RCA Corporation
RCA Corporation, founded as the Radio Corporation of America, was a major American electronics company in existence from 1919 to 1987. Initially, RCA was a patent trust owned by a partnership of General Electric, Westinghouse, AT&T Corporation and United Fruit Company. It became an independent company in 1932 after the partners agreed to divest their ownerships in settling an antitrust lawsuit by the United States.
An innovative and progressive company, RCA was the dominant electronics and communications firm in the United States for over five decades. In the early 1920s, RCA was at the forefront of the mushrooming radio industry, both as a major manufacturer of radio receivers and as the exclusive manufacturer of the first superheterodyne receiver. In 1926, the company founded the National Broadcasting Company, the first nationwide radio network. During the '20s and '30s RCA also pioneered the introduction and development of broadcast televisionboth black and white and especially color television. Throughout most of its existence, RCA was closely identified with the leadership of David Sarnoff. He became general manager at the company's founding, served as president from 1930 to 1965, and remained active as chairman of the board until the end of 1969.
Until the 1970s, RCA maintained a seemingly impregnable stature as corporate America's leading name in technology, innovation, and home entertainment. However, the company's performance began to weaken as it expanded beyond its original focusdeveloping and marketing consumer electronics and communications in the UStowards the larger goal of operating as a diversified multinational conglomerate. The company also faced increasing domestic competition from international electronics firms such as Sony, Philips, Matsushita and Mitsubishi. RCA suffered enormous financial losses attempting to enter the mainframe computer industry, and in other failed projects including the CED videodisc system.
By the mid 1980s, RCA was rebounding but the company was never able to regain its former eminence. In 1986, RCA was reacquired by General Electric during the Jack Welch era at GE. Welch sold or liquidated most of RCA's assets, retaining only NBC and some government services units. Today, RCA exists as a brand name only; the various RCA trademarks are currently owned by Sony Music Entertainment and Vantiva, which in turn license the RCA brand name and trademarks for various products to several other companies, including Voxx International, Curtis International, AVC Multimedia, TCL Corporation, and Express LUCK International.
Establishment by General Electric
RCA originated as a reorganization of the Marconi Wireless Telegraph Company of America, commonly called "American Marconi". In 1897, the Wireless Telegraph and Signal Company, Limited, was founded in London to promote the radio—then known as "wireless telegraphy"—inventions of Guglielmo Marconi. As part of worldwide expansion, American Marconi was organized as a subsidiary in 1899, holding the rights to Marconi patents in the United States and Cuba. In 1912, American Marconi took control of the assets of the bankrupt United Wireless Telegraph Company, and from that point forward, was the dominant radio communications company in the United States.When the United States entered World War I in April 1917, the federal government took control of most civilian radio stations to use them for the war effort. Although the government planned to restore civilian ownership of the radio stations once the war ended, many United States Navy officials hoped to retain a monopoly on radio communication even after the war. Contrary to instructions it had received, the Navy began purchasing large numbers of radio stations. When the war ended, Congress rejected the Navy's efforts to have peacetime control of the radio industry and instructed that the Navy return the stations to the original owners.
Due to national security considerations, the Navy was particularly concerned about returning high-powered international stations to American Marconi, since the majority of its stock was in foreign hands, and the British already largely controlled the international undersea telegraph cables. This concern was increased by the announcement in late 1918 of the formation of the Pan-American Wireless Telegraph and Telephone Company, a joint venture between American Marconi and the Federal Telegraph Company, with plans to set up service between the United States and South America.
The Navy had installed a high-powered Alexanderson alternator, built by General Electric, at the American Marconi transmitter site in New Brunswick, New Jersey. It proved to be superior for transatlantic transmissions to the spark-gap transmitters that had been traditionally used by the Marconi companies. Marconi officials were so impressed by the capabilities of the Alexanderson alternators that they began making preparations to adopt them as their standard transmitters for international communication. A tentative plan made with General Electric proposed that over a two-year period the Marconi companies would purchase most of GE's alternator production. However, the U.S. Navy objected to the plan, fearing British domination in international radio communications and the national security concerns this raised.
The Navy, claiming support from U.S. President Woodrow Wilson, looked for an alternative that would result in an "all-American" company taking over the American Marconi assets. In April 1919, two naval officers, Admiral H. G. Bullard and Commander S. C. Hooper, met with GE president, Owen D. Young and requested a suspension of the pending alternator sales to the Marconi companies. This would leave General Electric without a buyer for its transmitters, so the officers proposed that GE purchase American Marconi, and use the assets to form its own radio communications subsidiary. Young consented to this proposal, which, effective November 20, 1919, transformed American Marconi into the Radio Corporation of America. The decision to form the new company was promoted as a patriotic gesture. The corporate officers were required to be citizens of the United States, with a majority of the company stock to be held by U.S. citizens.
