319 U.S. 190, 63 S. Ct. 997, 87 L. Ed. 1344 (1943)
On March 18, 1938, the Federal Communications Commission undertook a comprehensive investigation to determine whether special regulations applicable to radio stations engaged in chain broadcasting were required in the public interest, convenience, or necessity.1
The Commission's order directed inquiry into the number of stations licensed to or affiliated with networks and the amount of station time used or controlled by networks, the contractual rights and obligations of stations under their agreements with networks, the scope of network agreements containing exclusive affiliation provisions, the rights and obligations of stations with respect to network advertisers, the nature of the program service rendered by stations licensed to networks, the policies of networks with respect to character of programs and diversification, the extent to which affiliated stations exercise control over programs, the nature and extent of network program duplication, the extent to which particular networks have exclusive coverage in some areas, the competitive practices of stations engaged in chain broadcasting, the effect of chain broadcasting upon stations not licensed to or affiliated with networks, practices or agreements in restraint of trade or in furtherance of monopoly, and the scope of concentration of control over stations locally, regionally, or nationally.2
A committee of three Commissioners was designated on April 6, 1938, to hold hearings and make recommendations.3 The committee held public hearings for 73 days over six months from November 14, 1938, to May 19, 1939.4 Order No. 37 was published in the Federal Register and copies were sent to every station licensee and network organization.5 Ninety-six witnesses were heard, 45 of whom were called by the national networks.6 The evidence covers 27 volumes, including over 8,000 pages of transcript and more than 700 exhibits.7 The testimony of the witnesses called by the national networks fills more than 6,000 pages.8 The committee submitted a report to the Commission on June 12, 1940.9 Briefs were filed and oral arguments held on December 2 and 3, 1940, after the Commission issued proposed regulations on November 28, 1940.10
On May 2, 1941, the Commission issued its Report on Chain Broadcasting setting forth its findings and conclusions together with an order adopting the Regulations.11 Two of the seven members dissented.12 The effective date was deferred and postponed multiple times.13 On August 14, 1941, the Mutual Broadcasting Company petitioned to amend two Regulations.14 Briefs were filed by all national networks and oral argument was held on September 12, 1941.15 On October 11, 1941, the Commission issued a Supplemental Report amending three Regulations, again with two members dissenting.16 The suits by National Broadcasting Co., Inc. and Columbia Broadcasting System, Inc. were brought on October 30, 1941, to enjoin enforcement of the Regulations.17
At the end of 1938 there were 660 commercial stations in the United States, and 341 of these were affiliated with national networks.18 One hundred thirty-five stations were affiliated exclusively with NBC, which operated two national networks and was the licensee of 10 stations including seven clear-channel stations operating at 50 kilowatts.19 One hundred two stations were affiliated exclusively with CBS, which was the licensee of eight stations, seven of which were clear-channel stations operating at 50 kilowatts.20 Seventy-four stations were under exclusive affiliation with Mutual.21 Twenty-five stations were affiliated with both NBC and Mutual, and five with both CBS and Mutual.22
The stations affiliated with the national networks utilized more than 97 percent of the total night-time broadcasting power of all stations in the country.23 NBC and CBS together controlled more than 85 percent of the total night-time wattage.24 The Regulations addressed exclusive affiliation of stations, territorial exclusivity, term of affiliation limited to two years, option time with minimum 56 days' notice and limits on hours, the right of stations to reject programs, network ownership of stations, dual network operation, and control by networks of station rates.25
In the prior Term the Supreme Court held that the suits could be maintained under 47 U.S.C. § 402(a) of the Communications Act of 1934 and reversed the district court dismissals for want of jurisdiction.26 On remand the district court granted the Government's motions for summary judgment and dismissed the suits on the merits at 47 F. Supp. 940.27 The cases are here on appeal under 28 U.S.C. § 47.28
Whether the Communications Act of 1934 authorizes the Federal Communications Commission to promulgate the Chain Broadcasting Regulations?29
The Communications Act of 1934 confers upon the Commission expansive authority under sections 303(g), (i), and (r) to make special regulations for chain broadcasting when required by public interest, convenience, or necessity, a standard that encompasses network affiliation practices affecting competition, program diversity, and licensee control.30
