companies (telcos) have always figured in the history of U.S. television.
By the end of the 20th century they may attain the broadcast role
they hoped for as long ago as the 1920s.
earliest involvement of telephone companies in broadcasting dates
to AT and T's interest in radio. Before World War I, AT and T was
one among several companies actively experimenting with the hertzian
waves with a view to controlling what seemed to be an imminent wireless
communication era. AT and T's stake in the government-formed Radio
Corporation of America (RCA) in the early 1920s seemed to guarantee
the phone company a role in radio broadcasting, specifically with
respect to developing the international market, selling transmitters,
and providing anything that seemed to be telephony. Yet AT and T's
definition of telephony broadened in that era: in 1922 it offered
a special "toll broadcasting" service allowing people to use its
"radio telephony" channels to send out their own programs--for a
fee. At that time AT and T eschewed any interest in controlling
content, although it did use its long distance lines to broadcast
sports events, music, and certain other entertainment, avowing it
desired only its rightful opportunity to transmit. Nevertheless,
by 1924 the phone company had a regular radio programming schedule.
Its early control over broadcasting was broken up, however, by federal
government (Federal Trade Commission) objections to the apparent
growing monopoly power in radio. In 1926 a new structure was created
to answer the monopoly charges, relegating the phone company to
a role in transmission only while other companies involved in radio
(General Electric, Westinghouse and RCA) would form the National
Broadcasting Company and develop programming and an audience-oriented
and T, America's regulated, dominant national telephone carrier
operated in that capacity for several decades, conveying first radio
and later television signals across the country, enabling the formation
of national networks through its long distance links. The carriage
fees it accumulated were enormous, and as the sanctioned, monopoly
inter-state common carrier, AT and T had the business to itself.
a monopoly role that was at times contested. In 1948, for example,
the FCC debated procedures concerning intercity video carriage.
At that time the Commission espoused a rule reserving permanent
microwave frequencies to common--not private--carriers. This rule
thus sanctioned a de facto continued monopoly transmission
role in television for AT and T. The company's first serious setbacks,
however, did not occur until the mid-1970s.
the 1970s regulatory liberalizations in two realms undermined AT
and T's control of transmission services essential to television.
First, communication satellites, an outgrowth of the U.S. space
program, provided efficient and economical ways to transmit messages
or signals over long distances. Although AT and T retained a major
role for itself in international satellite communication through
provisions in the 1962 Communication Satellite Act, the stage was
set for other companies to enter into satellite services. Ultimately,
this development would provide crucial alternatives to television's
(and cable television's) continued reliance on AT and T for transmission.
In particular, telephone companies were unable to control domestic
satellite services, which became the preferred and cost-effective
method for broadcast and cable television networks to deliver their
signals, thus ending their dependence on AT and T for interconnection.
The successful launch of HBO nationwide on RCA's Satcom satellite
in 1975 bypassed AT and T and illustrated a future independent of
the telcos. The Public Broadcasting Service moved to satellite distribution
of its signal in 1978, followed by the major television networks'
migration from AT and T to satellites in the mid-1980s.
skirmishes between telcos and the young cable television industry
prompted the FCC (Federal Communications Commission) and Congress
to limit telcos' ability to own and operate cable television systems.
The FCC ruled in 1970 that telcos could operate systems only in
small, rural populations. In 1978, affirming that AT and T had abused
its power in overcharging companies that wished to use its poles
to establish cable television service, Congress enacted the The
Pole Attachment Act authorizing the FCC to "regulate the rates and
conditions for pole attachments," and effectively removing the telco's
control over a key access and right-of-way issue and allowing cable
television to expand under more favorable terms. Telephone company
ability to enter into or otherwise control this new television medium
clearly would be restrained. The cable television industry's insistence
on this is in part reflected in a section of the 1984 Cable Communications
Act that reiterated the 1970 telco-cable cross-ownership ban and
explicitly forbade telephone companies from offering cable television
telephone companies' interest in video services never died. If the
aforementioned two new communication technologies ultimately underscored
telcos' limited hold on an expanding set of services, they can also
be counted among the causes of a massive restructuring of the U.S.
telephone system under the 1982 Modification of Final Judgment (MFJ),
a federal court ruling that broke up AT and T's monopoly telephone
service in the United States. The result of a long-standing inquiry
into AT and T's vertical integration and possible abuse of power
under antitrust laws, the MFJ separated competitive long distance
(interexchange) service from monopoly-provided local service. AT
and T restructured, spinning off the "Baby Bells," regional companies
restricted to the provision of local telephone service (local exchange
companies). Both sets of companies, AT and T and other long distance
service providers (interexchange carriers) as well as the local
service providers again eyed the provision of video services as
one among other competitive possibilities.
MFJ put several restrictions on AT and T. The most notable was a
seven-year restriction from 1984 (effective date of the MFJ), on
entering into "electronic publishing." But in the late 1980s and
1990s AT and T, as well as several other telcos, quickly constructed
a number of strategic liaisons with cable television, computer,
software and even movie companies in order to position themselves
for new video and multimedia services. Such liaisons built on the
telephone companies' long standing interest in new media and their
abortive history of attempting to provide teletext or videotext
services in conjunction with publishers.
1988, amid the deregulatory fever of the 1980s, the FCC recommended
lifting the cable-telco cross-ownership ban, but the requisite Congressional
action was not forthcoming. Nevertheless, continued restructuring
proceeded, allowing the convergence of what had been conceived as
quite separate video, voice and data industries. In 1992 the FCC
issued its "Video Dialtone" order allowing telcos (such as the "Baby
Bells" or other local exchange companies) to provide the technological
platforms for video service to subscribers. Essentially this also
allowed them to enter the video services business, albeit without
permitting them to directly own programming. One year later, in
response to separate suits brought by telcos, several district courts
began lifting the cable-telco crossownership ban. The first such
suit was brought in 1993 (Chesapeake & Potomac Telephone Co.
of Virginia v. US, 830 F. Supp. 909) by Bell Atlantic, a telco
which also announced that same year a proposed merger with the largest
cable company in the United States, TCI, a deal which later collapsed.
Additionally, in the mid-1990s several telcos announced plans to
provide video services as cable companies (which would allow them
to own programming) rather than as telephone companies operating
a video dialtone platform.
new emphasis on creating a national information infrastructure,
the role of telephone companies in providing an array of new services,
including television, seems certain. Deregulating telcos and allowing
them to offer video services, alone or in conjunction with already-established
providers, has set the stage for a new television service and an
entirely new set of corporate powers.
E. Tube of Plenty: The Evolution of American Television.
London: Oxford University Press, 1975.
Mark. "Telcos Going Their Own Way Into Video." Broadcasting &
Cable (Washington, D.C.), 2 May 1994.
R. The Irony of Regulatory Reform: The Deregulation of American
Telecommunications. London: Oxford University Press, 1989.
Kim. "Telco's Army Poised For Assault on TV Entry." Broadcasting
(Washington, D.C.), 3 October 1988.
Michael G. "The Cable-Telco Cross-Ownership Prohibition: First Amendment
Infringement Through Obsolescence." Federal Communications Law
Journal (Los Angeles, California), December 1993.
Home Box Office; Radio
Corporation of America; Satellite;
States: Cable Television