Episode 4: The Birth of Cable Television

Early cable television systems were little more than wire relays set up in small towns to receive broadcast signals from distant cities. The method was first used by early radio broadcasters in 1923. American inventor Philo T. Farnsworth performed one of the first public demonstrations of televised images in Philadelphia in 1934. NBC’s David Sarnoff followed with his own exhibition at the 1939 New York World’s Fair. By the late forties, with the advent of broadcast television, the New York Times reported several examples in which distant signals were brought into isolated communities via strategically placed antenna and wire strung from house to house. These early systems became known as "community antenna television", and later simply called "CATV".

Mahony City, Pennsylvania

One of the first recorded demonstrations of CATV occurred in Mahony City, Pennsylvania in the summer of 1947. John Walson, a maintenance man for Pennsylvania Power and Light Company, and the owner of an appliance store, had grown frustrated with his attempts to sell television sets to locals. The reception of network programs from Philadelphia, 85 miles away, in this Appalachian coal mining town was often sporadic, and sometimes non-existent. To boost TV sales, Walson erected an antenna on a nearby mountain and invited prospective customers to drive up with him for a demonstration. Once connected to a portable generator Walson kept in his truck, the antenna could receive up to three stations. These stations were usually viewed on a new television set driven up the mountain with the customer to complete the sale.

Walson's ambitious approach caused TV set sales to increase steadily. He then began stringing electrical wire down from the antenna to his warehouse, where demonstrations could be made to more customers. Interest was high enough that by the spring of 1948 Walson replaced his old antenna with a larger one, and substituted the electrical wire with a twin-lead strand. To this new wire he added amplifiers every five hundred feet to keep signal quality sharp. In time a surge in sales at Walson's appliance store and numerous inquiries about the service convinced him to expand the new television system.

In June, 1948 Walson convinced the manager of Penn Power and Light to letting him string wire along the company's power poles between the warehouse and the appliance store. Walson then put three television sets in the store's front window. Soon customers living along the wire run began asking him to bring service to their homes. As the demand grew, Walson replaced the twin-lead wire with more durable coaxial cable, and began charging customers $100 for each connection plus $2 a month for maintenance. Within a year, he had 727 subscribers.

By 1950 Walson's project had become a full time business. That year he signed an agreement with the power company allowing him to lease electrical poles for $1.50 each. By then a second community antenna system had been built to serve another section of Mahony City. This one was operated by William McLaughlin, the Chief of Police, but was partially owned by Jerrold Electronics Corporation, a large equipment supplier. This partnership became known as City Television Corporation of Mahony City. In 1953 the system offered five channels, and in 1970 was purchased by Walson. By then the ex-maintenance man's system had 85,000 subscribers.

Astoria, Oregon

At about the time Walson was erecting his first wire system, L.E. (Ed) Parsons, the owner of radio station KAST in Astoria, Oregon, was being convinced by his wife that television was the coming medium. Mrs. Parsons had just returned from the 1948 National Association of Radio and Television Broadcasters convention, and was determined to bring television to Astoria. Parsons had already tried to receive television signals from the nearest station, KRSC-TV, 125 miles away in Seattle, but to no avail. Parsons had performed a rigorous survey only to find that broadcast signals traveled to Astoria in narrow finger-like patterns. By chance these signals penetrated the nearby mountains just enough to give ghost-like reception to residents of the downtown hotel, where the Parsons lived. Although the signals were weak, Parsons received permission to erect an antenna on the hotel's roof and ran a wire into his apartment. Then he invited some friends over to view the first programs on Thanksgiving Day, 1948.

His friends' enthusiasm convinced Parsons to extend the make-shift system into the hotel's lobby and across the street to a music store. Like Walson, Parsons set up viewing areas, and began a new business. Unlike Walson, Parsons started a cooperative partnership in which owners could purchase lines and equipment for a connection fee and a monthly service charge. By 1949 the new cooperative was averaging 20 connections per month, and Parsons was forced to hire helpers to keep up with the growing demand.

Parsons' approach to community antenna television was different from Walson's in another important way. The radio broadcaster's instincts told him that his new relay system might be construed as unauthorized use of signals. In May, 1949, to shortcut any legal issues that may arise, Ed Parsons wrote Robert Priebe, the general manager of KRSC-TV in Seattle, explaining how his television system worked and asked for permission to rebroadcast television signals into Astoria. Priebe granted the request on three conditions: first, that the rebroadcasts be experimental: second, that there be no commercial use of the rebroadcast; and third, that permission would be revoked if the rebroadcast became detrimental to KRSC-TV.

The vagueness of these conditions was not lost on Parsons. What would be considered "detrimental" to the Seattle station? And what was meant by "commercial use of the rebroadcast”? In a sense, since Parsons was charging customers for connections, might a commercial use already exist? Despite the fact that Parsons implied the latter when he explained his fee structure, Priebe's reply included encouragement to continue the experiments and to keep him informed of Parsons' progress. When the Seattle station was sold in August, 1949, the new general manager reaffirmed the agreement.

