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Cable television first became available in the United States in 1948.[1] Data by SNL Kagan shows that as of 2006 about 58.4% of all American homes subscribe to basic cable television services.[needs update] Most cable viewers in the U.S. reside in the suburbs and tend to be middle class;[2] cable television is less common in low income, urban, and rural areas.[2]

According to reports released by the Federal Communications Commission, traditional cable television subscriptions in the US peaked around the year 2000, at 68.5 million total subscriptions.[3] Since then, cable subscriptions have been in slow decline, dropping to 54.4 million subscribers by December 2013.[4] Some telephone service providers have started offering television, reaching to 11.3 million video subscribers as of December 2013.[4]

In 1969, the FCC issued rules requiring all CATV systems with over 3,500 subscribers

In 1969, the FCC issued rules requiring all CATV systems with over 3,500 subscribers to have facilities for local origination of programming by April 1, 1971; the date was later suspended. In 1972, Dean Burch steered the FCC into a new area of regulation. It lifted its restrictions on CATV in large cities, but now put the burden of more local programming on CATV operators. In 1976, the FCC used its rule-making power to require that new systems now had to have 20 channels, and that cable providers with systems of 3,500 subscribers or more had to provide Public, educational, and government access (PEG) services with facilities and equipment necessary to use this channel capacity.

During the early 1980s, various live local programs with local interests were rapidly being created all over the United States in most major television markets. Before there was public access TV, one of Time Inc.'s pioneering stations was in Columbus, Ohio, where Richard Sillman becam

During the early 1980s, various live local programs with local interests were rapidly being created all over the United States in most major television markets. Before there was public access TV, one of Time Inc.'s pioneering stations was in Columbus, Ohio, where Richard Sillman became the nation's youngest cable television director at age 16.[13]

Cable television programming is often divided between basic and premium television. Basic cable networks are generally those with wide carriage on the lowest service tiers of multichannel television providers. In the era of analog cable television, these channels were typically transmitted without any encryption or other scrambling methods. These networks can vary in format, ranging from those targeting mainstream audiences, to specialty networks that are focused on specific genres, demographics, or niches. Basic cable networks depend on a mix of per-subscriber carriage fees paid by the provider, and revenue from advertising sold on the service, as their sources of revenue.

One of the first "basic cable" networks was TBS—which was initially established as a satellite uplink of an independent television station (the present-day WPCH-TV) in Atlanta, Georgia. TBS would serve as the starting point for other major basic cable ventures by its owner, Ted Turner, including CNN—the first 24-hour news channel. Another early network was the CBN Satellite Service, a Christian television service launched by televangelist Pat Robertson in April 1977 as the television ministry of his Christian Broadcasting Network, that was delivered by satellite as a more efficient way to distribute the programming. For years, the CBN Satellite Service (later renamed CBN Cable Network in 1984) mixed religious programming with reruns of classic television series to fill out its 24-hour schedule. The network changed its name to The CBN Family Channel in 1988 (revised to The Family Channel in 1990 once CBN spun it out to an indirectly-owned for-profit company, International Family Entertainment). It was subsequently renamed Fox Family in 1998 after it was acquired by a partnership between Fox Entertainment Group and Saban Entertainment, then ABC Family after its 2001 sale to ABC parent One of the first "basic cable" networks was TBS—which was initially established as a satellite uplink of an independent television station (the present-day WPCH-TV) in Atlanta, Georgia. TBS would serve as the starting point for other major basic cable ventures by its owner, Ted Turner, including CNN—the first 24-hour news channel. Another early network was the CBN Satellite Service, a Christian television service launched by televangelist Pat Robertson in April 1977 as the television ministry of his Christian Broadcasting Network, that was delivered by satellite as a more efficient way to distribute the programming. For years, the CBN Satellite Service (later renamed CBN Cable Network in 1984) mixed religious programming with reruns of classic television series to fill out its 24-hour schedule. The network changed its name to The CBN Family Channel in 1988 (revised to The Family Channel in 1990 once CBN spun it out to an indirectly-owned for-profit company, International Family Entertainment). It was subsequently renamed Fox Family in 1998 after it was acquired by a partnership between Fox Entertainment Group and Saban Entertainment, then ABC Family after its 2001 sale to ABC parent The Walt Disney Company, and finally to its current name, Freeform in 2016.[14]

The origins of premium cable lie in two areas: early pay television systems of the 1950s and 1960s and early cable (CATV) operators' small efforts to add extra channels to their systems that were not derived from free-to-air signals. In more recent years, premium cable refers to networks – such as Home Box Office (HBO), Cinemax, Showtime, The Movie Channel, Flix, Starz, MoviePlex, and Epix – that scramble or encrypt their signals so that only those paying additional monthly fees to their cable system can legally view them (via the use of a converter box). Because their programming is commercial-free (except for promotions in-between shows for the networks' own content), these networks command much higher fees from cable systems. Premium services have the discretion to offer the service unencrypted to a certain number of participating cable providers during a short-term free preview period to allow those who do not receive a premium service to sample its programming, in an effort for subscribers to the participant provider to consider obtaining a subscription to the offered service to continue viewing it following the preview period.

