1. The Federal Communications Commission renewed a license for a
radio station only after the applicant (petitioner here), pursuant
to a condition prescribed by the Commission and without
respondents' consent, repudiated a contract with respondents. The
Commission had determined that, unless the contract were given "no
further effect," a renewal of the license would not be in the
public interest. This was based on findings that the contract
jeopardized petitioner's financial position, and that it allowed
respondents to profit from a situation created by a previous
contract with petitioner which the Commission had held illegal.
Respondents were not parties to the proceedings before the
Commission, and did not seek to intervene, but they subsequently
sued in a state court and obtained a judgment for the amount due
under the contract.
Held: the judgment of the state court did not
contravene the Supremacy Clause of Article VI of the Constitution.
Pp.
338 U. S.
587-603.
2. Whether petitioner was entitled to have its defense of
impossibility of performance sustained is a question of state law.
P.
338 U. S.
594.
3. Under the Communications Act of 1934, the Commission's
regulatory powers center around the grant or revocation of
licenses. Pp.
338 U. S.
594-600.
4. Under § 303(r) of the Act, authorizing the Commission to
prescribe such "conditions" as are "necessary to carry out the
provisions" of the Act, the Commission may impose conditions which
an applicant must meet before it will be granted a license; but
imposition of such conditions cannot directly affect the
applicant's responsibilities to a third party dealing with the
applicant. P.
338 U. S.
600.
5. The Commission could insist that the applicant change its
situation before it granted a license, but it could not act as a
bankruptcy court to change the situation for the applicant. Pp.
338 U. S.
600-602.
6. The Act does not authorize the Commission to determine the
validity of contracts between licensees and others. P.
338 U. S.
602.
Page 338 U. S. 587
7. A different result is not required by the fact that
respondents had knowledge of the Commission's action in denying a
license unless the contract were given "no effect" and they made no
effort to intervene in the proceedings before the Commission. Pp.
338 U. S.
602-603.
78 Ga.App. 292, 50 S.E.2d 808, affirmed.
Notwithstanding an order of the Federal Communications
Commission (11 F.C.C. 71) renewing petitioner's license for a radio
station on condition that petitioner repudiate a contract with
respondents, a Georgia court awarded respondents a judgment for the
amount due under the contract. The Court of Appeals of Georgia
affirmed. 78 Ga.App. 292, 50 S.E.2d 808. The Supreme Court of
Georgia denied certiorari. 78 Ga.App. 898. This Court granted
certiorari. 338 U.S. 846.
Affirmed, p.
338 U. S.
603.
MR. JUSTICE REED delivered the opinion of the Court.
The Federal Communications Commission renewed a radio license
only after the applicant, the Board of Regents, carried out a
required repudiation of a contract with other persons, respondents
here. The Commission had determined that, unless the contract were
given "no further effect," a renewal of the license would not in
the public interest. This was based on findings that the
Page 338 U. S. 588
contract seriously jeopardized the applicant's financial
position and that it allowed the other persons to profit from a
situation created by a previous contract with the applicant that
the Commission had held illegal. May a state now enforce the
repudiated contract against the applicant although this would have
the practical effect of nullifying the repudiation required by the
Commission? That is the federal question presented in this
proceeding.
The question arises in this way. The Georgia School of
Technology received radio station WGST in 1923 as a gift.
Petitioner [
Footnote 1]
operated the station until January, 1930, when it made a contract
with the Southern Broadcasting Company for the operation of the
station. The contract was to run for a ten-year period, and the
company was to receive all the earnings of the station except a
percentage of the gross receipts. This percentage, which varied up
to 10%, was to be paid Regents. Southern Broadcasting Stations,
Inc., of which respondents are the former stockholders, succeeded
to the rights of the company. The contract was extended for a
period to end January 6, 1950. On execution, both the original
contract and the extension were filed with the Commission. 10
F.C.C. 110, 114.
Various renewals of petitioner's license were made during this
period, but, when petitioner applied for a renewal
Page 338 U. S. 589
in 1940, the Federal Communications Commission ordered a hearing
to determine whether the contract arrangement constituted a
violation of the Federal Communications Act and whether renewal of
the license to petitioner would serve the public interest,
convenience, and necessity. Southern was permitted to intervene in
the proceeding.
