{"id":5728,"date":"2023-04-17T15:14:25","date_gmt":"2023-04-17T15:14:25","guid":{"rendered":"https:\/\/revolutionsincommunication.com\/law\/?page_id=5728"},"modified":"2026-01-20T13:27:42","modified_gmt":"2026-01-20T13:27:42","slug":"structure-of-broadcasting","status":"publish","type":"page","link":"https:\/\/revolutionsincommunication.com\/law\/structure-of-broadcasting\/","title":{"rendered":"Structure of broadcasting"},"content":{"rendered":"

The original rationale for regulation<\/strong> of the broadcast industry was the scarcity of frequencies over which radio and TV were broadcast. (The decision in Reno v ACLU,<\/a> 1996, for example,\u00a0 noted that there were “special factors” such as frequency scarcity that justified regulation of the broadcast media).<\/p>\n

In the early 1920s, when commercial radio was still in its infancy, no one knew what form radio would take or who would pay for it, or even how radio frequencies would be regulated. Frequency allocation was originally based on a “conference system” of voluntary industry standards.<\/p>\n

When that did not work out, Congress established the Federal Radio Commission<\/a> in 1927 to sort out the increasing chaos. Radio stations would receive licenses from the FRC and be expected to serve the “public interest, convenience and necessity.” Content<\/em><\/strong> issues came up (as we have seen) with Trinity Methodist Church v FRC, 1932, and similar cases.<\/p>\n

The FRC’s early decisions also had a major impact on the structure<\/strong> <\/em>of broadcasting, and a major reorganization came with\u00a0 General Order 40\u00a0 <\/a>\u00a0issued on August 30, 1928. The “broadcast band” was divided into 96 frequencies from 550 to 1500 kHz. Six of these\u00a0 were restricted for Canadian stations, leaving 90 frequencies for US stations.<\/p>\n

<\/sup>The new assignments favored large existing companies, especially the National Broadcasting Company, a division of the Radio Corporation of America, which was given most of the high-powered “clear channel” stations.<\/p>\n

By the 1930s, the new FCC faced a new challenge: Most cities had radio stations, and 97 percent were affiliated with three networks: NBC (red and blue networks), CBS and Mutual. All night time programming came from through these networks out of New York or Los Angeles. Locally produced programs were almost non-existent, and news was kept off the air.\u00a0 This concentration of broadcasting ownership led to a study in 1938 that concluded more competition was necessary, and to Chain Broadcasting<\/a> regulations, issued in 1941, that was challenged by NBC in 1943:<\/p>\n

NBC v US,<\/a><\/strong> 1943 \u2014 The Supreme Court said the First Amendment doesn\u2019t exempt broadcasters from FCC regulation, even in anti-trust cases. \u00a0This led NBC to sell its Blue Network which became ABC.<\/p>\n

From the 1950s through the 1990s, ownership of TV and radio stations was limited.<\/p>\n

Original ownership limit:<\/strong>\u00a0The Rule of Sevens \u2014 From 1940s thru 1984, no one owner (note, owner, and not affiliate) could have more than seven TV, seven AM and seven FM stations. The law was liberalized in 1984 to 12, and again limit raised to 18 in 1992 and 20 in 1994.<\/p>\n

Ownership rules change:<\/strong>\u00a0As telecommunications volume and flexibility expanded with new technologies in the late 20th century, neo-conservatives argued for a new approach, saying that the original scarcity rationale for regulation was no longer relevant.\u00a0 This led to the the Telecommunication Act of 1996.<\/p>\n

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Telecommunications Act of 1996\u00a0<\/strong><\/h3>\n

\u00a0Telecommunications Act of 1996<\/a><\/strong>\u00a0lifted limits on radio and TV station ownership with the idea of saving failing radio stations and increasing diversity in television broadcast ownership.\u00a0 One unexpected result was the complete domination of radio by a handful of companies and the end of local radio broadcasting.<\/p>\n

Under the 1996\u00a0 law, there is no limit to the number of radio and TV stations owned, but owners were not supposed to reach more than 35 percent of all audiences. The law had a UHF discount provision saying the UHF stations counted as half the number as VHF stations. Theoretically, one company could own TV stations serving up to 70 percent of the market. Before 1996, duopoly was prohibited: no company could more than one FM and one AM station and one TV station in any single market. After 1996, a major market realignment for radio occurred after the rules changed for radio (Realignment of TV ownership occurred with the FCC 2003 order):<\/p>\n