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 the Radio Act of 1927, which replaced the Radio Act of 1912 after the earlier law was found to lack sufficient oversight provisions, especially for regulating broadcasting stations. In addition to increased regulatory powers, the FRC introduced the standard that, in order to receive a license, a radio station had to be shown to be "in the public interest, convenience, or necessity".

Although radio communication (originally known as "wireless telegraphy") was developed in the late 1890s, it was largely unregulated in the United States until the passage of the Radio Act of 1912. This law set up procedures for the Department of Commerce to license radio transmitters, which initially consisted primarily of maritime and amateur stations. The broadcasting of news and entertainment to the general public, which began to be developed early 1920s, was not foreseen by this legislation.

The first Commerce Department regulations specifically addressing broadcasting were adopted on December 1, 1921, when two wavelengths were set aside for stations making broadcasts intended for a general audience: 360 meters (833 kHz) for "entertainment", and 485 meters (619 kHz) for "market and weather reports". The number of broadcasting stations grew tremendously in 1922, numbering over 500 in the United States by the end of the year. The number of reserved transmitting frequencies also expanded, and by 1925, the "broadcast band" consisted of the frequencies from 550 kHz to 1500 kHz, in ten kHz steps.

Herbert Hoover became the Secretary of Commerce in March 1921, and thus assumed primary responsibility for shaping radio broadcasting during its earliest days, which was a difficult task in a fast-changing environment. To aid decision-making, he sponsored a series of four national conferences from 1922 to 1925, where invited industry leaders participated in setting standards for radio in general.

During his tenure Hoover was aware that some of his actions were on shaky legal ground, given the limited powers assigned to him by the 1912 Act. In particular, in 1921 the department had tried to refuse to issue a renewal license to a point-to-point radiotelegraph station in New York City, operated by the Intercity Radio Company, on the grounds that it was causing excessive interference to earlier radiotelegraph stations operating nearby. Intercity appealed, and in 1923 the Court of Appeals of the District of Columbia sided with Intercity, stating the 1912 Act did not provide for licensing decisions at "the discretion of an executive officer". The Department of Commerce planned to request a review by the Supreme Court, but the case was rendered moot when Intercity decided to shut down the New York City station. Still, it had raised significant questions about the extent of Hoover's authority.

A second, ultimately successful, challenge occurred in 1926. The Zenith Radio Corporation in late 1925 established a high-powered radio station, WJAZ, with a transmitter site outside Chicago, Illinois. After being informed that there might not be an available frequency for the station to use, company president E. F. McDonald proposed that, because they only wanted to broadcast two hours a week, they would be happy with an assignment on 930 kHz that was limited to 10:00 p.m. to midnight Central time on Thursday nights, when the only other station on the frequency, KOA in Denver, Colorado, was normally off the air. Despite McDonald's initial expression of satisfaction with a schedule of just two hours per week, his tone soon changed. At this time the United States had an informal agreement with Canada that six designated AM band frequencies would be used exclusively by Canadian stations. In early January 1926, McDonald directed WJAZ to move from its 930 kHz assignment to 910 kHz, one of the restricted Canadian frequencies, and begin expanded hours of operation.

Invoking the Intercity Radio Company case rulings, Zenith ignored the Commerce Department's order to return WJAZ to its assigned frequency. On January 20, 1926, a federal court suit, United States versus Zenith Radio Corporation and E. F. McDonald, was filed in Chicago. McDonald expected a narrow ruling in his favor, claiming that only a small number of stations, including WJAZ, held the "Class D Developmental" licenses that were free from normal restrictions. However, the actual outcome was sweeping. On April 16, 1926, Judge James H. Wilkerson's ruling stated that, under the 1912 Act, the Commerce Department in fact could not limit the number of broadcasting licenses issued, or designate station frequencies. The government reviewed whether to try to appeal this decision, but Acting Attorney General William J. Donovan's analysis concurred with the court's decision.

The immediate result was that, until Congress passed new legislation, the Commerce Department could not limit the number of new broadcasting stations, which were now free to operate on any frequency and use any power they wished. Many stations showed restraint, while others took the opportunity to increase powers and move to new frequencies (derisively called "wave jumping"). The extent to which this new environment resulted in disruption for the average listener is difficult to judge, but the term "chaos" started to appear in discussions.