The Commission found that, although the contract provided that
its execution should not release the licensee from its right and
duty to maintain general control over the station, actually
petitioner had exercised only nominal authority. The contract
itself stipulated that Southern should arrange the programs and
attend to all program details. In the operations under the
contract, Southern had purchased additional equipment and apparatus
without consulting with petitioner, and, since 1930, nothing had
been spent by petitioner for purchase or maintenance of the
equipment. Southern had contracted in its own name with buyers of
broadcasting time and for network service.
From these facts, the Commission determined that Southern's
operation of petitioner's station violated the Commission's rule
that a licensee must be responsible for the control and operation
of the station, and that a licensee may not transfer to any person
its responsibility as licensee except with the Commission's written
consent. It also held that the Communications Act of 1934 had been
violated. [
Footnote 2]
Page 338 U. S. 590
The Commission issued proposed findings of fact and conclusions
of law on March 23, 1943. This decision refused the application for
renewal of the license. It said, however, that
"The Commission will consider the issuance of a renewal of the
license to Georgia School of Technology provided the Commission is
given assurance that the applicant is prepared to, and will, in
fact, assume and discharge the full responsibilities of a
licensee."
10 F.C.C. at 121. It permitted temporary continued operation.
The proposal was adopted by the Commission May 8, 1943. No appeal
was taken by petitioner or respondents from this order.
See 47 U.S.C. § 402.
In order to obviate the Commission's objection to Southern's
operation of the station, petitioner, on April 15, 1943, entered
into the contract here in issue. Under it, petitioner purchased
from respondents all the shares of stock of Southern, and, as the
consideration, agreed to pay each month a sum equal to 15% of the
net billings [
Footnote 3] of
the station until January 6, 1950. Petitioner proceeded to
liquidate Southern and to transfer the assets, consisting of
station equipment, broadcasting contracts and sundries, to itself
in trust for the Georgia School of Technology. Since July 9, 1943,
petitioner has itself managed, directed and controlled the affairs
of the station.
On May 23, 1943, petitioner filed another application for
renewal of its license. While respondents had actual knowledge of
this second proceeding, they were never parties to it, by
intervention or otherwise. After hearings, the Commission held that
the public interest, convenience, or necessity would not be served
by a grant of the application. Estimating that, under the new
contract, petitioner would be paying out 70% of the net
earnings
Page 338 U. S. 591
of the station, it found that petitioner's financial ability to
conduct the station in the public interest would be jeopardized. It
was concerned especially because it thought that the use of so much
of the station income for the contract obligations would lessen the
station's ability to enter the fields of FM and television. The
Commission also found that the contract represented an effort to
give further effect to the earlier managerial arrangements, which
it had held violative of the Act and its regulations. It thought
that the agreed price for the stock -- estimated at over $300,000
-- was excessive because the equipment had only an estimated value
of $50,000. Southern's title to that was questionable, and Southern
had no "legal interest" in the operation of the station. While the
Commission did not undertake to pass upon the validity of the stock
purchase contract as a matter of contract law, it concluded (11
F.C.C. 71, 76):
"A grant of the renewal application under circumstances where a
party to an arrangement found by the Commission to be in
contravention of law would continue to profit from such arrangement
would not be in the public interest, since it would, in effect,
condone such illegality and thwart the Commission's efforts to
enforce the requirements of the act."
The Commission, on September 19, 1945, again denied the
application, but it allowed the petitioner to continue operations
and to make a new application, provided it should affirmatively
show "that no further effect is given to the agreements" between
petitioner and respondents. One of these agreements is the stock
purchase contract involved in this present litigation.
Thereupon the Regents, on October 11, 1945, adopted a resolution
repudiating the stock purchase contract, and added a copy of the
resolution to its pending application
Page 338 U. S. 592
for renewal of its license. [
Footnote 4] By a statement attached to its application,
the Regents informed the Commission that respondents had been
notified of the resolution, and announced that no settlement would
be made with respondents without Commission approval. [
Footnote 5] Respondents do not deny
notice of the repudiation. On March 7, 1946, the Commission issued
to petitioner the requested license, and has since renewed it for
the period ending May 1, 1950. Thus, petitioner has been able to
operate its station without interruption throughout the years.
Until the repudiation, the agreed payments had been made under
the contract. After the notice to respondents, petitioner made no
further payments, nor did it at any time, so far as the record
indicates, make any effort or offer to return to respondents the
property and the
Page 338 U. S. 593
intangible assets acquired through the contract. The Regents
cannot now restore the parties to their former position. The
proceeding on review was brought by the respondents for an
accounting on the contract in the Superior Court of Fulton County,
Georgia, in June, 1947, for the sums accruing from August,
1945.
