Bringing Order to Chaos with the Radio Act of 1927

In the 1920s, as radio moved from narrowcasting to broadcasting, the battle for more frequency space and less channel interference intensified. Manufacturers, engineers, station operators, network executives, and the listening public demanded action. Many wanted more sweeping regulation than the simple licensing function granted under the Radio Act of 1912, which gave the Commerce Department little power to deny a license or to unclog the airwaves.

Beginning in 1924, Commerce Secretary Herbert Hoover ordered radio stations to share time by setting aside certain frequencies for entertainment and news and others for farm and weather reports. To challenge Hoover, a station in Chicago jammed the airwaves, intentionally moving its signal onto an unauthorized frequency. In 1926, the courts decided that based on the existing Radio Act, Hoover had the power only to grant licenses, not to restrict stations from operating. Within the year, two hundred new stations clogged the airwaves, creating a chaotic period in which nearly all radios had poor reception. By early 1927, sales of radio sets had declined sharply.

To restore order to the airwaves, Congress passed the Radio Act of 1927, which stated an extremely important principle—licensees did not own their channels but could only license them as long as they operated to serve the “public interest, convenience, or necessity.” To oversee licenses and negotiate channel problems, the 1927 act created the Federal Radio Commission (FRC), whose members were appointed by the president. Although the FRC was intended as a temporary committee, it grew into a powerful regulatory agency. With passage of the Communications Act of 1934, the FRC became the Federal Communications Commission (FCC). Its jurisdiction covered not only radio but also the telephone and the telegraph (and later television, cable, and the Internet). More significantly, by this time Congress and the president had sided with the already-powerful radio networks and acceded to a system of advertising-supported commercial broadcasting as best serving “public interest, convenience, or necessity,” overriding the concerns of educational, labor, and citizen broadcasting advocates.9 (See Table 5.1.)

In 1941, an activist FCC went after the networks. Declaring that NBC and CBS could no longer force affiliates to carry programs they did not want, the government outlawed the practice of option time that Paley had used to build CBS into a major network. The FCC also demanded that RCA sell one of its two NBC networks. RCA and NBC claimed that the rulings would bankrupt them. The Supreme Court sided with the FCC, however, and RCA eventually sold NBC-Blue to a group of businessmen for $8 million in the mid-1940s. It became the American Broadcasting Company (ABC). These government crackdowns brought long-overdue reform to the radio industry, but they had not come soon enough to prevent considerable damage to noncommercial radio.

TABLE 5.1

MAJOR ACTS IN THE HISTORY OF U.S. RADIO

Act Provisions Effects
Wireless Ship Act of 1910 Required U.S. seagoing ships carrying more than fifty passengers and traveling more than two hundred miles off the coast to be equipped with wireless equipment with a one-hundred-mile range. Saved lives at sea, including more than seven hundred rescued by ships responding to the Titanic’s distress signals two years later.
Radio Act of 1912 Required radio operators to obtain a license, gave the Commerce Department the power to deny a license, and began a uniform system of assigning call letters to identify stations. The federal government began to assert control over radio. Penalties were established for stations that interfere with other stations’ signals.
Radio Act of 1927 Established the Federal Radio Commission (FRC) as a temporary agency to oversee licenses and negotiate channel assignments. First expressed the now-fundamental principle that licensees did not own their channels but could only license them as long as they operated to serve the “public interest, convenience, or necessity.”
Communications Act of 1934 Established the Federal Communications Commission (FCC) to replace the FRC. The FCC regulated radio, the telephone, the telegraph, and later television, cable, and the lnternet. Congress tacitly agreed to a system of advertising-supported commercial broadcasting despite concerns of the public.
Telecommunications Act of 1996 Eliminated most radio and television station ownership rules, some dating back more fifty years. Enormous national and regional station groups formed, dramatically changing the sound and localism of radio in the United States.