The authors would like to acknowledge the comments
and suggestions of Candace Greene, Seymour Mandelbaum, and Robert
Warren.
Can Cable Keep Its Promise?
Though the promise of cable television may
well be realized, the current enthusiasm will be tempered by the
difficulties inherent in cabling big cities and the costs of providing
services: New York is a case in point.
Few technologies have been the subject of as many hopes and expectations
as cable television. If one were to believe its varied advocates,
cable TV could carry almost every international sports and cultural
event into the home, allow retail shopping from the living room,
permit instantaneous referenda on public issues, and assure emergency
monitoring of fire and burglar alarms. What more could anyone ask
for? With all those dazzling services, cable TV should be the financial
hit of the century. And, by all accounts, investment firms believe
it is.
New York City was once a pioneer in cable television. In 1970,
the City of New York awarded highly sophisticated franchises to
two cable operators, Sterling Information Services (now Manhattan
Cable Television) and Teleprompter, to wire the borough of Manhattan.
Now, more than ten years later, the city is in the process of granting
cable franchises for the other four boroughs. Many groups are actively
pressing for their piece of the action; jobs for minorities and
women, reserved channels for local groups and educational institutions,
and video production facilities for community-based programming.
Naturally, cable operators competing for franchises are promising
virtually all these services and more; in many cases, whatever it
takes to get the franchise with little regard for the cost of fulfilling
such promises.
It is just possible that the wishful thinking about cable television
will come true. But, if experience is any guide, the current enthusiasm
about cable TV will be severely tempered by the difficulties inherent
in cabling big cities and the cost of providing the wide range of
services that are envisioned.
The Early Years
Despite the recent enthusiasm, cable television is not new. Unlike
most technological innovations, this one started in small towns
during the 1940s where natural features such as mountains interfered
with the reception of over-the-air broadcast signals. Originally
called "community antenna television systems" (CATV), cable systems
deliver programs by using a specialized receiving antenna to pick
television signals out of the air. The antenna sends the signal
to a central distributing facility where the signal is filtered,
amplified, and then transmitted through the coaxial cable to the
television sets of subscribers.
Some of the same reception problems occur in cities where tall
buildings interfere with color television signals. In many cities,
however, cable wires are installed in underground ducts rather than
across utility poles thus incurring considerably higher construction
costs than those faced in outlying areas.
In addition to providing better reception, the appeal of cable
television lies in the following features: 1. the large carrying
capacity of the coaxial cable (up to 58 channels on a single cable);
2. the capability to discriminately deliver programming to subscribers
and thus charge on a per-channel or per-program basis; 3. the potential
for two-way services; and 4. the possibility of providing low-cost
access to the television medium. Given this rich potential, it is
not surprising that many saw cable as a solution to a variety of
problems ranging from education for the homebound to continuous
monitoring of residential energy systems.
During the sixties and early seventies, consulting firms and task
forces predicted the rapid growth of cable and described the social
benefits it would bring forth. Several theorists argued that cable
could be used to restructure public services and enhance citizen
access to information while others felt that the substantial growth
of private, home-based cable services was needed before any of cable's
public benefits could be realized. The Sloan Commission on Cable
Communications estimated that "By the end of the decade (1980),
or perhaps shortly thereafter, cable penetration will be in the
general range of 40 to 60 percent, and that in metropolitan areas
penetration is likely to be substantially higher." The Ford Foundation
established the Cable Television Information Center to assist cities
in the franchising process and the National Science Foundation funded
several large-scale experiments to evaluate public uses of two-way
cable.
Until the mid-1960s, the Federal Communications Commission (FCC)
considered cable to be outside its jurisdiction. To start a system,
a cable operator merely needed to obtain a franchise from the local
government, build the physical plant, and solicit subscribers. Revenue
was obtained from subscribers who paid initial installation fees
and a monthly service charge. In 1966, the FCC assumed jurisdiction
over cable TV in response to pressure from broadcasters who saw
cable as a threat to their major urban markets. During the next
decade, the FCC imposed severe restrictions on the types of programs
that cable operators were permitted to transmit. In 1972, the FCC
proposed a broad set of requirements for cable systems which had
the effect of substantially limiting cable growth.(1) The 1972 rules
(many of which were subsequently modified) required local origination
programming, dedicated channels for governmental and educational
institutions, and two-way capability in cable systems, and set limits
on municipal franchise fees.