Petitioner defended the action on the ground that to permit
recovery would be an interference with the Commission's power over
broadcasting. It also contended that the Commission's requirement
of disaffirmance made the purchase contract impossible of
performance. [
Footnote 6] The
case was submitted by stipulation and documentary evidence, and
there was no conflict as to the facts. The trial court entered a
judgment for the amounts due under the contract through August,
1947, some $145,000. The court held that
"The Federal Communications Commission was without jurisdiction
to nullify, change, or anywise modify the duties and obligations of
the parties to the contract of April 15, 1943."
It also decided that the Commission order requiring
disaffirmance of the purchase contract
"does not constitute a valid defense or bar as a matter of fact
or law to the right of the plaintiffs to enforce the provisions of
the contract of April 15, 1943, on the ground that said order has
rendered performance
Page 338 U. S. 594
on the part of the defendant Board of Regents impossible."
The Court of Appeals of Georgia accepted the trial court's
determinations, and affirmed. [
Footnote 7] Since an important question of the relation of
federal administrative power to state judicial power was involved,
we granted certiorari. 338 U.S. 846.
We may summarily dispose of the defense of impossibility of
performance. It is a matter of state law. It was a defense made in
a state court to a contract entered into under the law of Georgia.
Since petitioner actually was an operating licensee up to the entry
of the judgment, the state court thought petitioner remained liable
under the contract.
Whatever power the Federal Communications Commission had to
affect the rights of the parties under these contracts rests on the
Communications Act of 1934 and its amendments. The sections
pertinent to the determination of this case appear in the margin.
[
Footnote 8]
Page 338 U. S. 595
To lay bare the controlling issue in this case, we can remove
several matters from discussion as not significant to our decision.
There is no challenge to the Commission's ruling that Southern's
operation of the station violated
Page 338 U. S. 596
§ 310(b) and the regulations in that it constituted a transfer
of the licensee's responsibilities without consent of the
Commission. [
Footnote 9] We
assume its soundness. Similarly, we accept the ruling that the
payments contemplated under the stock purchase contract made the
petitioner financially unacceptable as a licensee, [
Footnote 10] and we assume the validity of
the Commission's conclusion that petitioner might be denied a
license because the price promised respondents under the stock
purchase contract permitted them to profit from their prior invalid
arrangement. [
Footnote 11]
Thus, our inquiry is narrowed to the point of whether, in the light
of the Supremacy Clause of the Constitution, Art. 6, cl. 2, a state
may enter a judgment that grants respondents a recovery on the very
stock purchase contract that justified the Commission's refusal of
a license. [
Footnote 12]
Page 338 U. S. 597
Our former decisions interpretative of the Communications Act
furnish a basis for examining this question. As an administrative
body, the Commission must find its powers within the compass of the
authority given
Page 338 U. S. 598
it by Congress. [
Footnote
13] When, to assert its undoubted power to regulate radio
channels, [
Footnote 14]
Congress set up the Federal Communications Commission, it
prescribed licensing as the method of regulation. 47 U.S.C. § 307.
In its action on licenses, the Commission is to be guided by what
we have called the "touchstone" of "public convenience, interest,
or necessity." [
Footnote 15]
Since the licensee receives no rights in the channel beyond the
term of its license, the Commission may grant a license to a
competitor even though it results in an economic injury to an
existing station. [
Footnote
16] Although the licensee's business as such is not regulated,
the qualifications of the licensee and the character of its
broadcasts may be weighed in determining whether or not to grant a
license.
Federal Communications Commission v. Sanders Bros.
Radio Station, 309 U. S. 470,
309 U. S. 475;
National Broadcasting Co.,
Inc. v.
Page 338 U. S. 599
United States, 319 U. S. 190,
319 U. S. 218,
319 U. S. 227.
These cases make clear that the Commission's regulatory powers
center around the grant of licenses. They contain no reference to
any sanctions, other than refusal or revocation of a license, that
the Commission may apply to enforce its decisions. [
Footnote 17]
Radio Station WOW, Inc. v. Johnson, 326 U.
