In the 1930s, staffers at the newly established Federal Communications Commission devised a novel rationale for limiting network power in radio, telephony, and the press. While much has changed since the “age of radio,” the concerns they raised inform the present-day debate over the control that social media platforms exert over public discourse, writes Richard R. John.
This article is based on remarks that John gave at the 2025 Stigler Center Antitrust and Competition Conference this past April
Fake news, as Paul Starr documented in his presentation at the 2025 Stigler Center Antitrust and Competition Conference, has long troubled journalists unable to gain access to coveted sources, promoters eager to break into new markets, and lawmakers troubled by bad press. Though the United States in 1920 boasted many more newspapers than any other country in the world—a byproduct of a raft of public policies designed to encourage local reporting—critics charged that news content in publications large and small was skewed in favor of advertisers, government officials, and the powers-that-be.
The pro-establishment bias of news content outraged radical journalist Upton Sinclair, who in 1919 published The Brass Check, a biting indictment of the subordination to vested interests of even the most highly respected newspapers and magazines. The brass check was a token that the patron of a brothel gave to the prostitute of his choice, and, by analogy, the payments journalists surreptitiously received to slant their reporting.
Sinclair’s critique had a solid basis in fact. It was a shock to discover, reminisced veteran journalist John Jessup in 1977, that—or so Jessup learned from colleagues at the J. Walter Thompson advertising agency—over half of the news stories in the New York Times in the early 1930s could be traced to the public relations work of press agents. Fully half of all news items in the press, reported one political scientist in 1930, originated in this way. “Many reporters today,” the social scientist concluded, “are little more than intellectual mendicants who go from one publicity agent or press bureau to another seeking ‘handouts.’”
The news bias that Sinclair derided did not lead to calls for the restructuring of the newspaper business. Journalists, and many others, might well have denounced such a proposal had it been seriously entertained—and it was not—as a flagrant infringement of the free expression clause of the First Amendment.
To be sure, public policy shaped print media in myriad ways. Libel law constrained editorial opinion; tariff schedules influenced the cost of newsprint (a major factor in the cost of every print publication); and administrative regulations limited the advertising content of publications that coveted the low-cost postal rates that Congress authorized for newspapers and magazines. Yet Sinclair had a point by stressing the influence on news content of advertising. Advertisers in Sinclair’s day not only supplied much of the content that journalists surreptitiously called news, but they also skewed the journalists’ business coverage to favor the economic interests of their clients. He who paid the piper called the tune. For example, the dubious business practices of the sketchy businesses that peddled quack medical remedies known as “patent medicine” were rarely called out by journalists because their proprietors advertised so heavily in the press.
Radio transforms communications regulation
The commercialization of radio broadcasting that began in 1920 transformed the public debate over news bias. Radio broadcasting presupposed exclusive access to specific wavelengths of the electromagnetic spectrum. The spectrum was a new kind of “national domain” over which the federal government exercised sovereign authority.
Contemporaries took it for granted that the spectrum was limited, a presumption that made obligatory the establishment of standard-setting protocols. No such presumption had shaped the publishers of newspapers or magazines, transforming almost overnight what had been a debate over news bias into a debate over media concentration.
Regulation was a priority not only for incumbent radio broadcasters—who, or so economist R. H. Coase mistakenly contended, had “captured” the regulatory apparatus—but also for every major interest group with a financial stake in the new medium. Prominent among these stakeholders were the manufacturers of radio sets. From their standpoint, as the social scientists David A. Moss and Jonathan B. L. Decker have documented, the spectrum-scarcity presumption minimized the likelihood that radio broadcasters might render their receivers obsolete by scheduling programming on wavelengths to which they had not been tuned.
The regulation of the spectrum was coordinated through the licensing of individual radio stations, a task that would be performed between 1927 and 1934 by the Federal Radio Commission (FRC) and after 1934 by the Federal Communications Commission (FCC). The framework that the FRC and the FCC established for the regulation of what would become known as “mass communications” would remain long after the age of radio had come to a close with the commercialization of television after the Second World War.
