A Lesson from the History of Broadcasting
Berkman, Dave, Monthly Review
A LESSON FROM THE HISTORY OF BROADCASTING
The development which has come to dominate American broadcasting of late has, of course, been the trend to increased concentration of control.
An accommodating, Reagan-appointed, pro-deregulation Federal Communications Commission (FCC), an equally sympathetic Justice Department Antitrust Division, the availability of money or credit for leveraged buyouts, and the willingness of stockholders in broadcast companies to sell their holdings for double what they were worth a few days earlier, have ceated a situation such that Channel's editor Les Brown predicts that by the turn of the century virtually all major media will be in the hands of 7 to 10 corporations. This would be a situation far worse even than that in print journalism where increasing ownership of daily papers by fewer and fewer publishing groups has been the trend for 50 years. (Indeed, among those 7 to 10 corporations are likely to be such publishers as Murdoch, the Los Angeles Times, and Gannett.) Strange as it may seem, however, matters might have been far worse. While today's efforts to concentrate control of broadcasting -- and especially television -- seem headed for oligopoly, in broadcasting's earliest days there were attempts by single companies to gather all of radio broadcasting wholly unto themselves.
The first major threat came from AT&T; but it was RCA which came closest to actually succeeding, so that from the late 1920s through at least the Second World War RCA ended up dominating broadcasting to a degree greater than anything threatened by any single corporation today.
Radio in America, following the end of the First World War and prior to the advent of broadcasting some two years later, briefly assumed the form of what was actually a government-promoted monopoly. The U.S. Navy Department, distrustful of British-owned Marconi Company's control of many of the patents critical to a technology which had proven so essential to the fleet, forced the sale of American Marconi -- which would then be known as the Radio Corporation of America -- to a group of American corporations, the two principal ones being General Electric and AT&T.
Through the end of 1920 radio was employed exclusively in point-to-point communication -- in effect, long-distance telephone without wires. Then came the completely unanticipated application of the techonology in the form we now know as broadcasting. The prime mover here, a corporation not originally included in the "Radio Group" (those companies which participated in RCA's ownership) was Westinghouse which, in looking for a way to employ radio not controlled by RCA or its owners, more or less lucked into this use of wireless. By the end of 1921, Westinghouse had erected large broadcasting stations in Pittsburgh, Newark (New Jersey), chicago, and springfield (Massachusetts). The radio explosin which followed created over 800 broadcast outlets -- a number which declined to between 550 and 600 during most of the 1920s. It was at this time that Westinghouse became a part of the group which shared in RCA ownership.
Something was obviously going on here. And as AT&T saw it, it was taking place on what was its turf! This was made clear in an internal AT&T memo of the time, which surfaced a few years later in a Congressional antitrust hearing, which stated with a chutzpah that was pure Ma Bell that while the phone trust had been careful not to state to the public in any way . . . the idea that the Bell system desires to monopolize broadcasting . . . the fact remains that it is a telephone job, that we are the telephone people . . . and it seems the clear, logical conclusion that must be reached is that sooner or later, in one form or another, we have got to do the job. (Emphasis added).
AT&T had three things going for it which would help it to achieve monopoly control of American broadcasting: (1) ownership of the dominant radio station at the time, WEAF-New York, which was pioneering the sale of commercial time to advertisers--the practice which came to provide radio (and subsequently television) with its economic base; (2) its Long Lines Division through which it could connect stations in cities throughout the country to form a network; and (3) a series of patents either originally granted, or subsequently assigned to it by its RCA partners, which it saw--on what may have been solid legal grounds! …