Part III
will examine scarcity's fall from grace in the Fairness Doctrine decisions and
court cases in the 1980s and 1990s. Part IV will look at recent court cases and
congressional and FCC decisions that have kept the scarcity and public interest
concepts alive. Part V will offer an analysis of whether the renewed efficacy of
scarcity and Commission and Congressional decisions in recent years have led to
a more coherent regulatory framework for broadcasting.
II. Scarcity's History: So Many Voices, So Little Spectrum
A. Broadcasting's Beginnings
The regulation of radio began before commercial radio, when Congress' major
concern was aiding communication between sea-going vessels and other vessels and
land stations. The Radio Act of 1912[3] forbade anyone from using radio
equipment commercially without a license from the Secretary of Commerce, but
most of the
act dealt with regulations to prevent interference with government or ship
communications.
Commercial radio grew rapidly in the 1920s with virtually no regulation, but
its success proved to be its downfall. By the mid-1920s there were about 600
commercial radio stations in the United States, but many of them were
interfering with each other by using the same frequencies. Industry leaders
began calling on Commerce Secretary Herbert Hoover to do something about the
problem. Hoover started refusing to issue licenses, saying no more wavelengths
were available.[4]
However, in 1926, a U.S. District Court in Illinois ruled that the Commerce
Secretary had no authority to order radio licensees to do anything other than
obey the specific regulations in the 1912 Act. In the Zenith decision,[5] the
court ruled that Hoover overstepped his authority when he tried to punish a
Chicago station for operating on a different wavelength and at different times
than those stated in the license.[6]
After the decision effectively handcuffed Hoover, more radio stations went on
the air. By early 1927, there were 732 commercial stations operating.[7]
Congress responded to the power vacuum that the court decision left by passing
the Radio Act of 1927,[8] which created the Federal Radio Commission and
established regulatory guidelines, some of which still exist.
The 1927 Act was a product of its times. Interference between stations and the
government's allocation of spectrum had created the assumption that the airwaves
were scarce. Scandals during the Harding administration, including one that
involved the leasing of national oil reserves to private interests, had outraged
conservationists and strengthened their cries for scarce national resources to
be managed as public responsibilities.[9] For that reason, the 1927 Act
proclaimed that licenses for use of the airwaves would be granted for limited
times, but ownership would remain with the government.[10] The law also stated
that decisions about who should be granted licenses should be based on the
standard of the "public interest, convenience or necessity."[11]
The FRC was supposed to be a full-time body for only one year,[12] but the
complexity of the task of setting rules, deciding on licenses and allocating
wavelengths prompted Congress to continue extending its life. Seven years after
creating the FRC, Congress passed the Communications Act of 1934[13], which
replaced the FRC with the Federal Communications Commission, added telephone and
telegraph regulation to its responsibilities, and kept its broadcast regulatory
powers mostly intact.
Some modern scholars have suggested that the idea that the spectrum was a
scarce resource requiring licensed public trustees was woefully misguided.
According to these scholars, the government created a scarcity when it chose to
give free licenses to broadcasters in order to encourage the growth of the
medium. This free licensing encouraged more people than the market could bear to
seek licenses and prompted wasteful use of the spectrum.[14]
Whatever the view is in hindsight, it seemed clear to Congress in 1927 that the
government should regard the airwaves as a scarce resource, borrowed by
licensees chosen in the "public interest, convenience or necessity" as public
trustees. This view of the broadcasting world would survive a number of court
challenges and other attacks for more than 50 years.
B. The Commissions and Courts
Scarcity is never mentioned directly in either the 1927 Act or the 1934 Act,
but the concept was behind the "public interest" standard. It was up to the FRC,
FCC, and the courts to figure out what "public interest" meant.
The FRC issued a policy statement in 1928 in which it attempted to define the
public interest in broadcasting. Along with technical matters related to
interference, the statement also dealt with programming content. The statement
said that broadcasters should not use their stations for private matters and
that the interests of the audience should take precedence over licensee
interests.[15]
A number of the FRC's early decisions based on its definition of public
interest prompted lawsuits. In nearly all cases, the Court of Appeals for the
District of Columbia upheld or expanded the public interest standard. The court
overturned part of an FRC ruling and considered the quality of programming
offered while resolving a dispute between Chicago radio stations over frequency
reallocations;[16] upheld the FRC's rejection of license renewal for a station
used to promote its owner's questionable medicinal products;[17] and upheld the
FRC's denial of a renewal to a minister who used his radio broadcasts to attack
public officials and the Roman Catholic Church.[18] None of the decisions
questioned the scarcity concept behind the public interest standard, and those
that mentioned it at all seemed to take it as a given.[19]
After the FCC replaced the FRC, there was a brief moment in 1940 when the U.S.
Supreme Court seemed to rethink the Commission's public interest definition. In
the Sanders Brothers decision,[20] the Court upheld an FCC action to grant a
license to one station after an existing station complained that it would be
harmed economically because there was not enough advertising revenue available
in the community to support both stations. In the course of the opinion, the
Court also said that the FCC had no power under the 1934 Act to regulate
licensees' business management, policies, or programming. The opinion stated
that the broadcasting field was open to anyone who could show "competency, the
adequacy of his equipment, and the financial ability to make good use of the
assigned channel" if a frequency was available.[21]
But in 1943, the Supreme Court took a more liberal view of the FCC's powers and
tied those powers more specifically to scarcity. In the NBC case,[22] the Court
upheld Commission chain broadcasting rules limiting network control over radio
stations. In detailing the history of radio regulation, Chief Justice Felix
Frankfurter, writing for the Court, stated that among the "basic facts" of the
medium were that "its facilities are limited" and that the spectrum was "not
large enough to accommodate everybody."[23] He denied that the chain
broadcasting rules violated broadcasters' First Amendment rights of free speech:
Freedom of utterance is abridged to many who wish to use the
limited facilities of radio. Unlike other modes of expression, radio
inherently is not available to all. That is its unique
characteristic, and that is why, unlike other modes of expression, it
is subject to government regulation.[24]
For the first time, then, the Court directly used scarcity as a justification
for the regulation of broadcasting. It would not be the last time.
