Cable television in the United States is a common form of television delivery, generally by subscription. Cable television first became available in the United States in 1948, with subscription services in 1949. Data by SNL Kagan shows that as of 2006 about 58.4% of all American homes subscribe to basic cable television services. Most cable viewers in the US are in the suburbs and tend to be middle class;[1] cable television is less common in low income, inner city, and rural areas.[1]
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Cable television in the United States in its first twenty-four years was used almost exclusively to relay over-the-air commercial broadcasting television channels to remote and inaccessible areas. It also became popular in other areas which were not remote, but whose mountainous terrain caused poor reception over the air. Original television programming came in 1972 with government deregulation of the industry.
While entrepreneurship played a key role in the early development of CATV,[2] it was not alone. Pioneering technical development was also part of what made that development possible, particularly the work of the Jerrold Electronics laboratory under the direction of Keneth Alden Simons.[3] (One instrument that came out of that period, the Jerrold 704B Field strength meter, was widely used in the cable TV industry for 20 years.[4])
During the television licensing freeze of 1948–1952,[5] the demand for television increased. Since new television licenses were not being issued, the only way the demand was met was by Community Antenna Television (CATV), as early cable was known (so named because of the literal sharing of a very large receiving antenna by an entire community).
Many people believe that the first system was started in Mahanoy City, Pennsylvania by John Walson to provide television signals to people who bought sets from his appliance store in Mahanoy City, charging $100 per hookup and $2 per month. Mahanoy City was ideally suited for CATV services, since broadcast television signals easily could be received via mountaintop antennas and retransmitted by "twin-lead" or "ladder-lead" cable to the valley community below (where broadcast reception was very poor). Walson's "first" claim is highly disputed, however, since his claimed starting date cannot be verified.[6]
In 1950, Robert Tarlton developed the first commercial cable television system in the United States. Mr. Tarlton organized a group of fellow television set retailers in Lansford, Pennsylvania, a town in the same region as Mahanoy City, to offer television signals from Philadelphia, Pennsylvania broadcast stations to homes in Lansford for a fee. The system was featured in stories in the New York Times, Newsweek and The Wall Street Journal. The publicity of this successful early system set off a wave of cable system construction throughout the United States, and Tarlton himself became a highly sought-after consultant.
Tarlton used equipment manufactured by a new company, Jerrold Electronics. After seeing the success of the Tarlton system in 1950, Jerrold President Milton Shapp reorganized his company to build equipment for the now-growing cable industry. In 1952, Tarlton went to work for Jerrold, helping to construct most of the major systems built by that company in the 1950s, including the landmark system in Williamsport, Pennsylvania. Tarlton was also responsible for training many of the major operators of cable systems in the 1950s. In 2003, Mr. Tarlton was inducted in the Cable Television Hall of Fame for his work building the first widely publicized cable television company in America.[7][8]
A CATV System was developed in the late 1940s by James F. Reynolds. The cable started in his town of Maple Dale, Pennsylvania, then moved to his hometown in Sandy Lake, further progressing east to Stoneboro and Polk, and north to Cochranton and Meadville. Large industrious companies then took the cable invention and began deploying it around the United States. James's company was incorporated as Reynolds TV Cable, in 1975 it was sold to Rick Reynolds. Rick sold the company at a later date.
Even though Eastern Pennsylvania, particularly the counties of Schuylkill and Carbon in the anthracite coal region, is known for having several of the earliest CATV systems, there were other CATV entrepreneurs scattered throughout the United States. One was James Y. ("Jimmy") Davidson of Tuckerman, Arkansas.