To help minimize the possibility that radio broadcasting might come under foreign control, the FCC mandated that the owners of radio stations be U. S. citizens. “Country over company” was the taken-for-granted rationale for these restrictions, a convention that the present-day social media mogul Mark Zuckerberg has inverted by professing allegiance to “company over country” in Meta’s quest for global dominance.
The FCC also intervened to shape broadcasting content. For example, to help provide listeners with access to a range of perspectives on current events, the agency mandated what we might call today “viewpoint diversity.” Pluralism was hardwired into the “fairness doctrine,” a checklist of broadcasting “do’s and don’t’s” that shaped the content of radio and television from 1949 until its repeal in 1987. The much-derided conformism of the U.S. in the 1950s had many sources. Among them was the continuing commitment of the FCC to the regulation of radio and television in the public interest.
Three features of communications policy in the radio age would seem to be particularly relevant to the present-day debate over the regulation of the social media platforms that are popularly known at Big Tech. The first is the identification of media concentration as a problem for which a public policy solution could be found. This presumption received a major impetus from the establishment in 1934 of the FCC as an umbrella agency with jurisdiction over every communications medium that relied on electric power: radio, point-to-point wireless, the underseas cable, the landline telegraph, and the telephone.
The FCC in its formative era—a period that stretched from its establishment in 1934 to the end of the tenure of its fourth chair James Lawrence Fly a decade later—has in my view been unjustly maligned as unduly beholden to vested interests, particularly the nation’s dominant radio networks: the National Broadcasting Company (NBC) and the Columbia Broadcasting System (CBS). True, the FCC failed in this period to limit the cross-ownership of radio stations by newspaper publishers, as President Franklin D. Roosevelt had hoped. Roosevelt believed that his administration was likely to receive more favorable treatment from radio broadcasters than from newspaper publishers, since the FCC exercised though its licensing power considerable control over individual radio stations, a power that no federal government agency could claim with respect to newspapers and magazines.
Fearful that Roosevelt might try to expand federal government control over the press, newspaper publishers in New York, Chicago, and several other big cities vigorously championed their prerogatives by defending—or, perhaps it would be more accurate to say, and as the cultural historians Michael Stamm and Sam Lebovic have documented, inventing—a libertarian interpretation of the free press guarantee in the first amendment. The ability of newspaper publishers to own radio stations promised to improve their bottom line, while depriving Roosevelt of influence over an increasingly popular medium.
The Federal Communications Commission and media concentration
The FCC proved more successful in limiting “chain” or network broadcasting by weakening the protocols that had been devised by NBC and CBS to restrict the autonomy of their affiliates. Each network was headquartered in New York City, a fact that was not lost on Fly, a proud Texan whose ancestors had fought for the Confederacy in the Civil War. Fearful of the influence that NBC and CBS exerted over their affiliates’ programming, the FCC devised protocols that increased their affiliates’ ability to set their own advertising rates, choose between rival network offerings, and develop original programming. Fly went so far as to order NBC to sell its second network, which became the American Broadcasting Company (ABC), a directive that in 1943 received the imprimatur of the Supreme Court in National Broadcasting Company v. United States. The majority opinion, crafted by Justice Felix Frankfurter, a former law school instructor of Fly, offered a sweeping vindication of Fly’s assault on media concentration.
The amassing of information detailing the business strategy of media giants became in the 1930s something of an FCC specialty. FCC economist Dallas W. Smythe helped pioneer the quantitative analysis of media concentration in radio, and, following his departure from the agency, embarked on a long career as a university professor in the emerging field of communications. FCC commissioner Paul A. Walker presided over a massive investigation of the Bell System, the then-dominant telephone network provider. Walker’s investigation created an evidentiary paper trail that featured thousands of pages of testimony, company documents, and statistical charts. This data dump would help to justify the 1949 Justice Department antitrust suit against Bell that culminated in the 1956 consent decree that opened the way for the widespread commercialization of computing in the United States and abroad.
Smythe and Walker were hardly alone. Media concentration as a problem for which regulation could provide a solution was a premise of FCC rule-making in the 1930s. That presumption was built on the unquestioned assumption that, since the spectrum was scarce, it fell on the federal government to ensure that the new medium would be regulated to promote the public good.
