AT&T had closely monitored advances in radio telephony, including Fessenden's December 21, 1906 alternator-transmitter demonstration at Brant Rock, Massachusetts. In 1915, taking advantage of the recently developed vacuum-tube transmitters and receivers, AT&T conducted radiotelephony tests from NAA, the U.S. Navy station in Arlington (Radio), Virginia. These audio transmissions were heard as far away as Paris, France and Hawaii, which clearly showed how advanced the vacuum-tube equipment was, compared to the "somewhat over 10 miles" (16 kilometers) range of Fessenden's groundbreaking alternator-transmitter tests. At the time of the 1915 Arlington tests President Vail announced that AT&T was planning to add radiotelephone links to the Bell system, and AT&T continued to build experimental radio stations to test telephony ideas. But it wasn't until July, 1920 that the first telephone link using radio in the U.S. was constructed, linking Catalina Island, California with the mainland.
It turned out that, in addition to its advanced technical knowledge about vacuum-tube radio transmitters, the telephone company had another extremely valuable area of expertise, which would change the face of broadcasting. Radio companies, when they wanted to increase a coverage area, traditionally built a bigger transmitter. In contrast, AT&T had been achieving the same objective by using telephone wires for interconnection, in order to link various localities together.
In April, 1919, during the Victory Liberty Loan drive, AT&T used special telephone lines to bring political speeches in Washington to outdoor gatherings in New York, carried over loudspeakers. November 11, 1921 brought the first transcontinental hookup, when President Harding's Armistice Day speech at the Arlington Memorial, National Cemetary in Arlington, Virginia, was simultaneously heard, again over loudspeakers, by audiences in New York City's Madison Square Garden and San Francisco's Civic Auditorium:
Commercial Broadcasting Pioneer: The WEAF Experiment, 1922-1926, William Peck Banning, 1946, page 56:
To the staff at AT&T's Long Lines Department, radio transmitters were essentially Very Big Loudspeakers, not much more difficult to connect together than the regular kind. An article appearing in the July, 1919, issue of Telephone Engineer, "Radio Telephony" by E. B. Craft and E. H. Colpitts, noted that "the connection of a wire system to a radio system is no more complicated than connecting two wire lines", and also commented on the potential of a radio service that was directed to groups of people, and would include the "broadcasting of news, time and weather signals, and warnings". The following memo, written in October, 1921, further explored this idea, reviewing the possibilities of a national interconnection of both remote loudspeaker sites and radio transmitters:
Commercial Broadcasting Pioneer: The WEAF Experiment, 1922-1926, William Peck Banning, 1946, page 60:
The technical possibilities of broadcasting from the Bell standpoint may be best indicated by picturing the setup for some national event, such as the Armistice Day ceremonies or the inauguration of the President.
Under such conditions we can imagine the President or other official speaking in Washington with or without the use of local loud speakers, and that his voice is then carried out over a network of wires extending to all the important centers of the country.
If each point on this network can be reached by two or more routes, the possibility of interruption to telephone service would be small. At the offices along the selected route connections are established through one-way repeaters to other circuits, to loud speakers and radio stations, without interfering at all with the main circuit. In each city and larger town there are halls equipped with loud speaking apparatus at which the people in the neighborhood are gathered and which are properly connected directly or indirectly to the backbone routes.
To properly do the above will require that we have available along all of our important routes one or more circuits which are constructed and maintained so as to give a somewhat better grade of transmission, and a somewhat higher degree of reliability.