C. The Fairness Doctrine and Red Lion
The early 1940s were an active time for the FCC. In addition to the chain
broadcasting rules, it adopted rules limiting the number of FM,[25]
television,[26] and AM stations[27] that one company could own nationwide. The
FCC also decided in the Mayflower case that radio stations could not
editorialize about matters of public importance.[28] However, a few years later,
the FCC issued its "Blue Book" detailing its view of the public service
requirements for broadcasters.[29] The Commission noted that the airing of
public affairs programming raised a number of questions, including: "Should
commentators be forbidden, permitted, or encouraged to express their own
personal opinions?" and "Should the `right of reply' to broadcasts be afforded;
and if so, to whom should the right be afforded, and under what
circumstances?"[30] The FCC did not attempt to answer the questions, but stated
that "the public interest clearly requires that an adequate amount of time be
made available for the discussion of public issues" and added that the amount of
time devoted to public affairs would be considered at license renewal time.[31]
The rule against editorializing coupled with an obligation to discuss public
issues seemed a paradox to some broadcasters, however. After repeated pressure
to reconsider its editorializing rules, the FCC in 1949 issued a report that
gave birth to the Fairness Doctrine.[32] The report said broadcasters were
obligated to (1) provide a reasonable amount of time for the presentation of
public issues and (2) provide reasonable opportunities for contrasting views on
controversial issues of public importance to be aired. The Commission also
agreed to allow stations to editorialize.
Enforcing the Fairness Doctrine was not always popular, of course, and the
Commission and the courts spent much of the next 20 years fine-tuning how the
doctrine would be applied. One appeal of a Fairness Doctrine ruling resulted in
the landmark Red
Lion case.[33] The decision in that case also marked a sort of high-water mark
for the efficacy of scarcity.
The FCC had amended the Fairness Doctrine in 1967 to require stations that had
aired a personal attack of someone other than a political candidate, or foreign
group or citizen, to offer that person a chance to respond on the air. Personal
attacks in legitimate news broadcasts were excluded, however.[34]
The FCC rule change stemmed in part from the Red Lion case. A Pennsylvania
station licensed to Red Lion Broadcasting had carried a broadcast by the
Reverend Billy James Hargis in 1964 attacking the author of a book critical of
Barry Goldwater, the Republican candidate for president that year. Hargis
asserted that the author, Fred J. Cook, was fired from a newspaper job for
making false charges against a New York City official and had been connected
with "communist-affiliated" organizations. Cook demanded time to reply but was
refused.[35]
In ruling that the FCC did not violate the First Amendment in ordering Red Lion
to offer response time to Cook, Justice Byron White relied heavily on scarcity
arguments. Noting that there were substantially more people who wanted to
broadcast than available frequencies, White wrote that it was "idle to posit an
unabridgeable First Amendment right to broadcast" comparable to individual
speech and print rights.[36] Licensees had no rights greater than those of
people who were not licensed to broadcast, White continued, and there was
nothing in the First Amendment preventing the government from requiring
broadcasters to present other views and voices that would not be heard
otherwise.[37]
The Court rejected the notion that scarcity no longer existed because of
technological advances, such as the use of microwave transmission, that made
more uses of the spectrum possible. White wrote that uses for the spectrum had
grown at the same pace as technology. Thus, he said, it would be "unwise to
speculate on the future allocation of that space."[38]
The discussion of Red Lion requires some additional notes. Justice William O.
Douglas, a frequent champion of First Amendment rights, did not participate in
the decision. In a concurring opinion in another case in 1973, CBS v. Democratic
National Committee,[39] Douglas wrote that he would not have supported the Red
Lion decision because he found the Fairness Doctrine gave government too much
control over broadcasters.[40] He conceded that there was technological scarcity
that demanded licensing but said regulation should be confined to preventing
monopolistic practices and promoting technological development to create more
channels.[41]
The majority opinion in the CBS case, which upheld an FCC ruling that
broadcasters could refuse paid "editorial advertisements," also limited Red Lion
somewhat. Chief Justice Burger, writing for the Court, said that Red Lion found,
"rightly or wrongly," that the First Amendment rights of broadcasters could be
abridged, but he said that did not mean that such rights did not exist.[42]
The decision in Red Lion came even as cable television was beginning to grow as
a competitor to broadcast television and the number of radio and television
stations increased. In the 1980s, those market factors began to gain more
attention and limit the efficacy of scarcity as a justification for broadcast
regulation.
III. The FCC Reconsiders
The 1980s and the election of Ronald Reagan as president brought a new spirit
of deregulation to much of government. This
was true at the FCC, where serious doubts about scarcity, the Fairness Doctrine,
and other regulations were being entertained.
