UK Accounting Glossary
In 1898 Guglielmo Marconi, a twenty-four-year-old Italian, began the world’s first commercial radio service. For citizens of the United States, radio—and later television—not only introduced an abundance of entertainment and information, it also raised many legal questions surrounding its implementation and regulation. In radio’s earliest days, stations all broadcast at the same frequency; this posed problems because although some stations agreed to share their time, others attempted to broadcast stronger signals over those of their competitors. Problems continued even when stations began to broadcast on separate frequencies. Because broadcasting requires use of the airwaves for the transmission of its signals, and because the airwaves can carry only a limited number of signals, it soon became apparent that some form of regulation was necessary. In 1927, the Radio Act (47 U.S.C.A § 81 et seq.) became law and the Federal Radio Commission (FRC) was created to police the broadcasting industry. Two important tenets of broadcasting were introduced by the law. The first was that stations must broadcast “in the public interest, convenience, or necessity.” The second was that the people, not the radio stations, owned the airwaves. In its efforts to see that the airwaves were used in the appropriate manner, government regulation faced obstacles as it attempted to ensure suitable government-funded programming, appropriate programming for children, and equal access to broadcasting for minorities. Additional challenges were created by changing technology as cable television went underground and satellite television took to outer space.
The History of Radio
In its infancy, broadcasting was much less controversial. Experimental radio broadcasting began in 1910 when Lee De Forest produced a program from the Metropolitan Opera House in New York City. Other experimental radio stations were started at the University of Wisconsin in Madison in 1915 and another in Wilkinsburg, a suburban of Pittsburgh, in 1916.
Detroit radio station WWJ is considered the first commercial radio station in the United States. It began broadcasting on August 20, 1920. Pittsburgh station KDKA grew out of the Wilkinsburg experimental station. Its broadcast of the 1920 presidential election results on November 2, 1920, is generally considered to be the beginning of professional broadcasting. Although fewer than one thousand receivers were tuned in, the excitement of the event created great publicity.
Stations soon started appearing in all parts of the United States. By the end of 1924, 583 radio stations were transmitting and more than 3 million receivers were tuned in. These stations transmitted radio signals using amplitude modulation, the abbreviation of the term becoming the general category AM radio. AM broadcasts can be received at great distances because the radio transmissions bounce off the atmosphere and reach beyond the curve of the earth. However, AM signals are affected by static, thus reducing sound fidelity.
Radio established itself as a national medium with the creation of the first radio network in 1926. In that year the National Broadcasting Company (NBC), led by David Sarnoff, head of its parent company, Radio Corporation of America, presented its first national broadcast. Radio stations around the country entered into contracts with NBC that allowed them to receive an audio feed through a telephone line, which was then broadcast by the station’s radio transmitter. Apart from creating a national radio audience, NBC also introduced the financial cornerstone of commercial radio: networks and local stations would support themselves by selling advertising time. The success of NBC led to the creation of the Columbia Broadcasting System (CBS), led by William Paley.
The success of radio produced problems as well. There was competition for frequencies and increased transmission power. The strongest AM stations have a power of fifty thousand watts. At this strength, a station can be heard at night up to one thousand miles away. The least powerful AM stations operate at 250 watts, which usually limits their range to one or two towns. Unregulated growth of the radio industry led in 1934 to the passage of the Communications Act (40 U.S.C.A. § 791). This act created the Federal Communications Commission (FCC), replacing the FRC. The FCC began regulating broadcasting content. In the 1930s it banned the advertisement of hard liquor and lotteries over the air.
The period from 1925 to 1950 has been called the “Golden Age of Radio.” During this period radio was a major source of family entertainment. Every night families would gather around the radio and listen to news, music, comedies, and adventure dramas. Serialized stories aimed mainly at women, dubbed “soap operas,” became popular. They were called soap operas because they were initially sponsored by soap companies. President Franklin Roosevelt became the first president to understand the power of radio. He regularly conducted “fireside chats” over the radio between 1933 and 1945. These informal talks helped Roosevelt gain support for his policies.