Prospects for Cable
There are approximately 18 million cable-subscribing homes in the
United States today representing about 22 percent of all television
households. Until recently, cable systems have been of modest size
and technical capability. By 1979, only twelve of the more than
4,000 cable systems in the country had 50,000 or more subscribers.
More than 70 percent of those systems had from six to twelve channels;
12 percent had twelve to twenty channels, and only 14 percent carried
twenty channels or more.
This situation is about to change significantly. Cities across
the country are in the process of granting franchises for the construction
of cable systems. Almost all of these systems will have 35 channels
or more plus the capability for two-way digital services. In some
cities, cable operators are planning to build systems with multiple
trunks providing over 100 channels plus two-way video capability.
By the end of the decade, approximately 30 percent of all television
households are expected to have cable.
The projected growth of cable in urban areas is largely due to
recent technological developments such as the use of communications
satellites for the transmission of television signals and the deregulation
of cable as the result of judicial decisions and policies adopted
by the Federal Communications Commission in the late 1970s. The
relaxation of federal rules governing cable and the advent of low-cost
satellite receiving equipment has led to the emergence of profitable
new cable networks and super stations. Today, cable is being marketed
as a means to receive more varied programming than is available
through traditional broadcast networks, and consumers are showing
a remarkable willingness to pay for the additional programming.
Cable in the Marketplace
In contrast to the early seventies, when the driving force behind
cable was the belief that it was a technological shortcut to solve
urban problems, the basis for cable's growth in the eighties is
the capacity of pay TV to cater to the increasing segmentation of
American tastes and preferences. Pay cable was first started in
1972 by Home Box Office (HBO), a small firm that got cable operators
to show movies on a special cable channel. Home Box Office was subsequently
acquired by Time Inc.
After the RCA communications satellite was launched in 1975, it
became economically feasible to transmit cable programming by satellite.
HBO began distributing its programs by satellite and the FCC subsequently
approved the use of low-cost antennas for satellite reception. Soon,
competing pay TV programs as well as other non-pay programs (such
as religious services and sports events) were being distributed
by satellite.
In just five years, from 197510 1980, the number of pay TV subscribers
nationwide grew from 265,000 to over 7 million.(2) Cable operators
typically split the subscriber revenues with the pay TV programmer.
Today, HBO has about 70 percent of the pay cable market, followed
by Showtime and The Movie Channel. Each of these pay systems is
owned, at least in part, by one of the major cable multi-system
operators (MSO). Time Inc., the owner of HBO, also owns American
TV and Communications (ATC), the second largest MSO; Showtime is
jointly owned by Viacom and Teleprompter, the nation's largest MSO,
and The Movie Channel is run by Warner-Amex Cable Communications,
the nation's fourth largest MSO.(3) In 1979, more than a third of
all cable systems carried pay programming and 40 percent of all
subscribers to whom pay TV was available subscribed to it. Today,
cable operators are selling packages of cable services as "tiers"
which include both pay and non-pay channels at a set fee per tier.
Numerous pay TV programming companies have been created, including
offshoots of ABC and CBS as well as such entities as the Rockefeller-sponsored
RCTV, which has recently purchased exclusive rights to all BBC productions.
The remarkable aspect of pay cable is the fact that it is generating
a powerful set of alternatives to the major broadcast networks simply
as the result of private sector initiatives without any deliberate
public policymaking. As a recent federally-funded report notes,
"This expansion of U.S. television, so earnestly sought for so long
by many parties concerned with monopoly control of over-the-air
TV, and so often urged as the proper destiny of cable, came without
extensive government or civic intervention when technology and demonstrated
consumer demand provided an economic underpinning."(4) Public Uses
Pay TV's success has far overshadowed the development of community
and public uses of cable systems. With the notable exception of
the Cable News Network and C-SPAN, the cable-industry-sponsored
system for televising congressional sessions, cable's potential
as a means to strengthen citizen involvement in public affairs has
yet to be fulfilled. Although many cable operators do televise such
local events as high school sports, campaign debates, and town meetings,
the cable systems with extensive schedules of locally-oriented programs
tend to be the exception, not the rule.
