It was 1926. Broadcast radio was all the rage. But most stations barely resembled the kind of outlets we listen to today. The majority were run by colleges, civic organizations, and in some instances, labor unions. Only 4.3 percent could be classified as "commercial broadcasters."

Less than a decade later, the situation had more than reversed itself. By 1934, nonprofit broadcasting added up to a mere two percent of all air time.

Why? Pressure from commercial stations had a lot to do with it. But ultimately the call was made by the precursor to the Federal Communications Commission, the Federal Radio Commission. Although in the early 1920s most prominent voices agreed that commercial broadcasting would be the worst possible way to fund radio, the FRC now concluded that advertising was the only way to support the big range "clear channel" licenses that the agency had given to forty signals across the country.

And so the Commission classified commercial signals as "general purpose" stations, and the non-profits as "propaganda" stations, less deserving of spectrum. As a consequence, most of the latter disappeared from the airwaves.

Was this the right call? Eighty years later, the FCC still isn't sure. "Although commercial radio produced a Golden Age of programming in the late 1930s, the question remains whether the FRC's decision to favor corporate-sponsored networks—rather than the multiplicity of diverse non-commercial stations—best served the public interest," the agency concludes in its newly published essay, Transformative Choices: A Review of 70 years of FCC Decisions, written by FCC senior attorney Sherille Ismail.

This candid assessment of the FCC's history continues with a review of its decisions about FM radio, broadcast television, cable TV, Direct Broadcast Satellite, digital cellphone standards, and HDTV. In some instances, the essay declares victory for the Commission. In others, the paper wonders whether other, more restrained choices would have better served the public.

1945-52: television's rocky start

In the years just after World War II, only six cities enjoyed television stations: New York, Washington, Chicago, Philadelphia, Los Angeles, and... Schenectady (?). Most broadcast only a few hours a day. If TV was to expand, it would need more licenses. A huge question was whether to allow fledgling FM radio—developed by engineer Edwin Howard Armstrong in the mid-1930s—to keep its spectrum in the 42-55MHz Very High Frequency (VHF) band, or give it over to TV?

Not surprisingly, RCA and CBS made a huge push to relocate FM to the band that it currently occupies: 88-108MHz. The FCC, which had replaced the FRC in 1934, complied. The move was justified on a dubious prediction that FM radio would suffer interference from sunspots in several years—the paper politely acknowledges that the prophecy was "later alleged to be flawed."

The decision destroyed Armstrong's "Yankee" FM network. "Though FM gained by getting more channels, the creator of FM radio, Edwin Armstrong, lost, as the FCC decision rendered obsolete 400,000-500,000 radio sets." The 1945 reallocation "stopped FM in its tracks." The service did not begin to grow again for another 15 years.

In addition, the FCC authorized experimentation with television channels in the more technologically challenging Ultra High Frequency (UHF) band (480 to 980MHz), and permitted a policy of "intermixture"—allowing UHF and VHF signals in the same markets. The agency also permitted local communities to have less-powerful local TV stations rather than green-lighting more big "regional" signals. And the Commission adopted a standard for color television pushed by CBS, which the government saw as superior to RCA's.

The results? "Intermixture" failed. UHF stations couldn't compete with established VHF stations serving areas with VHF-only TV sets. It wasn't until 1962 that Congress passed the All-Receiver Act which mandated UHF in receivers (our assessment of the results of that law here).

"By focusing on localism as a principal goal, and by intermixing VHF and UHF stations, the FCC missed the chance to create as many as 7 national networks," the paper concludes.

As for the CBS color standard, it had one huge problem—it wasn't backwards compatible. In other words, CBS standard color sets couldn't view black and white transmissions. So by 1963 only three percent of households had color TV. Overall, the result of these decisions for most Americans was "less choice: few on-air stations and confusion resulting from the failures of the FCC's intermixture policy," the paper concludes.