In the mid-1920s, profit-seeking companies such as department stores and newspapers owned a majority of the nation’s broadcast radio stations, which promoted their owners’ businesses. [17] Nonprofit groups such as churches and schools operated another third of the stations. As the number of radio stations outgrew the available frequencies, interference became problematic, and the government stepped into the fray. The Radio Act of 1927 established the Federal Radio Commission (FRC) to oversee regulation of the airwaves. A year after its creation, the FRC reallocated station bandwidths to correct interference problems. The organization reserved 40 high-powered channels, setting aside 37 of these for network affiliates. The remaining 600 lower-powered bandwidths went to stations that had to share the frequencies; this meant that as one station went off the air at a designated time, another one began broadcasting in its place. The Radio Act of 1927 allowed major networks such as CBS and NBC to gain a 70 percent share of U.S. broadcasting by the early 1930s, earning them $72 million in profits by 1934. [18] At the same time, nonprofit broadcasting fell to only 2 percent of the market. [19] …show more content…
Basing their argument on the notion that the airwaves—unlike newspapers—were a public resource, they asserted that groups working for the public good should take precedence over commercial interests. Nevertheless, the Communications Act of 1934 passed without addressing these issues, and radio continued as a mainly commercial enterprise.