was succeeded by Mr. Neville Chamberlain on the 2nd November, 1922. In the meantime (according to evidence submitted by the British Broadcasting Company) the scheme had been explained and approved at a general meeting on the 18th October to which 400 manufacturers were invited and which 300 attended. Certain details were not finally settled until January, 1923, and it was not until the 18th of that month that a licence was issued to the British Broadcasting Company (which had been formally incorporated on the 15th December, 1922, and had, with the Postmaster General's approval, commenced operations on an earlier date) to establish and work a system of broadcasting during a period of 26 months from the 1st November, 1922, to the 1st January, 1925. The final agreements between the Company and its constituent members the form of which was set out in a schedule to the licence-were not ready for signature until the end of March, 1923. 12. The issue of broadcast receiving licences at Post Offices began on the 1st November, 1922, and a daily broadcasting service was started at the London station on the 15th November. Stations were opened at later dates at Birmingham, Cardiff, Glasgow, Manchester and Newcastle-on-Tyne. Stations at Aberdeen and Bournemouth are being erected now, and two relay stations have been sanctioned experimentally to serve other populous areas. 13. Outline of existing Scheme.-The principal features of the scheme which was recognised as being necessarily of a provisional nature-were as follows: (a) A Company (called the British Broadcasting Company) to be formed among British manufacturers of wireless apparatus. Any such manufacturer to be entitled to join the Company on subscribing for one or more £1 shares, and on paying a deposit of £50 and entering into an agreement in the form approved by the Postmaster General. (b) The Company to establish eight broadcasting stations and to provide a regular service to the reasonable satisfaction of the Postmaster General. The Company to pay a royalty of £50 per annum in respect of each station. (c) The Post Office to issue broadcast receiving licences at a fee of 10s. a year containing a condition that the sets used, and certain parts (viz., valves, valve amplifiers, head telephones, and loud speakers) must bear a standard mark- B.B.C.-Type approved by Postmaster General." (d) The Post Office to pay the Company a sum equal to one-half of the licence fees received in respect of broadcast and experimental receiving licences. (e) The sets sold by members of the Company, as a condition of bearing the "B.B.C." mark, to be British made, to carry a payment to the Company in accordance with a tariff approved by the Postmaster General, and to (f) No advertising or paid matter to be broadcast, (g) The Company not to pay dividends at a higher rate than 7 per cent. per annum. (h) An undertaking to be given that the requisite capital would be subscribed, that the service would be continued throughout the period of the licence, and that any deficit would be met. Six firms undertook these responsibilities and were given the right each to nominate a director, two additional directors being nominated by the remaining firms who might take up shares, and an independent chairman being appointed by the six firms. These conditions were embodied in the licence issued to the Company on the 18th January, 1923.* 14. Difficulties leading to Deadlock. In reply to a question in the House of Commons on the 27th July, 1922, Mr. Kellaway stated that "provision will be made under which amateurs who construct their own receiving sets will be allowed to use them," the view then taken by the Post Office being that if an applicant were sufficiently skilled to make his own apparatus he would have sufficient knowledge to make proper use of an experimental licence, which is free of the restriction inserted in the broadcasting licence as to the type of apparatus to be used. On the strength, however, of Mr. Kellaway's statement, firms began to place on the market ready-made parts, both of British and foreign manufacture, which could easily be built up by the purchaser into a receiving set. Home-assembled apparatus of this sort paid little or no contribution to the British Broadcasting Company, and for this and other reasons was very much cheaper to buy than B.B.C. apparatus, while purchasers claimed that their sets were home-made, and that they were entitled to experimental licences in accordance with Mr. Kellaway's promise. It will be apparent, however, that there is a distinction between the man who, before the inauguration of the broadcasting service, was sufficiently interested in wireless to build a set and experiment with it, and the person who, subsequent to the establishment of the service, assembled or built a set only to listen to the programmes. L m 20560 * Command Paper No. 1822 of 1923 B 15. The question of experimental licences was discussed in September, 1922, by the Post Office and the committee of manufacturers mentioned above, and it was agreed that in considering applications for such licences the term "experimenter" should be interpreted liberally for the time being; but the question soon arose whether the liberality afforded was not too great. The sale of parts began to undermine the sale of complete sets; and, in response to representations by the British Broadcasting Company that experimental licences were being issued to many more persons than were genuine experimenters, the Post Office agreed in January, 1923, to issue experimental licences only to persons with unquestionable qualifications, the applications from other persons being held over for further consideration. 16. The British Broadcasting Company claim that while they were adhering rigorously to the Agreement no steps were taken by the Post Office to carry out its duties with respect to the evasion of licences and terms of licences. On the other hand it is represented by the Post Office that it had become practically impossible for the Department to enforce its existing regulations and to take action against the large number of persons who were using home-made sets without a licence. For however willing such a person might be to take out a licence, the Post Office had no licence to give him, seeing that he was not fulfilling the conditions of a broadcast receiving licence and was not entitled to an experimental licence. The Postmaster General stated in the House of Commons that no proceedings would be taken in such cases until a further announcement had been made on the subject. Suggestions were then made from various sources that a new type of 'constructor's" licence should be issued to meet these cases; but although the British Broadcasting Company agreed in principle to the issue of such a licence, notwithstanding the fact that they need not have done so under the terms of their licence, it proved impossible for the Post Office and the Company to come to an agreement as to the conditions on which such licences should be issued. A situation intolerable alike to the Post Office and the Company having thus arisen, Sir William Joynson-Hicks, then Postmaster General, referred the question-together with the general question of the future of broadcasting -to this Committee. 