Upon its founding, RCA was the largest radio communications firm in the United States. Most of the former American Marconi staff continued to work for RCA. Owen Young became the chairman of the board of the new company. Former American Marconi vice president and general manager E. J. Nally become RCA's first president. Nally was succeeded by Major General James G. Harbord, who served from 1922 until January 3, 1930, when Harbord replaced Owen Young as chairman of the board. David Sarnoff, who was RCA's founding general manager, became its third president on the same day. RCA worked closely with the federal government and felt it deserved to maintain its predominant role in U.S. radio communications. At the company's recommendation, President Wilson appointed Rear Admiral Bullard "to attend the stockholders' and director's meetings... in order that he may present and discuss informally the Government's views and interests".
The radio industry had been making technical advances, particularly in the area of vacuum tube technology and GE needed access to additional patents before its new subsidiary could be fully competitive. During this time American Marconi had been steadily falling behind others in the industry. The two companies then proceeded to negotiate a series of mutually beneficial cross-licensing agreements between themselves and various other companies in the industry. On July 1, 1920, the American Telephone & Telegraph Company, agreed to purchase 500,000 shares of RCAalthough it divested these shares in early 1923. The United Fruit Company held a small portfolio of radio patents, and signed two agreements in 1921. GE's traditional electric company rival, the Westinghouse Electric & Manufacturing Corporation, had also purchased rights to some critical patents, including one for heterodyne receiving originally issued to Reginald Fessenden, plus regenerative circuit and superheterodyne receiver patents issued to Edwin Armstrong. Westinghouse used this position to negotiate a cross-licensing agreement, effective July 1, 1921, that included a concession that 40% of RCA's equipment purchases would be from Westinghouse. Following these transactions, GE owned 30.1% of RCA's stock, Westinghouse 20.6%, AT&T 10.3%, and United Fruit 4.1%, with the remaining 34.9% owned by individual shareholders.
In 1930, RCA agreed to occupy the yet-to-be-constructed landmark skyscraper of the Rockefeller Center complex, 30 Rockefeller Plaza, which in 1933 became known as the RCA Building. This lease was critical for enabling the massive project to proceed as a commercially viable venture—David Rockefeller cited RCA's action as being responsible for "the salvation of the project".
Radio development
International and marine communication
RCA's primary business objectives at its founding were to provide equipment and services for seagoing vessels, and "worldwide wireless" communication in competition with existing international undersea telegraph cables. To provide the international service, the company soon undertook a massive project to build a "Radio Central" communications hub at Rocky Point, Long Island, New York, designed to achieve "the realization of the vision of communication engineers to transmit messages to all points of the world from a single centrally located source". Construction began in July 1920, and the site was dedicated on November 5, 1921, after two of the proposed twelve antenna spokes had been completed, and two of the 200-kilowatt alternators installed. The debut transmissions received replies from stations in 17 countries.Although the initial installation would remain in operation, the additional antenna spokes and alternator installations would not be completed, due to a major discovery about radio signal propagation. While investigating transmitter "harmonics" – unwanted additional radio signals produced at higher frequencies than a station's normal transmission frequency – Westinghouse's Frank Conrad unexpectedly found that in some cases the harmonics could be heard farther than the primary signal, something previously thought impossible, as high-frequency shortwave signals, which had poor groundwave coverage, were thought to have a very limited transmission range. In 1924, Conrad demonstrated to Sarnoff that a low-powered shortwave station in East Pittsburgh, Pennsylvania could be readily received in London by a simple receiver using a curtain rod as an antenna, matching, at a small fraction of the cost, the performance of the massive alternator transmitters. In 1926, Harold H. Beverage further reported that a shortwave signal, transmitted on a 15-meter wavelength, was received in South America more readily during the daytime than the 200-kilowatt alternator transmissions.
The Alexanderson alternators, control of which had led to RCA's formation, were now considered obsolete, and international radio communication would be primarily conducted using vacuum tube transmitters operating on shortwave bands. RCA would continue to operate international telecommunications services for the remainder of its existence, through its subsidiary RCA Communications, Inc., and later the RCA Global Communications Company. In 1975, the company formed RCA American Communications, which operated its Satcom series of geostationary communications satellites. International shortwave links were in turn largely supplanted by communications satellites, especially for distributing network radio and television programming.
At the time RCA was founded in 1919, all radio and telegraphic communication between China and the US, including official messages, were sent through either German radio or British cable links. The U.S. Navy lobbied RCA to seek a concession for a radio link to China, however the company was reluctant because its other concessions were already operating at a loss. This link began operation in 1928. The Mackay Radio and Telegraph Company of California signed a similar agreement with China in 1932. RCA claimed this was breach of contract on the grounds that its 1928 agreement had given it exclusive rights. The dispute went to arbitration, and in 1935 a decision, issued in Radio Corporation of America v China, concluded the Mackay concession was valid, because the earlier RCA concession had not granted exclusive rights.