New FCC Chairman Mark Fowler signalled the new thinking at the FCC in 1982 when
he and a colleague wrote an article urging that broadcasters be viewed as
"marketplace participants" rather than public trustees.[43] Fowler argued that
instead of trying to determine public demand and then ordering broadcasters to
meet it, the FCC should let market forces determine what the public wanted and
needed and allow broadcasters freedom to provide it.[44]
Fowler also wrote that it was time to rethink the scarcity concept. Arguing
that all goods in society were scarce, Fowler suggested that economic forces
were better controllers of the market than regulation. He said the true scarce
resource was advertising dollars, not spectrum. The scarcity rationale also
ignored the many channels open to viewers and listeners through other sources,
such as cable, Fowler said. It was illogical, he added, to assume that a
trusteeship model could protect consumers better than "a system relying on the
judgment of marketplace players."[45]
The Supreme Court remained unconvinced, however. In the League of Women Voters
decision striking down a law banning editorials from publicly supported
television stations,[46] the Court noted that scarcity had come under fire from
a number of sources, notably Fowler. The Court said that it was unwilling to
reconsider its longstanding approach to broadcast regulation "without some
signal from Congress or the FCC" that technological changes had made that
approach obsolete.[47]
The FCC soon began signalling like mad. In a 1985 Fairness Report,[48] the
Commission said that the Fairness Doctrine was no longer needed because the
"multiplicity of voices in the marketplace today" served the public interest in
viewpoint diversity. The FCC also said that the Fairness Doctrine intruded into
broadcasters' journalistic freedom and inhibited the presentation of
controversial issues because broadcasters feared that any such presentation
would trigger FCC enforcement of the doctrine.[49] However, the FCC declined to
eliminate the Fairness Doctrine because it believed that a 1959 amendment of the
Communications Act of 1934 had codified the doctrine.[50]
The FCC said it would await Congressional action before repealing the Fairness
Doctrine.[51] Before Congress could act, however, the Circuit Court of Appeals
for the District of Columbia ruled in TRAC v. FCC that the 1959 law did not
codify the Fairness Doctrine.[52] In that same case, the court raised questions
about the scarcity rationale. In trying to determine whether teletext services
should be subject to the same Fairness Doctrine requirements as broadcasting,
the court criticized Red Lion and its progeny for creating a "distinction
without a difference" between print and broadcast. All resources are scarce,
including newsprint, ink and other resources used in print journalism, the court
said, so the scarcity of broadcast frequencies did not explain the regulation of
one medium but not the other.[53]
The FCC got another strong signal from the D.C. Circuit in 1987 that it could
repeal the Fairness Doctrine. The Meredith case[54] involved a Fairness Doctrine
complaint against a Syracuse, N.Y., television station that sponsored ads
favoring the construction of a nuclear power plant. The FCC had ruled that the
Meredith Corp. station violated the Fairness Doctrine by refusing to run
opposing viewpoints. The Court of Appeals said that the FCC had undermined its
own case by trying to enforce the Fairness Doctrine against Meredith while
preparing a report repudiating the doctrine.[55] The court ordered the
Commission to reconsider Meredith's constitutional arguments against the
Fairness Doctrine. However, the judges said the FCC could avoid revisiting that
issue if it decided that enforcing the Fairness Doctrine was, as it suggested in
1985, contrary to the public interest.[56]
Shortly after the decision in Meredith, the FCC issued a final report repealing
the Fairness Doctrine.[57] Relying partly on the Court of Appeals' dicta in the
TRAC case, the FCC said that it no longer believed that there was a scarcity of
media outlets. Even if a scarcity of spectrum allocations existed, however, the
FCC said that the situation did not justify treating broadcasters differently
from publishers of print media.[58]
The FCC report in 1987 was upheld in an appeal of the Meredith case by the
Syracuse Peace Council, which had brought the original complaint against
Meredith Corp. The Court of Appeals for the District of Columbia ruled that the
FCC's decision to scrap the Fairness Doctrine, and thus its ruling against the
Syracuse Peace Council, was not arbitrary or capricious and allowed it to
stand.[59]
As far as the FCC and the Court of Appeals were concerned, then, the Fairness
Doctrine was dead, along with the scarcity rationale. But the Supreme Court
never ruled on the Fairness Doctrine cases. So far, despite apparently receiving
the signal it was looking for in League of Women Voters,[60] the Court has not
discarded scarcity as a rationale for regulating broadcasting. As recently as
1994, in the Turner Broadcasting case, the Court said it still was not ready to
question scarcity's "continuing validity as support for our broadcast
jurisprudence."[61]
Despite the Supreme Court's refusal to do away with the scarcity rationale for
broadcast regulation, the FCC's repudiation of it, supported by the D.C. Court
of Appeals, seemed to relegate scarcity to the ranks of an obscure and ignored
doctrine. However, the public interest concept remained intact, and Congress,
the FCC and the courts began to apply it to programming in ways it never had
before. Recently, through the comments of a new FCC chairman, scarcity began to
re-emerge as a basis for the rationale of broadcasting regulation.
IV. The Public Interest, Indecency, Violence and Kids
Reed Hundt, who became FCC chairman in 1993 after his appointment by President
Clinton, gave a series of speeches in late 1995 and early 1996 in which he
attempted to reconcile the Commission's recent deregulatory past with its
renewed interest in requiring certain acts of broadcasters. Hundt suggested that
the FCC had gone too far in protecting the private commercial interests of
broadcasters, resulting in rules that rarely were enforced and were too
vague.[62] Hundt said his intent was that the FCC should deregulate all
commercial aspects of broadcasting "best left to the market" while improving
Commission regulation in those areas "where the market alone cannot deliver the
services that Congress and the public interest require."[63]
In language similar to that used by the Supreme Court in Red Lion, Hundt said
that scarcity was still a sound rationale for broadcast regulation despite
technological innovations, such as the use of digital rather than analog
signals, that would allow more people to use the spectrum. Hundt said that even
as engineers devised ways to expand spectrum availability, they were also
devising new ways to use the spectrum, such as wireless communication.[64]
Hundt identified four areas in which market forces were unlikely to provide
results compatible with broadcasters' public interest mandates: indecent
programming, children's educational television, violent programming, and
election campaign programming.[65] The evolution of government regulations and
court decisions in indecency, children's television and violent programming will
be discussed below.
A. Indecency
The Radio Act of 1927[66] and the Communications Act of 1934[67] both banned
the airing of "obscene, indecent, or profane language" over the airwaves. In a
1948 law overhauling the nation's penal code, Congress moved the language
provision from the Communications Act to the penal code[68] but left enforcement
with the FCC. The ban on foul language rarely was enforced, however, until 1975.
