Mass Communications Law(redirected from Regulation of Licensees)
Mass Communications Law
A body of primarily federal statutes, regulations, and judicial decisions that govern radio; broadcast, cable, and satellite television; and other means of electronic communication.
Since the introduction of the radio in the early twentieth century, sophisticated technological devices have been developed to facilitate the transmission of ideas, information, and entertainment throughout the United States and the world. The federal government has taken an active role in regulating the means of communication that involve the interstate transmittal of information. Government regulation was needed in order to create a coherent plan for radio and television broadcasting and to ensure that these facilities are used responsibly. The passage of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, however, signals a decline in government regulation. This massive deregulation allows companies involved with mass communications to compete and to combine more freely.
Government regulation of radio began in 1910, at a time when radio was regarded primarily as a device to bring about safe maritime operations and as a potential advancement in military technology. Persons seeking to use radio frequencies would register with the Commerce Department to have a frequency assigned to them. During World War I, entrepreneurs began to recognize the commercial possibilities of radio.
By the mid 1920s, commercial radio stations were operating, and the secretary of commerce set aside frequencies for commercial application. The regulatory powers of the secretary were uncertain because the secretary was authorized under law only to record applications and to grant frequencies. The Federal Radio Commission was created in 1927 to assign applicants designated frequencies under specific engineering rules and to create and enforce standards for the broadcasters' privilege of using the public's airwaves.
The commission later became the Federal Communications Commission (FCC), which was established by the Communications Act of 1934 (47 U.S.C.A. §§ 151 et seq.). The 1934 act set out a regulatory structure that would govern mass communications law for more than 60 years, with the FCC as the governing regulatory body. The law also made clear that the federal government has sole jurisdiction over modern mass communication.
The FCC establishes the requirements for the licensing of stations and sets up a framework that tries to ensure some competition for licenses. It allows the free market to determine such matters as advertising costs, expenses, cost of equipment, and choice of programming by broadcasters.
In addition to regulating commercial and educational broadcasting, the FCC has pervasive power to govern nonbroadcast use of communications facilities, such as interstate commerce carrier systems, radio systems for truck-to-truck communication, taxicab networks, marine and ship radio, aviation frequencies, citizens band (i.e., CB) radio, international "ham" communication, police and fire communications networks, and cable and satellite television. All radio stations owned and operated by the United States, however, are exempt from regulation by the FCC.
The FCC may not decide whether a particular advertising message is false or misleading. This subject matter is delegated by law to the Federal Trade Commission (FTC). The FCC can act when a licensee continues to broadcast an advertisement that the FTC has determined to be false and misleading. The FCC does not set advertising rates or oversee ordinary and usual business practices, such as production charges, commission arrangements, and salaries of artists.
Although government regulation of broadcasting appears to conflict with the First Amendment's guarantee of Freedom of Speech and Freedom of the Press, such regulation is often justified in terms of the limited number of available broadcast frequencies. Unlike the print media, which can physically coexist in the same community at the same time, broadcasting requires the government to make a choice between two or more potential broadcasters that wish to use the same broadcast space. In broadcasting, two or more radio or television stations cannot physically operate on the same frequency, because neither would be heard. Because it is important to the general public that someone be heard, the FCC must choose who that will be.
The FCC is not always faced with the necessity of choice. Only one broadcaster might apply for a particular open frequency. The FCC must determine, no matter how many applicants, whether a potential broadcaster has the proper qualifications and whether it will operate "in the public interest" before the applicant will be permitted to broadcast.
Cable TV and the "Must Carry" Law
Since the 1970s the Federal Communications Commission (FCC) has required Cable Television systems to dedicate some of their channels to local broadcasting stations. For many years cable operators did not challenge the constitutionality of these "must carry" provisions, believing that compliance was necessary to obtain operating licenses. With the dramatic growth in the cable industry, however, cable operators argued that they should be able to use these channels for more profitable programming. In the late 1980s, as a result of challenges by cable operators, the courts struck down must carry rules as a violation of the First Amendment.
Congress replied in the Cable Television Consumer Protection and Competition Act of 1992 (47 U.S.C.A. § 151 et seq.), providing that cable systems with twelve or fewer channels must carry at least three local broadcast signals and that larger systems must carry all local signals up to a maximum of one-third of the system's total number of channels.
Turner Broadcasting System, a leading cable operator, filed suit, claiming that the must carry law violated the First Amendment by suppressing and burdening free speech. The Supreme Court, on a 5–4 vote, in Turner Broadcasting System v. FCC, 117 S. Ct. 1174 (1997), rejected these arguments, finding that Congress had substantial evidence to justify the must carry provisions and that the provisions advanced important governmental interests unrelated to the suppression or burdening of free speech.
