Broadcasting Company of America

On May 11, 1926, AT&T announced that "The radio broadcasting activities heretofore carried on by the radio broadcasting department of the American Telephone and Telegraph Company, under the general designation of WEAF, will be incorporated under the name Broadcasting Company of America." The new company's officers were: President, J. C. Lynch; Vice-president and General Manager, William E. Harkness; Manager of Broadcasting, George F. McClelland; Secretary and Treasurer, F. S. Spring; and Auditor, H. F. McKeon. Operations continued to be based at AT&T headquarters at 195 Broadway in New York City.

Unpublicized at the time were ongoing intense negotiations between AT&T and the radio group companies, led by RCA, about the status of the cross-licensing agreements, and the overall future of the broadcasting industry. AT&T's consolidation of its radio activities into the BCA subsidiary allowed for two possible outcomes: if AT&T decided to withdraw, then the transfer of its radio operations would be simplified, otherwise, the new entity could continue to be run semi-independently of the parent corporation.

During BCA's short existence, the standard WEAF chain configuration consisted of 17 stations, concentrated in the northeastern United States, but also extending westward to WDAF in Kansas City. Individual evening hourly station rates ranged from $170 for three stations located in smaller communities to $480 for flagship WEAF. The standard charge for an hour of evening programming over the entire roster of stations was $4,080, before any applicable discounts.

Organized radio broadcasting was introduced in late 1920 and 1921, and by the end of 1922 there were more than 500 stations throughout the United States. AT&T soon recognized that it had the technical expertise and patent rights needed to play an important, and possibly dominant, role in the industry. As early as December 1921, a memo prepared by two AT&T engineers proposed that the company construct a nationwide radio network, using the company's longlines to connect together individual stations. They also noted that "this service would enable the national and local advertisers, industrial institutions of all kinds, and even individuals if they desire, to send forth information and advertising matter audibly to thousands". AT&T moved quickly to start implementation of its bold plan, and on February 11, 1922, formally announced its intention to develop a "national chain of radio transmitting stations".

A key component of the plan was the construction by AT&T of a well equipped New York City station, WEAF, that was the originating point for the new network, which became known as the "WEAF chain". The first network program was transmitted on January 4, 1923, linking just one additional station, WNAC in Boston, Massachusetts, to WEAF. A more ambitious three-month link began operation on July 1, 1923, when Colonel Edward H. R. Green arranged for AT&T to provide WEAF's programming for rebroadcast by his station, WMAF in South Dartmouth, Massachusetts. The summer of 1923 also saw the opening of WCAP in Washington, D.C., licensed to the Chesapeake and Potomac Telephone Company, an AT&T subsidiary. The resulting New York-to-Washington link was extensively used to gain engineering knowledge in using telephone lines for radio network connections.

Initially WEAF had few advertisers, so most of its schedule consisted of unsponsored "sustaining" programs which network stations had to pay for, although they were not charged for sponsored programs. An important early sponsored program was The Eveready Hour, which debuted over WEAF in December 1923, and began to be carried over a rapidly growing number of stations in early 1924. The first transcontinental link was made in early 1924, and that fall a coast-to-coast network of 23 stations broadcast a speech by President Coolidge. By the end of 1925 there were 26 affiliates in the standard WEAF chain network, extending westward to Kansas City, Missouri.

Reacting to AT&T's actions, RCA quickly began efforts to establish its own network, originating from its New York City station, WJZ, but was badly handicapped in competing effectively. AT&T maintained that the cross-licensing agreements gave it the exclusive right to sell airtime. AT&T also normally refused access to its high-quality telephone lines to competitors, so RCA's efforts generally used telegraph lines to connect stations, which would prove to have inadequate fidelity and reliability. RCA also investigated using high-powered or shortwave stations to establish network connections, but none of these alternatives matched the quality of AT&T's telephone links. Thus, while President Coolidge's March 1925 inauguration was sent over a growing AT&T transcontinental network of 23 stations, the WJZ chain's broadcast of the speech was carried by only four stations, all located in the East.