S. 120, which required an examination into the
respective powers of state courts and the Communications
Commission, is particularly applicable to this case. The owner of
licensed station WOW had leased the facilities for a term of years,
and had secured approval from the Commission of a transfer of the
license to the lessee. The state courts set aside the lease for
fraud, and ordered a retransfer of the physical facilities to the
lessor. The essential holding, so far as it relates to our present
problem, lies in these words, 326 U.S. at
326 U. S.
131:
"We have no doubt of the power of the Nebraska court to
adjudicate, and conclusively, the claim of fraud in the transfer of
the station by the Society to WOW and, upon finding fraud, to
direct a reconveyance of the lease to the Society. And this even
though the property consists of licensed facilities and the Society
chooses not to apply for retransfer of the radio license to it or
the Commission, upon such application, refuses the retransfer. The
result may well be the termination of a broadcasting station."
In the
WOW case, the Commission had not passed upon the
question of fraud, but if, at the time of the state adjudication,
there had been a finding by the Commission
Page 338 U. S. 600
that the facts did not justify a refusal to transfer the
license, this finding would not have affected the right of the
state court to determine independently the issue of fraud.
We now come to consider the arguments put forward to show that,
under the Act, the Commission's orders are effective to bar
recovery. One suggestion is that petitioner's position has a
specific statutory basis in § 303(r), which permits the Commission
to prescribe such "conditions" as are "necessary to carry out the
provisions" of the Act. We do not think the suggestion is sound.
Congress has enabled the Commission to regulate the use of
broadcasting channels through a licensing power. It is in
connection with this power that § 303(r) is to be interpreted. The
Commission may impose on an applicant conditions which it must meet
before it will be granted a license, but the imposition of the
conditions cannot directly affect the applicant's responsibilities
to a third party dealing with the applicant.
Petitioner also urges that a state court judgment should not be
allowed to thwart the Commission's efforts to enforce the
requirements of the Act. [
Footnote 18] Since the Communications Act does not
specifically empower the Commission to adjudicate the contractual
liability of a licensee for its contracts or to declare a
licensee's contracts unenforceable in the courts, for this defense,
petitioner must depend upon general implications from the Act.
The argument is that if, before it issues a license, the
Commission cannot be assured that it has secured an effective
cancellation of a contract like the one in suit, it must choose
between two undesirable alternatives. It must either condone the
violation of its rules for operation and forsake its duty to insure
that only the financially
Page 338 U. S. 601
able may be licensees, or it must deprive the public of the
advantage of a station under the management of the Board of
Regents.
The renewal application indeed presented the Commission with a
hard choice. For ten years the operating arrangement had continued.
Suddenly, after the station had been brought to a favorable profit
position under Southern's management, the Commission became
conscious of the violation of law involved in the management
contract. When the management contract was superseded by the
purchase contract, the Commission insisted that petitioner could
not be a suitable licensee unless the latter contract were given
"no effect." For some reason which has not been explained to us,
the Commission was satisfied that the contract was of "no effect"
when the petitioner made a unilateral disaffirmance, and it did not
think it necessary to require that Southern agree to the
cancellation before a license would issue.
This choice of method lay within the Commission's power.
Considerations unknown to us may have dictated this procedure.
Before issuing a license in similar cases, however, the Commission
has successfully obtained from both parties to a contract clear and
unequivocal assent to its cancellation. [
Footnote 19] Indeed, the Commission might refuse to
issue a license until the applicant has demonstrated that it has
been freed by the state courts from the obnoxious contract.
[
Footnote 20]
But, if the Commission was placed in a dilemma from which it had
no escape, that dilemma was the inevitable result of the statutory
scheme of licensing. The Commission
Page 338 U. S. 602
itself has indicated to Congress that it is embarrassed by its
inability to issue cease and desist orders, that it has at its
disposal only the cumbersome weapons of criminal penalties and
license refusal and revocation. [
Footnote 21] But, so far as we are aware, the Commission
request did not go beyond asking for power to issue a cease and
desist order against a licensee. No power was sought against a
third party. Under the present statute, the Commission could make a
choice only within the scope of its licensing power,
i.e.,
to grant or deny the license on the basis of the situation of the
applicant. It could insist that the applicant change its situation
before it granted a license, but it could not act as a bankruptcy
court to change that situation for the applicant. The public
interest, after all, is in the effective use of the available
channels, and only to that extent in what particular applicant
receives a license. [
Footnote
22] The Commission has said frequently that controversies as to
rights between licensees and others are outside the ambit of its
powers. [
Footnote 23] We do
not read the Communications Act to give authority to the Commission
to determine the validity of contracts between licensees and
others.