Although the Supreme Court ruled in the Miller case in 1973 that obscene speech
was not protected by the First Amendment and attempted to define obscenity,[69]
indecency in broadcasting was undefined legally until the FCC ruled in a
complaint against a New York radio station licensed to the Pacifica Foundation.
The station had broadcast comedian George Carlin's "Filthy Words" monologue, in
which he recited the seven words that one supposedly was not allowed to use on
the air. The monologue was broadcast in the afternoon, and a man driving with
his son heard the broadcast and complained. The FCC said the language was not
obscene but indecent because it described sexual and excretory activities and
organs in a patently offensive manner, but did not appeal to a prurient
interest. The Commission also said that the time of day the monologue was
broadcast affected whether it would be considered indecent and suggested that
indecency could be
broadcast when children were unlikely to be present in the audience, from 10
p.m. to 6 a.m.[70]
The Commission warned Pacifica that it could be punished if more complaints
were received. It based its decision on a number of factors, including
children's access to radio when they were unsupervised by parents, the presence
of radio in the home, where private interests deserved more deference, the lack
of any warning that a person was about to hear indecent speech when he or she
turned on a radio, and scarcity, which the FCC said justified treating
broadcasting differently from other media.[71]
Pacifica appealed to the Supreme Court. In its 1978 decision, the Court did not
address the scarcity argument in detail but, in a narrow decision, upheld the
FCC indecency policy based on the idea that broadcasting had a "unique
pervasiveness" and was able to "invade" the home. However, the Court said that
the decision should be construed narrowly and that a determination that
programming was indecent should be based on its context and accessibility to
children.[72]
The FCC confined enforcement of the indecency standard to the seven "filthy
words" for nearly ten years. However, in 1987, the same year that it abolished
the Fairness Doctrine, the Commission clarified its indecency standard by
adopting the more generic definition in Pacifica concerning patently offensive
language. The Commission also stated that the 10 p.m. to 6 a.m. "safe harbor"
for the airing of indecent material was no longer sufficient because evidence
showed that a substantial number of children were still in the audience after 10
p.m. However, the FCC did not state a specific time when indecency could be
aired.[73] The FCC later set the safe harbor at midnight to 6 a.m.[74]
In three specific cases, the FCC warned broadcasters that future airings of
shows it found indecent would be actionable but declined to issue sanctions. Two
of the cases involved programs that used some of the "filthy words" after 10
p.m.[75] The third dealt with a Howard Stern show in which the "filthy words"
were not used, but there was some discussion of sexual conduct and organs. The
show aired from 6 a.m. to 10 a.m.[76]
In an appeal brought by Action for Children's Television (ACT I), the Court of
Appeals upheld the revised definition of indecency but threw out the two cases
involving broadcasts after 10 p.m., saying the Commission decision to change the
safe harbor hours was arbitrary and capricious.[77] Congress then added a
section to an appropriations bill banning all indecent material from the
airwaves.[78] After the FCC adopted rules to reflect the new law,[79] the court
ruled in ACT II that the total ban was unconstitutional because indecent speech
was protected by the First Amendment. It ordered the FCC to come up with new
regulations after a "full and fair hearing."[80]
Congress then passed a law banning indecent speech from 6 a.m. to midnight but
allowing public stations to broadcast indecency after 10 p.m. if they went off
the air at or before midnight.[81] After the FCC passed rules in line with the
new law,[82] the court again ruled against the agency in ACT III, saying the
distinction between commercial and public stations did not provide a basis for
treating them differently.[83] In a 1995 rehearing en banc, the court upheld the
FCC's ban on indecent programming from 6 a.m. to 10 p.m., essentially returning
to Square One.[84]
During the to-and-fro regarding the safe harbor, the FCC began to issue fines
in record numbers for indecency violations. The most notable series of cases
involved "shock jock" Howard Stern, whose program is syndicated nationwide by
Infinity Broadcasting. In 1995, Infinity paid the FCC $1.7 million in fines
accumulated since 1987 for Stern broadcasts in which sex and genitalia were
discussed outside the "safe harbor" hours.[85]
B. Children's Television
Efforts by the FCC and Congress to regulate indecency have been based, at least
indirectly, on a perceived need to protect children from adult programming.
Particularly since 1990, Congress and the FCC have tried to deal more directly
with the issue of programming for children.