HBO was the first true premium cable (or "pay-cable") network as well as the first television network intended for cable distribution on a regional or national basis; however, there were notable precursors to premium cable in the pay-television industry that operated during the 1950s and 1960s (with a few systems lingering until 1980), as well as some attempts by free-the-air broadcasters during the 1970s and 1980s that ultimately folded as their subscriber bases declined amid viewer shifts to receiving premium television content delivered by cable providers that had begun operating in metropolitan areas throughout that period. In its infancy, following its launch over Service Electric Cable's Wilkes-Barre, Pennsylvania, system on November 8, 1972, HBO had been quietly providing pay programming to CATV systems in Pennsylvania and New York, using microwave technology to transmit its programming to cable and MMDS providers. In 1975, HBO became the first cable network to be delivered nationwide by satellite transmission. Although such conversions are rare, some present-day basic cable channels have originated as premium services, including the Disney Channel (from 1983 to 1997), AMC (from 1984 to 1988) and Bravo (from 1982 to 1994); some of these services eventually switched to an advertiser-

HBO was the first true premium cable (or "pay-cable") network as well as the first television network intended for cable distribution on a regional or national basis; however, there were notable precursors to premium cable in the pay-television industry that operated during the 1950s and 1960s (with a few systems lingering until 1980), as well as some attempts by free-the-air broadcasters during the 1970s and 1980s that ultimately folded as their subscriber bases declined amid viewer shifts to receiving premium television content delivered by cable providers that had begun operating in metropolitan areas throughout that period. In its infancy, following its launch over Service Electric Cable's Wilkes-Barre, Pennsylvania, system on November 8, 1972, HBO had been quietly providing pay programming to CATV systems in Pennsylvania and New York, using microwave technology to transmit its programming to cable and MMDS providers. In 1975, HBO became the first cable network to be delivered nationwide by satellite transmission. Although such conversions are rare, some present-day basic cable channels have originated as premium services, including the Disney Channel (from 1983 to 1997), AMC (from 1984 to 1988) and Bravo (from 1982 to 1994); some of these services eventually switched to an advertiser-supported model after transitioning to an unencrypted structure. Other fledgling premium services (such as early HBO spin-off efforts Take Two and Festival, Home Theater Network and Spotlight) have lasted for a few years, only to fail due to the inability to compete against established premium services that had broader distribution and higher subscriber totals.

Since cable television channels are not broadcast on public spectrum, they are not subject to FCC regulations on indecent material. Premium networks generally offer greater freedom in the use of profanity, sex and violence; some premium services – such as Cinemax and The Movie Channel (which have carried such programs as part of their late-night schedules) as well as Playboy TV, one of the first adult-oriented premium cable services – have even offered softcore pornography as part of their programming inventory.

While there are no FCC rules that apply to content on basic cable networks, many self-regulate their program content due to demographic targeting, or because of viewer and advertiser expectations, particularly with regard to profane language and nudity. In recent years, however, some networks have become more lenient towards content aired during late-primetime and late-night hours. In addition, some channels, such as FX, have positioned themselves with an original programming direction more akin to premium services, with a focus on more "mature" and creator-driven series to help attract critical acclaim and key demographic viewership.[15][16] Turner Classic Movies has also aired uncut prints of theatrical films that have featured nudity, sexual content, violence and profanity, as had the now-ad-supported SundanceTV and IFC, the former of which began as a premium service spun off from Showtime. Commercial-free basic channels have tended to rate their film presentations using the TV Parental Guidelines, instead of the Motion Picture Association of America (MPAA) ratings system.

Since the early 21st century, some have advocated for laws that would require cable providers to offer their subscribers their own "à la carte" choice of channels.[17] Unlike the standardized subscription packages being offered currently, an à la carte model requires the customer to subscribe to each channel individually. It is not clear how this might affect subscription costs over all, but it would allow a parent to censor their child's viewing habits by removing any channel they deem objectionable from their subscription. Offering such individualized subscriptions would have been relatively complicated and labor-intensive using analog cable, but the widespread adoption of digital cable & IPTV technologies have now made it more feasible.

