Evening star., 1928-12-12
R. c. A. TO SEPARATE
ITS RADIO BUSINESS
Officials Plan to Handle Com
muniCationS by Special
Company.
BY MARTIN CODEL.


Corporation of America are focusing
interest on its plan to sever its radio
telegraph business from its many other
lines Of activity. Officials of the radio
corporation are now engaged in forming
a separate company to handle its world
wide communications network
The separation of this unit would
place the radio corporation in a strate
Ric position to merge with one of the
great cable companies, like the Western
Union or the international Telephone
g. Telegraph Co. in the event the pres
ent radio law is amended by the next
Congress to permit such a merger.
1t is conceivable also that the radio
transoceanic business entirely, in view
of the economic and political hazards
involved and the fact that this branch
produced a gross income last year Of
less than $4,000, 900, compared with
gross from other lines, chiefly radio
sales, amounting to more than $685.
100000.
The newest attack upon the Radio
Corporation of America represents an
effort Of at least one independent radio
producer to prevent it from obtaining
more ether channels for its various
services. The law firm of Darby &
Darby. New York City, has asked the
Federal Radio Commission to deny all
wave length requests of the corporation
on the ground that section Is of the
radio act instructs the commission to
refuse operating licenses to corporations
found guilty of restraining trade or of
unfair competition.
Independents Upheld.
It is contended that the recent tube
d. tAta 80 1f
the United States upheld the independ-
ents in their effort to break down the
radio corporations license requirement
that all sets produced under its patents
shall be equipped with Radio Corpora
ton of America tubes, was, in effect. a
finding that the corporation had vio-
lated the Clayton antitrust act.
This demand from the ranks of the
Independents has succeeded to the ex-
tent that the commission refused this
week to act upon a set of applications
for experimental waves from the Radio
Corporation of America, referring the
Darby letter to its legal department for
an opinion first Samuel E. Darby. jr.,
while he was counsel for DR.. Lee De
Forest in the recent feedback circuit
case, also won in the Supreme Court
did not serve as counsel in the tube
case.
His firms letter to the Radio Com
mission may be the first stage in a con-
certed effort to wound the Radio Cor
poration of America by further attack
ing the communications end of its busi-
ness. At Chicago last week Ernest
Reichman, who won the tube case for
the group of independents, stated that
he also is preparing a brief to submit
to Congress to urge no change in sec
n ant l. L.
section that prohibits the merger Of
American cable and radio systems.
British Position Dominant,
The merger question undoubtedly will
come before the next Congress on ac-
count of the British cable-radio ANAL
gamation. voted a few weeks ago by
the House of Commons. 1t is claimed
that this unification of its world COM
munication facilities will place the
British in dominant position over the
separated and competing American ca
bic and radio companies unless the law
Is amended here to permit similar
mergers.
The radio corporations new COM
munication company will be operated
under the ownership and under virtu-
aIy the same directorate as the parent
company Thus it win not escape the
attacks the independents have opened.
1t may, however, have different legal
status than the company which dis
tributes wireless apparatus and collects
patent ROYALTIES from the bulk of the
other producers in the country.
In other words. the question arises
whether any one of the subsidiary COM
panies can be held liable for allegad
trust" findings against the large COM
pany. Other we'll known S,1hsieiiorie
OF the Radio Corporation of America
are the National Brcadcasting Co. the
Radio Corporation of America Photo
Phone, Inc, and Radio Marine Cor
pcration of America. All are operated
as separate entities. as it is proposed
TO operate the new communications
company.
tCopyright. 1928. by North American News
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