Finally, we find irrelevant the fact that respondents had
knowledge of the Commission proceeding denying a license unless the
stock purchase contract were given "no effect." Even if we should
assume that respondents had the right to intervene in that
proceeding and to
Page 338 U. S. 603
appeal from the Commission's decision, their failure to do so
could not destroy their rights under the contract. It could affect
them no more than to prevent them from challenging in any court the
Commission's decision that a license might be denied Regents for
the reasons given by the Commission. [
Footnote 24] We have assumed the correctness of the
refusal to grant a license, but we hold that the Commission's order
cannot directly affect the validity of the contract. It is a most
extraordinary rule that would require respondents to intervene upon
pain of suffering a binding judgment which the Commission could not
have lawfully imposed upon them had they been actual parties.
Affirmed.
MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS took no part in the
consideration or decision of this case.
[
Footnote 1]
As nothing of importance in this case turns upon the details of
title, we hereafter refer to the petitioner as petitioner or
Regents. We treat it as owner, applicant for license, or licensee.
Contracts for the operation of WGST were made by the Board of
Trustees of the Georgia School of Technology until, by state
legislation, management of the School affairs passed from that
Board to the Board of Regents of the University System of Georgia.
Thereafter, the Regents handled the station for the School. The
applications for license have been made, and the licenses issued in
the name of the Georgia School of Technology.
[
Footnote 2]
10 F.C.C. 110, 120. The Commission based its ruling particularly
on its interpretation of the rule in FCC Rules & Regulations §
1.364 (Part I, Revised to Feb. 1, 1945), and on §§ 301, 307, 308,
309 and 310 of the Communications Act (47 U.S.C.). It also called
attention to the application form for renewals, one of the
questions on which, No. 11c, asked: "Does applicant have absolute
control of station, both as to physical operation and programs
broadcast?"
[
Footnote 3]
I.e., the sales of broadcasting time less commissions
or disbursements to others.
[
Footnote 4]
"Resolved, by the Board of Regents of the University System of
Georgia, that the ruling of the Federal Communications Commission
having made the contract with the stockholders of Southern
Broadcasting Stations, Inc., legally impossible of performance, the
board hereby approves the action of its WGST Radio Committee in
directing that said contract be not further complied with. This
action is taken without prejudice to a fair adjustment or
settlement of whatever rights the said stockholders may have,
subject to the approval or consent of the Federal Communications
Commission."
[
Footnote 5]
"The agreement effective April 15, 1943, was cancelled by the
Regents of the University System of Georgia by resolution adopted
at a meeting of the Board of Regents held on October 11, 1945. A
true and correct copy of the resolution is hereto attached as
Exhibit J. The other parties to the agreement have been notified
orally of the cancellation of the agreement, and no payments under
the agreement have been made since the issuance of the proposed
decision of the Commission in Docket No. 6534 on September 20,
1945. The Board of Regents will not undertake to negotiate any
adjustment or settlement with the other parties to the agreement
unless and until said parties first obtain the approval or consent
of the Federal Communications Commission to negotiate a settlement
of whatever rights said parties may have under the agreement."
[
Footnote 6]
There are further allegations of defense in the answer that may
be summarized as a statement that respondents had actual knowledge
of the filing of the renewal application that resulted in issuance
of the license; that respondents had actual knowledge of the
hearings, of the proposed decision and of the final order of the
Commission. The petitioner further alleged that respondents knew
the operation of the station depended upon the grant of a
license.
We consider these allegations as to notice only as they bear
upon the effect of the Board order on petitioner's responsibility
under the contract. Petitioner did not plead them as an estoppel to
recovery. Neither of the Georgia courts treated the allegations as
a basis of estoppel under the law of Georgia. This would be a
matter of state law.
[
Footnote 7]
78 Ga. App. 292, 50 S.E.2d 808 (
cert. by the Sup.Ct. of
Georgia denied, 78 Ga.App. 898).
[
Footnote 8]
47 U.S.C.:
"§ 151. For the purpose of regulating interstate and foreign
commerce in communication by wire and radio so as to make [it]
available, so far as possible, to all the people of the United
States . . . , there is . . . created a commission to be known as
the 'Federal Communications Commission.' . . ."
"§ 154."
"
* * * *"
"(i) The Commission may perform any and all acts, make such
rules and regulations, and issue such orders, not inconsistent with
this chapter, as may be necessary in the execution of its
functions."
