Federal Radio Commission

Historical background

The Federal Radio Commission (FRC) was a government body that regulated radio use in the United States from its creation in 1926 until its replacement by the Federal Communications Commission (FCC) in 1934. The Commission was created to regulate radio use "as the public convenience, interest, or necessity requires."

The Radio Act of 1927 superseded the Radio Act of 1912, which had given regulatory powers over radio communication to the Secretary of Commerce and Labor. The Radio Act of 1912 did not mention broadcasting and limited all private radio communications to what is now the AM band.

Power of the Commission

The five-person Commission was given the power to grant and deny licenses, and to assign frequencies and power levels for each licensee. The Commission was not given any official power of censorship, although programming could not include "obscene, indecent, or profane language." In theory, anything else could be aired. In practice, the Commission could take into consideration programming when renewing licenses, and their ability to take away a broadcaster's license obviously enabled them to control content to some degree.

The Commission also had little power over radio networks; in fact, the Radio Act of 1927 made almost no mention of the radio networks (notably NBC and, a bit later CBS) that were in the process of dominating radio. The only mention of radio networks was vague: The Commission shall "[h]ave the authority to make special regulations applicable to stations engaged in chain broadcasting."

What did the FRC do?

The Federal Radio Commission created a new structure favoring commercial broadcasting. Specifically, the FRC:

• adopted a series of orders widening the broadcast band to the entire spectrum between 550 kHz to 1500 kHz and removing portable stations from the air;
• allocated 40 nationwide, high-powered (generally 25,000-50,000 watts) "clear channels" on which only one station operated at nighttime, plus other regional and local channels;
• set a preference for commercial use over stations representing religious, political, social, and economic viewpoints.

The FRC's rationale for its actions

The main stated reason for regulating spectrum use was to bring order to the chaotic situation where stations operated without licenses and interference was a major concern. Though national networks could have been created by interconnecting (using telephone lines) a chain of lower-power local stations, the FRC at that time favored networks consisting of high power, 'clear channels' that had nationwide coverage at nighttime. Commercial broadcasters pushed for national radio networks which they saw as "the only plan" for successfully financing radio broadcasting because it would permit the development of national advertising.

The FRC initially steered away from endorsing these proposals to create a national advertiser-financed broadcasting system. The FRC's chief engineer described the channel allocation plan as entirely an engineering matter: "The reason for this is purely physical fact." Indeed, the FRC stated in 1928 that its allocation plan was not intended for the primary benefit of advertisers. By 1929, however, after having created 40 national clear channels and other regional high powered stations that depended on advertiser financing, the FRC acknowledged that the system it had created would need to be financed by advertising: "without advertising, broadcast would not exist."

The FRC also said it was driven by spectrum scarcity to favor "general purpose" commercial stations over the non-profit ("propaganda") stations. In regard to "propaganda" stations, the FRC stated:

“

There is not room in the broadcast band for every school of thought, religious, political, social, and economic, each to have its separate broadcasting station, its mouthpiece in the ether.

”

In practice, the FRC issued licenses to well-financed commercial stations rather than to non-commercial stations.

Impact of the decision: The long view

• The FRC's decisions brought an end to the chaos in the airwaves that had existed in the mid-1920s and set the structure of the broadcasting industry for decades.
• Commercial broadcasting replaced non-commercial broadcasting as the dominant force in radio.
• National radio networks rose in prominence. In 1926, the National Broadcasting Company (NBC) was created, with 22 affiliates. This became known as the Red network. NBC‘s second network, known as the Blue network, had 6 affiliates. These added up to 7 percent of all stations. By 1933, Red had 28, Blue had 24, and 36 were supplemental, for a total of 88 NBC affiliates, nearly 15 percent of all affiliates. The Columbia Broadcasting System (CBS) had 17 affiliates in 1928 (4 percent of the total) and rose to 91 affiliates in 1933 (16 percent of the total). More significantly, NBC and CBS were affiliated with all but 3 of the 40 "clear channels" and accounted for 97 percent of nighttime broadcasting (when the smaller stations were not allowed to operate).
• Advertising became the principal source of broadcasting revenue. Radio advertising, a marginal factor in 1927, rose to $100 million in 1930. Radio stations’ income rose from less than $5 million in 1927 to $56 million four years later.