Leroy E. "Ed" Parsons is known for building the first system in the U.S. that used coaxial cable, amplifiers, and a community antenna to deliver television signals to an area that otherwise would not have been able to receive broadcast television signals. In 1948, Parsons owned a radio station in Astoria, Oregon. A year earlier he and his wife had first seen television at a broadcasters’ convention in Chicago. His wife wanted a set. In the spring of 1948, Parsons learned that radio station KRSC in Seattle—125 miles away— was going to launch a television station that fall. He found that with a large antenna he could receive KRSC's signal on the roof of the Astoria Hotel and from there he ran coaxial cable across the street to his apartment. When the station (now KING-TV) went on the air in November 1948, Parsons was the only one in town able to see television. Soon others in town wanted the same service, and Parsons helped them hook up to the system. He charged them a fee for his work and materials but never instituted a monthly service charge. In May 1968, Parsons was acknowledged as the father of community antenna television. Former Astoria resident Byron Roman was also involved in early cable invention and distribution.[9] According to MSNBC's Bob Sullivan, however, Parsons charged a $125 one-time set-up fee and a $3 a month service fee.[10]
Founded in 1988 by cable television operating companies, Cable Television Laboratories, Inc. (CableLabs) is a non-profit research and development consortium that has cable operators as its members. System operators from around the world are eligible to be members. Members dues are based on revenue generated from the cable services and businesses they sell to consumers. The CableLabs Board of Directors is composed of the Chief Executive Officers of member companies, thus affording business and strategic insight into the technology development process.
CableLabs works with members to determine what service requirements are to be supported by new technologies and new services. CableLabs then seeks to support those requirements through open interface specifications, written in tandem with members and suppliers. The specifications, in turn, take much of the guess work out of vendors' engineering decisions as to where cable operators are moving with many of their new businesses. These freely published specifications are available at www.cablelabs.com.
This process is designed to get products to market more quickly and at lower price points due to global economies of scale. Innovation is driven by a multiplicity of working relationships between suppliers and CableLabs staff: Visiting engineers and contributing engineers from these vendor organizations create a pool of thousands of individuals providing innovative input to the work performed at CableLabs. Development undertaken at CableLabs and endorsed by the cable industry has led to relationships among companies never before known within the cable market.
The key CableLabs technology projects– OpenCable (for interactive digital video and known as Tru2way in the retail market), DOCSIS for high speed Internet access/broadband, PacketCable for digital voice and multimedia, and Cable Information Services open the door to cable establishing a national footprint for rolling out new services. CableLabs' facilitation of intellectual property rights (IPR) discussions minimizes exposure to intellectual property risk for companies entering the marketplace.
CableLabs has approximately 160 employees with an additional on-site population of visiting engineers and consultants.
On August 1, 1949 T.J. Slowie, a secretary of the Federal Communications Commission (FCC), sent a letter to a CATV pioneer in Astoria, Oregon, L.E. Parsons, requesting he "furnish the Commission full information with respect to the nature of the system you may have developed and may be operating." He did. This is the first known involvement of the FCC in CATV. An FCC lawyer, E. Stratford Smith, determined the Commission could exercise common carrier jurisdiction over CATV. The FCC didn't act on this opinion and Smith later changed his mind after working in the cable industry for some time and testifying in Senate committee hearings. Senator and future Federal Communications Commissioner Kenneth A. Cox attended and participated in these hearings. He prepared a report for the Senate Committee on Interstate and Foreign Commerce against CATV and supporting the FCC policy of a television station in every community.
In 1959 and 1961 bills were introduced in Congress that would have determined the role of the FCC in CATV policy. The 1959 bill, which made it to the floor of the Senate, would have limited FCC jurisdiction to CATV systems within the contours, i.e. the broadcast range, of a single station. It was defeated. The 1961 bill proposed by the FCC would have given the Commission authority over CATV as CATV, and not as a common carrier or broadcaster. The Commission could then adopt rules and regulations "in the public interest" to govern CATV in any area covered both by CATV and broadcast television. No action was ever taken on this bill.
