The comparative hearing process was used by the United States
Federal Radio Commission
The Federal Radio Commission (FRC) was a government agency that regulated United States radio communication from its creation in 1927 until 1934, when it was succeeded by the Federal Communications Commission (FCC). The FRC was established by t ...
from 1927 to 1934 and its successor, the
Federal Communications Commission
The Federal Communications Commission (FCC) is an independent agency of the United States federal government that regulates communications by radio, television, wire, satellite, and cable across the United States. The FCC maintains jurisd ...
(FCC), from 1934 to 1994 for the evaluation of mutually exclusive applications for broadcast stations and other licenses. Commission examiners evaluated criteria to make an initial decision, which could then be appealed to a review board and then the full commission.
A confluence of factors in the 1990s, including a court case invalidating the commission's comparative criteria as arbitrary and capricious; an increased workload that had already led to the implementation of lotteries in certain fields in telecommunications and low-power television; and a desire to reduce the federal budget deficit, led to the FCC ultimately being required by
Congress
A congress is a formal meeting of the representatives of different countries, constituent states, organizations, trade unions, political parties, or other groups. The term originated in Late Middle English to denote an encounter (meeting of ...
in the
Balanced Budget Act of 1997
The Balanced Budget Act of 1997 () was an omnibus legislative package enacted by the United States Congress, using the budget reconciliation process, and designed to balance the federal budget by 2002. This act was enacted during Bill Clinton's ...
to auction off broadcast and other licenses to the highest bidder. The FCC had previously been authorized in 1993 to auction non-broadcast licenses.
History
Introduction
The establishment of the
Federal Radio Commission
The Federal Radio Commission (FRC) was a government agency that regulated United States radio communication from its creation in 1927 until 1934, when it was succeeded by the Federal Communications Commission (FCC). The FRC was established by t ...
in 1927 introduced an aspect of public interest concerns into determining the allocation of radio frequencies in the United States, a process once governed by first-user considerations in the early days of radio.
Reforms and use of alternate processes
In September 1983, two years after being authorized, the first low-power TV license lottery was held to select 23 station licensees, with minority-owned applicants given greater weight. At the first lottery, numbers were loaded into one of the four drums that the
Selective Service System
The Selective Service System (SSS) is an independent agency of the United States government that maintains information on U.S. citizens and other U.S. residents potentially subject to military conscription (i.e., the draft) and carries out con ...
had once employed for
draft lotteries.
Lotteries were also used to assign cellular telephone licenses from 1984 to 1989, as there were more than 1,400 such licenses to be awarded; however, the use of lotteries encouraged speculators and "application mills".
The FCC reformed the process in 1990 to cut down on "sham applications" that hoped to profit from settlement payments among applicants and make hearings less time-consuming, reducing the number of cases for which the review board held arguments. In a 1998 journal article, economist
Thomas Hazlett called the process "socially wasteful and politically charged".
Discontinuation
On December 20, 1993, a federal appeals court ruled in ''Bechtel v. FCC'' that a longstanding comparative criterion, which favored the integration of ownership and management, was arbitrary and capricious. The case had been filed by the losing applicant for a radio station in
Selbyville, Delaware
Selbyville is a town in Sussex County, Delaware, United States. Its population was 2,167 at the 2010 census, an increase of 31.7% over the previous decade. It is part of the Salisbury, Maryland-Delaware Metropolitan Statistical Area.
History
Se ...
, Susan Bechtel. As a result, the commission froze all pending comparative cases on February 28, 1994, and began appointing settlement judges to allow applicants to withdraw in pending cases. The
Balanced Budget Act
The Balanced Budget Act of 1997 () was an omnibus legislative package enacted by the United States Congress, using the budget reconciliation process, and designed to balance the federal budget by 2002. This act was enacted during Bill Clinton's ...
of 1997 extended the FCC's authority to auction spectrum, first granted by Congress in 1993 to allow the commission to auction non-broadcasting services, to allow radio and television auctions; this came in the context of reducing the federal budget deficit, and the timing of its passage ensured it would have little impact on the transition to digital television in the U.S.
The commission urged settlements in frozen comparative cases until September 28, 1999, when parties were ordered to bid on the frequencies they had sought. Most notably affected by ''Bechtel'' and its aftermath was
96.5 FM at Biltmore Forest, North Carolina, near
Asheville
Asheville ( ) is a city in, and the county seat of, Buncombe County, North Carolina. Located at the confluence of the French Broad and Swannanoa rivers, it is the largest city in Western North Carolina, and the state's 11th-most populous city ...
. When no settlement was held in the 11-year battle, for which an initial winning applicant had already started a station under temporary authority, had it rescinded and then restored, it was sent to auction among five remaining parties.
The initial station, WZLS, then definitively left the air in February 2002.
Criteria
At the time the FCC abandoned the use of comparative criteria due to the ruling in ''Bechtel'', these were the criteria:
* Diversification of media of mass communication, preferring applicants with fewer or no media interests;
* Integration of ownership and management, preferring station owners who proposed to be active in the management of the proposed station;
* Local residence in the area to be served and participation in civic activities;
* Past broadcast record as a station owner or operator;
* Broadcast experience;
* Comparative coverage, with a general preference for stations serving more people;
* Auxiliary power specification, to provide continued transmission in case of power loss, though this had become a "routine" specification for applicants;
* Ethnicity and sex of applicant, with the commission giving preference to minorities active in management. This policy was upheld by ''
Metro Broadcasting, Inc. v. FCC
''Metro Broadcasting, Inc. v. FCC'', 497 U.S. 547 (1990), was a case decided by the Supreme Court of the United States that held that intermediate scrutiny should be applied to equal protection challenges to federal statutes using benign racial ...
'' in 1990 but mostly overturned by ''
Adarand Constructors, Inc. v. Peña'' in 1995.
* Daytimer preference, in FM proceedings to owners of daytime-only AM radio stations.
References
{{reflist
Federal Radio Commission
Federal Communications Commission
United States communications regulation