66 MERITS AND DEFECTS OF EXISTING SCHEME. 17. Aims of Scheme.-The objects of the Post Office were (a) To secure the early establishment of an efficient and attractive broadcasting service without cost to the taxpayer and without the establishment of any manufacturing monopoly. (b) To ensure that during the first two years,-i.e., until the 1st January, 1925-those British manufacturers whose enterprise inaugurated the service and the price of whose sets was increased by the contribution to the cost of broadcasting should be protected (as explained by Mr. Kellaway in the House of Commons on the 18th July, 1922) from the competition of foreign manufacturers who made no such contribution. The first of these aims met with a considerable measure of success; but the machinery designed to give effect to the second proved to be in certain respects unworkable. 18. Efficiency of Service.-It should be stated at once that evidence placed before this Committee demonstrates that the British Broadcasting Company have shown enterprise and ability of a high order in carrying out their undertaking and have done much valuable pioneer work in face of many difficulties. They have shown a readiness to accept suggestions and advice in regard to their programmes, which have won and merited widespread approval. 19. Objections to Scheme.-Apart from the practical difficulties referred to above, certain manufacturers and dealers have raised objection to the scheme on the following grounds :- (a) That it is wrong in principle to attempt to control the manufacture and importation of wireless apparatuswhich is a function of the House of Commons-by means of licences issued by the Postmaster General. (b) That it is improper that firms should in effect have to join the British Broadcasting Company as a condition of the right to manufacture and sell receiving apparatus for use in this country under a broadcast receiving licence. (c) That the Company is practically controlled by a few large firms, who, it is suggested, are placed in a position of advantage over smaller trade rivals. (d) That certain conditions of the agreement which members of the British Broadcasting Company have to sign are of an oppressive character or give the Company powers which might be used harshly. 20. We agree with the general view expressed in (a) of the preceding paragraph. With regard to the remaining three subparagraphs, whilst it is true that the scheme gives the British Broadcasting Company unusual powers, we have had no proof that the Company have made any improper use of their position. It is fair to point out that the scheme for levying a contribution on apparatus from the manufacturers was imposed by the Government as a condition of the broadcasting licence which the manufacturers desired, the position taken by the Post Office being that if they were to be granted the privilege they sought they must contribute at any rate a substantial part of the cost. It has been represented in evidence by the British Broadcasting Company and the National Association of Radio Manufacturers that opposition to this scheme has come largely from firms concerned with importation, or from those who had no interest B 2 in wireless apparatus before the inauguration of the scheme. We have, however, been impressed by the general objections to the system of marking and royalties, and by the practical difficulties attending its operation. We do not consider it feasible or desirable to prevent the construction of wireless sets from ready-made parts. Yet it would be obviously unfair that users of ready-made sets should pay royalty to meet the cost of the broadcasting service while users of home-made or homeassembled sets should escape. The marking of all the minute parts of a set would be impracticable; but a suggestion has been made that about ten of the principal component parts should be marked "B.B.C." and should pay royalty. We have examined these parts and have satisfied ourselves that nearly all of them could easily be sub-divided into two cr more smaller parts, which could be sold without marking or royalty. It seems clear, therefore, that just as difficulties arose in the system of marking of sets through the use of unmarked parts, so difficulties would arise in a system of marking of component parts through the use of smaller unmarked parts. CONTROLLING AUTHORITY. 21. Parliamentary Control.-We have made it clear that broadcasting may be expected to become of great national importance as a medium for the performance of valuable public services. It is essential, therefore, that permission to transmit, and the matter to be transmitted, should be subject to public authority. It seems certain, as we shall explain later, that the bulk of the revenue for broadcasting must be collected by the State. Moreover, the regulation of the power and wave-length of each transmitting station must necessarily be undertaken by the Government, in order to avoid chaos. The ultimate control of broadcasting must, therefore, rest with a Minister responsible to Parliament, presumably the Postmaster General. 22. Proposed Broadcasting Board-Functions and Composition. -But the questions involved in broadcasting are so complex, and the decisions to be taken are so various and require so much technical and other consideration, that we are of opinion that a standing committee, which might be called the "Broadcasting Board," should be set up by statute to assist the Postmaster General in the administration-technical, operational and general of broadcasting, and to which the Postmaster General should refer important matters concerning the control of broadcasting for advice. For example, it would advise on such questions as who should operate broadcasting, how many stations should be operated, how revenue should be raised and how allocated, what should be the general character of the matter to be broadcast and what regulations are necessary to prevent interference. It would become the authority to whom complaints and suggestions of all kinds concerning broadcasting would be |