Evening star., 1940-01-28
FEC. Denies Station
Is Entitled 10 Freedom
From Competition
Brief Filed in Appeal
From Court Ruling,
Blocking License

Owners of radio stations are not
entitled to protection from COM
petition by having applications for
broadcast facilities in the same area
denied because of the adverse
economic effect on the existing sta
ton, the Federal Communications
Commission contended in a brief
filed yesterday before the Supreme
Court.
The case is that of the Sanders
Brothers Radio Station at Dubuque,
Iowa, which has been decided ad-
-'versely to the Government by the
Court Of Appeals here. and ON which
the Supreme Court has granted q
writ of certiorari.
The commission had granted a
permit for a new radio station in
Dubuque to the Telegraph Herald,
a daily newspaper, over the objec-
ton Of Sanders Brothers that there
is insufficient advertising revenue
available in the city to support an
additional radio station.
Anti Trust Laws Applicable.
The decision OF the lower court,
the commission said, requires it to
prevent free competition and, at
the same time, leaves it without
statutory power to correct the
'aouses in unregulated monopoly"
1t added that the statute under
which the commission operates de-
clares that the antitrust laws shall
be applicable to broadcasting and
that the licenses of offenders may
be revoked. 1t would be inconsist-
ent, it is held, for Congress to have
empowered the commission to recoke
licenses for violation of laws de-
signed to foster competition and
at the same timT to have required
the commission TO encourage monop-
oily by denying competitors the op-
portunlty to enter the field.
Further analysis of the act, it
was pointed out, demonstrates that
financial loss to an existing licensee
due to competition from a new sta.
ton is not factor which the COM
mission must consider in determin-
ing whether granting a license will
serve the public interest. The act,
1t was contended, does not purport
to confer upon the commission juris-
dlction over the business of radio
station licensees.
The licensee, the court it told, is
free to carry on his business as he
chooses and, if the public is to be
protected from abuses which may
result from such economic freedom,
that protection must be found in the
effects of competition.
Rivalry Improves Quality.
Every consideration of policy, it is
argued, repels the suggestion that
the act should be construed as re-
quiring the commission to consider
the issue OF competitive effect. The
basic theory upon which broadcast
licenses have always been .allocated
Is that competition is essential to
the maintenance of high quality of
programs. This. it was explained. is
because competition among stations
for advertisers means competition
among stations for listeners, and this
in turn means rivalry to present the
highest quality programs. Thus, it
was added, the character. of radio
preSenta tons, and therefore the
public interest, is largely dependent
upon competition.
The Sanders Bros, the court
was told, in the conduct of its ad-
vertising business, clearly has no
right to freedom from competition
from any one else furnishing an
advertising medium, whether it be a
newspaper, a magazine or another
broadcast station.