Apart from building local support and good will, cable companies
have little reason to invest in such community programming since
it can't match sports or movies as a revenue producing source. Admittedly,
there are a handful of systems such as ATC'S Berks Suburban Cable
TV in Reading, Pennsylvania, and Warner-Amex's QUBE in Columbus,
Ohio, where cable companies actively foster community-oriented programming.
But in most cases, the success of local programming is due to the
energy, skill, and resourcefulness of civic groups working with
limited funds and technical equipment. Of more importance, perhaps,
is the fact that few local governments have taken the initiative
to develop uses of cable that can complement their existing methods
of service delivery and communication with citizens. Municipal officials
have traditionally regarded cable television as a source of revenue
or as a way to provide more varied entertainment on television.
Most have little understanding of how telecommunications can be
used by public agencies and citizens. Moreover, urban bureaucracies,
faced with day-to-day brush fires and budgetary cut-backs, are unlikely
to invest resources in a technology which seems far-removed from
the rigors of administrative life. And cable operators, unlike their
more sophisticated counterparts in the telephone company or computer
industry, do not aggressively promote the application of cable to
public services.
The New York City Experience
New York's experience with cable television reflects the cyclical
pattern of cable activity in the nation as a whole. The first local
use of cable began in 1961 when Sterling Information Services was
authorized by the Board of Estimate to lease underground duct space
in Manhattan from the Empire City Subway Company, a subsidiary of
New York Telephone. The city gave Sterling permission to provide
specialized local public service and commercial programs in the
area from 23rd to 86th streets. Sterling established a closed circuit
cable service called Teleguide, which carried information about
local events as well as UPI news and stock reports to about 40 hotels
in that designated area.
Under New York City's governmental structure, cable television
fell under the jurisdiction of the Bureau of Franchises, an independent
office reporting directly to the Board of Estimate, which has authority
over commercial uses of public streets, such as bus shelters and
private bus lines. In 1965, the Board of Estimate authorized Sterling
Information Services and Teleprompter to wire Manhattan and Bronx-CATV
Enterprises to wire the Riverdale section of the Bronx. The Bureau
of Franchises had previously recommended that Sterling alone be
given the franchise for Manhattan, but heavy lobbying by Teleprompter
resulted in the carving up of Manhattan into two franchise areas.
Sterling got all of Manhattan from the Battery to 79th Street on
the West Side and 86th Street on the East Side. Teleprompter was
given the area north of those boundaries. The cable systems were
to provide clear television signals, and the franchises, which were
initially for a two-year period, were subsequently renewed for another
two years.
Realizing the potential importance of cable television, the Lindsay
administration established an Advisory Task Force on CATV in 1967
headed by Fred Friendly, former president of CBS News and then communications
advisor to the Ford Foundation. The Friendly Report, issued in September
1968, recommended that New York be wired for cable, that it could
be achieved within two or three years, that the city be divided
into from nine to twelve service areas with only one cable system
in each service area, and that cable systems reflect state-of-the-art
technology (a vague term which is often subject to competing interpretations).
The report also called for the creation of a new Office of Telecommunications
reporting directly to the mayor and Board of Estimate. Morris Tarshis,
the director of the Bureau of Franchises, served on the task force
and prepared a separate statement outlining his views on cable policymaking
and suggesting that the proposed Office of Telecommunications be
part of the Bureau of Franchises. Two years after the Friendly Report
came out, the Board of Estimate granted identical twenty-year franchises
to Teleprompter and Sterling Information Services. Those contracts,
which were negotiated by Tarshis and then Assistant Corporation
Counsel Sheila Mahony, were considered to be the most advanced cable
franchises in the nation.