Yes. The Commission undertook the investigation detailed in the established facts, held 73 days of hearings receiving over 8,000 pages of testimony, and identified eight network practices including exclusive affiliation contracts and option time provisions that limited licensees' ability to serve local needs. These findings directly support the conclusion that the Regulations particularize the statutory public interest criterion and fall within the authority granted by the Act's broad language.31
The Communications Act of 1934 authorizes the Commission to promulgate the Chain Broadcasting Regulations.32
Related opinions on this issue
Joined by Justice Roberts
Justice Murphy dissented on the ground that the Act supplies no clear mandate for the Commission to regulate network contractual relations as an incident of its licensing power.33 He emphasized that sections 307 through 310 and 303 contain no explicit reference to network affiliations.34 The public interest standard must be interpreted by its context of technical and engineering considerations rather than business practices of national networks.35
In his view the Regulations represent an assumption of authority beyond what Congress intended to confer through mere inference from general clauses.36 He stressed that the subject of network contracts is one of such scope and importance as to warrant explicit mention if Congress had intended to grant the Commission such far-reaching control.37
Whether the Chain Broadcasting Regulations are arbitrary and capricious?38
No. The Commission's Report rested on the extensive evidentiary record compiled during the 1938-1941 investigation, including testimony from network witnesses and data showing that NBC and CBS controlled more than 85 percent of night-time wattage. The Regulations were tailored to each identified abuse while preserving beneficial aspects of networking.41 The Commission expressly reserved case-by-case application, demonstrating reasoned decision-making rather than caprice.42
The Chain Broadcasting Regulations are not arbitrary and capricious.43
Whether construing the Communications Act of 1934 to authorize the Chain Broadcasting Regulations constitutes an unconstitutional delegation of legislative power?44
A statutory standard such as public interest, convenience, or necessity is sufficiently definite to withstand a nondelegation challenge when read in light of the Act's purpose, the nature of radio transmission, and the comparative considerations inherent in licensing scarce frequencies.45
No. The public interest criterion is anchored in the statutory context of limited frequencies and the Commission's duty to promote the larger and more effective use of radio.46 The Regulations represent a permissible particularization of that standard rather than an open-ended grant of legislative power, consistent with precedents upholding comparable delegations in the radio field.47
Construing the Communications Act of 1934 to authorize the Chain Broadcasting Regulations does not constitute an unconstitutional delegation of legislative power.48
Whether the Chain Broadcasting Regulations abridge the right of free speech in violation of the First Amendment?49
The First Amendment does not confer a right to use scarce radio facilities without a license.50 Denial of a license on the statutory ground of public interest, convenience, or necessity is not an abridgment of free speech when the licensing scheme itself is a valid exercise of congressional power over interstate commerce.51
No. Radio's inherent physical limitations require governmental allocation of frequencies, and the Regulations condition licensing on avoidance of practices that impair licensees' ability to serve the public.52 The Commission is forbidden from selecting licensees on the basis of political or economic viewpoint, and the Regulations do not attempt such viewpoint discrimination.53
The Chain Broadcasting Regulations do not abridge the right of free speech in violation of the First Amendment.54
Whether section 311 of the Communications Act of 1934 precludes the Commission from considering network practices related to antitrust laws absent a judicial conviction?55
No. The 1934 amendment to the predecessor provision made clear that the Commission may exercise judgment about past antitrust violations without awaiting conviction.58 The Regulations rest on the Commission's own findings that the practices prevent maximum utilization of facilities, not on enforcement of the Sherman Act itself.59
Section 311 of the Communications Act of 1934 does not preclude the Commission from considering network practices related to antitrust laws absent a judicial conviction.60
Related opinions on this issue
Joined by Justice Roberts
Justice Murphy maintained that sections 311 and 313 supply the exclusive statutory mechanism for addressing antitrust concerns.61 The Commission may not refuse licenses on the basis of business arrangements that have not been finally adjudged unlawful by a court.62 He viewed the Regulations as an attempt to enforce competition policy through licensing without the procedural safeguards Congress placed in those specific provisions.63
He noted that the enforcement of the antitrust laws has been committed to the courts and other law enforcement agencies, and the Commission should invoke the aid of Congress rather than fabricate authority.64