The importance of radio as a national medium was reinforced during World War II. Edward R. Murrow became a national figure when he broadcast from London during the early years of the war. Following the United States’s entrance into the war in December 1941, millions of Americans turned to the radio every day to hear the latest war news.
The popularity of radio continued into the late 1940s until the beginning of television signaled radio’s rapid demise as the major source of home entertainment. The popularity of television was so great and so sudden that the FCC had to put a temporary freeze on the granting of licenses, as the number of available broadcast channels was limited. As soon as the freeze was lifted, radio began to lose advertisers to the new medium. Network radio was all but dead by the early 1950s because all of its greatest stars had moved their programs to television. NBC and CBS quickly shifted their focus to the creation of television networks.
Faced with this sudden change, AM radio developed new formats. Music stations began to specialize in top forty popular music, country music, and rhythm and blues music. By the 1990s, talk radio had become a popular and profitable format, making national celebrities of political commentator Rush Limbaugh and “shock jocks” Howard Stern and Don Imus. Stern and Imus received the shock jock designation by their raunchy and outrageous behavior on the air.
Radio broadcasting experienced new growth in the 1960s and 1970s with the licensing of many FM radio stations. FM stations transmit radio signals by frequency modulation, hence the term FM. FM waves do not travel as far as AM waves, but FM waves are not affected by static as much as AM waves. In addition, FM signals produce a much truer reproduction of sound. Since the late 1960s FM stations have had the ability of broadcasting in stereo. This development was a factor in the growth of the popularity of FM stations. Music from records and compact disks can be transmitted in high fidelity.
Despite the dominance of television, radio continues to play a major role in broadcasting. More than ten thousand radio stations were broadcasting in the United States in 1995.
The FCC continues to serve numerous roles in the radio broadcasting industry. It processes license applications, assigns frequencies and call signs, conducts hearings, enforces regulations, licenses radio operators, and carries out the provisions of the Communications Act.
The U.S. Supreme Court has upheld the FCC’s right to police the airwaves for obscene material. In Federal Communications Commission v. Pacifica Foundation, 438 U.S. 726, 98 S. Ct. 3026, L. Ed. 2d 1073 (1978), a New York radio station owned by the Pacifica Foundation broadcast comedian George Carlin’s monologue on the “seven dirty words you can’t say on the radio.” When a listener complained to the FCC that he had heard the monologue in his car while his young son was present, the FCC investigated. Although it imposed no formal sanction, the FCC indicated that the complaint would be placed in the station’s license file. If any subsequent complaints were received, the commission stated that it would then decide whether any sanctions would be applied. One potential sanction was the loss of the station’s license, when it came up for renewal in three years.
Justice John Paul Stevens, writing for the majority, noted that the “broadcast media have established a uniquely pervasive presence in the lives of all Americans.” Offensive material over the airwaves “confronts the citizen, not only in public, but also in the privacy of the home, where individuals right to be left alone plainly outweighs the First Amendment rights of an intruder.” In addition, broadcasting is “uniquely accessible to children, even those too young to read.” Thus, the Court ruled that the FCC had the constitutional right to take the action it did.
In 1987 the FCC demonstrated its continuing interest in preventing the radio broadcast of indecent or obscene language when it threatened not to renew the licenses of several radio stations in New York and California that were engaged in “shock radio.” The talk programs, including one by Howard Stern, were intentionally controversial and given to large doses of profanity and sexual innuendo. Although the FCC’s threats made headlines, there was little talk of challenging the agency’s regulations.
The FCC had a hand in the growth of political talk radio shows such as Rush Limbaugh’s when it repealed the “fairness doctrine” in 1987. Since 1934, the FCC had required broadcasters to devote a reasonable proportion of their air time to discussion of important public issues. Until 1987, the FCC had interpreted this doctrine to require broadcasters engaged in editorials in which specific persons were criticized to provide notice to the persons involved and air time for rebuttal.
