In spite of these brilliant technical achievements, Armstrong saw little financial benefit from his inventions. Many of his ideas were plundered by unscrupulous people, a trend which ultimately led to Armstrong's tragic and premature death.
The first of Armstrong's technology troubles began in 1922 when he lost a patent lawsuit for the rights to the regenerative circuit. A man named Lee De Forest had patented the same invention in 1916-- two years after Armstrong's patent was granted-- and sold the rights to AT&T.
In the meantime, between court appearances and legal meetings, Armstrong continued to innovate. He started to work on the "static problem" which plagued early radios, despite some colleague's assertion that static could never be eliminated. At the time, radio was transmitted via Amplitude Modulation (AM), which varied the amplitude of the radio waves. This gave the signal a much wider reach, but resulted in poor-quality sound. Armstrong sought to improve the signal quality by instead varying the radio waves' frequency, creating Frequency Modulation radio (FM). He won a patent for FM radio in 1933, and the following year he did his first field test when he broadcast an organ recital in AM and FM signals from the top of the Empire State Building. The AM broadcast was static-filled and the FM broadcast was clean and rich. Listeners were shocked by the difference. Later, in experiment after experiment he proved the on-air differences and improvements in sound.
Just before World War 2, Armstrong successfully lobbied the FCC to create an FM broadcast spectrum between 42 and 50 MHz. He built an experimental station and 410-foot tower at a cost of $300,000 in Alpine, New Jersey. He started a small network of high-powered FM stations in New England called the Yankee Network, and began manufacturing receivers to pick up the broadcasts. To all who heard the fledgling network, its quality was astounding. The broadcasts could deliver the entire range of human hearing between 50 and 15,000 cycles while AM delivered only 5,000 cycles.
Armstrong went on to prove that FM was capable of dual-channel transmissions, allowing for stereo sound. This capability of FM could also be used to send two separate non-stereo programs, or a facsimile and telegraph message simultaneously in a process called multiplexing. He even successfully bounced a FM signal off the moon, something not possible with AM signals.
Of course AM radio was big business in the pre-television days, and there were powerful people who wanted things to stay as they were. Innovation only meant smaller profits for them. At that time there was no more influential man in radio media than the founder of RCA, David Sarnoff. Known as "The General," Sarnoff controlled all the technical aspects of radio; he also created the NBC and ABC television networks. He was also an important early supporter of television and developed the current NTSC standard for TV that we have used for over 60 years.
Seeking to kill FM radio before it could threaten his profits, Sarnoff's company successfully lobbied the FCC to have the FM spectrum moved from Armstrong’s frequencies to the ones we use today: 88 to 108 MHz. That move immediately rendered Armstrong’s Yankee Network obsolete, along with all of the FM radio sets which had been produced. The cost to re-equip the stations for the new frequencies would be enormous. The FCC ruling said that the 40 MHz band was to be used for the new television broadcasts, in which RCA had a heavy stake. RCA also had an ally in AT&T, which actively supported the frequency move because the loss of FM relaying stations forced the Yankee Network stations to buy wired links from AT&T. The deck was stacked against the future of FM broadcasting.
Matters became worse when Armstrong became entangled in a new patent suit with RCA and NBC, who were using FM technology without paying royalties. The cost of the new legal battle compounded the financial burden that the problems with the Yankee Network had caused. His health and temperament deteriorated as the FM lawsuit dominated his life. His wife of thirty-one years, unable to cope with his worsening personality and financial strain, left him in November of 1953. RCA's greater financial resources crushed Armstrong's legal defences, and he was left penniless, alone, and distraught.
Following Armstrong’s death, television’s emerging popularity ended radio’s golden years. Slowly, listeners learned that FM radio was clearly better for musical high fidelity than AM broadcasts. Radios started to have an FM band included with the AM band in the late 1950s and 1960s. By the 1970s, FM audience size surpassed that of AM, and the gap has been growing ever since. Today over 2,000 FM stations broadcast in the United States, and FM signals are commonly used for microwave relay links and space communications. Edwin Armstrong's innovations clearly changed the world; had he not taken his own life, it is likely he would have lived long enough to watch his dream come to fruition.