The Community Antenna Television Industry

Abstract

COMMUN ITY ANTENNA TELEVISION (CATV) originated after World War II when many communities found television reception to be unsatisfactory. Either communities were too far from the transmitter, or mountainous terrain interfered with reception of the television signal. In some communities, associations were formed to erect a large antenna which was then connected by coaxial cable to each subscriber. In other communities, appliance dealers, desiring to promote the sales of television sets, built CATV systems to provide satisfactory television reception for the town. Over a period of years there has been a trend towards consolidation in the industry. Several large holding companies have been formed and such public companies as H & B American, Teleprompter, and National General now own major chains of CATV systems. In addition, broadcasters such as RKO-General and, more recently, CBS, Cox, Reeves, and Crosely have made important investments in the industry. Today, approximately 1,450 CATV systems exist throughout the country serving more than 1,600,000 homes. New subscribers are being added at a rate approaching 15,000 per month. Many CATV systems have expanded beyond the original antenna-on-a-mountain operation. Often five to eight channels are available to subscribers and newer systems are capable of supplying twelve channels to the community. CATV systems often have multiple antenna installations and in some areas signals of distant stations are brought to the community through the use of microwave relays. In addition to commercial television, several systems have branched out to offer background music, educational television, and continuous weather information to their subscribers. Many people in the industry believe that CATV systems may one day serve as the nucleus for a pay television industry. Perhaps for this reason broadcasters have recently become very active in acquiring and building CATV systems. CATV systems were originally built in so-called fringe areas, but many systems now operate in mediumsized cities having one or two local television stations. In these cities, CATV offers subscribers additional channels which they could not otherwise obtain, as well as improved reception of the local signals. For example, in the San Diego, California, area Trans-Video Corporation offers subscribers three local television channels plus eight channels from Los Angeles. The system has grown rapidly even though many homes can receive good signals from one or two of the San Diego stations without joining the system. CATV systems, like telephone, electric, and gas utilities, are essentially businesses without competition. While there is always the possibility of technological obsolescence, as a practical matter the economics are against supplanting the wired cable antenna systems with a wireless means of bringing television signals to the set owner. When a community has poor television reception, the alternatives to CATV systems are additional local television stations, devices called and which are essentially slave rebroadcasting stations, and finally, the possibility of an earth satellite TV transmitter. All of these methods suffer from certain limitations. Boosters and translators are devices which pick up IV signals, amplify the signals and then rebroadcast them to the community. However, only a limited number of boosters and translators are in use since there is no way of denying their signal to members of the community who fail to pay for the service. The advent of the all-channel television set will result in construction of additional TV stations, operating on UHF channels. But, it is anticipated that economics of the television industry will limit UHF stations to those areas where their high cost of operation can be justified by a sufficiently large audience. Thus, CATV systems will indeed face UHF competition, but only in a limited number of specific markets. UHF reception also appears to be more critical than VHF and in most cases a separate antenna is needed. This could conceivably increase the demand for CATV service in some areas. In addition, CATV systems do not carry UHF signals as such, but translate these signals to VHF for distribution. CATV subscribers thus will be able to watch UHF programs on their present 12 channel sets without having to purchase special tuners. Satellite transmission of television signals capable of reception by home TV sets would require such large amounts of power that the idea is at present uneconomical and impractical. One must also consider that Congress has in the past been eager to preserve the autonomy of local television stations. Satellite transmission, with a virtually unlimited signal range, would mean the end of local television. CATV systems receive signals from the air and are Mr. Lamport is a member of the Corporate Finance Department of Burnham and Company. He is a director of Trans-Video, a CATV venture based in California.