The public interest group Action for Children's Television asked the FCC to
consider a number of rule changes and policies directed at children's
television. Specifically, ACT wanted the Commission to ban commercials on
children's television; stop performers from using or mentioning specific
products during children's programs; and require each station to provide at
least 14 hours of children's programming per week during hours when children
were likely to be in the audience.[86] The FCC noted that it received more than
100,000 responses to its 1971 Notice of Inquiry seeking comments on proposed
rule changes.[87]
Despite all the attention the Notice received and three years of gathering
comments, however, the Commission decided not to adopt any formal rules
concerning ACT's recommendations, instead relying on industry self-regulation to
decrease the number of commercials and increase and schedule programming for
children.[88] The FCC noted, however, that broadcasters "clearly" had a
responsibility to serve the children in their audiences. Using television to
meet children's educational and informational needs bore a "direct relationship"
to a broadcaster's obligation to act in the "public interest," the FCC said.[89]
The Commission adopted some general policy guidelines related to television
programming, including discouraging host selling on children's programs,
discouraging program-length commercials (in which the characters in the show
were based on toys or other products advertised on commercials during the show),
and encouraging a separation between shows and commercials so that children
would not confuse commercials and program content.[90]
However, little was done to enforce the regulations, and the FCC seemed to have
problems with the definitions. In 1985, for example, the Commission declined to
find that a number of television stations had violated the policy against
program-length commercials by airing shows based on toys and cereals that were
also advertised, such as "He Man and the Masters of the Universe," "G.I. Joe: A
Real American Hero," "Rubik the Amazing Cube," and "Strawberry Shortcake and
Care Bears Family TV Fun Festival." The programs had "sufficient independent
literary and educational merit" that they could not be said to be interwoven
with the commercials, the FCC said.[91]
The government did little to affect children's programming until Congress
addressed the issue with the Children's Television Act of 1990 (CTA).[92] The
CTA directed the Commission to adopt rules limiting commercials on children's
television to 10.5 minutes per hour on weekends and 12 minutes per hour on
weekdays.[93] The legislation also required the FCC to consider, during license
renewal deliberations, whether a television licensee had met the advertising
standard and had served the "educational and informational needs" of children
through programming or non-broadcast efforts.[94] Congress also ordered the FCC
to wrap up within 180 days a proceeding that had begun in 1983 to define
"program-length commercials" and adopt rules for them.[95]
In April 1991, the FCC issued a Report and Order addressing the issues brought
up by the CTA.[96] The Commission adopted the limit on advertising contained in
the CTA and defined "children" as people 12 years old and younger, "commercial"
as any air time "sold for purposes of selling a product" and "program" as "an
identifiable unit of program material that is not a commercial or promotional
announcement."[97] The Commission decided that for the purposes of programming,
"children" would be defined as people 16 years old and younger.[98] "Educational
and informational programming" was defined as programming that "furthers the
positive development of the child in any respect, including the child's
cognitive/intellectual or emotional/social needs."[99] The FCC also defined
"program-length commercial" as "a program associated with a product in which
commercials for that product are aired."[100] The definition effectively banned
such programming because a "program-length" commercial would violate the limits
on advertising on children's programs.
The 1991 report, and clarifications of parts of it in a subsequent
reconsideration,[101] offered one of the FCC's first concrete efforts at
regulating children's television in the public interest. However, although the
order stated that compliance with the rules would be considered at license
renewal time and fines could be imposed for violating the regulations,[102] no
specific requirements for the amount of children's programming to be aired were
adopted.
In 1995, the FCC issued a Notice of Proposed Rule Making in which it suggested
that it was time to reconsider the 1991 decision.[103] The FCC said that its
review of 320 license renewal applications had shown that the definitions of
programming were too vague, allowing, for example, "Beverly Hills 90210" to be
classified as "educational and informational."[104] The Commission proposed that
children's programming should be specifically designed to meet the educational
and informational needs of children 16 and under; be scheduled when children are
likely to be in the audience, between 6 a.m. and 11 p.m.; and be identified as
educational children's programming at the time it is aired and in program
guides.[105]
The Commission also sought comment on whether it should monitor broadcaster
performance to see if educational and informational programming for children
increased; establish a guideline of three to five hours per week of such
programming as a means of satisfying license renewal obligations; or set a
programming standard of three to five hours per week that could
be partly fulfilled by the broadcaster sponsoring children's programming on
other stations.[106]
C. Violence
The government generally has relied on urging broadcasters to adopt voluntary
standards to curb violence on television.[107] Concerns have been expressed in a
number of social research studies that portrayals of violence on television lead
indirectly to an increase in societal violence. The effects are particularly
acute, researchers claim, when the violence is being watched by children.[108]
However, legal scholars generally have concluded that any government attempt to
order programmers to limit violence would be unconstitutional censorship. In a
poignant postscript at the end of a law review article tracing the history of
attempts to regulate violence, Harry T. Edwards, chief judge of the District of
Columbia Court of Appeals, said he was not surprised at his conclusion that
regulating violent programming probably was unconstitutional. As a father,
however, Edwards said he wished he could "play God" and remove gratuitous
violence from television to protect future generations from its effects.[109]
More recently, Congress has decided to try its hand at giving parents more
power over the violence their children see. The Telecommunications Act of
1996[110] contains a provision that would require television manufacturers to
install "V-chips" in all new sets. The circuitry would allow parents to block
out programs containing certain levels of violence. The act tied the V-chip to a
voluntary rating system that it urged programmers to develop within one year of
the act's approval. Programmers would transmit signals containing rating
information that could be read by the V-chip. If the programmers do not come up
with a rating system of their own, the FCC is required to come up with one for
them.[111] Television industry representatives introduced a rating system in
December 1996 that took effect in January 1997, but the system almost
immediately came under fire from critics who said it was not specific enough to
help parents decide what programs their children could watch.[112]
V. Analysis
In the years before deregulation became a buzzword and Mark Fowler became FCC
chairman, the government had followed a two-tiered path of broadcast regulation.
The Commission and its predecessor, the FRC, had laid down some broad
programming guidelines but generally stayed out of the business of
micro-managing content.[113] In contrast, beginning in the late 1930s, the FCC
passed a number of rules affecting the business side of broadcasting. Most
notable were the Commission's multiple ownership regulations,[114] which sought
to assure that the public would be exposed to a diversity of viewpoints by
ensuring a diversity of ownership.[115] This may have been a response to anti-
monopoly and anti-censorship language in the Radio Act of 1927[116] and the
Communications Act of 1934.[117]
Beginning in the mid-1980s, however, the FCC began to loosen restrictions on
station ownership, increasing the number of radio and television stations a
single company could own nationally[118] and abolishing the duopoly policy.[119]
The Commission also repealed a number of requirements on the number of
commercials a television station could air hourly, the keeping of program logs
and the ascertainment of community programming needs.[120] At the same time, the
FCC and Congress began getting more heavily involved in regulating programming,
particularly in the areas of indecency, children's television, and violent
shows.
