people of the country the impression that all American broadcasting was as bad as the worst. (c) A few broadcasters, who understood the legal implications of the Blue Book, realized that whatever its merits might be, it contained, carefully tucked in with much exposition and illustrative material, assertions of power never conferred by Congress, and statements of philosophy destructively inconsistent with a free medium of speech. This is the most dangerous feature of the report, as I will point out, in detail, later; especially as undiscriminating readers are unaware of the dangerous, subtle poison which was stirred in with what seems to them a palatable repast. III. In response to the suggestion that the Blue Book is "no more than an effort upon the part of the Commission to remove and prevent abuses of overcommercialism": (a) The Blue Book is much more than suggested. A reading of it, with the point in mind, will very quickly demonstate that it is concerned with such additional subjects as: 1. "Commission jurisdiction with respect to program service." 2. "Cooperation between networks, stations, and nonprofit organizations." 3. "Significant minority tastes and interests." 4. "Service to nonprofit organizations." 5. "Chain broadcasing regulations." * 6. "Economic aspects of broadcasting": Under this subject we find such statements as the following, "* * A review of the economic aspects of broadcasting during recent years indicates that there are no economic considerations to prevent the rendering of a considerably broader program service than the public is currently afforded. 7. Programs and program policies, "more discussion programs," "more local live-talent programs." 8. "Balance-wheel function of the sustaining programs." 9. "Soap operas." 10. "Package programs." 11. Market reports, weather reports, talks on farming and other broadcasts specifically intended for rural listeners. 12. "Program experimentation." 13. “Round-table discussions of current problems." 14. "Religious programs." 15. "Transcribed programs." 16. "Discussion of public issues": Under this heading the Commission lists 19 questions, including consideration of such subjects as (a) forums; (b) town meetings; (c) round-table discussions; (d) locally originated discussion programs; (e) selection of commentators; (f) discharging of commentators; (g) the "right to reply"; (h) whether a station should be required to state in writing its reasons for refusal of time on the air and "what measures can be taken to open broadcasting to types of informational programs which contravene the interests of large advertisers for example, news of the reports and decisions of the Federal Trade Commission concerning unfair advertising; reports of the American Medical Association concerning the effects of cigarette smoking; temperance broadcasts, etc." * * * 17. "Proposals for future Commission policy": Under this heading we find such statements as the following: There is need, for example, for professional radio critics, who will play in this field the role which literary and dramatic critics have long assumed in the older forms of artistic expression. It is, indeed, a curious instance of the time lag in our adjustment to changed circumstances that while plavs and concerts performed to comparatively small audiences in the 'legitimate' theater or concert hall are regularly reviewed in the press, radio's best productions performed before an audience of millions receive only occasional and limited critical consideration. * Colleges and universities, some of them already active in the field, have a like distinctive role to play. Together with the public schools, they have it in their power to raise a new generation of listeners with higher standards and expectations of what radio can offer." In this respect the Blue Book is not a proper governmental report, but instead an attempt to propagate the sociological ideas of particular Commissioners. While it is entirely proper and desirable for informed critics to analyze and challenge practices and performances of radio broadcasting, it is an entirely different proposition for a Government agency which is engaged in "regulation of interstate commerce" to be stirring up such criticism. It is as if the Postmaster General in administering the law concerning the use of the second-class-mail privilege, by magazines and newspapers, should issue a "report" condemning the contents of such publications and urging critics to attack them. (b) The standards suggested by the Commission to distinguish between "commercial" and "noncommercial" are unsound. Several Commissioners already have conceded this with respect to so-called sustaining as contrasted with sponsored programs. Carried as a sustainer, the Metropolitan Opera broadcasts become 22 or 3 hours on the credit side of the station's program ledger, but sponsored by Texaco, the opera becomes merely a cipher, 150 or 180 minutes of NC (network commercial) to be counted against the station's commercial versus sustaining position. The broadcasts of the Metropolitan Opera and the New York Philharmonic, as well as dozens of other public-interest programs of high cultural value, have been materially benefited by sponsorship. More money is spent on their promotion, their time segment is assured, and more care and attention can be given to their production. As a result, more people can and do listen to these sponsored broadcasts than ever heard them as "sustainers." That the Commission glorifies the "sustainer" and brands the "commercial"—even though they be the same program—is a patent injustice which has no basis in reason. Despite the fact that the sponsor normally uses less than 4 minutes of commercial announcements on the 2-hour broadcast of the philharmonic orchestra, the stations carrying it must label it 120 minutes NC (network commercial) to be counted against their commercial versus sustaining position. Judged on any similar basis, the average newspaper or magazine