The contracts set forth specific conditions as to the number of
channels to be provided and the allocation of channels for use by
the cable operator, local citizens, and city government. A free
cable outlet was to be installed on each floor of city prisons,
reformatories, day care centers, hospitals, police and fire stations,
detention centers, and public schools. The city was to receive 5
percent of all subscriber fees and 10 percent of all other receipts.
The two systems were to be interconnected on all cable channels
specified by the city.
Other provisions included the division of each system into ten
subdistricts within four years for the purposes of local programming
and the wiring of a production facility designated by the city in
each franchise area. Editorial control over the programming on the
public access channels was also prohibited. Sterling and Teleprompter
were also obligated to match any new city agreements negotiated
with other systems with regard to subscriber rates, channel capacity,
two-way trans) mission, and city discounts. In the event of noncompliance
with any of the major franchise requirements, the city retained
the right of cancellation.
Communities across the country and the Federal Communications Commission
regarded the New York City franchises as a prototype for future
cable regulation. The city's franchises were "grandfathered" under
the FCC rules and avoided some of the restrictive policies subsequently
proposed by the FCC. In 1971, following Tarshis' recommendation,
the Board of Estimate decided to create an Office of Telecommunications
within the Bureau of Franchises. Herbert Dordick, a California based-engineer
with broad experience in telecommunications, was brought in to head
the new office in 1972.
The responsibilities assigned to the Office of Telecommunications
included enforcement and regulation of the cable franchises, planning
for future cable systems, and development of municipal uses of cable.
Handicapped by limited autonomy, Dordick left at the end of 1973
and the job was taken by Leonard Cohen, an engineer who had served
under Dordick. The city's elected officials maintained their involvement
with cable through an Advisory Committee to the Office of Telecommunications
which consisted of eight appointees representing each member of
the Board of Estimate. The committee, working without a budget or
staff, met on a monthly basis to discuss regulatory and policy issues.
An additional element in the regulatory apparatus was added in
1972 when the State Commission on Cable Television was established.
The growing state and federal presence was a response to the new
awareness of cable television and the emerging prospects for a "wired
nation." The state commission formulated procedures for franchising
and requirements for cable construction and programming as well
as imposing fees on cable operators.
Cable in Manhattan
Building the Manhattan cable systems turned out to be far more
difficult than anyone had foreseen. The Empire City Subway Company
objected to leasing additional duct space for cable, claiming that
they had to reserve space for maintenance; landlords refused access
to cable companies, until state legislation was passed to override
them; numerous technical and bureaucratic obstacles further delayed
construction. For example, the Building Department had to grant
permission for the cable companies to open up streets to lay cable.
Despite these impediments, the system expanded its programming and
number of subscribers. In 1971, Sterling began cablecasting the
home games of the New York Knickerbockers and New York Rangers,
and public access programming started on two cable channels.
In 1973, Time Inc. bought Sterling and changed its name to Manhattan
Cable Television, Inc., (MCTV). Because of high construction costs
and limited subscriber growth both systems operated at a deficit
and rate increases were granted in 1974 and 1975 to $9 and then
$10 per month. For a short period. Time Inc. tried to sell MCTV
but after failing to do so, began to invest substantial resources
and installed new management to improve the cable company's operations.
Teleprompter, once a leader in the cable industry, developed management
problems once its founder, lrving Kahn, left the company. Partially
owned by Hughes Aircraft, Teleprompter suffered from corporate neglect
for many years and has recently been acquired by Westinghouse Electric
Corporation.
Although the original franchises had prohibited pay movies from
being shown on cable, they were amended in 1975 so that both systems
could carry Home Box Office. In addition, a leased public access
channel was opened on MCTV at a rate of S25 per half hour of programming
in 1976. Advertising could be sold for programs on this channel
at whatever the market would bear. Programs on the two public access
channels were and continue to be extremely variable in terms of
quality and content. Access programs deal with almost any conceivable
subject ranging from video art to neighborhood problems to exotic
call-in programs and consumer information on such esoteric topics
as the price, quality, and availability of marijuana. Often, it
seems that every self-indulgent eccentric in New York is on late
night cable. The access programs which receive the most prominence
are pornographic: "Midnight Blue," produced by the editors of Screw
Magazine and "The Ugly George Show." These programs, which are
supported by advertising, have now moved to the leased channel.
