Toll broadcasting

From Arcane Radio Trivia:

I read the term in a radio history book "toll broadcasting." I immediately thought of New Jersey. The concept was announced on WBAY-AM on August 3, 1922. The station had only been on air for a month. Then the AT&T Long Lines Commercial Department manager George W. Peck took the microphone to explain an idea of his. More here.

AT&T had been mumbling about toll broadcasting since February of that year. The concept was a new kind of station, a nationwide chain of stations. These weren't conceived as broadcasters but as "radiotelephone" stations... Mr. Peck compared them to phone booths. A user entered a booth, paid a fee and broadcasted on their radio stations nationwide. Any Joe on the street could become a broadcaster; it could have been a public broadcasting service.

Two weeks went by with only one user. Then they noticed the WBAY-AM signal was very weak. So they switched the broadcast to the Western Electric owned WEAF. The improved signal attracted a lot more attention to the idea. The Queensboro Corporation paid $50 for a 10-minute chunk of air time to promote some of their real estate. It appeared to work and they became a regular buyer. The American Express Company and the Tidewater Oil Company also were early adopters. But the first 60 days of "toll broadcasting" only made $550.

Interestingly only AT&T was allowed to sell airtime. Other stations were doing it, but AT&T was uniquely incorporated and licensed to do so because they owned the telephone lines. While ordinary citizens never took an interest in their "radiotelephone booths" other New York stations did. RCA’s two New York stations, WJZ-AM and WJY-AM, started toll broadcasting. AT&T called in the lawyers and threatened to withhold use of the phone lines.

The FTC tried to break up the fight by accusing most of the players with restraint of trade. instead they reacted with a back room deal. AT&T would get out of radio manufacture and in return got a cut of revenue for use of the phone lines. The AT&T, RCA and GE stations would be grouped under the ownership of a new company, NBC. More here.