would be almost 100 percent commercial. (c) The standards are faulty in other respects. The Commission seeks to evaluate the public-interest aspects and program structure of radio by reducing them to a statistic. Commercial programs are listed as LC (local commercial) or NC (network commercial). Sustaining programs must be listed as LS (local sustaining) or NS (network sustaining). Recorded programs must be listed as RC for commercial and RS for sustaining, etc. By such a tight standard the Commission cannot possibly evaluate or review the programs of a station in any respect except the proportion of time which it devotes either to sustaining, commercial, or recorded programs. I give you an example: The Red Cross has said that one of the most effective programs ever presented by radio in its behalf was the half-hour completely devoted to it by Fibber McGee and Molly during one of its campaigns. Despite the fact that the entire program was devoted to the Red Cross, under Blue Book procedure, it is listed as 30 minutes NC (network commercial). How is the Commission to judge the tremendous impact of one of America's No. 1 shows, on behalf of one of America's No. 1 philanthropic causes, from the statistic "30 minutes NC"? And how can a sponsor, a network, or a radio station detail its performance in the public interest by such a method? Even the spot announcements which stations would use to call attention to such an outstanding program would have to be listed as CSA (commercial spot announcements). The Commission, in the Blue Book, rules that a 15 minute program, regardless of its content, if interrupted by a single spot announcement, must be listed as "15 minutes LC" (local commercial). (d) But apart from all other questions, the effort of the Commission, in this respect, to indict broadcasting licensees on the theory that they are making too much money is an unwarranted indirect attack upon freedom of speech, similar in character to that revealed in the Grosjean case,3 decided by the Supreme Court in 1936. 1. This effort is revealed in such statements in the Blue Book as: "A prosperous broadcasting industry is obviously in a position to render a better program service to the public * * "A review of the economic aspects of broadcasting during recent years indicates that there are no economic considerations to pre 3 For convenience, several headnotes from the decision in the case AGrosjean v. American Press Co., 297 U. S. 233) are set out here. Members of the committee will find the full text of the decision very helpful. The headnotes, however, indicate pretty clearly_the fundamental principles involved, as follows: "A State license tax (La. Act No. 23, July 12, 1934) imposed on the owners of newspapers for the privilege of selling or charging for the advertising therein, and measured by a percent of the gross receipts from such advertisements, but applicable only to newspapers enjoying a circulation of more than 20,000 copies per week. Held unconstitutional. P. 244. "From the history of the subject it is plain that the English rule restricting freedom of the press to immunity from censorship before publication was not accepted by the American colonists, and that the first amendment was aimed at any form of previous restraint upon printed publications or their circulation including restraint by taxation of newspapers and their advertising, which were well-known and odious methods still used in England when the first amendment was adopted. P. 245." [Emphasis supplied.] vent the rendering of a considerably broader program service than the public is currently afforded." 2. The Blue Book then presents statistics designed to show that broadcasters are now receiving income amounting to 222.6 percent of depreciated cost of physical investment and 32.8 percent of income to revenues. 3. No broadcaster had any opportunity to participate in these determinations. 4. No competent court has ever had an opportunity to pass upon their validity, either as to the formula used, the facts, or the results of the computations. 5. No consideration is given in these determinations to use of venture capital in a developing industry; to factors of experimentation, good will, professional services, and other such considerations. 6. Such statistical procedures as those used by FCC, while, perhaps, appropriate to public utilities, with large physical investments and long stabilized business practices, are no more applicable to broadcasting than they would be to newspapers, to the professions, to writers, to composers, etc. It is as absurd a procedure as it would be to limit the author of a "best seller" to a percentage return upon the value of a second-hand typewriter; of a physician, upon the value of his office equipment or a placer-gold miner, upon the value of the old pan in which he washes gravel; or the inimitable Jack Benny to 6 percent on the value of a cracked violin and a tailor-made suit of clothes. 7. The important statistics about radio earnings cannot be found anywhere in the Blue Book. Broadcasting in the United States grossed about $400,000,000 last year. It netted about 10 percent of that amount divided among over a thousand stations and four networks. Between 35 and 40 percent of all its net income was paid out in salaries and wages to 60,000 people who work in the industry. Well over $100,000,000 went to provide the American people with the finest and most elaborate schedule of radio entertainment and information in all the world. It may be of minor importance that probably another $40,000,000 of radio's income was paid to Uncle Sam in taxes. 8. Assuming large profits for broadcasting during the war years, this was only one incident in the whole picture of wartime prosperity; and even then, some stations operated in the red. 9. As a matter of fact, it is now pretty generally recognized that many broadcasters are operating close to the margin; that too many people have been overpersuaded to enter broadcasting by these rosy estimates; that a considerable number of failures is inevitable. 