MYTH: The FCC requiring an educational LPFM/NCE licensee to be a nonprofit corporation recognized by state law is a violation of the First Amendment.

A variant of this myth attempts to justify pirate radio stating that the FCC not allowing persons to broadcast without a license is a violation of the First Amendment.

The key argument made in both cases are similar, and that is the necessity of a license, however the original myth extends that to how the FCC issues broadcast licenses.

The issue of applicant qualification and the ability for the FCC to deny an authorization to an entity that is not a state recognized corporation is not considered a violation of the First Amendment.

The 1943 Supreme Court case, National Broadcasting Company v. United States (319 U.S. 190 (1943)) had to do with the FCC’s regulations at the time regarding “chain broadcasting”, which prohibited licenses to be granted to a standard broadcasting station having any contract, arrangement, or understanding with a network organization under which the station is prevented, or hindered from, or penalized for, broadcasting the programs of any other network organization.

In short, the overall result of this proceeding resulted in NBC, which at the time had two radio networks, Red and Blue; having to divest itself of the Blue Network.  The Blue Network would eventually become the American Broadcasting Company (ABC).

In respect to an appeal made in this proceeding that the Commission’s practices in restricting the authorization of licenses was a violation of the First Amendment, the Court stated:

The Regulations, even if valid in all other respects, must fall because they abridge, say the appellants, their right of free speech. If that be so, it would follow that every person whose application for a license to operate a station is denied by the Commission is thereby denied his constitutional right of free speech. Freedom of utterance is abridged to many who wish to use the limited facilities of radio. Unlike other modes of expression, radio inherently is not available to all. That is its unique characteristic, and that is why, unlike other modes of expression, it is subject to governmental regulation. Because it cannot be used by all, some who wish to use it must be denied. But Congress did not authorize the Commission to choose among applicants upon the basis of their political, economic or social views, or upon any other capricious basis. If it did, or if the Commission, by these Regulations, proposed a choice among applicants upon some such basis, the issue before us would be wholly different. The question here is simply whether the Commission, by announcing that it will refuse licenses to persons who engage in specified network practices (a basis for choice which we hold is comprehended within the statutory criterion of "public interest"), is thereby denying such persons the constitutional right of free speech. The right of free speech does not include, however, the right to use the facilities of radio without a license. The licensing system established by Congress in the Communications Act of 1934 was a proper exercise of its power over commerce. The standard it provided for the licensing of stations was the "public interest, convenience, or necessity." Denial of a station license on that ground, if valid under the Act, is not a denial of free speech.  (Id. at 226-227, emphasis added)

With that said, it can be interpreted that the court is stating that because of the fact that radio spectrum is a finite resource, the FCC has a responsibility to manage this spectrum and therefore, does have the right to develop regulations consistent with their authority in the Communications Act and that as long as the specific Commission policy for the denial is otherwise consistent (valid) with the Communications Act, then such an action is considered by the Supreme Court as not being a denial of free speech.

This leads us to the controversy over entities that are not recognized as corporations being denied authorizations in the LPFM (NCE) service. 

The FCC’s policies requiring LPFM/NCE stations to be bona fide organizations rests on the definition of a “noncommercial educational broadcast station” in §397(6) of the Communications Act, which defines a “noncommercial educational broadcast station” and “public broadcast station” to mean a radio or television station which under the rules and regulations of the Commission in effect on November 2, 1978, is eligible to be licensed by the Commission as a noncommercial educational radio or television broadcast station and which is owned and operated by a public agency or nonprofit private foundation, corporation or association; or is owned and operated by a municipality and which transmits only noncommercial programs for educational purposes.  (47 USC §397(6), emphasis added; see also Applications for Review of Decisions Regarding Six Applications for New Low Power FM Stations, Memorandum Opinion and Order, 28 FCC Rcd. 13390, 13394 at n. 39).

The Communications Act is the will of Congress. 

This definition of a noncommercial educational broadcast station (NCE) in §397(6) is essential for the administration of the LPFM service and noncommercial stations in general.  The Communications Act depends on the §397(6) definition to exclude NCE/LPFM stations from using auctions for the purpose of determining prevailing mutually exclusive applications (47 USC §309(j)(2)(C)).  Per the Communications Act, NCE/LPFM stations are also excluded from application fees (47 USC §158(d)(1)(c)) and filing fees (47 USC §159(e)(1)(C)).  Likewise, since NCE stations were not subject to ownership limits through §73.3555 at the time when the Telecom Act of 1996 was enacted, the FCC can enforce the “one station per organization” rules in respect to LPFM stations operated by educational organizations. 

So, as you can see, it is very important for the LPFM service to abide by this §397(6) definition of a Noncommercial Educational Broadcast Station. The key part of that definition is that a NCE/LPFM station must be a corporation.  The FCC relegates the definition of such a corporation to the state.  In all states, such an entity can be incorporated as a nonprofit corporation and in some states, unincorporated associations are permitted pursuant to the appropriate state laws (Unincorporated associations: see Fondren Community Voices, Letter, 30 FCC Rcd. 3003 (MB, 2015, additional citations omitted); see also Media Bureau Announces Filing Procedures and Requirements for November 1 – November 8, 2023, Low Power FM Filing Window, Public Notice, DA 23-642 (MB, Jul. 31, 2023) at 6).

The FCC must provide fair and equal treatment to all applicants while acting pursuant to the Communications Act (see e.g. Melody Music v. FCC, 345 F. 2d 730 (DC Cir., 1965)).

While the First Amendment does not play a role in the FCC’s policies in the distribution of authorizations (licenses), it does play a role in program content.  Likewise, while the FCC can regulate certain types of speech (such as obscenity/profanity, which was the center of FCC v. Pacifica Foundation (438 U.S. 726 (1978)), the FCC cannot regulate a licensee’s overall choice of entertainment format (FCC v. WNCN Listener’s Guild, 450 U.S. 582 (1981)).

FACT: The specific act of the FCC restricting LPFM licenses only to nonprofit corporations and other entities named in §397(6) of the Communications Act, that have been legally organized by and/or  recognized by law in the state (both incorporated and unincorporated), does not violate anyone’s First Amendment rights to free speech as determined by the Supreme Court.