Communications Act of 1934

The Communications Act of 1934 was a United States federal law enacted as Public Law Number 416, Act of June 19, 1934, ch. 652, 48 Stat. 1064, by the 73rd Congress, codified as Chapter 5 of Title 47 of the United States Code, et seq. The Act replaced the Federal Radio Commission with the Federal Communications Commission (FCC). It also transferred regulation of interstate telephone services from the Interstate Commerce Commission to the FCC.

On January 3, 1996, the 104th Congress of the United States amended or repealed sections of the Communications Act of 1934 with the new Telecommunications Act of 1996. It was the first major overhaul of American telecommunications policy in nearly 62 years.

Brief history of the Act
The Act largely combined and reorganized existing provisions of law, including provisions of the Federal Radio Act of 1927 relating to radio licensing, and of the Mann-Elkins Act of 1910 relating to telephone service.

Commercial radio debate
Before the Communications Act of 1934 was enacted as law by the U.S. Congress, there was a debate over commercial versus non-commercial broadcasting: Senators Robert Wagner of New York and Henry Hatfield of West Virginia offered an amendment to the then proposed Communications Act. Educators wanted more of radio to be given to them; they had been termed a "special interest" by the Federal Radio Commission and their stations were forced to share frequencies. The Wagner-Hatfield amendment would have given 25% of all radio broadcasting facilities to non-profit institutions and organizations. It would also have allowed these educational stations to sell advertising in order to become self-sufficient. Senator C.C. Dill, a pro-industry spokesman opposed this amendment. It would have meant eliminating numerous commercial stations, but that is not what Dill publicly complained about. He expressed horror over the advertising. He said there was too much advertising already. Not all educators supported the advertising clause, so a compromise was struck. The issue was to be given to the new Federal Communications Commission to study and to hold hearings on and to report back to Congress. Hatfield and Wagner stuck to their guns, however, and proposed their amendment anyway. The Hatfield-Wagner amendment died and the Communications Act was passed.

The Federal Communications Commission reported back, saying that commercial stations had ample time for educational and other public service programs. The Commission called for cooperation between commercial and educational interests and other non-profit groups. The educators lost, though commercial broadcasters were forced to air public affairs programs.

Chain (network) case
The United States Supreme Court held in National Broadcasting Co. Inc. et al. v. United States et al., 319 U.S. 190 on May 10, 1943 that the FCC had the right to issue regulations pertaining to associations between broadcasting networks and their affiliated stations. The Opinion of the Supreme Court was not unanimous and it led to a conflict with an earlier decision in Federal Communications Commission v. Sanders Brothers Radio Station, 309 U.S. 470, on March 25, 1940.

In that case the FCC interpreted Supreme Court decisions concerning broadcasting to mean that potential economic injury to an existing licensee was not grounds for refusing to license a competitor. (This FCC interpretation remained in place from 1940 to 1958.)

The Opinion of the Supreme Court was delivered by Felix Frankfurter with Justices Hugo Black and Wiley Blount Rutledge taking no part in the discussion or decision. Justice Frank Murphy offered a dissenting Opinion by stating that the Court was effectively giving the FCC a power to regulate networks which had not been given to the FCC by Congress. Murphy stated that; "... we exceed our competence when we gratuitously bestow upon an agency power which the Congress has not granted. Since that is what the Court in substance does today, I dissent."

Because the majority of the Court did not agree with Murphy it effectively gave the FCC power to regulate the networks. As a result of this 1943 decision, NBC was forced to sell one of its two networks (its Blue Network) and it was this action which then led to the creation of the American Broadcasting Company

Overhaul of FCC policy
The 1934 Communications Act remained in place but was amended by the Telecommunications Act of 1996.