More important than Congressional action in determining Federal Communications Commission CATV policy were court cases and FCC hearings. Frontier Broadcasting Co. v. Collier was a hearing in which broadcasters tried to get the FCC to exercise common carrier authority over 288 CATV systems in 36 states. The broadcasters maintained that CATV went against the FCC's Sixth Report and Order, which advocated at least one television station in every community. In 1958, the FCC decided that CATV was not really a common carrier since the subscriber did not determine the programming. Carter Mountain Transmission Corp., a common carrier that already transmitted television signals by microwave to CATV systems in several Wyoming towns, wanted to add a second signal to two of the towns and add two signals to a previously unserved town. A television station in one town opposed this and protested to the FCC on the grounds of economic damage. A hearing examiner supported Carter Mountain but the Commission supported the television station. The case was taken to appeal, as most are, and the Federal Communications Commission won. "The fact that no broadcaster has actually gone off the air due to CATV competition at the time the government moved to expand its authority (nor have any since) did not stay the momentum for the expansion of regulatory authority. That some economic impact was merely plausible sufficed as the basis for government concern and government action." The FCC overruled a hearing examiner in favor of broadcasters again in the "San Diego Case". The CATV systems in San Diego, California wanted to import stations from Los Angeles, some of which could be seen in San Diego; the television stations in San Diego didn't want the signals imported. The television stations won, not allowing the signals on future cable lines in San Diego and its environs. The FCC's reasoning was to protect the present and future ultra high frequency stations in San Diego.
In the First Report and Order by the Federal Communications Commission on CATV the FCC gave itself the power to regulate CATV. This Report and Order was designed to protect small town television stations. It did this by imposing two rules, which in slightly altered form still stand: one requires that a CATV system carry all local stations in which the CATV system is in the A (best reception) contour of the station. The second prohibits the importation of programs from a non-local station that duplicates programming on a local station if the duplication is shown either 15 days before or 15 days after its local airing. This 1965 report reasoning is as follows: 1) CATV should carry local stations because CATV supplements, not replaces, local stations and the non-carriage of local stations gives distant stations an advantage since people will not change from the cable to the antenna to see a local station; 2) non-carriage is "inherently contrary to the public interest"; 3) CATV duplication of local programming via distant signals is unfair since broadcasters and CATV do not compete for programs on an equal footing; the FCC recommends "a reasonable measure of exclusivity".
The 1966 Second Report and Order made some minor changes in the First Report and Order and added a major regulation. This was designed to protect UHF stations in large cities. The new rule disallowed the importation of distant signals into the top 100 markets, thus making CATV at that time profitable only in cities with poor reception. In 1968 the Supreme Court upheld the FCC's right to make rules and regulations concerning CATV. In its decision on United States v. Southwestern Cable, the "San Diego Case", it said "the Commission's authority over 'all interstate ... communications by wire or radio' permits the regulation of CATV systems."
In 1969 the FCC issued rules requiring all CATV systems with over 3500 subscribers to have facilities for local origination of programming by April 1, 1971. The date was later suspended. In 1972, Dean Burch steered the FCC into a new area of regulation. It lifted its restrictions on CATV in large cities, but now put the burden of more local programming on CATV operators. In 1976, the FCC used its rule-making power to require that new systems now had to have 20 channels, and that cable providers with systems of 3500 subscribers or more had to provide Public, educational, and government access (PEG) services with facilities and equipment necessary to use this channel capacity.
Cable television programming is often divided between basic and Pay TV or premium programming. Basic cable TV networks are generally transmitted without any television encryption or other scrambling methods and thus anyone connected to the cable TV system can receive the basic channel. Basic cable networks receive at least some funding through "per-subscriber fees," fees paid by the cable TV systems for the right to include the television network in its channel lineup. Most basic cable TV networks also include advertising to supplement the fees, since their programming costs typically are not covered by per-subscriber fees alone.
