Federal Radio Commission v. Nelson Bros Bond Mortgage Co Wibo Same v. North Shore Church Wpcc Federal Radio Commission Wjks v. Nelson Bros Bond Mortgage Co Wibo Same v. North Shore Church Wpcc

• Decision Date: 08 May 1933
• Docket Number: 658,660,659,Nos. 657,s. 657
• Citation: 77 L.Ed. 1166,289 U.S. 266,89 A.L.R. 406,53 S.Ct. 627
• Parties: FEDERAL RADIO COMMISSION v. NELSON BROS. BOND & MORTGAGE CO. (Station WIBO). SAME v. NORTH SHORE CHURCH (Station WPCC). FEDERAL RADIO COMMISSION et al. (Station WJKS) v. NELSON BROS. BOND & MORTGAGE CO. (Station WIBO). SAME v. NORTH SHORE CHURCH (Station WPCC)
• Court: U.S. Supreme Court

289 U.S. 266

53 S.Ct. 627

77 L.Ed. 1166

FEDERAL RADIO COMMISSION

v NELSON BROS. BOND & MORTGAGE CO. (Station WIBO).

SAME

v. NORTH SHORE CHURCH (Station WPCC).

FEDERAL RADIO COMMISSION et al. (Station WJKS)

v. NELSON BROS. BOND & MORTGAGE CO. (Station WIBO).

SAME

v. NORTH SHORE CHURCH (Station WPCC).

Nos. 657, 658, 659, 660.

Argued April 11, 1933.

Decided May 8, 1933.

[Syllabus from pages 266-268 intentionally omitted] The Attorney General and Mr. Thomas D. Thacher, Sol. Gen., of Washington, D.C., for petitioner Federal Radio Commission.

Mrs. Mabel Walker Willebrandt, of Washington, D.C., for petitioner Johnson-Kennedy Radio Corporation.

Mr. James M. Beck, of Washington, D.C., for respondents.

Mr. Chief Justice HUGHES delivered the opinion of the Court.

The Johnson-Kennedy Radio Corporation, owning Station WJKS at Gary, Ind., applied to the Federal Radio Commission for modification of license so as to permit operation, with unlimited time, on the frequency of 560 kc. then assigned for the use of Station WIBO, owned by Nelson Bros. Bond & Mortgage Company, and Station WPCC, owned by the North Shore Church, both at Chicago, Ill. These owners appeared before the chief examiner who, after taking voluminous testimony, recommended that the application be denied. The applicant filed exceptions and, on consideration of the evidence, the Commission granted the application and directed a modified license to issue to the applicant authorizing the operation of Station WJKS on the frequency of 560 kc. and terminating the existing licenses theretofore issued for Stations WIBO and WPCC. On appeal, the Court of Appeals of the District of Columbia reversed the commission's decision upon the ground that it was 'in a legal sense arbitrary and capricious.' 61 App.D.C. 315, 62 F.(2d) 854, 857. This court granted certiorari, 288 U.S. 597, 53 S.Ct. 506, 77 L.Ed. —-. region which has a population of about 800,000, under section 9 of the Radio Act of 1927 (c. 169, 44 Stat. 1166), as amended by section 5 of the Act of March 28, 1928, c. 263, 45 Stat. 373, 47 U.S.C. § 89 (47 USCA § 89).¹ The findings of fact upon which the commission based its order included the following:

Gary, Ind., about 30 miles from Chicago, is the largest steel center in the world. It has a population of approximately 110,000 and is located in what is known as the Calumet region which has a population of about 800,000, 60 per cent. of whom are foreign born and represent over fifty nationalities. Station WJKS is the only radio station in Gary and the programs it broadcasts are well designed to meet the needs of the foreign popula- tion. These programs include 'broadcasts for Hungarian, Italian, Mexican, Spanish, German, Russian, Polish, Croatian, Lithuanian, Scotch and Irish people,' and 'are musical, educational and instructive in their nature and stress loyalty to the community and the Nation.' Programs are arranged and supervised 'to stimulate community and racial origin pride and rivalry and to instruct in citizenship and American ideals and responsibilities.' 'Special safety prevention talks' are given for workingmen, explaining the application of new safeguards of various types of machinery used in the steel mills. The children's hour utilizes selections from various schools. There are 'good citizenship talks' weekly by civic leaders. The facilities of the station are made available to the local police department and to all fraternal, charitable, and religious organizations in the Calumet region, without charge. Sunday programs consist mainly 'of church service broadcast' including all churches and denominations desiring to participate. Although the Calumet area is served by a station at Fort Wayne and by several stations in Chicago, Station WJKS 'is the only station which serves a substantial portion of the area with excellent or even good service.' While Station WJKS 'delivers a signal of sufficient strength to give good reception in its normal service area if not interfered with, heterodyne and cross-talk interference exist to within three miles of the transmitter and constant objection to interference is found in the good service area of the station, particularly to the south, southeast and east.' This interference has increased during the past two years.

