The Johnson-Kennedy Radio Corporation, owning Station WJKS at Gary, Ind., applied to the Federal Radio Commission for modification of license so as to permit operation, with unlimited time, on the frequency of 560 kc. then assigned for the use of Station WIBO, owned by Nelson Bros. Bond & Mortgage Company, and Station WPCC, owned by the North Shore Church, both at Chicago, Ill. These owners appeared before the chief examiner who, after taking voluminous testimony, recommended that the application be denied. The applicant filed exceptions and, on consideration of the evidence, the Commission granted the application and directed a modified license to issue to the applicant authorizing the operation of Station WJKS on the frequency of 560 kc. and terminating the existing licenses theretofore issued for Stations WIBO and WPCC. On appeal, the Court of Appeals of the District of Columbia reversed the commission's decision upon the ground that it was 'in a legal sense arbitrary and capricious.' 61 App.D.C. 315, 62 F.(2d) 854, 857. This court granted certiorari, 288 U.S. 597, 53 S.Ct. 506, 77 L.Ed. --. region which has a population of about 800,000, under section 9 of the Radio Act of 1927 (c. 169, 44 Stat. 1166), as amended by section 5 of the Act of March 28, 1928, c. 263, 45 Stat. 373, 47 U.S.C. § 89 (47 USCA § 89). The findings of fact upon which the commission based its order included the following:
Gary, Ind., about 30 miles from Chicago, is the largest steel center in the world. It has a population of approximately 110,000 and is located in what is known as the Calumet region which has a population of about 800,000, 60 per cent. of whom are foreign born and represent over fifty nationalities. Station WJKS is the only radio station in Gary and the programs it broadcasts are well designed to meet the needs of the foreign population. These programs include 'broadcasts for Hungarian, Italian, Mexican, Spanish, German, Russian, Polish, Croatian, Lithuanian, Scotch and Irish people,' and 'are musical, educational and instructive in their nature and stress loyalty to the community and the Nation.' Programs are arranged and supervised 'to stimulate community and racial origin pride and rivalry and to instruct in citizenship and American ideals and responsibilities.' 'Special safety prevention talks' are given for workingmen, explaining the application of new safeguards of various types of machinery used in the steel mills. The children's hour utilizes selections from various schools. There are 'good citizenship talks' weekly by civic leaders. The facilities of the station are made available to the local police department and to all fraternal, charitable, and religious organizations in the Calumet region, without charge. Sunday programs consist mainly 'of church service broadcast' including all churches and denominations desiring to participate. Although the Calumet area is served by a station at Fort Wayne and by several stations in Chicago, Station WJKS 'is the only station which serves a substantial portion of the area with excellent or even good service.' While Station WJKS 'delivers a signal of sufficient strength to give good reception in its normal service area if not interfered with, heterodyne and cross-talk interference exist to within three miles of the transmitter and constant objection to interference is found in the good service area of the station, particularly to the south, southeast and east.' This interference has increased during the past two years.
Station WIBO is operated by Nelson Bros. Bond & Mortgage Company separately from its mortgage and real estate business. It employs 55 persons and its total monthly expenses average $17,000. In March, 1931, it earned a net profit of $9,000. It represents a total cost of $346,362.99 less a reserve for depreciation of $54,627.36, and has been operated since April, 1925. Station WIBO was licensed to share time with Station WPCC, the latter being authorized to operate on Sundays during stated hours and by agreement has operated on certain week days in exchange for Sunday hours.
The licenses for Stations WIBO and WPCC, effective from September 1, 1931, to March 1, 1932, were issued upon the following condition: 'This license is issued on a temporary basis and subject to such action as the Commission may take after hearing on the application filed by Station WJKS, Gary, Indiana, for the frequency 560 kc. No authority contained herein shall be construed as a finding by the Federal Radio Commission that the operation of this station is or will be in the public interest beyond the term hereof.'