The Court noted that the must carry provisions preserve the benefits of free, over-the-air local broadcast television, promote the widespread dissemination of information from many sources, and advance fair competition in the television programming market. The Court was reluctant to abandon the law when 40 percent of U.S. households still rely on over-the-air signals for television programming. The Court found that when local broadcasters are denied cable access, audience size and advertising revenues decline, station operations are restricted, and Bankruptcy may result.
Conversely, the Court determined that the must carry provisions had not burdened cable operators, with the vast majority unaffected in a significant manner. Most systems had enough channels to accommodate local stations and their own programming. Therefore, Congress had not overstepped the First Amendment in mandating the must carry requirement.
Congress has devised a procedure by which broadcasters are granted an exclusive right or license to broadcast over a particular frequency for a statutory maximum number of years. Under the Telecommunications Act of 1996, new licenses and renewals are granted for eight years. The FCC classifies different types of stations and the particular services they provide, and it assigns the band of frequencies for each individual station. The three sets of broadcast frequencies are the AM band, the FM band, and a third set used for television. Licenses are issued only on a showing that public convenience, interest, and necessity will be served and that an applicant satisfies certain requirements, such as citizenship, character, financial capability, and technical expertise.Citizenship A noncitizen, foreign government, or corporation of which any officer or director is an alien, or where more than one-fifth of the stock is owned by Aliens or representatives of foreign governments, may not receive a broadcasting license. These restrictions are mandatory and the FCC may not waive them. Only Congress may pass legislation making an exception to the citizenship rule. There are no similar restrictions on foreign ownership of Cable Television systems.
Character Applicants must possess the essential character qualifications of honesty and candor. However, the FCC evaluates the applicant based on information that the applicant provides. The FCC relies on the honesty of applicants because it has neither the staff nor the budget to verify the representations made by license applicants or its licensees. Any intentional Misrepresentation by an applicant will seriously jeopardize the license application, regardless of the significance of the matter.
A license may be denied for violations of Criminal Law, but disqualification does not automatically occur for minor offenses. An applicant that has been convicted of violating federal regulatory laws in a business not involving communications might have a license application denied because the conviction indicates an intentional disregard for government regulations.
When faced with a choice between an applicant against whom no character question is raised and one who has violated a law, but not one that results in an automatic denial, the FCC is most likely, all other considerations being equal, to grant the license to the non-lawbreaker.
Financial Qualifications An applicant must demonstrate the financial capability to construct and operate the proposed facility for one year. If the person intends to rely on anticipated revenue, he or she must file evidence that these revenues will, in fact, be earned. Such evidence may include affidavits from prospective advertisers indicating their plan to contract with the station for advertising time.
An applicant who wants to buy an existing profit-making station need only show the financial ability to maintain operations without revenues for the first three months. A station that has earned profits in the past is considered to be likely to continue to earn profits in the future. Where a station that is already in financial difficulty is being sold, the applicant-purchaser must demonstrate a capability to produce a profit in the first year of operation.
Technical Expertise A broadcaster must comply with all of the technical requirements imposed by the FCC, such as the use of transmitting equipment that is the type approved by the FCC and the operation of broadcast facilities during the hours appropriate for the frequency sought.
Ownership of More Than One Station Before 1996, the FCC enforced its "multipleownership rule," which restricted persons or entities from acquiring excessive power through ownership of a number of radio and television facilities. The rule was based on the assumption that if one person or company owned most or all of the media outlets in an area, the diversity of information and programming on these stations would be restricted. The rule meant that a single entity could not own more than one station in the same market, such as two AM stations in the same community, or in adjacent communities when the stations' signals would overlap to a certain designated extent. In addition, the FCC restricted the total number of licenses that one entity could own to 12 AM, 12 FM, and seven television stations anywhere in the United States.
The Telecommunications Act of 1996 eliminated the restrictions limiting the number of AM and FM stations that may be owned by one entity nationally. The FCC was directed to reduce the restrictions on locally owned AM and FM stations as well. The act eliminated the restriction on the number of television stations that an entity may own directly or indirectly and increased the ceiling on permissible national audience reach from 25 percent to 35 percent. The FCC was directed to permit entities to have cross-ownership in network and cable systems. The act also removed the prohibition on cable operators from owning or controlling local television broadcast systems.
Procedure for Obtaining a License
A license can be granted without a hearing. Where there are substantial and material questions of fact, or the FCC does not find that the issuance of a license would be in the public interest, a hearing must be held to review the application. Other broadcast stations might intervene in the application process, particularly where a grant of a license to another applicant could affect their licenses or seriously impair their economic well-being. In cases of such intervention, a hearing is usually required.