The Supreme Court upheld the fairness doctrine as a reasonable balance between the public interest in hearing various points of view and the broadcaster’s interests in free expression. Red Lion Broadcasting Co. v. Federal Communications Commission, 395 U.S. 367, 89 S. Ct. 1794, 23 L. Ed. 2d 371 (1969). Nevertheless, the doctrine remained controversial until its repeal. Freed from this doctrine, radio show hosts such as Limbaugh were free to criticize public figures without having to give the person air time to respond.
The History of Television
In 1928, GE displayed the first presentation on a television, but it was quite some time before the invention became a practical reality. The 1930s brought an excitement to those conducting experiments on the new technology. They predicted that television would be as much a part of the life of the United States as radio had become.
In 1939, the National Broadcasting Company (NBC) brought television to the world during the New York World’s Fair, and on February 1, 1940, it conducted the first official network television broadcast in the United States. In 1941, the FCC officially authorized commercial television, transferred television sound from AM to FM, and increased the resolution standards for broadcasts. By 1948, thirty-six television stations were broadcasting and over 1 million television sets were receiving. So many applications for new stations were coming in to the FCC that a freeze on requests was instituted. In 1952, the freeze was lifted and seventy ultrahigh-frequency (UHF) channels were added to those already available. By 1953, nearly four hundred stations were providing coverage to nearly 90 percent of the United States; no medium in history could compare to television in its record-breaking implementation.
The Future of Radio and Television
As the popularity of television and radio continues to grow, controversy and concern continue to develop surrounding their implementation and worth. Issues range from government regulation to suitable ethical content. The future of the broadcast industry is in the hands of the courts and the government as they seek to determine the best possible means of making the broadcast media serve the needs of the society that has grown to depend on them.
Communications technology advanced again when cable television joined traditional broadcast radio and television. Cable television, or community antenna television (CATV), provides a means for otherwise inaccessible areas to receive broadcast signals that are in some way impeded. The FCC claimed authority over the regulation of cable television in 1966. The claim of this authority was challenged, but in 1968, it was upheld by the Supreme Court (United States v. Southwestern Cable Co., 392 U.S. 157, 88 S. Ct. 1994, 20 L. Ed. 2d 1001).
Dealing with cable television has proved to be controversial. The standards that were originally established in the Communications Act apply to broadcast television; cable television is not broadcast across the airwaves—it is transmitted through coaxial cable that may be able to carry over two hundred channels. Because of this, some argue that cable television should be treated more like print media such as newspapers and magazines, than like broadcast television. Since cable operators select the channels that they carry, they argue that they should be treated as “electronic publishers.”
Such distinctions are significant because the U.S. Supreme Court has held that the First Amendment will tolerate more government regulation of the broadcast media than of the print media because the physical capacity of the airwaves is limited and cannot accommodate all the existing demand (FCC v. National Citizens Committee for Broadcasting, 436 U.S. 775, 98 S. Ct. 2096, 56 L. Ed. 2d 697 ). In other words, without regulation, the competing voices on the airwaves would drown each other out.
In one form or another, government regulation is involved in two issues concerning cable television. One issue is whether cities may limit access to all or part of their territory to a single cable supplier. Many cities have granted what are essentially monopoly franchises, and this practice has been challenged by cable suppliers who argue that disallowing them a franchise interferes with their free speech rights.
The cable franchise system that exists for cable operators was approved by Congress in 1984 in the Cable Communications Policy Act (15 U.S.C.A. § 21; 18 U.S.C.A. § 2511; 46 U.S.C.A. §§ 484-487; 47 U.S.C.A. § 35 et seq.). This act attempted to balance the interests of cable operators, which wanted less regulation, with the public-policy concerns of the cities, which wanted guarantees that poorer neighborhoods would be wired for cable and that educational and government programming would not be neglected.
Under 47 U.S.C.A. §§ 541-543, a franchising authority—usually a city or county—may award one or more franchises within its jurisdiction; in practice, most have chosen one. Franchising authorities are authorized to require cable operators to reserve channel space for public, educational, and government use. Operators may also be required to make space available for lease for commercial use by persons not affiliated with the operator.