"§ 301. It is the purpose of this chapter, among other things,
to maintain the control of the United States over all the channels
of interstate and foreign radio transmission, and to provide for
the use of such channels, but not the ownership thereof, by persons
for limited periods of time, under licenses granted by Federal
authority, and no such license shall be construed to create any
right, beyond the terms, conditions, and periods of the license. No
person shall use or operate any apparatus for the transmission of
energy or communications or signals by radio . . . except under and
in accordance with this chapter and with a license in that behalf
granted under the provisions of this chapter."
"§ 303. Except as otherwise provided in this chapter, the
Commission from time to time, as public convenience, interest, or
necessity requires, shall --"
"
* * * *"
"(r) Make such rules and regulations and prescribe such
restrictions and conditions, not inconsistent with law, as may be
necessary to carry out the provisions of this chapter. . . ."
"§ 307. (a) The Commission, if public convenience, interest, or
necessity will be served thereby, subject to the limitations of
this chapter, shall grant to any applicant therefor a station
license provided for by this chapter."
"
* * * *"
"§ 307. (d) . . . but action of the Commission with reference to
the granting of such application for the renewal of a license shall
be limited to and governed by the same considerations and practice
which affect the granting of original applications."
"§ 308."
"
* * * *"
"(b) All such applications shall set forth such facts as the
Commission by regulation may prescribe as to the citizenship,
character, and financial, technical, and other qualifications of
the applicant to operate the station. . . ."
"§ 309. (a) If, upon examination of any application for a
station license or for the renewal or modification of a station
license, the Commission shall determine that public interest,
convenience, or necessity would be served by the granting thereof,
it shall authorize the issuance, renewal, or modification thereof
in accordance with said finding. . . . "
"§ 310."
"
* * * *"
"(b) The station license required . . . , the frequencies
authorized to be used by the licensee, and the rights therein
granted shall not be transferred, assigned, or in any manner either
voluntarily or involuntarily disposed of, or indirectly by transfer
of control of any corporation holding such license, to any person,
unless the Commission shall, after securing full information,
decide that said transfer is in the public interest, and shall give
its consent in writing."
"§ 312. (a) Any station license may be revoked for false
statements either in the application or in the statement of fact
which may be required by section 308 of this title, or because of
conditions revealed by such statements of fact as may be required
from time to time which would warrant the Commission in refusing to
grant a license on an original application, or for failure to
operate substantially as set forth in the license, or for violation
of or failure to observe any of the restrictions and conditions of
this chapter or of any regulation of the Commission authorized by
this chapter or by a treaty ratified by the United States. . .
."
"§ 405. After a decision, order, or requirement has been made by
the Commission in any proceeding, any party thereto may at any time
make application for rehearing of the same, or any matter
determined therein, and it shall be lawful for the Commission in
its discretion to grant such a rehearing if sufficient reason
therefor be made to appear. . . ."
[
Footnote 9]
10 F.C.C. 110, 120; 11 F.C.C. 71, 76.
[
Footnote 10]
11 F.C.C. 71 at 75;
see § 308(b),
note 8 See Federal Communications Commission
v. Sanders Bros. Radio Station, 309 U.
S. 470,
309 U. S.
475.
[
Footnote 11]
11 F.C.C. 71, 76.
[
Footnote 12]
The Georgia court similarly conceived the issue:
"The Federal Communications Commission is an administrative
agency of the Federal Government, empowered to enforce the
provisions of the Communications Act of 1934, and has the power and
authority to grant or refuse licenses to radio broadcasting
stations, with a view to subserving the public interest so that the
people shall have the best possible radio service; but nothing in
the power granted to the Commission or in said Communications Act
of Congress gives to the commission the power and authority to
regulate the private contracts and business of those operating
radio broadcasting stations where the same is not necessary in the
protection of the public interest and where such contracts do not
affect the interstate transactions of the radio station."
78 Ga.App. 292, 50 S.E.2d 808, 809.
"The Federal Communications Commission has power in the 'public
interest' under said act to refuse licenses to stations which
engage in practices contrary to the public interest, convenience or
necessity. In each case that comes before it, the Commission must
exercise ultimate judgment whether the grant of a license in the
particular instance would serve the public interest, convenience or
necessity. . . ."
