Federal Trade Commission

The first stirrings of the FTC date from 1903, when President Theodore Roosevelt created the Bureau of Corporations to investigate the practices of increasingly larger American businesses. In time, authorities determined that an agency with more sweeping powers was necessary. Founded on September 26, 1914, the FTC came into being when President Woodrow Wilson signed the FTC Act into law, creating an agency designed to “prevent unfair methods of competition in commerce (Federal Trade Commission).” From the beginning, the FTC absorbed the work and staff of the Bureau of Corporations, operating in a similar manner, but with additional regulatory authorization. In the words of the FTC,

Like the Bureau of Corporations, the FTC could conduct investigations, gather information, and publish reports. The early Commission reported on export trade, resale price maintenance, and other general issues, as well as meat packing and other specific industries. Unlike the Bureau, though, the Commission could…challenge “unfair methods of competition” under Section 5 of the FTC Act, and it could enforce…more specific prohibitions against certain price discriminations, vertical arrangements, interlocking directorships, and stock acquisitions (Federal Trade Commission).

Although its primary focus was on the prevention of anticompetitive business practices, in its early years, the FTC also provided oversight on wartime economic practices. During World War I, for example, President Wilson frequently turned to the FTC for advice on exports and trading with foreign nations, resulting in the Trading with the Enemy Act, which restricted trade with countries in conflict with the United States.

Federal Radio Commission

First established with the passage of the Radio Act of 1927, the FRC was intended to “bring order to the chaotic situation that developed as a result of the breakdown of earlier wireless acts passed during the formative years of wireless radio communication (Messere).” The FRC comprised five employees who were authorized to grant and deny broadcasting licenses and assign frequency ranges and power levels to each radio station.

In its early years, the FRC struggled to find its role and responsibility in regulating the radio airwaves. With no clear breakdown of what could or could not be aired, nearly everything was allowed to play. As you learned in Chapter 7 “Radio”, the FRC lasted only until 1934, when it was absorbed by the FCC.

Federal Communications Commission

Figure 15.2 President Franklin D. Roosevelt established the Federal Communications Commission in 1934 as part of the New Deal. FDR Presidential Library & Museum – 61-406 – CC BY 2.0.

Since its creation by the Communications Act in 1934, the FCC has been “charged with regulating interstate and international communications by radio, television, wire, satellite and cable (Federal Communications Commission).” Part of the New Deal—President Franklin D. Roosevelt’s Great Depression–era suite of federal programs and agencies—the commission worked to establish “a rapid, efficient, Nation-wide, and world-wide wire and radio communication service (Museum of Broadcast Communications).”

The responsibilities of the FCC are broad, and throughout its long history the agency has enforced several laws that regulate media. A selection of these laws include the 1941 National TV Ownership Rule, which states that a broadcaster cannot own television stations that reach more than 35 percent of the nation’s homes; the 1970 Radio/TV Cross-Ownership Restriction, which prohibits a broadcaster from owning a radio station and a TV station in the same market; and the 1975 Newspaper/Broadcast Cross-Ownership Prohibition, which discourages ownership of a newspaper and a TV station in the same market (PBS, 2004).

The Structure and Purposes of the FCC

The FCC contains three major divisions: broadcast, telegraph, and telephone. Within these branches, subdivisions allow the agency to more efficiently carry out its tasks. Presently, the FCC houses 7 operating bureaus and 10 staff offices. Although the bureaus and offices have varying specialties, the bureaus’ general responsibilities include “processing applications for licenses and other filings; analyzing complaints; conducting investigations; developing and implementing regulatory programs; and taking part in hearings (Federal Communications Commission).” Four key bureaus are the Media Bureau, the Wireline Competition Bureau, the Wireless Telecommunications Bureau, and the International Bureau.

The Media Bureau oversees licensing and regulation of broadcasting services. Specifically, the Media Bureau “develops, recommends and administers the policy and licensing programs relating to electronic media, including cable television, broadcast television, and radio in the United States and its territories (Federal Communications Commission).” Because it aids the FCC in its decisions to grant or withhold licenses from broadcast stations, the Media Bureau plays a particularly important role within the organization. Such decisions are based on the “commission’s own evaluation of whether the station has served in the public interest,” and come primarily from the Media Bureau’s recommendations.¹ The Media Bureau has been central to rulings on children’s programming and mandatory closed captioning.

The Wireline Competition Bureau (WCB) is primarily responsible for “rules and policies concerning telephone companies that provide interstate—and, under certain circumstances, intrastate—telecommunications services to the public through the use of wire-based transmission facilities (i.e. corded/cordless telephones) (Federal Communications Commission).” Despite the increasing market for wireless-based communications in the United States, the WCB maintains its large presence in the FCC by “ensuring choice, opportunity, and fairness in the development of wireline telecommunications services and markets (Federal Communications Commission).” In addition to this primary goal, the bureau’s objectives include “developing deregulatory initiatives; promoting economically efficient investment in wireline telecommunications services; and fostering economic growth (Federal Communications Commission).” The WCB recently ruled against Comcast regarding blocked online content to the public, causing many to question the amount of authority that the government has over the public and big businesses.

Another prominent bureau within the FCC is the Wireless Telecommunications Bureau (WTB). The rough counterpart of the WCB, this bureau oversees mobile phones, pagers, and two-way radios, handling “all FCC domestic wireless telecommunications programs and policies, except those involving public safety, satellite communications or broadcasting, including licensing, enforcement, and regulatory functions (Federal Communications Commission).” The WTB balances the expansion and limitation of wireless networks, registers antenna and broadband use, and manages the radio frequencies for airplane, ship, and land communication. As U.S. wireless communication continues to grow, this bureau seems likely to continue to increase in both scope and importance.

Finally, the International Bureau is responsible for representing the FCC in all satellite and international matters. A larger organization, the International Bureau’s goal is to “connect the globe for the good of consumers through prompt authorizations, innovative spectrum management and responsible global leadership (Federal Communications Commission).” In an effort to avoid international interference, the International Bureau coordinates with partners around the globe regarding frequency allocation and orbital assignments. It also concerns itself with foreign investment in the United States, ruling that outside governments, individuals, or corporations cannot own more than 20 percent of stock in a U.S. broadcast, telephone, or radio company.

The Structure and Purposes of the FTC

Although the FCC provides most of the nation’s media regulations, the FTC also has a hand in the media industry. As previously discussed, the FTC primarily dedicates itself to eliminating unfair business practices; however, in the course of those duties it has limited contact with media outlets.

One example of the FTC’s media regulatory responsibility is the National Do Not Call Registry. In 2004, the agency created this registry to prevent most telemarketing phone calls, exempting such groups as nonprofit charities and businesses with which a consumer has an existing relationship. Although originally intended for landline phones, the Do Not Call Registry allows individuals to register wireless telephones along with traditional wire-based numbers.