The Early Years

The history of cable television is a chronicle of ingenuity. Among its pioneers was John Walson, who took up selling television sets in 1947 from his appliance store in Pennsylvania’s southern coal country. Sales were slow, however, in no small part because of lousy reception in the valley town situated some 90 mountainous miles from station transmitters in Philadelphia. Not to be bested by the terrain, Walson attached an antenna to a utility pole atop a nearby peak, and ran cable and signal boosters to his store and to the homes of customers located along the way. Thus was born the first community access TV system.

Antennas soon sprouted from ridges and rooftops in other rural settings, which inspired Milton Jerrold Shapp to develop a master antenna from which coaxial cable and amplifiers would deliver multiple signals simultaneously to multiple dwellings. After reading about Shapp’s innovation, fellow appliance salesman Robert Tarlton organized television dealers in Lansford, Pa., to wire their town with cable. Operating under the name Panther Valley Television, Tarlton’s group obtained a franchise from local authorities on the condition that the company pay a tax on the service — likely the nation’s first cable franchise fee.[2] Much publicity ensued, and Panther Valley became the catalyst for community cable systems across the country.

Early cable systems simply improved the reception in rural areas of local channels. Cable firms soon began experimenting with microwave technology to import additional programming from distant cities. Community access TV systems that once transmitted only three local network channels soon offered programming from independent stations elsewhere. Not surprisingly, consumers responded favorably to this expansion of choice, and the service moved beyond rural communities to cities.

Local station owners and executives of ABC, NBC and CBS did not take kindly to the new competition, and demanded regulatory protections from the Federal Communications Commission. They worried that cable TV would divert viewers to stations elsewhere and thus undermine ad revenue, as rates are determined on audience size. Meanwhile, stations whose signals were imported protested that cable was profiting from their programming without compensation to them. The resulting service restrictions imposed on cable virtually paralyzed the nascent industry for two decades, and set an unfortunate precedent of government interference in cable TV service.

Consequently, in 1959 the FCC prohibited a cable company from importing a broadcast signal. Within five years, cable operators in the 100 largest television markets were required to obtain permission before importing a distant signal — permission that was rarely granted. The commission went on to limit the number of station signals a cable system could carry and to restrict the broadcast of movies, sports and syndicated programming.[3] Thereafter, access to capital for cable expansion became difficult to obtain.

Cable TV was rescued from its regulatory doldrums by the inventiveness of Charles Frances Dolan. Faced with the challenge of wiring lower Manhattan in 1965, Dolan laid cable beneath the city streets to avoid the signal interference of New York skyscrapers.[4] Five years later, he conceived of an independent channel for which subscribers would pay a premium to receive commercial-free movies and sports. Dolan’s channel subsequently became Home Box Office (HBO), which debuted on November 8, 1972 with coverage of the New York Rangers vs. the Vancouver Canucks. Only a few hundred viewers in Wilkes Barre, Pa., had access to HBO that first night. Subsequent use of satellite technology ultimately made HBO the world’s largest subscription cable service, with more than 11.5 million viewers.[5] In demonstrating that consumers would actually pay for programming, Dolan revolutionized the television industry.