Public Policy and the Evolution of Cable Television: 1950-1990

The cable television industry evolved from make-shift configurations of antennae and wires serving fewer than one hundred customers in 1950, to an industry serving 50 million subscribers and generating revenues of almost $18 billion by 1990 [30, 31]. Although entrepreneurial ingenuity and technological innovation provided the foundation for this extraordinary growth, the Federal Communications Commission (FCC), U.S. Congress, courts and municipalities also played critical roles in shaping the evolutionary path of the industry. Public policy with respect o cable television evolved haphazardly as a result of jurisdictional confusion, conflicting notions of the "public interest" in relation to the industry, and shifts in the relative power of key interest groups. In particular, broadcasters, who perceived the upstart business as a competitive threat, exerted significant pressure over time on policy makers to restrict the growth of cable in the name of protecting "free" (advertisersupported) television. Yet by the mid-1980s, the cable TV industry had successfully challenged the majority of regulatory constraints inhibiting its development, drawing heavily on freedom-of-speech arguments to support its positions. Yet ironically, by 1990, cable operators found themselves in the role of a media incumbent, aggressively obbying policy makers for regulatory protections against competitive threats from new wireless technologies and from local telephone companies. The main body of this paper is organized into four sections. Part I covers the first twelve years of the cable industry's existence; Part II encompasses the era of mounting regulatory intervention i the affairs of the industry through the early 1970s; Part III traces the tremendous advances in cable-related technology along with the steady erosion of public policy constraints during the subsequent decade and a half; Part IV highlights the slippery slope of industry success and excess in the late 1980s.