AT&T eventually dropped the idea of including remote loudspeakers, and settled on a radio-only plan. In mid-December, 1921, a few weeks after the Armistice day hook-up, a memo was prepared by two Commercial Engineers in the Department of Operation and Engineering, J. F. Bratney and H. C. Lauderback, outlining the proposed national radio network. Probably the most interesting feature was the casual assumption that the network would be supported by advertising, which would be a very controversial idea for another half-decade:
Commercial Broadcasting Pioneer: The WEAF Experiment, 1922-1926, William Peck Banning, 1946, page 66:
Radio Telephone Broadcasting is now being carried on at eight different points throughout the country . . . . There is apparently considerable demand for this service and it would seem that, if properly conducted, it would be of considerable value to the public. The purpose of this memorandum is to discuss the various phases of radio telephone broadcasting, its potential value to the public . . . . presupposing that the Bell System desires to enter the field.
Broadcasting stations, operated either by amateurs or by radio telephone apparatus manufacturers, are now located at Springfield, Mass.; Newark, N. J.; Pittsburgh, Pa.; Detroit, Mich.; Chicago, Ill.; Los Angeles, Cal.; San Francisco, Cal.; and Seattle, Wash.; . . . . as to the number of receiving stations throughout the country at present more or less adequately equipped to receive the service, conservative estimates vary from 100,000 to 500,000 stations, probably one-half of which are along the East Coast . . . . The equipment at these stations is more or less capable of receiving radio telephone broadcasting in the event that broadcasting stations of sufficient power were established.
. . . . The present broadcasting is going forward at various wave lengths between 200 and 800 meters and, as yet, no definite regulations or standards have been effected . . . . a chaotic condition . . . .
Our proposed plans call for the installation of 38 broadcasting stations . . . . The radius of each of these stations will be from 100 miles upward . . . . It is proposed to give a very reliable service at reasonable cost . . . . Without straining our imagination we can appreciate the value of this broadcasting service particularly to the rural and outlying sections throughout the middle and far west.
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 . . . .
. . . . A first consideration is that the material broadcasted . . . . be desirable to the receiver so that the demand for service will be stimulated.
. . . . Our present plans do not contemplate our providing talent for entertainment . . . . we propose to be responsible for the quality of the service in so far as the broadcasting is concerned.
Until the idea of connecting stations came along, the radio field looked relatively straight-forward. With the advent of vacuum-tube transmitters, even a teenager could set up a simple broadcasting station. But a national interconnection of stations was a far more technically difficult challenge, which at this time was beyond the abilities of everyone except AT&T, and would take a number of years to implement. Still, there were a number of twists in the road ahead.
AT&T apparently expected that it and its subsidiaries would build, and own, all of the stations in the proposed 38-city national network. The costs of constructing a high quality broadcast station were very high, and AT&T also felt it had, through patent rights, the exclusive right to sell advertising over the airwaves. But it was caught by surprise by the broadcast boom of 1922, when, ignoring the sober economics of what they were doing, hundreds of companies and individuals went ahead and built broadcast stations of their own. Also, AT&T's rights to a monopoly of radio advertising turned out to be both shakier and more controversial than it expected, so it relented, and began licencing other stations to carry on-air advertising. In the end, AT&T built broadcasting stations in only two cities: New York City (WBAY and WEAF), and Washington, D.C. (WCAP, licenced to the Chesapeake and Potomac Telephone Company). However, it did go ahead and let its Western Electric subsidiary sell its quality transmitters to a number of other companies for their own stations, among which were many of the best known in the country:
Radio Broadcast, "Western Electric Broadcasting Stations in the U. S.", January, 1923, page 256:
So in the end, AT&T didn't have to build all the stations in its network, just link up with the stations that others had constructed. Moreover, many of the stations that AT&T had sold transmitters to would eventually be the ones connected to AT&T's network, the "WEAF Chain", as it slowly expanded from New York City:
Map of AT&T's "WEAF Chain" radio network, from Radio Broadcast, "How Much It Costs to Broadcast", by Austin C. Lescarboura, September, 1926, p. 338:
For a comparison of the start of AT&T's radio network and the beginnings of the Internet, see Déjà Vu All Over Again by Todd Lappin. Also, for a review of how radio and the growth of networks affected politics in the United States, see Don Moore's The Radio Election of 1924.