Federal Communications Commission v. Sanders Bros Radio Station

Citation309 U.S. 470,84 L.Ed. 869,60 S.Ct. 693,84 L.Ed. 1037,309 U.S. 642
Decision Date25 March 1940
Docket NumberNo. 499,499
PartiesFEDERAL COMMUNICATIONS COMMISSION v. SANDERS BROS. RADIO STATION
CourtU.S. Supreme Court

As Amended on Denial of Rehearing April 22, 1940.

Messrs. Robert H. Jackson, Atty. Gen., and William J. Dempsey, of Washington, D.C., for petitioner.

Mr. Louis G. Caldwell, of Washington, D.C., for respondent.

Mr. Justice ROBERTS delivered the opinion of the Court.

We took this case to resolve important issues of substance and procedure arising under the Communications Act of 1934, as amended.1

January 20, 1936, the Telegraph Herald, a newspaper published in Dubuque, Iowa, filed with the petitioner an application for a construction permit to erect a broadcasting station in that city. May 14, 1936, the respondent, who had for some years held a broadcasting license for, and had operated, Station WKBB at East Dubuque, Illinois, directly across the Mississippi River from Dubuque, Iowa, applied for a permit to move its transmitter and studios to the last named city and to install its station there. August 18, 1936, respondent asked leave to intervene in the Telegraph Herald proceeding, alleging in its petition, inter alia, that there was an insufficiency of advertising revenue to support an additional station in Dubuque and insufficient talent to furnish programs for an additional station; that adequate service was being rendered to the community by Station WKBB and there was no need for any additional radio outlet in Dubuque and that the granting of the Telegraph Herald application would not serve the public interest, convenience, and necessity. Intervention was permitted and both applications were set for consolidated hearing.

The respondent and the Telegraph Herald offered evidence in support of their respective applications. The respondent's proof showed that its station had operated at a loss; that the area proposed to be served by the Telegraph Herald was substantially the same as that served by the respondent and that, of the advertisers relied on to support the Telegraph Herald station, more than half had used the respondent's station for advertising.

An examiner reported that the application of the Telegraph Herald should be denied and that of the respondent granted. On exceptions of the Telegraph Herald, and after oral argument, the broadcasting division of petitioner made an order granting both applications, reciting that 'public interest, convenience, and necessity would be served' by such action. The division promulgated a statement of the facts and of the grounds of decision, reciting that both applicants were legally, technically, and financially qualified to undertake the proposed construction and operation; that there was need in Dubuque and the surrounding territory for the services of both stations, and that no question of electrical interference between the two stations was involved. A rehearing was denied and respondent appealed to the Court of Appeals for the District of Columbia. That court entertained the appeal and held that one of the issues which the Commission should have tried was that of alleged economic injury to the respondent's station by the establishment of an additional station and that the Commission had erred in failing to make findings on that issue. It decided that, in the absence of such findings, the Commission's action in granting the Telegraph Herald permit must be set aside as arbitrary and capricious.2

The petitioner's contentions are that under the Communications Act economic injury to a competitor is not a ground for refusing a broadcasting license and that, since this is so, the respondent was not a person aggrieved or whose interests were adversely affected, by the Com- mission's action, within the meaning of Section 402(b) of the Act, 47 U.S.C.A. § 402(b), which authorizes appeals from the Commission's orders.

The respondent asserts that the petitioner in argument below contended itself with the contention that the respondent had failed to produce evidence requiring a finding of probable economic injury to it. It is consequently insisted that the petitioner is not in a position here to defend its failure to make such findings on the ground that it is not required by the Act to consider any such issue. By its petition for rehearing in the court below, the Commission made clear its position as now advanced. The decision of the court below, and the challenge made in petition for rehearing and here by the Commission, raise a fundamental question as to the function and powers of the Commission and we think that, on the record, it is open here.

First. We hold that resulting economic injury to a rival station is not in and of itself, and apart from considerations of public convenience, interest, or necessity, an element the petitioner must weigh and as to which it must make findings in passing on an application for a broadcasting license.

