1. A fundamental question as to the function and powers of the
Federal Communications Commission was raised in this case and, on
the record, is open here. P.
309 U. S.
473.
2. Resulting economic injury to a rival station is not, in and
of itself, and apart from considerations of public convenience,
interest, or necessity, an element which the Federal Communications
Commission must weigh, and as to which it must make findings, in
passing on an application for a broadcasting license. P.
309 U. S.
473.
3. A licensee of a broadcasting station, over whose objection --
of economic injury to his station -- the Communications Commission
granted a permit for the erection of a rival station, is, under §
402(b)(2) of the Act, a "person aggrieved or whose interests are
adversely affected" by the decision of the Commission, and entitled
to appeal therefrom. P.
309 U. S.
476.
4. An order of the Communications Commission granting a permit
to erect a broadcasting station
held supported by the
findings. P.
309 U. S.
477.
5. The conclusion of the appellate court that the Communications
Commission had not used as evidence certain data and reports in its
file which an intervening party had been denied an opportunity to
inspect accepted here. P.
309 U. S. 478.
70 App.D.C. 297, 106 F.2d 321, reversed.
Certiorari, 308 U.S. 546, to review a judgment which set aside
an order of the Federal Communications Commission granting a permit
to erect a broadcasting station.
Page 309 U. S. 471
MR. JUSTICE ROBERTS delivered the opinion of the Court.
We took this case to resolve important issues of substance and
procedure arising under the Communications Act of 1934, as amended.
[
Footnote 1]
January 20, 1936, the Telegraph Herald, a newspaper published in
Dubuque, Iowa, filed with the petitioner an application for a
construction permit to erect a broadcasting station in that city.
May 14, 1936, the respondent, who had for some years held a
broadcasting license for, and had operated, Station WKBB at East
Dubuque, Illinois, directly across the Mississippi River from
Dubuque, Iowa, applied for a permit to move its transmitter and
studios to the last named city and to install its station there.
August 18, 1936, respondent asked leave to intervene in the
Telegraph Herald proceeding, alleging in its petition,
inter
alia, that there was an insufficiency of advertising revenue
to support an additional station in Dubuque and insufficient talent
to furnish programs for an additional station; that adequate
service was being rendered to the community by Station WKBB and
there was no need for any additional radio outlet in Dubuque, and
that the granting of the Telegraph Herald application would not
serve the public interest, convenience, and necessity. Intervention
was permitted, and both applications were set for consolidated
hearing.
The respondent and the Telegraph Herald offered evidence in
support of their respective applications. The respondent's proof
showed that its station had operated
Page 309 U. S. 472
at a loss; that the area proposed to be served by the Telegraph
Herald was substantially the same as that served by the respondent,
and that, of the advertisers relied on to support the Telegraph
Herald station, more than half had used the respondent's station
for advertising.
An examiner reported that the application of the Telegraph
Herald should be denied, and that of the respondent granted. On
exceptions of the Telegraph Herald, and after oral argument, the
broadcasting division of petitioner made an order granting both
applications, reciting that "public interest, convenience, and
necessity would be served" by such action. The division promulgated
a statement of the facts and of the grounds of decision, reciting
that both applicants were legally, technically, and financially
qualified to undertake the proposed construction and operation;
that there was need in Dubuque and the surrounding territory for
the services of both stations, and that no question of electrical
interference between the two stations was involved. A rehearing was
denied, and respondent appealed to the Court of Appeals for the
District of Columbia. That court entertained the appeal and held
that one of the issues which the Commission should have tried was
that of alleged economic injury to the respondent's station by the
establishment of an additional station, and that the Commission had
erred in failing to make findings on that issue. It decided that,
in the absence of such findings, the Commission's action in
granting the Telegraph Herald permit must be set aside as arbitrary
and capricious. [
Footnote
2]
The petitioner's contentions are that, under the Communications
Act economic injury to a competitor is not a ground for refusing a
broadcasting license, and that, since this is so, the respondent
was not a person aggrieved or whose interests were adversely
affected by the Commission's
Page 309 U. S. 473
action within the meaning of Section 402(b) of the Act, which
authorizes appeals from the Commission's orders.