10. In this connection, it is probable that the FCC or someone speaking for it will, in the near future, be suggesting legislation and additional appropriations so that FCC can make economic determinations of needs for broadcasting stations in particular communities. It should be perfectly obvious that if such power is ever granted, the control of FCC over free speech will be immeasurably extended. (e) Another section of the report asserts the popular (in some quarters) fiction that a handful of advertisers controls and/or principally supports the American system of broadcasting. Nowhere in the Blue Book can the reader find facts to support such an assertion. There are well over a thousand radio stations in the United States supported by literally tens of thousands of local, regional, and national advertisers. All the network programs of all the big national advertisers on all of the national networks account for less than 25 percent of the income of America's radio stations. Here again a reading of the Blue Book suggests an effort to discredit free American broadcasting. Certainly it provides plentiful ammunition to support the sophistries of those who would like to break it down. "The predominant purpose of the grant of immunity was to preserve an untrammeled press as a vital source of public information. P. 250.' "Construction of a constitutional provision phrased in terms of the common law. is not determined by rules of the common law which had been rejected in this country as unsuited to local civil or political conditions. P. 248." "It is not intended in this case to suggest that the owners of newspapers are immune from any of the ordinary forms of taxation for support of government. The tax in question is not an ordinary form of tax, but one single in kind, with a long history of hostile misuses against the freedom of the press. The manner of its use in this case is in itself suspicious; it is not measured or limited by the volume of advertisements, but by the extent of the circulation of the publication in which the advertisements are carried, with the plain purpose of penalizing the publishers and curtailing the circulation of a selected group of newspapers.' IV. When the Blue Book was first released by the Commission, I issued a statement on behalf of the broadcasters concerning it. That statement still stands 100 percent, as an expression of my views. Among other things, that statement said: "The report released by the Federal Communications Commission, under date of March 7, 1946, concerning radio programing, reflects a philosophy of Government control which raises grave questions of constitutionality. The report overlooks, completely, freedom of speech in radio broadcasting, which was a primary consideration in the mind of Congress when it passed the Communications Act. Considered from every angle, the report reveals a lack of faith in the American system of free radio and a desire to impose artificial and arbitrary controls over what the people of this country shall hear. It indicates a reversion to that type of Government control and regulation from which our forefathers struggled to escape. In this instance, just as with the issue of freedom of the press, there can be no compromise. Highlighting a few examples of inadequate programing, the report then proceeds to indict the entire radio broadcasting industry. Relying upon its own administrative practices, it now asserts powers far beyond those given to it by Congress and inconsistent with the constitutional limitations under which Congress acted." V. The Blue Book asserts powers in excess of the commerce clause of the Constitution. (a) In creating the FCC, and in enacting the Communications Act, Congress exercised the power granted to it by the commerce clause. * (b) The pertinent language of that provision of the Constitution reads as follows: "Article I, section 8. The Congress shall have power * * to * * *"" regulate commerce with foreign nations, and among the several States (c) The power delegated by the commerce clause is limited by the first amendment. (d) The commerce clause is applicable to radio broadcasting, as a form of interstate commerce, even though it was a form of commerce unknown to those who wrote the Constitution. (e) By exactly the same process of interpretation, speech, amplified and transmitted by radio broadcasting, is covered by the first amendment, even though such methods of amplification and transmission were unknown to those who wrote the Constitution. (f) The fact that the nature of broadcasting frequencies necessitates "regulation" to prevent electrical interference in this particular form of interstate commerce does not by any stretch of the imagination warrant interferene with freedom of speech by supervising broadcasting programs. (g) The same argument would justify the Postmaster General, in determining public tastes in magazines and newspaper contents, through his licensing power, in connection with the second-class-mail privilege.* It would justify the setting up of a commission to distribute paper among magazines and newspapers; and, then, as a second step, the determination, by such a commission, of those magazines and newspapers which-because of "properly selected and balanced" news, entertainment, editorials, controversy, and advertising—should be entitled to use the scarce paper. VI. The Blue Book violates the letter and the spirit of the first amendment. (a) The first amendment provides that: "Congress shall make no law * * * abridging the freedom of speech, or of the press; * * (b) The Communications Act provides, in section 326, that: "Nothing in this act shall be understood or construed to give the Commission the power of censorship over the radio communications or signals transmitted by any radio station, and no regulation or condition shall be promulgated or fixed by the Commission which shall interfere with the