In 1922 AT&T believed that, due to patent agreements, it had the exclusive right in the U.S. for commercial radio broadcasting. Although it had sold radio transmitters through its Western Electric subsidiary to a variety of firms, such as department stores, AT&T believed that most of these companies would soon find that running their own radio station was too expensive for them to continue for very long. So the telephone company announced that it was building a state-of-the-art facility in New York City -- originally WBAY, today WFAN -- which various companies could lease to make their broadcasts. AT&T soon found that it had been overly optimistic about the demand for its station, as most companies still wanted their own facilities. But by the mid-twenties AT&T's analysis would be proven correct, and the sale of airtime by commercial stations became the standard U.S. practice.
Telephony, February 18, 1922, page 23:
A. T. & T. Co. to Operate Radio Commercial Broadcasting Station.
A permit has been granted for the erection of a wireless telephone broadcasting station by the American Telephone & Telegraph Co., on the roof of the 24-story operating building between Walker and Lispenard street, New York City. This building is 350 feet high and rises conspicuously above any other building in the immediate neighborhood. The steel towers supporting the antenna will be 100 feet high. It is expected that the work will be started at once and that the station will be ready to begin operations in less than two months' time.
This wireless broadcasting station will be unique in many respects. This important radio distributing station is to be equipped with the latest developments of the Bell system, including the use of electrical filters and new methods, whereby, as the business grows, several wave lengths can be sent out simultaneously from the same point, so that the receiving stations may listen at will to any one of the several services.
It will be unique in another respect, because it will be the first radio station for telephone broadcasting which will provide a means of distribution and will handle the distribution of news, music or other program on a commercial basis for such people as contract for this service.
The American Telephone & Telegraph Co. will provide no program of its own, but provide the channels through which anyone with whom it makes a contract can send out their own programs. Just as the company leases its long distance wire facilities for the use of newspapers, banks and other concerns, so it will lease its radio telephone facilities and will not provide the matter which is sent out from this station. There have been many requests for such a service, not only from newspapers and entertainment agencies, but also from department stores and a great variety of business houses who wish to utilize this means of distribution.
The new station on the Walker-Lispenard Building is designed to cover a region from 100 to 150 miles surrounding New York City. However, under most favorable conditions, it might be heard for much greater distances, but even for its designed radius, it must be permitted to operate on a wave length free from other radio interference.
Within the area normally covered by this station, there are now probably 35,000 receiving stations which would provide an audience for the lessees of the company's radio service. In this same area there are over 11,000,000 people, so that should such service prove popular, it can reasonably be expected that the number of receiving stations will be greatly increased.
This is a new undertaking in the commercial use of radiotelephony and if there appears a real field for such service, and it can be furnished sufficiently free from interference in the ether from other radio services, it will be followed as circumstances warrant by similar stations erected at important centers throughout the United States by the American Telephone & Telegraph Co. As these additional stations are erected, they can be connected by the toll and long distance wires of the Bell system so that from any central point, the same news, music or other program can be sent out simultaneously through all these stations by wire and wireless with the greatest possible economy and without interference.
While it is entirely possible, as has been demonstrated by the telephone company, to talk by wireless, when all atmospheric conditions are favorable, across the continent or even for much greater distances over water, such long distance radio telephone transmission at present is not dependable and is not to be compared from a standpoint of service or economy with the transmission which is provided over wire. However, for a broadcasting service, which involves only one-way transmission, where the same message is given simultaneously to a great number of people within reasonable distances of the transmitting station, radiotelephony offers a promising field for development. The new line of business to be handled by this radio telephone broadcasting station will be in charge of the Long Lines Department of the American Telephone & Telegraph Co., which is now engaged in solving the many problems both technical and commercial that arise in connection with this new kind of service.