Representatives of the public can participate in the licensing process where a grant of a license would have a particular, definable effect upon them. A citizen may not participate by merely asserting a general listenership interest without alleging a specific injury to himself or herself. A representative group that suffers a particular injury may file a petition with the FCC to deny the application. If there is a substantial or material Question of Fact, a hearing is justified.
In the context of radio licenses, a radio spectrum refers to the range of frequencies that are used by radio waves for communication. The FCC apportions these frequencies and allows parties exclusively to use frequencies with a specific geographic location. Since 1994, the FCC has held spectrum Auctions, which allows competitors to bid on the assignment of licenses for an electromagnetic spectrum. The auction is open to any eligible company or individual who submits and application and upfront payment and is found to be a qualified bidder by the commission. The auction is conducted electronically over the Internet.
License Renewal and Revocation
A broadcasting entity must renew its license during the time set by statute to continue operating on that frequency, and no guarantee exists that such renewal is automatic.
A license is revocable during its term, but the FCC must notify the licensee and give it a full opportunity to be heard prior to revocation. There must be reasonable grounds to warrant revocation of the license. The FCC decision must be embodied in written findings that contain a full explanation of its reasoning and actions. Such decisions are reviewable by the U.S. Court of Appeals for the District of Columbia.
Regulation of Licensees
Although the primary responsibility of the FCC is the licensing of broadcasting stations, it also regulates, to a certain extent, the manner in which stations operate.
Political Broadcasts Congress has long recognized the potential of using various broadcast media to influence the outcome of an election. A candidate with access to broadcasting facilities has a greater chance of reaching more voters than does a candidate who lacks such access. Congress has mandated that any licensee that permits a legally qualified candidate for public office to use its facilities to campaign must give all other candidates for that position equal opportunities to use the broadcast station. This requirement, sometimes called the "equal-time doctrine," does not apply to news broadcasts or advertisements on behalf of the candidate in which the candidate does not appear.
Equal rates must be charged to each candidate. During election campaigns, candidates must be given the "lowest unit charge" that is offered by the station to commercial advertisers for comparable time. The FCC is the regulatory agency that ensures licensee compliance with this law. Stations may not censor political advertisements, even if the candidate makes libelous or scandalous charges. Stations may not be sued, however, for libel or slander based on a candidate's remarks.
When a licensee either endorses or opposes a legally qualified candidate in an editorial, the other candidate must be notified within 24 hours of the date and time of the editorial, must be given a script or videotape or audio tape of the editorial, and must be furnished with a reasonable opportunity to respond. If the editorial is broadcast within 72 hours of the election, the licensee must provide the material within sufficient time prior to the broadcast to enable candidates to have a reasonable opportunity to present a reply. These requirements exist only when a station endorses a particular candidate. They do not apply to editorials on public issues, such as funding for public education.
The FCC has developed a "quasi equal opportunity doctrine" that governs appearances by representatives for candidates who are not covered by the equal-time doctrine. When supporters of a candidate purchase time from a broadcaster during an election campaign, the licensee must make comparable time available to the supporters of the opponent.
Fairness Doctrine From 1959 to 1987, the FCC enforced the "fairness doctrine," which required that broadcasters provide reasonable opportunity for the discussion of opposing views on controversial issues that affect the public. The doctrine proved controversial, and in 1987 the FCC rescinded it, concluding that it was a restriction on the First Amendment and that the growth of electronic media provided adequate means for presenting diverse opinions on issues of public policy.Personal Attack Rule Although the FCC repealed the Fairness Doctrine, it left intact the "personal-attack rule," which is an aspect of the fairness doctrine that concerns the right of a person who has been criticized in a broadcast to gain access to the broadcast facility to defend herself or himself. When, during the presentation of views on a controversial issue of public importance, the honesty, character, or integrity of an identified person or group is impugned, the licensee must, within one week after the attack, notify the subject of the attack of the date, time, and identification of the broadcast and must provide a script or videotape or audio tape of the attack and a reasonable opportunity to reply using the licensee's facilities. This rule does not apply to attacks on foreign groups or foreign public figures, or to personal attacks made by legally qualified candidates, their authorized representatives, or persons associated with them. Attacks occurring during bona fide newscasts, news interviews, or on-the-air coverage of bona fide news events are not covered by the personal-attack rule.
This rule does not cover every personal attack carried on a station—only personal attacks broadcast during the presentation of views on a controversial issue of public importance. A person who is attacked at some other time will have no redress from the FCC but might have grounds to seek relief under the law governing Libel and Slander. If the personal-attack rule is applicable, the person who has been attacked has an absolute right to appear in his or her own defense, and the station may not require that a different person make the defense.