The V-chip legislation in the Telecommunications Act points to a paradox in the
new thinking about the regulation of broadcasters. The V-chip imposes content
regulation on violent programming for the first time. But in another section of
the act, broadcasters receive relaxed rules on ownership restrictions both
nationally and in local markets.[121] The relaxation of regulations related to
the business side of broadcasting combined with stricter rules on content
reflects Reed Hundt's contention that the public interest requires less control
of commercial aspects of broadcasting and tighter control of other aspects.[122]
In another provision of the Telecommunications Act, Congress expressly rejected
an idea that would have allowed the government to get out of the business of
regulating broadcast content. Ithiel de Sola Pool suggested in 1983 that the
government could sell the spectrum to broadcasters instead of giving it to them
free and treating it as a scarce resource.[123] That would allow broadcasters to
compete in the open market for spectrum space and put them on much the same
footing as print publishers, who enjoy broad First Amendment protection and
control the resources of both production and dissemination of their
publications.
Congress considered auctioning the spectrum for advanced television, which
would use digital technology to deliver sharper pictures than the current analog
technology and would allow many more signals to be sent over the same
frequencies through compression technology. Instead, members decided to direct
the FCC to give away the spectrum for advanced television services if it decided
to develop digital technology and to give it to existing broadcasters.[124] This
leaves broadcasters in much the same position they now are in: beholden to the
government and subject to its policy zigs and zags on regulation.
The good news, if it can be called that, is that the FCC under Hundt, coupled
with Congressional action, seem to be reaching an accommodation in the varying
approaches to broadcast regulation. The government has done this by channeling
the public interest requirement into a few areas and providing more specific
rules in those areas, while unburdening the business side of the industry. What
remains to be seen is whether freeing broadcasters from most limits on ownership
will reduce the number of choices available to listeners and viewers, whose
choices could be reduced further by government regulation of indecent and
violent programming and children's television.
VI. Conclusion
The regulation of broadcasting began with the notion that the airwaves were a
scarce national resource that must be regulated to protect the public interest.
For that reason, the government decided to issue free licenses to broadcasters
to use, but not own, the airwaves. Despite rapid developments in new media and
technological changes that allowed more broadcasters to use the spectrum, the
basic scarcity rationale for broadcast regulation has remained. At times, the
FCC and the courts have pushed scarcity into a dark closet, but the Supreme
Court has never locked the door.
The scarcity concept and the public interest standard that it helped spawn
initially led to a system of broadcast regulation that kept a close government
eye on ownership practices to sustain a diversity of voices. At the same time,
mindful of censorship concerns, the government issued mostly broad guidelines
concerning content. Later, scarcity became, at least in theory, less of a
problem with more radio and television stations being created and new
competition from cable and satellite television and computer on-line services.
In response, the FCC began to ease business restrictions on broadcasters while
offering a few guidelines on programming under a marketplace approach. In recent
years, the FCC and Congress have stepped in to strengthen regulation in those
areas in which the market did not seem to be providing content that met the
public interest standard, while continuing to dismantle regulation of ownership
and other business concerns.
The question still remains whether the scarcity concept is viable while
consumers are being bombarded with news and information. The pragmatic answer is
that scarcity remains a viable rationale for broadcast regulation as long as the
Supreme Court and the FCC say it is viable. As long as broadcasters are tied to
the government's apron strings by free licenses, the situation is unlikely to
change. A wise person once said that there is no such thing as a free lunch, and
the tab for free licenses means that broadcasters must remain trustees of a
public resource. For the government to demand less of broadcasters would be
irresponsible. However, there remains a great deal of leeway for determining
what the public interest requires, as the evolution of broadcast regulation
shows. Congress, the FCC, and broadcasters must continue to try to strike a
balance between the private interests of communication companies and the public
interest.
The Concept That Would Not Die:
Scarcity As a Justification for Broadcast Regulation
By Anthony L. Fargo
Doctoral Student
University of Florida
Abstract
The idea that the airwaves are a scarce public resource that must be regulated
in the public interest has been around since the beginning of broadcast
regulation in the 1920s. This paper explores the history of scarcity as a
rationale for regulating broadcasters and examines how the concept has regained
its efficacy in recent years despite a sharp increase in the number of media
voices.
The Concept That Would Not Die:
Scarcity As a Justification for Broadcast Regulation
By Anthony L. Fargo
Doctoral Student
University of Florida
Abstract
The idea that the airwaves are a scarce public resource that must be regulated
in the public interest has been around since the beginning of broadcast
regulation in the 1920s. This paper explores the history of scarcity as a
rationale for regulating broadcasters and examines how the concept has regained
its efficacy in recent years despite a sharp increase in the number of media
voices.
Scarcity was regularly cited as a legitimizing concept behind the regulation of
broadcasting in FCC decisions and court opinions into the 1980s. However, the
FCC and the U.S. Court of Appeals for the District of Columbia began to have
doubts about the efficacy of scarcity as more media voices emerged through
radio, over-the-air television, and cable and satellite television. Fairness
Doctrine decisions in the late 1980s seemed to spell doom for the concept, but
the U.S. Supreme Court continued to cite scarcity as a rationale for regulation
as late as 1994.
In recent years, the FCC's chairman has revived scarcity's power by citing the
concept as a reason for regulating certain program content areas, even as the
FCC has backed away from regulating the business side of broadcasting.
[1] RICHARD ZOGLIN, "The News Wars: On TV and radio, in print and over the
Internet, news is everywhere. But are we better informed or just overwhelmed?"
TIME 58-70 (Oct. 21, 1996).
[2] See notes 66-112 infra and accompanying text.
[3] PUB. L. 62-264, 37 STAT. 302 (1912).
[4] ERIK BARNOUW, A TOWER IN BABEL: A HISTORY OF BROADCASTING IN THE UNITED
STATES I 174 (1966).