Section 307(a) of the Communications Act, 47 U.S.C.A. § 307(a), directs that 'the Commission, if public convenience, interest, or necessity will be served thereby, subject to the limitations of this Act (chapter), shall grant to any applicant therefor a station license provided for by this Act (chapter).' This mandate is given meaning and contour by the other provisions of the statute and the subject matter with which it deals.3 The Act contains no express command that in passing upon an application the Commission must consider the effect of competition with an existing station. Whether the Commission should consider the subject must depend upon the purpose of the Act and the specific provisions intended to effectuate that purpose.

The genesis of the Communications Act and the necessity for the adoption of some such regulatory measure is a matter of history. The number of available radio frequencies is limited. The attempt by a broadcaster to use a given frequency in disregard of its prior use by others, thus creating confusion and interference, deprives the public of the full benefit of radio audition. Unless Congress had exercised its power over interstate commerce to bring about allocation of available frequencies and to regulate the employment of transmission equipment the result would have been an impairment of the effective use of these facilities by anyone. The fundamental purpose of Congress in respect of broadcasting was the allocation and regulation of the use of radio frequencies by prohibiting such use except under license.

In contradistinction to communication by telephone and telegraph, which the Communications Act recognizes as a common carrier activity and regulates accordingly in analogy to the regulation of rail and other carriers by the Interstate Commerce Commission,4 the Act recognizes that broadcasters are not common carriers and are not to be dealt with as such.5 Thus the Act recognizes that the field of broadcasting is one of free competition. The sections dealing with broadcasting demonstrate that Congress has not, in its regulatory scheme, abandoned the principle of free competition, as it has done in the case of railroads,6 in respect of which regulation involves the suppression of wasteful practices due to competition, the regulation of rates and charges, and other measures which are unnecessary if free competition is to be permitted.

An important element of public interest and convenience affecting the issue of a license is the ability of the licensee to render the best practicable service to the community reached by his broadcasts. That such ability may be assured the Act contemplates inquiry by the Commission, inter alia, into an applicant's financial qualifications to operate the proposed...

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    ...under authority of the Act does not give any person anything in the nature of a property right, FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869 (1940). More explicitly, the Court in Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108 (1945), s......
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    ...See , e.g. , Hardin v. Ky. Utils. Co. , 390 U.S. 1, 5–6, 88 S.Ct. 651, 19 L.Ed.2d 787 (1968) ; F.C.C. v. Sanders Bros. Radio Station , 309 U.S. 470, 476–77, 60 S.Ct. 693, 84 L.Ed. 869 (1940). Second, Congress is "well positioned" to make its own judgment about which harms are sufficiently c......
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    • United States
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    • October 28, 2020
    ...1940s, the Court entered a relatively brief era of broad statutory standing. In a landmark case, F.C.C. v. Sanders Bros. Radio Station , 309 U.S. 470, 477, 60 S.Ct. 693, 84 L.Ed. 869 (1940), the Supreme Court permitted a radio station to sue to enjoin a Federal Communications Commission ord......
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    ...to which we traditionally defer. See 47 U.S.C. Sec. 304 (license does not create entitlement); FCC v. Sanders Brothers Radio Station, 309 U.S. 470, 474, 60 S.Ct. 693, 697, 84 L.Ed. 869 (1940) ("The policy of the Act is clear that no person is to have anything in the nature of a property rig......
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14 books & journal articles
  • Standing and social choice: historical evidence.
    • United States
    • University of Pennsylvania Law Review Vol. 144 No. 2, December 1995
    • December 1, 1995
    ...affected by any order of the [Federal Communications] Commission"); see also Federal Communications Comm'n v. Sanders Bros. Radio Station, 309 U.S. 470, 476-77 (1940) (granting standing to complainant even though the claimed injury was not a factor which the Commission was legally obligated......
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    • Environmental Law Reporter No. 49-1, January 2019
    • January 1, 2019
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  • Unpacking Third-Party Standing.
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    • Yale Law Journal Vol. 131 No. 1, October 2021
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    ...48 Stat. 1064, 1093 ('934) (codified as amended at 47 U.S.C. [section] 402(b)(6) (2018)). (44.) See FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 477 (1940); Magill, supra note 39, at (45.) Caleb Nelson, "Standing" and Remedial Rights in Administrative Law, 105 VA. L. REV. 703, 716 (201......
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