The NAB was founded in 1922 (the same year that the nonprofit BBC was founded in the United Kingdom) at the Drake Hotel in Chicago. The association's founder and first president was Eugene F. McDonald Jr., who also launched the Zenith corporation.
The NAB worked to establish a commercial radio system in the United States. The system was set up in August 1928 with the establishment of General Order 40 — a radio reallocation scheme by the Federal Radio Commission which awarded the choicest frequencies and broadcast times to the then-emerging commercial radio industry. In the wake of General Order 40, a loose coalition of educators, nonprofit broadcasters, labor unions, and religious groupscoalesced to oppose the NAB and their allies through the 1920s and 1930s, and to develop a public, nonprofit, license-funded radio system without commercials (similar to what happened with the BBC). The coalition claimed that the commercial industry would only promote profitable programming, thereby reducing the quality and future potential of radio broadcasting.
Not having the political connections, resources, or publicity of the NAB and the commercial radio industry, the non-profit coalition eventually lost the fight with the passage of the Communications Act of 1934.[2]