"The Federal Communications Commission has the power and
authority in granting a license to a radio station to see that the
public interest and convenience are subserved thereby, and an
important element of public interest and convenience affecting the
issue of a radio broadcasting license is the ability of the
licensee to render the best practicable service to the community
reached by his broadcasts. The commission must see to it that all
applicants for radio station licenses have the necessary technical
ability to broadcast programs, and that the stations are properly
constructed and properly and adequately manned and do not interfere
with other stations, and that all licensees are responsible,
morally and financially. . . ."
Id. 78 Ga. App. 298-299, 50 S.E.2d 812, 813.
". . . Matters of private concern, and contracts affecting such
rights, which do not have as their subject matter the rights
conferred by a license or do not substantially affect such rights,
are not within the scope of the commission's power to regulate and
control in the public interest broadcasting by radio stations and
licenses to such stations. . . ."
Id. 78 Ga. App. 300, 50 S.E.2d 813.
There is some language in the opinion (78 Ga. App. 292, 302, 50
S.E.2d 808, 814) from which it might be inferred that the Court of
Appeals thought that it could review the conclusion of the
Commission that the issuance of the license with the contract in
effect would adversely affect the public interest. In view of the
statements above and the general tenor of the opinion, we are
satisfied that the Court of Appeals did not claim a power to decide
the contract's effect upon an applicant's ability to meet the
requirements necessary for a license from the Commission. The Court
of Appeals bottomed its decision on the lack of power in the
Commission to affect legal responsibility under this contract.
[
Footnote 13]
American School of Magnetic Healing v. McAnnulty,
187 U. S. 94,
187 U. S. 110;
Helvering v. Sabine Transp. Co., 318 U.
S. 306,
318 U. S. 311;
Addison v. Holly Hill Fruit Products, 322 U.
S. 607,
322 U. S.
617-618;
Ashbacker Radio Corp. v. FCC,
326 U. S. 327,
326 U. S. 333,
dissent,
326 U. S. 335,
cf. § 9(a) Administrative Procedure Act, 60 Stat. 242:
"SEC. 9. In the exercise of any power or authority --"
"(a) IN GENERAL. -- No sanction shall be imposed or substantive
rule or order be issued except within jurisdiction delegated to the
agency and as authorized by law."
[
Footnote 14]
Federal Radio Commission v. Nelson Bros. Co.,
289 U. S. 266,
289 U. S. 279;
National Broadcasting Co., Inc. v. United States,
319 U. S. 190,
319 U. S.
210.
[
Footnote 15]
Federal Communications Comm'n v. Pottsville Broadcasting
Co., 309 U. S. 134,
309 U. S. 138;
National Broadcasting Co., Inc. v. United States,
319 U. S. 190,
319 U. S. 216,
47 U.S.C. § 307(a).
[
Footnote 16]
Federal Communications Commission v. Sanders Bros. Radio
Station, 309 U. S. 470,
309 U. S. 473,
309 U. S.
475-476.
[
Footnote 17]
The Communications Act has no provision such as appears in the
National Labor Relations Act, § 10(c), 49 Stat. 454, authorizing
the Labor Board to require affirmative action from those who
violate the Labor Act. Yet, even in cases under that Act, third
persons were left free to assert rights under their contracts.
National Licorice Co. v. Labor Board, 309 U.
S. 350,
309 U. S.
365.
[
Footnote 18]
11 F.C.C. 71, 76.
[
Footnote 19]
Matter of Westinghouse Electric and Manufacturing Co.,
8 F.C.C.195;
In re Cornell University (WHCU), Docket No.
5820 (Order, Oct. 15, 1940).
[
Footnote 20]
See Matter of the City of Camden (WCAM), 4 Pike and
Fischer Radio Regulations 344, 384.
[
Footnote 21]
Hearings before a Subcommittee of the Committee on Interstate
and Foreign Commerce on S. 1333, 80th Cong., 1st Sess. 14, 51.
[
Footnote 22]
National Broadcasting Co., Inc. v. United States,
supra, at
319 U. S.
215-216,
319 U. S.
218.
[
Footnote 23]
See In re Petition of Fannie I. Leese, et al., 5 F.C.C.
364;
Matter of Hearst Radio, Inc., 7 F.C.C. 292, 295;
In re Assignment of License of Station WMCA, 10 F.C.C.
241, 242.
[
Footnote 24]
See Red River Broadcasting Co. v. Federal Communications
Comm'n, 69 App.D.C. 1, 98 F.2d 282.