CBS Founded as Radio Broadcasting Oligopoly Takes Shape

The Columbia Phonograph Broadcasting System (later CBS) is founded in New York, initially as a network of 16 radio stations, just months after the Radio Act of 1927 establishes federal licensing. William Paley’s family purchases controlling interest in 1928 for $400,000, and Paley transforms the struggling network into NBC’s primary competitor. The emergence of CBS alongside NBC establishes the duopoly structure that will dominate American broadcasting for decades, demonstrating how regulatory frameworks intended to serve the public interest quickly become captured by concentrated commercial interests.

The Radio Act’s licensing requirements create barriers to entry that favor well-capitalized corporations over community or educational broadcasters. While the Act mandates operation in the “public interest, convenience, and necessity,” the Federal Radio Commission interprets this standard to favor commercially viable stations over nonprofit alternatives. Educational and religious broadcasters find their frequencies reassigned to commercial operators with better-funded applications. By 1930, just two networks - NBC and CBS - dominate national radio, controlling the most powerful clear-channel stations and the most desirable programming.

The network model concentrates programming decisions in New York headquarters while local affiliates serve primarily as delivery mechanisms for national content and advertising. This structure enables advertisers to reach national audiences while limiting local community control over broadcasting. Corporate sponsors increasingly shape programming content, with controversy-averse commercial imperatives replacing the diverse programming that characterized early radio. The pattern established in the 1920s - regulatory structure designed for public interest captured by concentrated commercial interests - will repeat with television, cable, and later internet platforms. CBS’s founding represents a formative moment in the development of centralized, commercially-dominated mass media that shapes American political discourse throughout the 20th century.