Broadcasting Content Unlike print media, radio and television broadcasts may be regulated for content. Typically this practice has involved broadcasts of allegedly obscene or indecent material. The U.S. Supreme Court has upheld regulations banning obscene material because Obscenity is not protected by the First Amendment. It also has permitted the FCC to prohibit material that is "patently offensive," and either "sexual" or "excretory," from being broadcast during times when children are presumed to be in the audience (FCC v. Pacifica Foundation, 438 U.S. 726, 98 S. Ct. 3026, 57 L. Ed. 2d 1073 ). The courts rejected FCC attempts to interpret the indecency standard more broadly. Congressional legislation that expanded the standard also was ruled unconstitutional. The Telecommunications Act of 1996 contained the Communications Decency Act (CDA), codified at 47 U.S.C.A. § 223 (a) to (h), which makes it a federal crime to use telecommunications to transmit "any comment, request, suggestion, proposal, image, or other communication which is obscene or indecent, knowing that the recipient of the communication is under 18 years of age, regardless of whether the maker of such communication placed the call or initiated the communication." A three-judge panel, in American Civil Liberties Union v. Reno, 929 F. Supp. 824 (E.D. Pa. 1996) held that the CDA was unconstitutional because it violated the First Amendment. The U.S. Supreme Court later upheld the decision in Reno v. American Civil Liberties Union, 519 U.S. 1025, 117 S. Ct. 554, 136 L. Ed. 2d 436 (1996).
The Telecommunications Act of 1996 also mandates the establishment of an advisory committee to rate video programming that contains indecent material, in order to warn parents of its content. The act also requires that by 1998, all manufactured televisions with screens 13 inches or larger must be equipped with a "V-chip" to allow parents to block programs with a predesignated rating for sex and violence.
Public broadcasting systems are noncommercial television and radio stations that are financed by viewer and private contributions, in addition to funding by federal, state, and local governments, as an alternative to the programming aired by commercial channels. The Corporation for Public Broadcasting, a private, independent, nonprofit corporation established in 1967 by the Public Broadcasting Act (47 U.S.C.A. §§ 390 et seq.), is also involved in the creation and development of public stations.
Cable television has grown tremendously since the 1980s. By 1996, it was available to more than 96 percent of U.S. homes, and 60 percent were subscribers to cable. Cable originally served communities in mountainous regions that had difficulty receiving broadcast transmissions. Many communities solved this problem by erecting tall receiving towers at the highest point in the area to capture broadcast signals and retransmit them over wires running from the tower to various homes that subscribed to this service. This service is called community antenna television system, popularly known as CATV, or cable television.During the 1970s and 1980s, large corporations installed cable systems in every large metropolitan area in the United States, as well as in rural areas. Independent programming was transmitted on cable systems by companies such as Home Box Office (HBO) and Cable News Network (CNN).
The FCC adopted the first general federal regulation of cable systems, although cable television could not be categorized as broadcasting in the traditional sense. Local government also became involved because each municipality had to award a cable system franchise to one vendor. Cable operators negotiated system requirements and pricing with local governments. Concerns about rate regulation led Congress to enact the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460. The act gave the FCC greater control of the cable television industry, mandated improved customer service, and sought to improve the competitive position of broadcast stations. It also set rate structures to control the price of cable subscriptions. However, the Telecommunications Act of 1996 reversed the 1992 act by ending all rate regulation. This meant that cable operators were free to charge what they wished.
Congress deregulated cable television rates in part because of increased interest by telephone companies to enter the cable market by sending programming through existing phone lines. The 1996 act permits phone companies to provide video programming directly to subscribers in their service areas. Congress believed that competition between phone companies and cable operators would improve service and hold down subscription rates.
The development of satellite, direct broadcast television, broadband Internet access, and wireless technologies, along with the continued development of other Internet technologies, has demonstrated the continued vitality of electronic communications technologies. The 1996 act moved toward deregulation and competition as ways of exploring the new and emerging vehicles of mass communications.
The FCC has continued to revise its regulations in order to ensure that they remain applicable to these new technologies. The new millennium saw a rise in the use of digital subscriber lines (DSL) and cable to provide broad-band Internet access. However, cable and DSL have been somewhat limited to larger geographic areas. In smaller, rural areas, some providers have sought to provide broadband access through wireless technologies. In 2002, the FCC relaxed its regulations relating to the frequencies used by these wireless technologies. The regulations were designed to add flexibility for these wireless broadband providers to further develop these technologies.
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