If cable were to provide an alternative to the conventional broadcast
networks, it has certainly done so - at least in the areas of social
commentary and pornography.
Surprisingly, the growth of access has occurred in the face of
numerous technological and organizational obstacles. For many years
there was no program guide listing the schedule of cable programs
and word of mouth was the primary way of learning what was on cable.
Only Teleprompter had a local production studio as required by the
franchise but it was located somewhat inaccessibly in upper Manhattan.
Many of the live access programs on MCTV were produced in a private
production facility which charged nominal rates but had poor technical
facilities.
The cable companies themselves have developed new services. MCTV
leases channel space to several banks for data transmission, and
a closed circuit security system has been installed on Roosevelt
Island. Teleprompter offers a guard channel in those apartment buildings
where all of the tenants subscribe to cable, which allows would-be
visitors to be seen over television. Until very recently, when the
Department of General Services issued a report on institutional
uses of cable, the city government has done little to foster municipal
uses of cable. The Office of Telecommunications operates on a modest
S60,000 annual budget and focuses almost entirely on regulatory
issues and subscriber complaints rather than planning or policymaking
issues. Programming on the channel designated for city use was initiated
in 1977 with funding from MCTV. Since then, a non-profit corporation.
Channel L Working Group, Inc., has been created by local citizens
to develop community programs and has been supported by MCTV and
Teleprompter on a voluntary basis. The Channel L Working Group provides
technical assistance for programs featuring government agencies,
elected officials, community boards, and non-profit organizations.
According to a 1979 survey, 6 percent of cable subscribers regularly
watched Channel L (when it only carried three and one-half hours
of live programming per week). Channel L currently programs 32 hours
of live and taped programming per week.
Until 1979, both cable systems operated at a deficit, and some
of the public provisions of the original franchises have yet to
be implemented such as subdistricting and a local production studio
in the MCTV area. Portions of Manhattan are still not wired, in
part because landlords can block passage of cable through their
premises if the line is not being used to provide service to a subscriber
in their building. This frequently occurs in areas such as SoHo
where commercial and industrial structures exist side-by-side with
converted residential lofts. Further, cable companies are understandably
reluctant to go into unsafe neighborhoods where their trucks and
personnel are vulnerable to robbery and theft.
By 1981, the two cable companies in Manhattan had a total of 185,000
subscribers, approximately 25 percent of the 700,000 households
in the borough. Teleprompter had 65,000 and MCTV had 120,000. The
MCTV franchise area, encompassing the city's central business district
and most of the borough's middle and upper income populations has
clearly been more favorable than the area covered by Teleprompter.
MCTV has also been more aggressive than Teleprompter in developing
new services. For example, MCTV carries the Cable News Network while
Teleprompter does not. MCTV is expanding its channel capacity from
26 to 35 channels and plans to add new pay services to its current
HBO offerings. Further, it is acquiring a mobile van for local program
origination and building a production studio.
The Other Boroughs
Once the revenue generating possibilities from pay TV became apparent,
the city opened up franchise procedures for Queens, which has more
than two million residents. After long negotiations with active
Queens community groups, Knickerbocker Communications, Inc. (a subsidiary
of ATC) was awarded the franchise for Queens in 1978. An unsuccessful
competitor, Orth-O-Vision, challenged the decision in a lawsuit
claiming that the city did not follow the Urban Land Use Review
Process as required by the revised City Charter. The city's corporation
counsel agreed as did the State Supreme Court. The Queens franchise
was terminated and the entire franchise process was re-opened.