This system of franchising has been attacked from both sides. Some operators have become upset when their applications for franchises were denied in areas where other operators had established franchises. The public has also been concerned over the monopolistic nature of cable operators. Arguments often revolve around the issue of cable rates; competition for cable operators, it is argued, would also lead to competitive pricing of services. Despite this, very few franchising authorities choose to offer more than a single cable operator to an area’s residents.
The second issue surrounding the regulation of cable television is whether the FCC’s “must-carry” rules, which require a cable operator to carry all local television stations, violate the First Amendment. The must-carry rules were instituted in an effort to ensure that cable television would not undermine the financial viability of free community-oriented television by attracting so many viewers away from local broadcast television stations that the advertising revenues of those stations would plummet. In 1984, a federal appeals court held that the must-carry rules violated the First Amendment (Quincy Cable TV v. FCC, 768 F. 2d 1434 [D.C. Cir. 1985]). The Supreme Court denied review of the case, and the FCC eliminated the must-carry rules.
The must-carry rules were problematic for one main reason: although most cable operators have the ability to carry many hundreds of channels, some can carry only a dozen. Requiring the latter to carry all local stations severely limited their ability to attract subscribers. Operators also argued that being forced to carry all local broadcasts caused cable systems to become saturated and deprived cable programmers of opportunities to sell their services.
The new technology of direct-broadcast satellite television is replacing transmission over the airwaves with transmission by satellite signals beamed to the home from space. Like cable television, despite its separation from conventional airwave broadcasting, the new technology has generated legal controversy.
To maintain constant, direct contact between itself and the recipients of its signals, a satellite must hold a geostationary orbit directly above the earth’s equator at an altitude of 22,300 miles. (A geostationary orbit is an orbit that keeps the satellite’s position fixed with respect to the earth.) The controversy surrounding satellite broadcasting comes not from any limit on the number of signals it can send but instead from the physical limitation of these geostationary orbits.
The world saw its first geostationary satellite launched by the United States in 1963; as of 1992, the United States had thirty geostationary satellites orbiting the earth. By the mid-1980s, the United States and other developed countries were quickly filling the equatorial orbit with satellites. Many developing countries feared that by the time they had developed the technology to put up their own satellites, the zone of geostationary orbit in space would be filled and they would be forced to buy broadcast time from countries owning satellites that were already in orbit. In 1985, the International Telecommunication Union (ITU), an agency of the United Nations, established new procedures that would represent the interests of these developing countries.
The ITU originally established a first-come, first-served policy regarding the assignment of geostationary orbits. The World Administrative Radio Conference of 1985 upheld the continuation of this policy, but also voted to guarantee at least one geostationary orbit to each country that was a member of the ITU. The decisions of the 1985 conference were finalized by another session in 1988. Although these decisions supported the interests of the United States in part—it could continue filling geostationary orbits—they caused concern for the FCC. The satellite technology of the United States would not, after all, be allowed to grow unchecked. Orbits that the United States had once assumed would be its to use were reallocated to other countries. The decisions of the World Administrative Radio Conferences of the 1980s gave the FCC even greater cause for regulating the broadcast industry within the United States and for being more selective about who is granted geostationary orbits and a piece of a broadcast industry that by the year 2000 is expected to bring in more than $10 billion annually.
Besides investigating developing technologies, the government and the FCC find themselves revisiting issues that have received attention from Congress, the broadcasting industry, and the public. One such issue is public television.
The Corporation for Public Broadcasting (CPB) was established in 1967 as the official, nongovernment allocator of federal money to public television and radio stations across the United States. In 1992, less than thirty years after its creation, the corporation became a political issue for conservatives who objected to the content and perceived philosophy of public programming and to its partial reliance on U.S. tax dollars.
The attacks began after the House of Representatives approved a bill in December 1991 that would increase spending for the corporation from $825 million to $1.1 billion in a three-year period (H.R. Res. 2977, 102d Congress, 1st Sess. ). (The bill was also passed by the Senate and signed into law in August 1992.) Political conservatives claimed that public broadcasting had a liberal bias, a bloated budget, and offensive programming. Complaints ranged from protests about two frank Public Broadcasting Service (PBS) specials on homosexuality, Tongues Untied and The Lost Language of the Cranes, to a claim that the Children’s Television Network program Sesame Street was educationally ineffective and no better than network cartoons.