The respondent asserts that the petitioner, in argument below,
contented itself with the contention that the respondent had failed
to produce evidence requiring a finding of probable economic injury
to it. It is consequently insisted that the petitioner is not in a
position here to defend its failure to make such findings on the
ground that it is not required by the Act to consider any such
issue. By its petition for rehearing in the court below, the
Commission made clear its position as now advanced. The decision of
the court below, and the challenge made in petition for rehearing
and here by the Commission, raise a fundamental question as to the
function and powers of the Commission, and we think that, on the
record, it is open here.
First. We hold that resulting economic injury to a
rival station is not, in and of itself and apart from
considerations of public convenience, interest, or necessity, an
element the petitioner must weigh and as to which it must make
findings in passing on an application for a broadcasting
license.
Section 307(a) of the Communications Act directs that
"the Commission, if public convenience, interest, or necessity
will be served thereby, subject to the limitations of this Act,
shall grant to any applicant therefor a station license provided
for by this Act."
This mandate is given meaning and contour by the other
provisions of the statute and the subject matter with which it
deals. [
Footnote 3] The Act
contains no express command that, in passing upon an application,
the Commission must consider the effect of competition with an
existing station. Whether the Commission should consider the
subject must depend
Page 309 U. S. 474
upon the purpose of the Act and the specific provisions intended
to effectuate that purpose.
The genesis of the Communications Act and the necessity for the
adoption of some such regulatory measure is a matter of history.
The number of available radio frequencies is limited. The attempt
by a broadcaster to use a given frequency in disregard of its prior
use by others, thus creating confusion and interference, deprives
the public of the full benefit of radio audition. Unless Congress
had exercised its power over interstate commerce to bring about
allocation of available frequencies and to regulate the employment
of transmission equipment, the result would have been an impairment
of the effective use of these facilities by anyone. The fundamental
purpose of Congress in respect of broadcasting was the allocation
and regulation of the use of radio frequencies by prohibiting such
use except under license.
In contradistinction to communication by telephone and
telegraph, which the Communications Act recognizes as a common
carrier activity and regulates accordingly in analogy to the
regulation of rail and other carriers by the Interstate Commerce
Commission, [
Footnote 4] the
Act recognizes that broadcasters are not common carriers, and are
not to be dealt with as such. [
Footnote 5] Thus, the Act recognizes that the field of
broadcasting is one of free competition. The sections dealing with
broadcasting demonstrate that Congress has not, in its regulatory
scheme, abandoned the principle of free competition, as it has done
in the case of railroads, [
Footnote
6] in respect of which regulation involves the suppression of
wasteful practices due to competition, the regulation of rates and
charges, and other measures
Page 309 U. S. 475
which are unnecessary if free competition is to be
permitted.
An important element of public interest and convenience
affecting the issue of a license is the ability of the licensee to
render the best practicable service to the community reached by his
broadcasts. That such ability may be assured the Act contemplates
inquiry by the Commission,
inter alia, into an applicant's
financial qualifications to operate the proposed station. [
Footnote 7]
But the Act does not essay to regulate the business of the
licensee. The Commission is given no supervisory control of the
programs, of business management, or of policy. In short, the
broadcasting field is open to anyone, provided there be an
available frequency over which he can broadcast without
interference to others, if he shows his competency, the adequacy of
his equipment, and financial ability to make good use of the
assigned channel.
The policy of the Act is clear that no person is to have
anything in the nature of a property right as a result of the
granting of a license. Licenses are limited to a maximum of three
years' duration, may be revoked, and need not be renewed. Thus, the
channels presently occupied remain free for a new assignment to
another licensee in the interest of the listening public.
Plainly it is not the purpose of the Act to protect a licensee
against competition, but to protect the public. Congress intended
to leave competition in the business of broadcasting where it found
it, to permit a licensee who was not interfering electrically with
other broadcasters to survive or succumb according to his ability
to make his programs attractive to the public.