As the result of the Orth-O-Vision case, cable policymaking temporarily
shifted to the City Planning Commission, headed by former Deputy
Mayor Herbert Sturz. In early 1980, Sturz engaged the Washington,
D.C., law firm of Arnold and Porter (with SI 5,000 from the Markle
Foundation) to review the status of the city's cable franchising
position. Their report was submitted in March 1980, and in April
1980, the Board of Estimate hired Arnold and Porter to develop a
plan for the city's cable franchise process at a cost of $118,000.
The two-volume plan, prepared with the assistance of several city
agencies, was issued in September 1980 and set forth the technical
configuration for future cable systems, the criteria to be used
in evaluating franchise proposals, and policies for cable regulation
and rate setting. The plan recommended that future cable systems
have 70 channels consisting of two subscriber cables as well as
an institutional cable linking all public offices and facilities.
The basic subscriber package was to consist of 27 channels. The
plan estimated that it would take six to eight years to complete
cable construction in the city and, pointing to the size and scale
of New York, said that "the construction of cable television systems
in the city will probably be as, if not more difficult than construction
in any other jurisdiction in the United States."
Serious questions have been raised about the use of Arnold and
Porter as consultants to the city in its cable franchise process.
Morton Hamburg, a prominent communications attorney and columnist
for The New York Law Journal, has suggested that public funds would
be more wisely spent on strengthening the city's own in-house cable
policymaking capacity. In addition, the State Cable Commission severely
criticized the Arnold and Porter plan for "an inappropriately conservative
attitude towards the service and system design demands that the
city should make upon franchises" and urged the city to explore
"the possibility of a publicly owned and financed system, leased
and privately operated by the cable companies."
In November 1980, the city created a Cable Working Group consisting
of representatives of Board of Estimate members and other city agencies
to formulate specific franchise requirements and evaluate the nineteen
franchise proposals submitted to the city. Without competitive bidding,
the firm of Arnold and Porter was engaged to manage and staff this
body at a fee of $650,000. The basic issues facing the city now
are how many franchises should be granted, to which companies, in
what areas, and with what specified services. There are a number
of trade-offs between an advanced technological capability and the
cost to subscribers.
Shaping the Future
Today, New York is in a superb position to formulate cable policy
because it has more than ten years of cable experience to draw upon.
Developing the Manhattan systems has demonstrated the limits and
potential of municipal regulation, the unanticipated growth of new
cable programming, and the possibilities for citizen-generated programming.
Unlike other cities. New York is not operating totally in the dark.
It has the benefit of first-hand experience in dealing with the
complex interplay of technological, economic, and regulatory factors
which shape the form of cable. Individuals and organizations rarely
get a second chance at the same task. New York has that opportunity
and it should remember that a franchise is only a beginning: it's
the implementation that counts. In designing and carrying out future
cable policies, the city should keep the lessons of the past in
mind:
Cable operators have been notorious for overpromising and underperforming.
There are no cable systems in the United States today that have
35 channels and full two-way capability; therefore, any advanced
cable system will undoubtedly face technical dilemmas and unforeseen
problems. Further, it's difficult to build anything in New York,
and installing a sophisticated cable system requires skilled labor,
access to materials, and patience while waiting for permits and
authorizations. The equipment may be on the shelf, but it is not
in the streets. Overly optimistic construction timetables should
be viewed with caution. Franchises should be awarded on the basis
of performance (in New York and other cities), not just promise.
With the deregulation of cable by the FCC, local governments are
now pivotal actors in establishing requirements governing cable
systems. New York City has a remarkable record of failing to achieve
its goals in regulating private sector activities. Just look at
our taxicabs, fire codes, and street vendors. Elaborate rules need
regulatory personnel, and hiring technically competent people costs
money. Politicians aren't likely to spend scarce municipal funds
for such regulatory purposes when the public demands more police,
sanitation workers, and teachers. Further, municipal regulatory
structures may be inappropriate to an evolving technology such as
cable. The city should design a self-regulating system, based upon
incentive systems and performance standards rather than rules and
restrictions.