Station WIBO is operated by Nelson Bros. Bond & Mortgage Company separately from its mortgage and real estate business. It employs 55 persons and its total monthly expenses average $17,000. In March, 1931, it earned a net profit of $9,000. It represents a total cost of $346,362.99 less a reserve for depreciation of $54,627.36 and has been operated since April, 1925. Station WIBO was licensed to share time with Station WPCC, the latter being authorized to operate on Sundays during stated hours and by agreement has operated on certain week days in exchange for Sunday hours.

The licenses for Stations WIBO and WPCC, effective from September 1, 1931, to March 1, 1932, were issued upon the following condition: 'This license is issued on a temporary basis and subject to such action as the Commission may take after hearing on the application filed by Station WJKS, Gary, Indiana, for the frequency 560 kc. No authority contained herein shall be construed as a finding by the Federal Radio Commission that the operation of this station is or will be in the public interest beyond the term hereof.'

The programs broadcast by Station WIBO include a large number of chain programs originating in the National Broadcasting network and are almost entirely commercial in their nature. The same general type of programs broadcast by WIBO, including National Broadcasting chain programs, are received in the service area of WIBO from many other stations located in the Chicago district.

Station WPCC, owned by the North Shore Church, has programs made up entirely of sermons, religious music, and talks relating to the work and interests of the church. Contributions are solicited for the use of the church and to advance the matters in which it is interested; it is not used by other denominations or societies. 'Other stations in Chicago, including WMBI, owned by the Moody Bible Institute, devoting more time to programs of a religious nature than WPCC, are received in the service area of that station.'

'The State of Indiana is 2.08 units or 22 per cent under-quota in station assignments and the State of Illinois is 12.49 units or 55 per cent over-quota in such assignments. The Fourth Zone, in which both States are located, is 21.00 units or 26 per cent over-quota in station assignments. The granting of this application and deletion of WIBO and WPCC would reduce the over-quota status of the State of Illinois and the Fourth Zone by .88 unit and .45 unit, respectively, and would increase the quota of Indiana by .43 unit.'

Summarizing the grounds of its decision, the commission found:

'1. The applicant station (WJKS) now renders an excellent public service in the Calumet region and the granting of this application would enable that station to further extend and enlarge upon that service.

'2. The deletion of Stations WIBO and WPCC would not deprive the persons within the service areas of those stations of any type of programs not now received from other stations.

'3. Objectionable interference is now experienced within the service area of WJKS through the operation of other stations on the same and adjacent frequencies.

'4. The granting of this application and deletion of Stations WIBO and WPCC would not increase interference within the good service areas of any other stations.

'5. The granting of this application and deletion of Stations WIBO and WPCC would work a more equitable distribution of broadcasting facilities within the Fourth Zone, in that there would be an increase in the radio broadcasting facilities of Indiana which is now assigned less than its share of such facilities and a decrease in the radio broadcasting facilities of Illinois which is now assigned more than its share of such facilities.

'6. Public interest, convenience and/or necessity would be served by the granting of this application.'

The Court of Appeals was divided in opinion. The majority pointed out that the court had repeatedly held that 'it would not be consistent with the legislative policy to equalize the comparative broadcasting facilities of the various states or zones by unnecessarily injuring stations already established which are rendering valuable service to their natural service areas'; and they were of opinion that the evidence showed that Stations WIBO and WPCC had been "serving public interest, convenience, and necessity' certainly to as great an extent as the applicant station' and that 'the conclusively established and admitted facts' furnished no legal basis for the commission's decision. The minority of the court took the view that the court was substituting its own conclusions for those of the commission; that the commission had acted within its authority; and that its findings were sustained by the evidence.

First. Respondents challenge the jurisdiction of this court. They insist that the decision of the Court of Appeals is not a 'judicial judgment'; that, for the purpose of the appeal to it, the Court of Appeals is merely a part of the machinery of the Radio Commission and that the decision of the court is an administrative decision. Respondents further insist that, if this court examines the record, its decision 'would not be a judgment, or permit of a judgment to be made in any lower court, but would permit only consummation of the administrative function of issuing or withholding a permit to operate the station.'

Under section 16 of the Radio Act of 1927, the Court of Appeals, on appeal from decisions of the Radio Commission, was directed to 'hear, review and determine the appeal' upon the record made before the commission, and upon such additional evidence as the court might receive, and was empowered to 'alter...