The first basic cable network, launched via satellite in 1976, was Ted Turner's superstation WTCG (Turner Communications Group), Channel 17, Atlanta. Turner subsequently obtained call sign WTBS (Turner Broadcasting Corporation), and continued to operate it as a broadcast station operating on Channel 17, Atlanta. During the 1990s, the company split the Atlanta broadcast station from the satellite-delivered cable channel, renamed the cable channel "TBS Superstation," and marketed it to the cable TV industry as a "free market superstation."
The FCC's definition of "superstation" is a popular broadcast station whose signal has been uplinked to satellite for redistribution by local cable systems outside the station's local and regional coverage area. By that definition, "TBS Superstation" is not a superstation.
The second basic cable network was televangelist Pat Robertson's Christian Broadcasting Network, CBN Cable, a christian television satellite service he launched as a more efficient way to distribute the programming. For years, CBN Cable mixed religious broadcasting with classic television reruns to fill out its 24-hour schedule. The network changed its name to The Family Channel in the 1980s, and after its sale to American Broadcasting Company (ABC) and was renamed ABC Family.[11]
The origins of premium cable lie in two areas: early pay TV systems of the 1950s and 1960s and early cable (CATV) operators' small efforts to add extra channels to their systems that were not derived from broadcast signals.
In more recent years, premium cable refers to networks, such as Home Box Office (HBO), Cinemax, Showtime, Starz, and the Disney Channel (prior to 1997) that scramble or encrypt their signals so that only those paying additional monthly fees to their cable TV system can legally view them (via the use of a Cable converter box). Because their programming is commercial-free (except for promos in-between shows for the networks' own content), these Television network command much higher fees from cable TV systems.
In 1975, HBO was the first cable network to be delivered nationwide by satellite transmission. Prior to this, starting in 1972, it had been quietly providing pay programming to CATV systems in Pennsylvania and New York, using microwave technology for transmission. HBO was also the first true premium cable (or "pay-cable") network. However, there were notable precursors to premium cable in the pay-television industry that operated during the 1950s and 1960s (with a few systems lingering until 1980).
There are several features of modern cable programming that distinguish it from broadcast television. Because cable television carries more bandwidth than broadcast TV (10 to 20 times as many channels), there is channel capacity for more specialty channels catering to particular television marketdemographics or interests. Also, because cable TV networks rely much less, or in some cases not at all, on revenue from television commercials, they can feature programming (such as specialty sports television or programming in foreign languages) that draws much smaller viewer numbers than what television networks would find acceptable. And finally, since cable TV channels cannot be viewed by those (e.g., children) without the proper equipment, the Federal Communications Commission's (FCC) rules regarding acceptable content do not apply to cable TV networks, allowing greater freedom in the use of profanity, sex and violence.
The lack of restrictions on content has led to cable TV programs with more adult-oriented content. Premium cable networks have traditionally been the loosest with regard to content, since they require a cable converter to view, making it easier to restrict children’s access to them. Thus, one can find nudity, strong language, and even pornography on these networks. Basic cable, on the other hand, has not traditionally been as loose with regard to content. While there are no FCC rules that apply to content on basic cable networks, many basic cable networks self-regulate their program content because of viewer and advertiser expectations, particularly with regard to language and nudity. In recent years though, some basic cable networks have begun to relax their self-imposed restrictions, particularly late at night. Thus, programs like Comedy Central’s South Park often contain content deemed unsuitable for U.S. broadcast TV. Networks have recently aired R-rated movies, uncut, late at night. Other networks such as FX have begun to position themselves as a lighter version of premium stations by developing shows that attract such critical acclaim that sponsors will overlook controversial content for solid demographics. Turner Classic Movies (TCM), Independent Film Channel (IFC) and Sundance Channel are commercial-free basic cable channels that are uncensored and from time to time are known to show R-rated movies on their channel (which are far more prevalent on IFC and Sundance Channel, though all three channels do not use the Motion Picture Association of America (MPAA) ratings for any of its films, instead rating films using the TV Parental Guidelines) and films may feature nudity, sexual content, violence and profanity.
