Radio broadcast .. (1922-30)

OCTOBER, 1926 IS THERE A MONOPOLY IN RADIO? 473 land largely determines the extent to which the scientific interest or the financial interest shall control the development of the art. WHAT HAS HAPPENED IN GREAT BRITAIN FOR this reason, it is worth while briefly to compare the development of radio in Great Britain and the United States. Marconi took his inventions to Great Britain, patented them there, and undertook to exploit them commercially there. Fortunately for him, British law makes any system of communications a Governmentcontrolled monopoly. Radio inventors in Great Britain, desiring to profit by their inventions, have necessarily to deal with Marconi, who, for practical purposes, is the British Government. How soon their inventions shall be used, and to what extent, is determined upon business principles, which demand an orderly commercial development of the whole radio structure, including telegraphic communication, broadcasting, and home reception. The result in Great Britain has been that most of the subsequent important radio inventions have been made in the United States. Other results have been that the per capita consumption of radio apparatus in Great Britain is incomparably less than in the United States. Both the art and the business of radio have suffered in Great Britain. The one notable exception to this statement is that Marconi has not suffered in a business sense. He, at least, has enjoyed the fruits of monopoly — though it is debatable whether he might not have profited more if he had had competition and consequently a wider market in America. In the United States, on the other hand, we have laws that provide for cj&a a patent monopoly but not for a monopoly of patents. We assure to each inventor a monopoly of the profits to be made from his invention; but we leave to the free play of competitive economic forces the extent to which his monopoly, on his invention, is combined with other monopolies, on other inventions. In this country, therefore, we have business groups that have acquired some of the important radio patents, competing with other business groups that have acquired other important radio patents. No one group has yet been able to corral all the essentials of radio into one lot, and thereby free themselves from the necessity of using every effort, to be more inventive than everybody else, to be more skilful in manufacture than everybody else, and to be more energetic and able in selling their product than everybody else. does not now distribute as many radio sets as its largest competitor and it has offered to license several competitors under its patents — an offer which was refused. Consequently there is evidence that the Radio Corporation has neither the opportunity nor the desire to become a monopolist in the manufacture and sale of radio sets or parts. This does not mean that the logic of an industry based upon patents as the radio industry is, does not lead to the conception of a concentration of all the patents (which are monopolies) in the field. When that concentration is sufficiently effected so that the rights to use enough patents to make a set are available, who will use them, one concern or many? If there are many, there will be competition. Competition thus far has justified itself by its fruits. The enormous public interest in broadcast reception has been made possible by the ease with which the listener could secure a receiving set, either by building it himself or by buying his choice of hundreds of ready-made designs. This public interest has created a market of such vast proportions that even a would-be monopolist's share of it is doubtless larger than he could have got by monopolizing the more restricted market which monopoly creates. But, of course, anyone contemplating a monopoly would not be thinking only of the present. He would be thinking of getting a strangle-hold on the future, so that when the industry does become as big as they pre-vision it, he would enjoy all the profits of it. Let us, then, review the present situation of radio in the United States, to see, if we Highlights From This Article FROM the day that Marconi took out his first patents, it was certain that every subsequent inventor in radio would patent bis invention. And from the day that Fleming took out his first patent, it was certain that every additional patent would involve a new conflict of financial interest. The reader may imagine what that means to-day, when there are twenty-four hundred unexpired radio patents in the United States." " In the United States, we have lawsthat provide fora patent monopoly, hut not a monopoly of patents. We assure to each inventor a monopoly of the profits to be made from his invention; but we leave to the free play of competitive economic forces the extent to which his monopoly, on his invention, is combined with other monopolies, on other inventions." IS THKRE A RADIO MONOPOLY IN THE UNITED STATES? pHE Radio Corporation of Amer* ica is very generally charged with trying to occupy that position in radio in the United States. However, the Radio Corporation "In this country, we have business groups that have acquired some of the important radio patents, competing with other business groups that have acquired other important radio patents. No one group has yet been able to corral all the essentials of radio into the lot, and thereby free themselves from the necessity of using every effort, both to be more inventive than everybody else and to be more skilful in manufacture than everybody else and to be more energetic and able in selling their product than everybody else." "The question is not only 'Who invented what ' in radio, and who now owns the inventions; but the question also is, Who can best make radio apparatus, who can best sell it, and who, if he exists, is the genius that can combine these multiform elements into a stable industry." can, what likelihood there is that radio will ultimately become the monopoly of one business group. Or, failing that, what the probable development will be. From what has been said above, it is clear that the answer will not be found in patents alone. Patents are only one of the raw materials upon which a great industry feeds. With them must be put great sums of money, invested in factories and machines. With these must go great manufacturing skill. Added to these must be great skill in salesmanship and the details of commerce. And finally there must be the rare and peculiar type of genius, called, in French, the entrepreneur, whom for lack of a single word in English, we call the "captain of industry" or the "statesman of industry" — the man who combines the power to survey a whole field of business enterprise, vision its possibilities, secure capital, organize men of all the diverse kinds involved in invention and manufacture and sale. The question, therefore, is not only "who invented what" in radio, and who now owns the inventions; but the question also is, who can best make radio apparatus, who can best sell it, and who, if he exists, is the genius that can combine these multiform elements into a stable industry? These articles are designed to give the reader as many useful facts as possible in answer to these questions, and to suggest some of the possible combinations of these facts as they may tend to determine what radio is coming to in America. At present, the radio art and the radio patents and the radio industry are in a state of chaos. On the whole, it is a healthy condition, because its very isv uncertainties stimulate the hopes of inventors, the opportunities of the listening public, and the enterprise of business men. But it is a chaos that cannot last, because inventive possibilities will ultimately become narrower and narrower; economic pressure will force out unskilful manufacturers and unwise commercial adventurers; and the courts will finally award each of the important patents to some one of the numerous claimants. Then the field will be clear for the business statesman to emerge with a practical monopoly in his hands; or, failing that, a group of friendly competitors will survive, as in the automobile field, cultivating various parts of a market big enough for all. The two articles that follow this will deal separately with the two most important elements in the present radio situation. The first article will discuss the complicated patent situation that surrounds the various essential parts of a radio receiving set — the inventors, and the inventions, and the patents. The second article will deal with the business side of radio — the business men and the business groups and the question of monopoly.