[5] UNITED STATES v. ZENITH RADIO CORPORATION, 12 F.2d 614 (N.D. ILL. 1926).
[6] Id.
[7] BARNOUW, at 209.
[8] Pub. L. 632, 44 Stat. 1162 (1927).
[9] BARNOUW, at 195-196.
[10] 44 STAT. 1162 (1927), section 1.
[11] Id., section 11.
[12] Id., sections 3, 4 & 5.
[13] PUB. L. 73-416, 48 STAT. 1064 (1934).
[14] See, e.g., ITHIEL DE SOLA POOL, TECHNOLOGIES OF FREEDOM 138-150 (1983).
[15] 2 FRC ANN. REP. 166-170 (1928).
[16] GREAT LAKES BROADCASTING CO. v. FRC, 37 F.2d 993 (D.C. CIRC. 1930); cert.
denied, 281 U.S. 706 (1930).
[17] KFKB v. FRC, 47 F.2d 670 (1931).
[18] TRINITY METHODIST CHURCH, SOUTH v. FRC, 62 F.2d 850 (1932); cert. denied,
288 U.S. 599 (1933).
[19] See, e.g., United States v. American Bond & Mortgage Co., 31 F.2d 448
(1929); rehearing denied, 52 F.2d 318 (1931); cert. denied, 282 U.S. 374
(1931). The case involved a station owner who threatened to go on the air
despite being denied license renewal. The opinion read in part: "Considering the
nature of radio, the limitations of its field of operation, the history of radio
regulation, the circumstances existing immediately prior to the passage of the
Radio Act of 1927, the complex problems to be solved, and the purposes of the
legislation, it must be held that the Radio Act of 1927 ... [is] appropriate and
adapted to the ends sought, and specifically that the provisions regulating the
number of broadcasting stations and licenses are also appropriate, adapted and
valid."
Id., at 457 (emphasis added).
[20] FCC v. SANDERS BROS. RADIO STATION, 309 U.S. 470 (1940).
[21] Id., at 475.
[22] Nat. Broadcasting Co. v. U.S., 319 U.S. 190 (1943).
[23] Id., at 213.
[24] Id., at 226.
[25] 5 Fed. Reg. 2384 (1940).
[26] 6 Fed. Reg. 2284 (1941).
[27] 8 Fed. Reg. 16065 (1943).
[28] Mayflower Broadcasting Corp., 8 F.C.C. 333 (1941).
[29] Federal Communications Commission, Public Service Responsibilities of
Broadcast Licensees, March 7, 1946.
[30] Id., at 39-40.
[31] Id., at 40.
[32] In the Matter of Editorializing by Broadcast Licenses, 13 F.C.C. 1246
(1949).
[33] Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969).
[34] 47 C.F.R. section 73.1920 (1996).
[35] Red Lion v. FCC, 395 U.S. 367 (1969), at 371-372.
[36] Id., at 388.
[37] Id., at 391.
[38] Id., at 397, 399.
[39] 412 U.S. 94 (1973).
[40] Id., at 154.
[41] Id., at 157-158.
[42] Id., at 146.
[43] MARK FOWLER AND DANIEL BRENNER, A MARKETPLACE APPROACH TO BROADCAST
REGULATION, 60 Texas L. Rev. 207 (1982), at 209.
[44] Id., at 210.
[45] Id., at 221-226.
[46] FCC v. League of Women Voters of California, 468 U.S. 364 (1984).
[47] Id., at 376-377, note 11.
[48] 102 F.C.C.2d 143 (1985).
[49] Id., at 147.
[50] Pub. L. 86-274, 73 Stat. 557 (1959). The law, which exempted news programs
from equal time provisions of the Fairness Doctrine, stated that the exemption
did not relieve broadcasters of their duties to "afford reasonable opportunities
for the discussion of conflicting views on issues of public importance." Id.
[51] 102 FCC 2d 143 (1985), at 247.
[52] Telecommunications Research and Action Ctr. v. FCC, 801 F.2d 501 (1986);
reh'g denied, 806 F.2d 1115; cert. denied, 482 U.S. 919 (1986).
[53] Id., at 508.
[54] Meredith Corporation v. FCC, 809 F.2d 863 (1987).
[55] Id., at 873.
[56] Id., at 874.
[57] 2 FCC RCD. 5043 (1987).
[58] Id., at 5054.
[59] Syracuse Peace Council v. FCC, 867 F.2d 654 (1989); cert. denied, 493 U.S.
1019 (1990).
[60] Supra note 46.
[61] Turner Broadcasting System, Inc. v. FCC, 114 S. Ct. 2554 (1994), at 2457.
[62] REED HUNDT, A NEW PARADIGM FOR BROADCAST REGULATION, 15 J. of L. & Comm.
527 (1996).
[63] Id., at 529-530.
[64] Id., at 542.
[65] REED HUNDT, THE PUBLIC'S AIRWAVES: WHAT DOES THE PUBLIC INTEREST REQUIRE
OF TELEVISION BROADCASTERS? 45 Duke L.J. 1089 (1996). Campaign programming is
not discussed in this paper because regulations in that area have been in the
embryonic stage. However, in March 1997, President Clinton proposed that the FCC
draft regulations requiring broadcasters to offer free air time to all qualified
federal candidates for political office in exchange for new licenses for the
digital spectrum. See JAMES BENNET, CLINTON SUGGESTS LICENSING DEAL FOR FREE TV
TIME IN CAMPAIGNS, THE NEW YORK TIMES A-1, A-14 (March 12, 1997).
[66] PUB. L. 69-632, 44 STAT. 1162 (1927), section 29.
[67] PUB. L. 73-416, 48 STAT. 1064, sections 326 and 501.
[68] PUB. L. 80-772, 108 STAT. 2147 (1948), codified at 18 U.S.C. 1464.
