Broadcasting Company of America
Encyclopedia
The Broadcasting Company of America was a former, short-lived broadcasting subsidiary of AT&T
.
When AT&T employees, notably Lee DeForest, developed advances in vacuum tube
technologies in the 1910s, the telephone giant entered the radio business. Throughout the 1920s, AT&T was involved in patent disputes with RCA
(the Radio Corporation of America). At the same time, it was also involved in a rivalry in broadcasting with RCA, with AT&T focusing its efforts around a network built around its New York station WEAF
(now WFAN), and RCA competing through its network built around WJZ
(now WABC-AM). Generally speaking, WEAF had a significant technological advantage over the WJZ chain, in that the telegraph lines the latter were forced to use (owing to a refusal by AT&T to lease the lines to RCA) were not as effective in transmitting radio broadcasts.
AT&T decided to exit the broadcasting business, in part to end the disputes and in part to focus its efforts on telecommunications. On May 15, 1926, the Broadcasting Company of America was formed to hold AT&T's broadcasting assets. The stated purpose of this transaction was to recognize the growth of the radio operations and the special issues related thereto, but subsequent events make it clear that the disposition of the radio assets was also a factor.
By a contract dated July 1, 1926 (in the NBC History Files at the Library of Congress), AT&T sold the assets of BCA, principally WEAF, but also the Washington, DC station WCAP, to RCA for $1 million. In reporting this transaction, the September 13, 1926 edition of the Oakland Tribune noted that this price represented a substantial premium over what radio stations were commanding in the marketplace, and reflected WEAF's position in the industry, as well as its access to AT&T's superior lines. The Tribune estimated that 4/5ths of the purchase price for WEAF represented good-will and the access to AT&T's lines. On that same day, the formation of the National Broadcasting Company
was announced.
WEAF would go on to be the "key station" for the NBC Red radio network. WCAP was shut down upon its acquisition by RCA. The leased lines that figured so importantly in the acquisition of BCA would form the backbone for both NBC Red and its sister Blue Network
for the next fifteen years.
American Telephone & Telegraph
AT&T Corp., originally American Telephone and Telegraph Company, is an American telecommunications company that provides voice, video, data, and Internet telecommunications and professional services to businesses, consumers, and government agencies. AT&T is the oldest telecommunications company...
.
When AT&T employees, notably Lee DeForest, developed advances in vacuum tube
Vacuum tube
In electronics, a vacuum tube, electron tube , or thermionic valve , reduced to simply "tube" or "valve" in everyday parlance, is a device that relies on the flow of electric current through a vacuum...
technologies in the 1910s, the telephone giant entered the radio business. Throughout the 1920s, AT&T was involved in patent disputes with RCA
RCA
RCA Corporation, founded as the Radio Corporation of America, was an American electronics company in existence from 1919 to 1986. The RCA trademark is currently owned by the French conglomerate Technicolor SA through RCA Trademark Management S.A., a company owned by Technicolor...
(the Radio Corporation of America). At the same time, it was also involved in a rivalry in broadcasting with RCA, with AT&T focusing its efforts around a network built around its New York station WEAF
WNBC (AM)
WNBC was a radio station that operated in New York City from 1922 to 1988. For most of its history, it was the flagship station of the NBC Radio Network...
(now WFAN), and RCA competing through its network built around WJZ
WABC (AM)
WABC , known as "NewsTalkRadio 77 WABC" is a radio station in New York City. Owned by the broadcasting division of Cumulus Media, the station broadcasts on a clear channel and is the flagship station of Cumulus Media Networks...
(now WABC-AM). Generally speaking, WEAF had a significant technological advantage over the WJZ chain, in that the telegraph lines the latter were forced to use (owing to a refusal by AT&T to lease the lines to RCA) were not as effective in transmitting radio broadcasts.
AT&T decided to exit the broadcasting business, in part to end the disputes and in part to focus its efforts on telecommunications. On May 15, 1926, the Broadcasting Company of America was formed to hold AT&T's broadcasting assets. The stated purpose of this transaction was to recognize the growth of the radio operations and the special issues related thereto, but subsequent events make it clear that the disposition of the radio assets was also a factor.
By a contract dated July 1, 1926 (in the NBC History Files at the Library of Congress), AT&T sold the assets of BCA, principally WEAF, but also the Washington, DC station WCAP, to RCA for $1 million. In reporting this transaction, the September 13, 1926 edition of the Oakland Tribune noted that this price represented a substantial premium over what radio stations were commanding in the marketplace, and reflected WEAF's position in the industry, as well as its access to AT&T's superior lines. The Tribune estimated that 4/5ths of the purchase price for WEAF represented good-will and the access to AT&T's lines. On that same day, the formation of the National Broadcasting Company
NBC
The National Broadcasting Company is an American commercial broadcasting television network and former radio network headquartered in the GE Building in New York City's Rockefeller Center with additional major offices near Los Angeles and in Chicago...
was announced.
WEAF would go on to be the "key station" for the NBC Red radio network. WCAP was shut down upon its acquisition by RCA. The leased lines that figured so importantly in the acquisition of BCA would form the backbone for both NBC Red and its sister Blue Network
Blue Network
The Blue Network, and its immediate predecessor, the NBC Blue Network, were the on-air names of an American radio production and distribution service from 1927 to 1945...
for the next fifteen years.