This is not to say that the question of competition between a
proposed station and one operating under an
Page 309 U. S. 476
existing license is to be entirely disregarded by the
Commission, and, indeed, the Commission's practice shows that it
does not disregard that question. It may have a vital and important
bearing upon the ability of the applicant adequately to serve his
public; it may indicate that both stations -- the existing and the
proposed -- will go under, with the result that a portion of the
listening public will be left without adequate service; it may
indicate that, by a division of the field, both stations will be
compelled to render inadequate service. These matters, however, are
distinct from the consideration that, if a license be granted,
competition between the licensee and any other existing station may
cause economic loss to the latter. If such economic loss were a
valid reason for refusing a license, this would mean that the
Commission's function is to grant a monopoly in the field of
broadcasting, a result which the Act itself expressly negatives,
[
Footnote 8] which Congress
would not have contemplated without granting the Commission powers
of control over the rates, programs, and other activities of the
business of broadcasting.
We conclude that economic injury to an existing station is not a
separate and independent element to be taken into consideration by
the Commission in determining whether it shall grant or withhold a
license.
Second. It does not follow that, because the licensee
of a station cannot resist the grant of a license to another, on
the ground that the resulting competition may work economic injury
to him, he has no standing to appeal from an order of the
Commission granting the application.
Section 402(b) of the Act provides for an appeal to the Court of
Appeals of the District of Columbia (1) by an applicant for a
license or permit, or (2)
"by any other person aggrieved or whose interests are adversely
affected
Page 309 U. S. 477
by any decision of the Commission granting or refusing any such
application."
The petitioner insists that, as economic injury to the
respondent was not a proper issue before the Commission, it is
impossible that § 402(b) was intended to give the respondent
standing to appeal, since absence of right implies absence of
remedy. This view would deprive subsection (2) of any substantial
effect.
Congress had some purpose in enacting § 402(b)(2). It may have
been of opinion that one likely to be financially injured by the
issue of a license would be the only person having a sufficient
interest to bring to the attention of the appellate court errors of
law in the action of the Commission in granting the license. It is
within the power of Congress to confer such standing to prosecute
an appeal. [
Footnote 9]
We hold, therefore, that the respondent had the requisite
standing to appeal and to raise, in the court below, any relevant
question of law in respect of the order of the Commission.
Third. Examination of the findings and grounds of
decision set forth by the Commission discloses that the findings
were sufficient to comply with the requirements of the Act in
respect of the public interest, convenience, or necessity involved
in the issue of the permit. In any event, if the findings were not
as detailed upon this subject as might be desirable, the attack
upon them is not that the public interest is not sufficiently
protected, but only that the financial interests of the respondent
have not been considered. We find no reason for abrogating the
Commission's order for lack of adequate findings.
Fourth. The respondent here renews a contention made in
the Court of Appeals to the effect that the Commission used as
evidence certain data and reports in its files without permitting
the respondent, as intervenor before the Commission, the
opportunity of inspecting them. The Commission disavows the use of
such material as evidence in the cause, and the Court of Appeals
has found the disavowal veracious and sufficient. We are not
disposed to disturb its conclusion.
The judgment of the Court of Appeals is
Reversed.
MR. JUSTICE McREYNOLDS took no part in the decision of this
case.
[
Footnote 1]
Act of June 19, 1934, c. 652, 48 Stat. 1064; Act of June 5,
1936, c. 511, 49 Stat. 1475; Act of May 20, 1937, c. 229, 50 Stat.
189, 47 U.S.C. § 151
et seq.
[
Footnote 2]
Sanders Brothers Radio Station v. Federal Communications
Commission, 70 App.D.C. 297, 106 F.2d 321.
[
Footnote 3]
Federal Radio Commission v. Nelson Bros. Co.,
289 U. S. 266,
289 U. S.
285.
[
Footnote 4]
See Title II, §§ 201-221, 47 U.S.C. §§ 201-221.
[
Footnote 5]
See § 3(h), 47 U.S.C. § 153(h).
[
Footnote 6]
Compare Texas & Pacific Ry. v. Gulf, C. & S.F. Ry.
Co., 270 U. S. 266,
270 U. S. 277;
Chicago Junction Case, 264 U. S. 258.
[
Footnote 7]
See § 308(b), 47 U.S.C. § 308(b).
[
Footnote 8]
See § 311, 47 U.S.C. § 311, relating to unfair
competition and monopoly.
[
Footnote 9]
Compare Interstate Commerce Commission v. Oregon-Washington
R. Co., 288 U. S. 14,
288 U. S.
23-25.