There has been a recent push to create laws that force cable providers to allow consumers to purchase individual cable TV channels "à la carte," i.e. to allow them to pick and choose which channels they would like to have available in their homes.[12] This is not likely to occur until digital cable television becomes popular, although technically, analog cable television would be sufficient if all channels were scrambled, as it is very difficult to notch out individual channels from a cable TV line without scrambling. For example, many cable providers have a "basic plan" consisting of local channels and a few national cable networks; and an "economy basic" plan consisting of local channels only. Both plans are supplied on the same cable, but the cable company can filter out the expanded channels to the "economy basic" subscribers using a low-pass filter, which filters out higher channels. Notch filters are available which can filter out a "notch" of channels (for example, channels 45-50 can be "notched" out yet the subscriber can receive channels below 45 and higher than 50). However, to do this individually for a single subscriber who wants many "notches," would be very difficult unless a scrambling system is used requiring a set-top box. These problems are alleviated with the use of digital cable, which requires a set-top converter box. This converter can be programmed remotely to allow or disallow access to channels on an individual basis. The use of IPTV (i.e., delivery of television over an internet or IP-based network) makes it even easier, since the provisioning of channels can be fully automated.
The current cable and satellite delivery systems provide an opportunity for networks that service niche and minority audiences to reach millions of households, and potentially, millions of viewers. Since à la carte could force each channel to be sold individually, many of these networks could face a significant reduction in subscription fees and advertising revenue, potentially driving them out of business. For these reasons, cable/satellite providers and programmers are reluctant to introduce an à la carte business model. Others however believe that by allowing a less expensive entry point into the cable marketplace the à la carte option would actually increase overall sales through the addition of new subscribers. Often when programming distributors would like to sell channels à la carte they are prevented by the contract that they have with the programmer which forces an all-or-nothing approach.[13]
On June 14, 2007, United States Representatives Dan Lipinski (Democrat, Illinois) and Jeff Fortenberry (Republican, Nebraska) introduced into legislation H.R. 2738, the Family and Consumer Choice Act of 2007, which intends to allow subscribers to choose and pay for only the cable television channels that they want to watch. Since January 2008, it is still in committee.[14]
Cable TV systems impose a monthly fee depending on the number and perceived quality of the channels offered. Cable TV subscribers are offered various packages of channels one can subscribe to. The cost of each package depends on the type of channels offered (basic vs. premium) and the quantity. These fees cover the fees paid to individual cable channels for the right to carry their programming, as well as the cost of operating and maintaining the cable TV system so that their signals can reach subscribers homes. Additional cable television franchise fees and taxes are often tacked on by local, state, and federal governments.
Most cable systems divide their channel lineups ("tiers") into three or four basic channel packages. A must-carry rule requires all cable TV systems to carry all full-power local commercial broadcasting stations in the designated television market on their lineups, unless those stations opt to invoke retransmission consent and demand compensation, in which case the cable provider can decline to carry the channel. Cable TV systems are also required to offer a subscription package that provides these broadcast channels at a lower rate than the standard subscription rate. The basic programming package offered by cable TV systems is usually known as "basic cable" and provides access to a large number of cable TV channels, as well as broadcast television networks (e.g., ABC, CBS, The CW Television Network, Fox broadcasting, NBC, Public Broadcast Service (PBS), local-access television channels, free public service channels such as C-SPAN and NASA TV, and several channels devoted to infomercials and home shopping to defray costs. Some providers may provide a small number of national cable networks in their basic lineups. Most systems differentiate between basic cable, which has locals, home shopping channels and local-access television channels, and expanded basic (or "standard"), which carries most of the better-known national cable television networks. Most basic cable lineups have approximately 20 channels overall, while expanded basic has channel capacity for as many as 70 channels. Under U.S. regulations, the price of basic cable can be regulated by local authorities as part of their franchise agreements, usually costing less than US$20 per month. Standard, or expanded basic, cable is not subject to price controls. In addition to the basic cable packages, all systems offer premium channel add-on packages offering either just one premium network (e.g. HBO) or several premium networks for one price (e.g. HBO and Showtime together). Finally, most cable systems offer pay per view channels where users can watch individual movies, live programs, sports, etc. for an additional fee for single viewing at a scheduled time. (This is generally the only place where pornography airs on American cable.) Some cable systems have begun to offer on-demand programming, where customers can select programs from a list of offerings including recent releases of movies, concerts, sports, first-run TV shows and specials and start the program whenever they wish, as if they were watching a DVD or a VHS tape. Some of the offerings have a cost similar to renting a movie at a video store while others are free.