Analog technology allowed cable providers to offer standardized subscription packages using low-pass filters and notch filters. A low-pass filter lets lower frequency signals pass while removing higher frequency signals. Using such filtering, the cable provider offered "economy basic" subscriptions (local channels only- these appear at the lowest frequency signals, denoted by the lowest channel numbers) and "basic" subscriptions (local channels plus a handful of national channels with frequencies just higher than the local stations). Notch filters were used to filter out a "notch" of channels from an analog cable signal (for example, channels 45-50 could be "notched" out and the subscriber still receives channels below 45 and above 50). This allowed cable providers to open standardized ranges of premium channels to the subscriber, but notch filtering was not a feasible way to offer each subscriber their own individual choice of channels.

To offer "à la carte" service using an analog signal, a cable provider would most likely have to scramble every channel and send a technician to each subscriber's home to unscramble their choice of channels on their set-top box. Each change an analog cable customer made in their subscription would then require an additional home visit to reprogram their set-top box. Offering the customer their choice of channels à la carte has become more cost-effective with the advent of digital cable, because a digital set-top converter box can be programmed remotely. low-pass filters and notch filters. A low-pass filter lets lower frequency signals pass while removing higher frequency signals. Using such filtering, the cable provider offered "economy basic" subscriptions (local channels only- these appear at the lowest frequency signals, denoted by the lowest channel numbers) and "basic" subscriptions (local channels plus a handful of national channels with frequencies just higher than the local stations). Notch filters were used to filter out a "notch" of channels from an analog cable signal (for example, channels 45-50 could be "notched" out and the subscriber still receives channels below 45 and above 50). This allowed cable providers to open standardized ranges of premium channels to the subscriber, but notch filtering was not a feasible way to offer each subscriber their own individual choice of channels.

To offer "à la carte" service using an analog signal, a cable provider would most likely have to scramble every channel and send a technician to each subscriber's home to unscramble their choice of channels on their set-top box. Each change an analog cable customer made in their subscription would then require an additional home visit to reprogram their set-top box. Offering the customer their choice of channels à la carte has become more cost-effective with the advent of digital cable, because a digital set-top converter box can be programmed remotely. IPTV (i.e., delivering TV channels over an internet or IP-based network) is even less labor-intensive, delivering channels to the consumer automatically.

Currently, digital cable and satellite delivery systems with standardized subscriptions are providing an opportunity for networks that service niche and minority audiences to reach millions of households, and potentially, millions of viewers. Since à la carte could force each channel to be sold individually, such networks worry they could face a significant reduction in subscription fees and advertising revenue, and potentially be driven out of business. Many cable/satellite providers are therefore reluctant to introduce an à la carte business model. They fear it will reduce the overall choice of viewing content, making their service less appealing to customers. Some believe the à la carte option could actually increase overall sales by allowing potential subscribers a less expensive entry point into the cable marketplace. Some cable/satellite providers might wish to sell channels à la carte, but their contracts with programmers often require the more standardized approach.[18]

Starting in the late 1990s, advances in digital signal processing (primarily Motorola's DigiCipher 2 video compression technology in North America) gave rise to wider implementation of digital cable services. Digital cable television provides many more television channels over the same available bandwidth, by converting cable channels to a digital signal and then compressing the signal. Currently, most systems offer a hybrid analog/digital cable system. This means they offer a certain number of analog channels via their basic cable service with additional channels being made available via their digital cable service.

Digital cable channels are touted as being able to offer a higher quality picture than their analog counterparts. This is often true, with a dramatic improvement in chroma resolution (120 lines for NTSC versus 270 for digital). However, digital compression has a tendency to soften the quality of the television picture, particularly of channels that are more heavily

Digital cable channels are touted as being able to offer a higher quality picture than their analog counterparts. This is often true, with a dramatic improvement in chroma resolution (120 lines for NTSC versus 270 for digital). However, digital compression has a tendency to soften the quality of the television picture, particularly of channels that are more heavily compressed. Pixelation and other artifacts are often visible.

Subscribers wishing to have access to digital cable channels must have a special cable converter box, (or, more recently, a "Digital Cable Ready" television) and a CableCARD to receive them. AllVid is a CableCARD replacement proposed by the U.S. Federal Communications Commission (FCC), U.S.A Federal Bureau of Investigation (FBI), intended to provide bidirectional compatibilities such as interactive programming guides, video-on-demand and pay-per-view, since retail CableCARD-ready devices are unable to access such systems.[19][20][21]

Cable television fees and programming lineups

cable television franchise fees and taxes are often tacked on by local, state, and federal governments.

Most cable systems divide their channel lineups ("tiers") into three or four basic channel packages. A must-carry rule requires all cable television systems to carry all full-power local commercial broadcast stations in the designated television market on their lineups, unless those stations opt to invoke retransmission consent and demand compensation, in which case the cable provider can decline to carry the channel (especially if the provider feels that the rate of carrying an existing service would result in an increase of the average price of a tier to levels to which it could result in a subscriber possibly dropping the service).

