Here is a statement from the FCC vs. Pacifica judgement of 1978 that should clear up the question:
"The FCC found a power to regulate indecent broadcasting, inter alia, in 18 U.S.C. 1464, which forbids the use of "any obscene, indecent, or profane language by means of radio communications." "
So while the Communications Act doesn't give the FCC the power to regulate content, the U.S. Codes do--at least in the eyes of the Commission.
http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=438&invol=726
An interesting statement from the Pacifica ruling gives a reason for why broadcast comes under such strict enforcement when it comes to indecency:
"Of all forms of communication, broadcasting has the most limited First Amendment protection. Among the reasons for specially treating indecent broadcasting is the uniquely pervasive presence that medium of expression occupies in the lives of our people. Broadcasts extend into the privacy of the home and it is impossible completely to avoid [438 U.S. 726, 728] those that are patently offensive. Broadcasting, moreover, is uniquely accessible to children."
Which makes me wonder why the internet, which also uses the 'public airwaves' and has an equally "pervasive presence" is given a pass.
However, it may be that the FCC sees the internet in the same way it sees cable:
"With respect to cable and satellite services, Congress has charged the Commission with enforcing the statutory prohibition against airing indecent programming "by means of radio communications." The Commission has historically interpreted this restriction to apply to radio and television broadcasters, and has never extended it to cover cable operators. In addition, because cable and satellite services are subscription-based, viewers of these services have greater control over the programming content that comes into their homes, whereas broadcast content traditionally has been available to any member of the public with a radio or television."
http://transition.fcc.gov/eb/oip/
In view of the terrible tragedy in Conn., the FCC has recently been criticized for hypocritically narrowing its focus on indecency to content of a scatological nature while ignoring equally offensive programming that contains extreme violence. No doubt this will change as the Commission begins to apply its vague standards of decency on programming of a violent nature (provided it receives complaints from the public on those programs). This will, in turn, result in exorbitant fines to the networks, leading to lawsuits from the same networks, leading to lower court and possibly Supreme Court rulings, and the cycle will begin all over again.