There are serious constraints on the range of public services
that can be provided over cable. In part this is due to the fact
that it is unlikely that all New York City households will ever
be wired for cable. Cable companies have claimed that it is dangerous
to lay cable in some neighborhoods. The residents of these neighborhoods
are often those who depend the most on public services. In areas
where cable wiring is limited, emphasis should be placed on booking
up community facilities and public places. This limitation doesn't
mean cable's role in municipal services should be dismissed. Rather,
the city should start to use cable for management and administrative
functions. The Philadelphia Police Department holds arraignments
over closed-circuit cable. Why can't New York use a similar system
instead of transporting prisoners back and forth between the courts
and detention centers? Data transmission and teleconferencing over
cable should also be tried in an effort to improve municipal government
productivity.
Use cable for economic and community development. New York's vast
number of performing arts groups could provide the critical mass
for a cultural programming cable network. Both the city and arts'
institutions would benefit if cable served as the impetus for establishing
a major video production industry in New York. In addition, local
businesses should be encouraged to use cable and perhaps give New
York a comparative advantage over other urban areas with regard
to communication facilities and information costs. Finally, new
immigrant groups, Hispanics, Russians, Asians, and others are a
vital element of the city's population but are poorly served by
conventional media. These groups are both a valuable resource and
untapped market for cable programs.
Channel space should not be allocated all at once. Cable is a
dynamic medium; there is simply no way to predict the choice of
technologies and pattern of consumer preferences for future cable
services. Some observers believe cable will only bring us more movies
and sports, others see security and alarm systems as the wave of
the future. (It's not clear who would answer these alarms in New
York, since the city can't handle the current number of electronically-transmitted
alarms it receives.) By the time New York's cable systems are in
place, the technology and economics of telecommunications may be
dramatically different than they are today. Therefore, the city
should reserve some decisions for the future rather than trying
to decide everything before the industry has really matured. The
development of telecommunications is replete with new technologies
that have failed to achieve their intended purposes but rather have
performed far more vital functions than those originally conceived:
the telephone, at its inception, was to provide transmission of
live concerts; few anticipated the demand for people to communicate
by voice over long distances. Given the emergence of new technologies
which compete with cable, such as low-powered television stations,
video disks, direct satellite-to-home televisions, and optical fiber
systems, the precise form that cable will take is far from certain.
Ten years ago, there was great euphoria about the public purposes
cable television would serve. Today there is a similar aura surrounding
the private home-based services of cable. Almost daily, a new venture
is formed to develop cable programming or a large media conglomerate
acquires a cable company. Advertisers view cable as a means to reach
an upscale market. The print media perceive cable as a way to transmit
information electronically. And sports and cultural entrepreneurs
regard cable as a way to expand their paying audience without significantly
higher production costs.
In formulating policies for cable, the experiences of the past
should be as much of a guide as our hopes for the future. The history
of cable demonstrates that regulations - no matter how well-intended
- are difficult to enforce, that public uses of cable are rarely
developed by municipalities, that the dynamics of consumer demand
for cable are by no means clear, and that public policies should
be designed to encourage rather than impede the timely construction
of cable systems throughout the city.
Endnotes
1. For a superb analysis of the FCC'S cable regulations, see Monroe
E. Price, "Requiem For the Wired Nation: Cable Rulemaking at the
FCC," Virginia Law Review, April 1975. Vol. 61, no. 3.
2. The subscriber to cable television usually pays a one-time installation
fee plus a monthly fee for "basic" service which includes the commercial
broadcast channels plus other programming made available by the
cable operator. Pay cable refers to an additional fee which the
subscriber pays for one or more channels carrying movies, concerts,
shows, etc.
3. The data and analysis of pay TV is drawn from a study by Ralph
Lee Smith and Raymond B. Gallagher, The Emergence of Pay Cable
Television. Final Report. Prepared for the National Telecommunications
and Information Administration, July 1980.
4. Ralph Lee Smith and Raymond B. Gallagher, The Emergence of
Pay Cable Television. Overview, p. 6.
Originally published in New
York Affairs
Volume 6, Number 4.
New York University. 1981