right of free speech by means of radio communication * * [Emphasis supplied.] (c) The Blue Book comes clearly within the meaning of section 326. Although called a report, it reveals, clearly, administrative intent that its suggestions and recommendations must be followed. It concludes with a section on "Proposals for Future Commission Policy." It was followed within a few days by a demand for specific compliance. Later, the Commission issued a statement entitled: “The Standard Definitions Contained in Part V, C, 1 of ‘Public Service Responsibilities of Broadcast Licensees' Were Amended by the Federal Communications Commission on July 2, 1946." There has been a continuous Commission procedure based Cr. Robert E. Hannegan v. Esquire, Inc. (U. S., 90 L. Ed. 429f). upon the Blue Book ever since. Any doubt upon this point is removed by the language of the Supreme Court in the CBS case. 6 * * * (d) The Commission, in a series of opinions and administrative interpretations, over a period of years, has been gradually encroaching upon free speech in radio broadcasting. A gross example of this is found in its opinion in the Mayflower case, decided in 1941, where the Commission said: "The record shows without contradiction that beginning early in 1937 and continuing through September 1938, it was the policy of Station WAAB to broadcast so-called editorials from time to time urging the election of various candidates for political office or sup porting one side or another of various questions in public controversy. In these editorials, which were delivered by the editor in chief of the station's news service, no pretense was made at objective, impartial reporting. It is clearindeed the station seems to have taken pride in the fact that the purpose of these editorials was to win public support for some person or view favored by those in control of the station. * * * The material in the record has been carefully considered and compels the conclusion that this licensee during the period in question, has revealed a serious misconception of its duties and func tions under the law. * * * A truly free radio cannot be used to advocate the causes of the licensee. It cannot be used to support the candidacies of his friends. It cannot be devoted to the support of principles he happens to regard most favorably. In brief, the broadcaster cannot be an advocate. These requirements are inherent in the conception of public interest set up by the Communications Act as the criterion of regulation. And while the day-to-day decisions applying to these requirements are the licensee's responsibility, the ultimate duty to review generally the course of conduct of the station over a period of time and to take appropriate action thereon is vested in the Commission. In response to a request of the Commission for details as to the conduct of the station since September 1938 two affidavits were filed with the Commission by John Shepard 3d, president of the Yankee Network, Inc. Apparently conceding departures from the requirements of public interest by the earlier conduct of the station, these affidavits state, and they are uncontradicted, that no editorials have been broadcast over Station WAAB since September 1938 and that it is not intended to depart from this uninterrupted policy. The station has no editorial policies. * Relying upon these comprehensive and unequivocal representations as to the future conduct of the station and in view of the loss of service to the public involved in the deletion of this station, it has been concluded to grant the applications for renewal. Should any future occasion arise to examine into the conduct of this licensee, however, the Commission will consider the facts developed in this record in its review of the activities as a whole. [Emphasis supplied.] * * * * " (e) In the Blue Book (pt. III, pp. 39-40), as previously noted, the Commission listed 19 questions-explicitly concerned with free speech-and then continued, "The Commission has never laid down, and does not now propose to lay down, any categorical answers to such questions as those raised above. Rather than enunciating general policies, the Commission reaches decisions on such matters in the crucible of particular cases." (See, for example, the Mayflower case. & F. C. C. 333, and United Broadcasting Co. (WHKC) case, decided June 26. 1945.) (f) This obviously, constitutes a direct threat to broadcasters-in violation of the first amendment and of the Communications Act, section 326-that unless they conform to the Commission's ideas in handling the 19 problems, the 5 Columbia Broadcasting System, Inc. v. United States of America (316 U. S. 407, 422. 86 L. Ed. 1563, 1573): "The Commission argues that since its report characterized the regulations as announcements of policy, the order promulgating them is no more subject to review than a press release similarly announcing its policy. Undoubtedly regulations adonted in the exercise of the administrative rule-making power, like laws enacted by When, legislatures, embody announcements of policy. But they may be something more. as here. the regulations are avowedly adopted in the exercise of that power, couched in terms of command and accompanied by an announcement of the Commission that the palier is one which we will follow in exercising our licensing power.' they must be taken by those entitled to rely upon them as what they purport to be an exercise of the delegated legislative nower-which, until amended, are controlling alike upon the Commission and all others whose rights may be affected by the Commission's execution of them. The Commission's contention that the regulations are no more reviewable than a press release is hardly reconcilable with its own recognition that the regulations afford legal basis for cancellation of the license of a station if it renews its contract with appellant." [Emphasis Supplied 1 In the Matter of the Mayflower Broadcasting Corporation (8 FCC Reports, 333, 339-341). |