[69] In Miller v. California, 413 U.S. 15 (1973), the Supreme Court said
obscenity appealed to the prurient interest of an average person applying
contemporary community standards; described or depicted sexual conduct,
specifically defined by state law, in a patently offensive manner; and as a
whole lacked any serious artistic, scientific, literary or political value.
[70] Pacifica Found. Inc., 56 FCC 2d 94 (1975).
[71] Id., at 97.
[72] FCC v. Pacifica Foundation, 438 U.S. 726 (1978).
[73] NEW INDECENCY ENFORCEMENT STANDARDS TO BE APPLIED TO ALL BROADCAST AND
AMATEUR RADIO LICENSEES, 2 FCC RCD. 2726 (1987).
[74] 64 R.R.2d 211 (1987).
[75] In the Matter of Pacifica Foundation Inc., 2 FCC Rcd. 2698 (1987); In the
Matter of The Regents of the University of California, 2 FCC Rcd. 2703 (1987).
[76] In the Matter of Infinity Broadcasting Corp. of Pennsylvania, 2 FCC Rcd.
2705 (1987).
[77] Action for Children's Television v. FCC, 852 F.2d 1332 (1988) ("ACT I).
[78] Pub. L. 100-459, 102 Stat. 2186, @ 608 (1988).
[79] 5 FCC Rcd. 5297 (1990).
[80] Action for Children's Television v. FCC, 932 F.2d 1504 (1991), at 1510
("ACT II"); cert. denied, 503 U.S. 913 (1992).
[81] Pub. L. 102-536, 106 Stat. 949 (1992).
[82] 8 FCC Rcd. 704 (1992).
[83] Action for Children's Television v. FCC, 11 F.3d 170 (1993) ("ACT III");
rehearing en banc granted, 15 F.3d 186 (1994).
[84] Action for Children's Television v. FCC, 58 F.3d 654 (1995) (en banc),
cert. denied, 116 S. Ct. 701 (1996).
[85] DONNA PETROZZELLO, STERN GENERATES INDECENCY FINE AGAINST RICHMOND
STATION: FCC ORDERS FORMER OWNER OF WVGO TO PAY $10,000. BROADCASTING & CABLE 23
(Oct. 21, 1996).
[86] REPORT AND POLICY STATEMENT, 50 FCC 2d 1 (1974); recon. denied, 55 FCC 2d
691 (1975).
[87] Id., at 2.
[88] Id.
[89] Id., at 5.
[90] Id., at 14.
[91] IN RE COMPLAINT OF ACTION FOR CHILDREN'S TELEVISION, 58 R.R.2d 61 (1985).
[92] PUB. L. 101-437, 104 STAT. 996 (1990).
[93] Id., section 102.
[94] Id., section 103.
[95] Id., section 104.
[96] 6 FCC RCD. 2111 (1991).
[97] Id., at 2111-2113.
[98] Id., at 2114.
[99] Id.
[100] Id., at 2117.
[101] 6 FCC RCD. 5093 (1991).
[102] 6 FCC RCD. 2111 (1991), at 2117.
[103] 10 FCC RCD. 6308 (1995).
[104] Id., at 6327.
[105] Id.
[106] Id., at 6331-6341.
[107] See, e.g., REPORT ON THE BROADCAST OF VIOLENT, INDECENT AND OBSCENE
MATERIAL, 51 F.C.C.2d 418 (1975).
[108] There have been literally dozens of studies since the early 1960s
exploring the effect of television violence on children. Two of the most recent
are available on the World Wide Web. See UCLA CENTER FOR COMMUNICATION POLICY,
THE UCLA TELEVISION VIOLENCE REPORT 1996, at
http://www-ccp.sppsr.ucla.edu/violence96/ and MEDIASCOPE, NATIONAL TELEVISION
VIOLENCE STUDY 1994-1995 at http://www.mediascope.org/ntvs1.htm
[109] HARRY T. EDWARD AND MITCHELL N. BERMAN, REGULATING VIOLENCE ON
TELEVISION, 89 Northwestern U.L. Rev. 1487 (1995), at 1566.
[110] Pub. L. 104-104, 110 Stat. 56 (1996).
[111] Id., section 551.
[112] JOHN M. BRODER, BROADCAST INDUSTRY DEFENDS ITS TV RATING SYSTEM, THE NEW
YORK TIMES A-14 (Feb. 28, 1997).
[113] See notes 16-24 supra and accompanying text.
[114] See notes 25-27 supra and accompanying text.
[115] In its Genesee Broadcasting decision in 1938, the FCC denied a radio
station license to a company whose owners already controlled the only other
radio station in Flint, MI. In that ruling, the Commission first articulated its
"duopoly" policy, effectively barring a company from owning more than one
station in the same market area. 5 F.C.C. 183 (1938).
[116] PUB. L. 69-632, 44 STAT. 1162 (1927), sections 15, 17 & 29.
[117] PUB. L. 73-416, 48 STAT. 1064 (1934), sections 303(i), 311, 313, 314 &
326.
[118] In 1984, the FCC increased the number of AM and FM radio stations and
television stations one company could own nationwide from seven of each to
twelve. 56 R.R.2d 887 (1984). In 1992, the limit was raised to 20 AM and 20 FM
stations. 71 R.R.2d 227 (1992).
[119] 71 R.R.2d 227 (1992). Companies were allowed to own up to three radio
stations in smaller markets and up to four in larger markets. Id.
[120] 98 FCC 2d 1076 (1984).
[121] Id., @ 202.
[122] See REED HUNDT, A NEW PARADIGM, supra note 62 and accompanying text.
[123] ITHIEL DE SOLA POOL, supra note 14.
[124] Conference Report on the Telecommunications Act of 1996, H. Rpt. 104-458,
@ 336 (1996).
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