Cable television systems are also required to offer a subscription package that provides these broadcast channels at a lower rate than the standard subscription rate. The basic programming package offered by cable television systems is usually known as "basic cable" and provides access to a large number of cable television channels, as well as broadcast television networks (e.g., ABC, CBS, The CW, Fox, NBC, PBS), public, educational, and government access channels, free or low-cost public service channels such as C-SPAN and NASA TV, and several channels devoted to infomercials, must-carry rule requires all cable television systems to carry all full-power local commercial broadcast stations in the designated television market on their lineups, unless those stations opt to invoke retransmission consent and demand compensation, in which case the cable provider can decline to carry the channel (especially if the provider feels that the rate of carrying an existing service would result in an increase of the average price of a tier to levels to which it could result in a subscriber possibly dropping the service).

Cable television systems are also required to offer a subscription package that provides these broadcast channels at a lower rate than the standard subscription rate. The basic programming package offered by cable television systems is usually known as "basic cable" and provides access to a large number of cable television channels, as well as broadcast television networks (e.g., ABC, CBS, The CW, Fox, NBC, PBS), public, educational, and government access channels, free or low-cost public service channels such as C-SPAN and NASA TV, and several channels devoted to infomercials, brokered televangelism and home shopping to defray costs. Some providers may provide a small number of national cable networks in their basic lineups. Most systems differentiate between basic cable, which has locals, home shopping channels and local-access television channels, and expanded basic (or "standard"), which carries most of the better-known national cable networks. Most basic cable lineups have approximately 20 channels overall, while expanded basic has channel capacity for as many as 70 channels. Under U.S. regulations, the price of basic cable can be regulated by local authorities as part of their franchise agreements. Standard, or expanded basic, cable is not subject to price controls.

In addition to the basic cable packages, all systems offer premium channel add-on packages offering either just one premium network (for example, HBO) or several premium networks for one price (for example, HBO and Showtime together). Finally, most cable systems offer pay-per-view channels where users can watch individual movies, live events, sports and other programs for an additional fee for single viewing at a scheduled time (this is generally the main place where pornographic content airs on American cable). Some cable systems have begun to offer on-demand programming, where customers can select programs from a list of offerings including recent releases of movies, concerts, sports, first-run television shows and specials and start the program whenever they wish, as if they were watching a DVD or a VHS tape (although some on demand services, generally those offered by broadcast networks, restrict the ability to fast forward through a program). Some of the offerings have a cost similar to renting a movie at a video store while others are free. On-demand content has slowly been replacing traditional pay-per-view for pre-recorded content; pay-per-view remains popular for live combat sports events (boxing, mixed martial arts and professional wrestling).

Additional subscription fees are also usually required to receive digital cable channels.

Many cable systems operate as de facto monopolies in the United States. While exclusive franchises are currently prohibited by federal law, and relatively few franchises were ever expressly exclusive, frequently only one cable company offers cable service in a given community.[22] Overbuilders in the U.S., other than telephone companies with existing infrastructure, have traditionally had severe difficulty in financial and market penetration numbers. Overbuilders have had some success in the MDU market, in which relationships are established with landlords, sometimes with contracts and exclusivity agreements for the buildings, sometimes to the anger of tenants. The rise of direct broadcast satellite systems providing the same type of programming using small satellite receivers, and of Verizon FiOS and other recent ventures by incumbent local exchange carriers such as U-verse, have also provided competition to incumbent cable television systems.

Many cable channels charge cable providers "subscriber fees," in order to carry their content. The fee that the cable service provider must pay to a cable television channel can vary depending on whether it is a basic or premium channel and the perceived popularity of that channel. Because cable service providers are not required to carry all cable channels, they may negotiate the fee they will pay for carrying a channel. Typically, more popular cable channels command higher fees. For example, ESPN typically charges $10 per month for its suite of networks ($7 for the main channel alone), by far the highest of any non-premium American cable channel, comparable to the premium channels, and rising rapidly.[23] Other widely viewed cable channels have been able to command fees of over 50 cents per subscriber per month; channels can vary widely in fees depending on if they are included in package deals with other channels.

Statistics

Total US cable subscribers by year
Year Cable TV subscribers Telephone company TV subscribers
Dec. 1990 51,700,000[24]
Dec. 1991 53,400,000[24]
Dec. 1992 55,200,000[24]
Dec. 1993 57,200,000[24]
Dec. 1994 59,700,000[24]
Dec. 1995 62,100,000[24]
Dec. 1996 63,500,000[3]
Dec. 1997 64,900,000[3]
Dec. 1998 66,100,000[3]