Starting in the late 1990s, advances in digital signal processing (primarily Motorola's DigiCipher 2 video compression technology in North America) have given rise to wider implementation of digital cable services. Digital cable provides many more television channels over the same available bandwidth, by converting cable TV channels to a digital signal and then compressing the signal. Currently, most systems offer a hybrid analog/digital cable system. This means they offer a certain number of analog channels via basic cable service with additional channels being made available via digital cable service. Thus subscribers wishing to have access to digital cable channels must have a special cable converter box, (or, more recently, a "Digital Cable Ready" TV and a CableCARD) to receive them. Additional subscription fees are also usually required to receive these digital channels.
Digital cable channels are touted as being able to offer a higher quality picture than their analog counterparts. This is often true, with a dramatic improvement in chroma resolution (120 lines for NTSC versus 270 for digital). However digital compression has a tendency to soften the quality of the television picture, particularly of channels that are more heavily compressed. Pixelation and other artifacts are often visible.
Many cable systems operate as de facto monopolies in the United States. While exclusive franchises are currently prohibited by federal law, and relatively few franchises were ever expressly exclusive, frequently only one cable company offers cable service in a given community.[15] Overbuilders in the US, other than telephone companies with existing infrastructure, have traditionally had severe difficulty in financial and market penetration numbers. Overbuilders have had some success in the MDU market, in which relationships are established with landlords, sometimes with contracts and exclusivity agreements for the buildings, sometimes to the anger of tenants. The rise of Direct Broadcast Satellite systems providing the same type of programming using small satellite receivers, and of Verizon FiOS and other recent ventures by incumbent local exchange carriers such as U-verse, have also provided competition to incumbent cable TV systems.
To support themselves, some cable channels charge "subscriber fees" in addition to airing commercials. These fees are collected directly from the cable service provider, who passes the cost onto the customer. The fee the cable service provider must pay to a cable TV channel can vary depending on whether it is a basic or premium channel and the perceived popularity of that channel. Because cable service providers are not required to carry all cable channels, they may negotiate the fee they will pay for carrying a channel. Typically, more popular cable channels command higher fees. For example, ESPN typically charges $4.69 per subscriber per month [3] for access to its main channel alone (plus another $1.13 for the rest of its English-language channels),[4] the highest of any non-premium American cable channel and comparable to the premium channels. Other widely viewed cable channels have been able to command fees of over 50 cents per subscriber per month; channels can vary widely in fees depending on if they are included in package deals with other channels.
The fees for local broadcast stations vary depending on retransmission consent deals, and can range from a simple barter (carrying a digital subchannel or low-power sister station) to as high as $1.00 per subscriber per month. If a full-power local broadcast station does not have the clout to demand a retransmission consent fee but still wants to be carried on cable television, it can invoke must-carry and force cable operators to carry the channel; using must-carry, however, requires the station not collect any fees for the right to be carried on cable. Many cable channels do not charge subscriber fees, and in the case of infomercial, home shopping, and low-power channels not covered under must-carry, may even pay the cable provider for carriage.
Top 10 Largest Cable Companies by subscribers[5]
Top 10 Ad-Supported Cable Networks among Viewers—Summer 2009 Prime time[6]
Top 10 Ad-Supported Cable Networks among Viewers—Summer 2009 Total Day[7]
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