Other community antenna operators seemed destined for bigger and better things. They were men who created the important links between the inventive loners providing television for friends and small-time entrepreneurs who recognized new markets.

Casper, Wyoming

One such individual was Bill Daniels. An ex-Golden Gloves middle-weight and Navy flyer who served in Europe and Korea, Daniels moved to Casper, Wyoming in 1952 to go into the insurance business with his brother. One evening, while passing through Denver on his way to New Mexico, Daniels stopped at a local bar to catch boxing televised from New York. The experience changed his life.

“In those days,...all three networks were on one station [in Denver], Channel 2. I found myself driving to Cheyenne and Denver on Wednesday and Fridays to watch the Pabst Blue Ribbon Wednesday Night Fights and the Gillette Cavalcade of Sports boxing shows...[That's when] I began to think there had to be a way to get TV to little towns like Casper.”

The solution for Daniels was to lease microwave service from the Denver phone company and form a partnership with a local TV engineer to offer community antenna service. After a Daniels' sales pitch, several oil men in Casper were interested enough to invest venture capital. Despite initially high overhead costs, including $8,500 a month rent to the phone company and a $125,000 cash bond, the partnership was almost an immediate success. Daniels described his first days.

“Once we got a cable hooked up into Casper, we leased space on phone company poles in the alleys...and ran the cable right into the homes. Hookup cost was $150. and the monthly charge was $7.50. It was a big hit. We couldn't wire homes fast enough.”

Refining his formula as he went, Daniels built several more antenna systems, while investing, selling and refinancing others. Soon his knack for salesmanship and business acumen attracted the attention of other CATV operators. In 1955 some of them founded the National Community Television Association, and one year later elected Daniels as the NCTA's second president. One of his first acts was to establish a lobbying office in Washington to represent the new industry's interests before Congress.

Daniels' term at the NCTA was important for another reason: it put him in contact with many people who wanted to buy, sell or invest in antenna or microwave systems. After his term as president ended, Daniels set up a brokerage firm in Denver to put such deals together. Acting as the principal middle man for many of the earliest transactions, Daniels helped create a new communications industry in the shadow of the major television networks. As one observer remarked,

“In the late '50's, when Bill Daniels began to interest investors in cable, he brought in people who were fairly sophisticated financially. From that point forward the industry became high profile, [and] more sophisticated.”


Winona, Minnesota and La Cross, Wisconsin

Edward Allen followed a path similar to Daniels. In 1958 Allen was the general manager and part owner of a radio station in Winoma, Minnesota. He was asked by early cable operators in nearby Mancato if they could hang test antenna on his radio tower. Allen's radio station had a six hundred foot antenna, which was situated on a six hundred foot hill. The cable people wanted to use the antenna to test a CATV system using television signals from Minneapolis, 100 miles away. But when a consulting engineer told the CATV investors that the signal quality was so poor no one would subscribe, the financing evaporated. Then Allen stepped in.

Allen talked to some friends, saying that CATV sounded like a good community service, as well as a good investment. Knowing little about community antenna systems, the investors asked Allen to get more information at the National Community Television Association convention in Washington, D.C. When Allen reported favorably, the investors agreed to provide the financing only if Allen left his radio station to run the new system. Allen agreed and built two of the first 12 channel systems in Winona in 1958 and in La Cross, Wisconsin in 1960.

In the early sixties Allen began using an innovative transistorized cable system developed by Spencer-Kennedy Laboratories of Boston, which did away with vacuum tubes and multiple amplifiers. In 1964 Spencer-Kennedy asked Allen to manage its five California systems east of San Francisco. Allen then sold his Minnesota and Wisconsin cable systems to Jack Kent Cooke. (Cooke was in the process of building ”Teleprompter”, and later purchased the Minneapolis Lakers and moved them to Los Angeles). In 1965 Allen moved to California just in time to witness the first battles over pay-tv, which will be discussed in a future episode. It was from this vantage point that the ex-radio broadcaster watched the new “Cable Television” industry begin its long political battle. Along the way, Allen co- founded the California Cable Television Association, remaining active until the late 1980’s.

The experiences of pioneers like Allen, Daniels, Parsons and Walson reflected the entrepreneurial spirit of cable television's early years. For the most part, however, cable’s free-wheeling days were short lived. By the late fifties large corporate investors, including many movie theater owners and radio broadcasters, were beginning to understand the potential of cable to circumvent the monopoly that broadcast television networks enjoyed in the United States. Soon the battle lines were drawn. People outside the television industry saw cable as a means to enter it. Those already in television began to perceive the new medium as a threat to their businesses. The protests of local television broadcasters, supported by a newly organized National Association of Broadcasters, a powerful lobby for the networks, eventually pushed the FCC to investigate.

Next Time: Cable TV Struggles to Survive

Copyright © 2007 R.E. Xavier