The second media-concentration-related concern to emerge at the FCC in its formative era was the relationship between domestic and international point-to-point communications. This concern is unfortunately almost entirely ignored by media critics, such as the late Robert W. McChesney, who remain fixated on the domestic scene. Yet it was of pressing significance to the U. S. Navy. From the standpoint of the navy’s radio engineers, the most threatening media organization was neither NBC and CBS, nor even the Bell System, but the British global media giant Cable and Wireless. Navy engineers regarded media concentration in ocean-borne communications as a national security threat that greatly increased the likelihood that U. S. naval logistics might become subject to foreign control. Intermodal competition became, from this perspective, a hedge against the menace of a global cable-and-wireless cartel.
A final media-concentration-related concern with which the FCC was engaged in this period can be summed up in a single resonant phrase: “listeners’ rights.” The idea that radio broadcasters had an obligation to their audiences that transcended mere profit making had been a staple of popular discourse about the new medium since the 1920s. In no sense was it a partisan issue. Though this principle would be enthusiastically embraced by Fly, a Democrat, it could count among its defenders the Republican stalwart Herbert Hoover.
Radio broadcasters, in Fly’s view, were, by virtue of the limited nature of the spectrum, beneficiaries of a government-granted special privilege. As a result, they had an obligation to put audience above profits even if this proved disadvantageous to their balance sheet. “The radio,” Fly explained in 1941, in an eloquent statement of his resolute listener-centrism, “is the most potent of all instruments for the projection of speech to the millions….The essential function of this publicly owned facility cannot be appraised without primary regard for the rights of the listening public.” Among the listeners’ rights that Fly regarded as the most fundamental were access to locally produced content and exposure to diverse viewpoints on matters of public concern.
The FCC’s commitment to listeners’ rights shaped what is perhaps the most underappreciated major agency ruling in its formative era: the Mayflower doctrine. Promulgated in January 1941, in keeping with the longstanding conviction of President Roosevelt that radio broadcasts should be “entirely factual,” this doctrine proscribed any radio broadcaster from expressing an editorial position on any of the major public controversies of the day. Had this doctrine not been in force when the Japanese attacked Pearl Harbor in December 1941, it would seem likely, given the sharp divide in the U.S. regarding foreign entanglements, that U.S. radio coverage of the Second World War would have been considerably more contentious, and the country much less united in a perilous juncture in its history.
The U.S. never established a government radio broadcasting agency to rival the British Broadcasting Corporation. In retrospect, the advertising-driven regulatory regime that did emerge would be constrained not only by advertisers—as media critics have long contended, echoing Upton Sinclair—but also by the rules of the game. Whether or not the spectrum was scarce was ultimately less important to the Roosevelt administration than whether or not radio broadcasters rallied to the cause.
Conclusion
James Lawrence Fly may well be the most important New Deal administrator most twentieth-century U. S. historians have never heard of. A principled anti-fascist, he defended listeners’ rights to promote a pluralistic vision of the good society. Following the Second World War, the U.S. would export this vision to much of the rest of the world.
All of this may well appear to be ancient history today. Yet, as this brief overview of media concentration in the radio age suggests, interwar U.S. communications policy was shaped less by Benthamite cost-benefit analysis than by what one historian has aptly called a “civic ambition.” The DNA of U.S. media policy is not only commercial—which it has been from the founding of the republic—but also pluralistic, anti-monopolistic, and anti-statist.
Fly built on this legacy. He did not invent it. Among the unanticipated consequences of the FCC’s civic mandate for communications regulation was the hostile response it elicited from big-city newspaper publishers. The origins of what media critic Victor Pickard has dubbed “corporate libertarianism” can be found not in the Reaganite 1980s (which witnessed the demise of the fairness doctrine), but in the interwar period. Hostility to content moderation received a powerful impetus not only from advertisers, but also from big-city newspaper publishers, which, in their contest with the Roosevelt administration, devised precedents that would be mobilized in the decades to come by Big Tech platforms to consolidate their power over the information infrastructure of the digital age.
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