Public broadcasting claimed that without federal funding through the CPB, its more than one thousand television and radio stations would cease to exist. Most experts agree that this is not true. Only 14 percent of the operating costs for public broadcasting is supplied by the federal government; the remainder comes from corporations, member donations, and other sources. In 1995, the CPB allocated $285.6 million to public broadcasting, and since 1968, Congress has budgeted more than $4 billion to that concern. Yet, if these funds were cut off, public broadcasting, although wounded, probably would survive. Polls showed that most people like public television and want it to continue, but as opposition gathers in Congress and the Senate, it appears that if public broadcasting is to continue, it may have to do so without federal funding.
There are other concerns surrounding children and television than whether Big Bird can make it without federal support. Radio and television reach no audience more impressionable than a country’s youth, and many controversies surround the exposure of children to sex and violence on television.
Another perennial issue of concern for parents and others is the amount of exposure children have to television; time spent in front of the television might be better spent exercising the body and the mind. It is frequently argued that not enough educational programming is available to children. Since the inception of broadcast programming, education has always been considered an important aspect of it. The Children’s Television Act (47 U.S.C.A. § 303a et seq.) was enacted in 1990 in an effort to put more educational programming on television. The response of broadcasters has been sluggish, prompting a harsh hearing before Congress in 1993. Despite this legislation, some maintain that next to nothing has been done to remedy the quality of children’s television, which House Telecommunications Subcommittee chairman Edward J. Markey (D-Mass.) referred to as “the video equivalent of a Twinkie.”
Also, the FCC debates whether children’s programs based on toys are program-length commercials. And controversy abounds over Channel One television and Star Broadcasting radio, which are broadcast into classrooms across the United States, mixing “educational” programming with corporate commercials. Critics argue that even when educational programming finds its way into the lives of children, it is corrupted by commercialism that does more to encourage children to buy shoes and soft drinks than it does to educate them on current affairs.
As of 1978, only one percent of all radio and television stations in the United States were run by minorities. In an attempt to diversify broadcasting, the FCC adopted rules that year giving preferential treatment to minorities regarding applications for new station licenses and in taking over failed stations (47 U.S.C.A. § 309). During the Reagan administration, this reform was nearly killed, but Congress saved it. Again, during the Bush administration, an attempt to stop the FCC was launched, this time when the Justice Department asked the Supreme Court to rule against the FCC’s new guidelines. The effort to block reform met its final failure in 1990, when the Supreme Court ruled 5-4 to uphold the constitutionality of race-based licensing. The Court held that such affirmative action is allowable in the broadcasting market if its purpose is to “serve important governmental objectives” (Metro Broadcasting, Inc. v. F.C.C., 497 U.S. 547, 110 S. Ct. 2997, 111 L. Ed. 2d 445). Still, in 1990, fewer than five percent of all radio and television licenses were held by minorities.
Equal opportunity employment has also become a very important consideration in the process of renewing broadcasting licenses. The National Association for the Advancement of Colored People (NAACP) reviews all applications closely to ensure that radio and television stations have provided an opportunity for the employment of minority groups. If any party, such as the NAACP, calls into question the practices of a station, a petition to deny can be filed. If the station cannot provide proof of compliance with equal opportunity standards, it can be denied renewal of its license.
In February 1996, President Clinton signed into law the Telecommunications Act of 1996 (Pub. L. No. 104-104), which made a number of major changes to laws governing the telecommunications industry. Among these were deregulatory measures, including provisions allowing local phone companies, long-distance companies, and cable companies to compete over the same services. Another provision requires television manufacturers to include circuitry that would allow parents to screen out programming they did not wish their children to view, such as programs featuring violence. Provisions in this act and other legislation prohibiting the transmission of “indecent” material have met major setbacks in the courts. The courts have been receptive to arguments that the provisions violate the First Amendment.
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This glossary post was last updated: 18th March 2020.