motivations for what to us now seems a startling agreement. First, they may have wanted
to avoid starting a race between themselves in programming quality that would likely
increase their costs quite dramatically, especially if they tried to cover local news. Second,
radio stations relied on newspapers to publish their schedules and so needed their co-
operation. Indeed, when WOR in New York started running its own extended news-
casts that proved to be popular with listeners, the newspaper association tried to pressure
their New York members not to publish WOR’s schedule. However, they refused to do
so as WOR was owned by R. H. Macy’s, the department store, one of the biggest news-
paper advertisers in the city (
Barnouw, 1968, p. 21). This example, the willingness of
large companies, such as Esso, to sponsor radio news shows, and the desire of non-
network stations to use news to compete for listeners undermined the Biltmore program
and by the late 1930s all of the radio networks had their own news departments.
However, there was also a trend toward newspapers taking over radio stations. In
1940, one-third of all radio stations were owned by newspapers, and in 100 US cities,
local newspapers owned the city’s only radio station.
While radio continued to grow into the 1950s, when it began to face increasing com-
petition from television, which was operated by the same networks, federal regulations
started to impose important limits on the networks in the 1940s. In 1941, the FCC issued
its Report on Chain Broadcasting (the network structure was referred to as “chain
broadcasting” because the links were AT&T’s telephone cables). This led to new rules
that made ties between stations and networks non-exclusive (allowing affiliated stations
to buy programming from multiple networks), prevented the networks from demanding
options on large amounts of station time (which allowed stations to develop their own
programming), and shortened the length of time that a station was bound by a network
contract from 5 years to 1 year (
Hillard and Keith, 2005, pp. 50–52). It also prohibited
licenses from being issued to stations that were affiliated with a network organization that
maintained more than one network, which was true of NBC.
When the new rules were upheld by the Supreme Court in 1943, NBC divested the
Blue network, which became ABC (
Hillard and Keith, 2005, p. 52). The shift of regu-
lation toward favoring independent broadcasters continued until the 1980s. For example,
in 1975 the FCC prohibited a newspaper from owning broadcast stations (radio or TV) in
the same market (
Gomery, 2002), a rule that was only relaxed in 2007 when the FCC
adopted an approach of considering cross-ownership on a case-by-case basis (
FCC,
2010
), partly because of the declining finances of the newspaper industry.
The FCC also used regulations to promote locally produced and focused program-
ming. In 1946, the Main Studio Rule required stations to have their main studio in
their city of license, while Program Origination rules required that at least 50% of pro-
gramming was locally produced, although this was achieved initially by airing local
programming outside of primetime (
Hillard and Keith, 2005, p. 46; Silverman and
Tobenkin, 2001
). In 1950, an FCC Report and Order defined radio transmission as an
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