Cable Television History
Cable television history is almost as long as TV history itself, but not quite. The founder of the cable television industry, John Walson, began the first Community Antenna TV service out of his television shop in Mahanoy City, Penn., 20 years after the first TV broadcasts began in Germany. Because Manahoy residents couldn’t receive service on the sets they bought from Walson’s shop, he would offer to connect their sets to his mountaintop antenna. He would charge a one-time $100 hook-up fee and a $2 per month subscription fee for this service.
Initially, the cable television stations pioneers like Walson transmitted to subscribers were basic free-to-air channels. You see, the cable television industry didn’t begin as a premium subscription service, but as a method of transmitting standard TV channels to people living in towns where reception for these channels was poor. The fledgling cable television industry also got a boost outside of these remote locations when the Federal Communications Commission froze the issuance of new TV licenses in 1948.
The four-year freeze affected every aspect of TV reception and program production, including the issuance of antenna licenses. As a result, private citizens in some regions could not own their own antennas and had to share those owned by licensed businesses with others in their community. The cable television industry came to be known as “cable” simply by token of CATV operators’ running coaxial cable from their licensed antennas to subscribers’ homes.
Cable Television History: 1950-1980
The cable television industry expanded in 1950 when Robert Tarlton used Walson’s theory to transmit Philadelphia free-to-air channels to subscribers in Lansford, PA, a town about 50 miles from Manahoy City and about 200 miles from Philadelphia. Tarlton’s extended CATV system received a great deal of attention in national press outlets like The New York Times, Newsweek and the Wall Street Journal, resulting in hundreds of similar systems springing up.
Before long, many of these small CATV companies grew into regional and multi-regional conglomerates, becoming the cable television industry giants they are today. One such company, Comcast Cable, grew its business through a succession of expansions. Founded in 1963 by Ralph J. Roberts, Daniel Aaron, and Julian A. Brodsky, Comcast changed its business name from “American Cable Systems” in 1969 when it was incorporated in Pennsylvania.
Comcast’s business model is a prime example of most successful subscription TV providers’ during the early years. Beginning with the largest deregulation in cable television history in 1972, Comcast began vertically expanding by creating its own cable television stations, which it not only transmitted to subscribers of its own services, but also rented the use of to its competitors.
To be sure, of course, CATV companies had been creating their own programming since the 1950s, but federal law restricted “leapfrogging,” or broadcasting this programming outside the providers’ coverage areas; furthermore, the FCC restricted the number of markets an individual company could offer service in, thereby limiting the amount of funding companies could devote to their original programming.
What the 1972 legal changes did, in fact, was change the FCC’s policy direction. The agency no longer curtailed and limited CATV expansion to protect network affiliates. Instead, it merely required that companies devote a certain portion of their bandwidth and offer facilities and equipment to local groups. Having to own the space and equipment anyhow, cable companies like Comcast figured they might as well use it themselves.
Meanwhile, advances in microwave and satellite technology allowed new, network-only players to enter the field. These companies, which offered exclusive, commercial-free programming to whatever subscription-TV company was willing to pay for it soon created the incentive consumers needed to order CATV service in masse.
When the FCC further liberalized the industry in the late 1970s, then, HBO, The Disney Channel and superstations like TBS could begin broadcasting at far wider ranges. Transmitting stations over the first geosynchronous satellite, the Westar 1, HBO was able to broaden its transmission range from a few CATV companies on the East Coast to every provider in the country.
Naturally, this expansion was lucrative, and as a result, network production companies were able to partner with cable providers to create even more channels. One such partner, for instance, resulted in the creation of E! Entertainment Television, which Comcast would eventually own fully after majority control changed hands several times.
Cable Television History: 1980-Present
Cable television continued to grow in popularity throughout the 1980s and ‘90s, eventually eclipsing free-to-air TV as the preferred reception method for U.S. television watchers. But many of the major players throughout this era remained the same. One reason for this was that many communities gave cable providers exclusive rights to offer services within their boundaries in return for sharing bandwidth with other telecommunications technologies like telephone and Internet. This, in turn, resulted in steady subscription price increases, prompting the FCC to institute consumer protections in 1992.
Another contributing factor to the development of these regional monopolies was the increased amount of lateral expansion cable companies engaged in. Companies that had long serviced highly populated areas naturally had profited more from the cable boom than those based in more rural areas. The resulting buyout boom virtually ensured that 10 or so companies would hold the majority of the market share nationwide, so in response, many cable providers that had withstood buyout became Charter Communications affiliates.
This is likely the main reason Charter Communication cable television companies’ services—such as the number of cable television stations they provide—vary so widely today. Many Charter Communication cable television companies’ services, in fact, are so different from other Charter Communication cable television companies’ services that their providers barely seem franchisees of the same company.
Satellite Television History: The DISH Network® Corporation
Other important developments in this era include the beginning of satellite subscription TV services using Ku-band signals with the launch of the DISH Network Corporation in Englewood, Colo. This new form of subscription TV service quickly challenged the old guard that had solidified due to regional monopolies by offering subscription TV service everywhere in the U.S. for prices far below the average cost of cable.
The strength of the system the DISH Network Corporation developed in Englewood, CO of course was that it rocked the proverbial boat so well. Cable companies that had before held reasonably large chunks of regional markets found themselves losing ground. And fellow cable companies that had once partnered with these suppliers predatorily took advantage of weakness as an opportunity to buy out their less-successful counterparts.
Soon members of the old guard were fighting amongst themselves and this insecurity in the system was magnified by the culture-wide shifts in demand that came about with the advent of the Internet. By and large, the DISH Network Corporation in Englewood, CO, stayed out of the Internet game. It did eventually begin offering Internet service in partnership with telecom AT&T and satellite Internet provider WildBlue.
But DISH Network itself did not invest in Internet infrastructure directly, leaving its cable competitors to deal with the added expense of revamping their ground-based cable systems to meet the added demand for bandwidth. This seemed like the smart decision too because telecoms were also getting into the cable game to retaliate for cable companies getting into the telecom game. The end result of all of this, then, has been that DISH Network deals have remained far cheaper than the packages that DISH Network’s cable competitors offer.
To learn more about these low-priced channel packages that feature a huge selection of channels, check out the article selection in the InternetLion.com Channel Packages section. Or, click here to see options for contacting a representative directly about the value of switching to DISH Network today. DISH Network has the best value in TV entertainment with the lowest all-digital price nationwide…every day!
Disclaimer: Please note that this article was written when the satellite TV provider DISH was branded as DISH Network. As of 2/1/2012 DISH Network has changed their branding name to DISH. Article post date: 11/26/2010.
