It’s Not TV: HBO, The Company That Changed Television: Walson’s Mountain


9) Walson’s Mountain

The point is, ladies and gentleman, that greed, for lack of a better word, is good.

Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge

has marked the upward surge of mankind.

From the movie, Wall Street (1987)

Up until alternate delivery systems — like home satellite dishes, home video, and, later, HBO’s online service, HBO GO — Home Box Office was synonymous with cable television. In fact, go back far enough and there was a time where, when you said “cable,” you meant “HBO,” and when you said “HBO” — … Well, you get the picture.

And that’s one of the several ironies in the birth of HBO, because cable TV was not originally developed as an alternative to broadcast television, but as an adjunct; you subscribed to cable to watch what everybody else was already watching…but you couldn’t get.


We’ve been throwing the word network around an awful lot, but what does it mean? Essentially, all a broadcast network is is a means of distribution; it’s the collection of transmission and reception facilities that get a programmer’s signal around the country.

From the beginning of commercial TV, the major networks — ABC, CBS, NBC — were headquartered in New York City, and that’s where their signals started, just like in the days of radio. And, just like their radio forbears, the nets got their signals from New York to other cities over the telephone company’s trunk lines. By 1948, the nets had linked 112 of the 127 TV stations then in operation with coaxial cable.

But even by that time, the nets were already looking at a less clunky, less expensive technology than carrying their signals from New York across the country by co-ax, and began to transfer their transmissions increasingly to microwave through equipment also leased from the phone company. By the 1970s, 95% of TV traffic was being carried by microwave.

It would work like this. ABC in New York would send an over-the-air microwave signal to Philadelphia. From Philadelphia, it would be microwaved to Baltimore, then from there it would be transmitted to markets west and further south.

One of the limitations of microwave transmissions is that they travel in a straight line. The problem here is, if you remember the big deal about Columbus, the Earth is round. After a distance of about 35 miles or so, the microwave signal is heading off into The Great Beyond. What the nets had to do to get the signal across the country is erect a series of microwave relay towers every 20 miles or so, aligned in line-of-sight, to receive the signal, amplify it, and send it on to the next relay.

The microwave relays worked in series, meaning — using our ABC example again — that Baltimore couldn’t get the signal before Philadelphia. Any break in that chain — say some nasty competing network blew up one of ABC’s relay points — and all those stations downstream from the break would go black.

When networks would do live special event coverage on location, a microwave signal had to be sent from the event through a series of relays to the nearest major market. Let’s say ABC wanted to cover Abraham Lincoln’s Gettysburg address. They would send a location truck to cover Lincoln’s speech, send a microwave transmission over the microwave towers already in place if they covered the area, or set up some temporary relays if they didn’t, then relay the signal to the ABC affiliate in Philadelphia where it would be passed on along the network system.

Once the signal reached a market, the local affiliate broadcast it over the air on either VHF (Very High Frequency) or UHF (Ultra High Frequency) transmission frequencies. Most commercials stations were VHF which has a wider reach than UHF. How far the local transmitter could reach was dependent on how much power they could put behind their signal.

Another limitation on a station’s range was geography. Obstacles such as mountains and high-rise buildings could block signals from reaching outlying areas. To relay signals around such obstacles, the nets used translaters. Translaters are, in effect, miniature TV stations. They’re placed where they can receive a clear signal, then re-broadcast it to blocked or remote areas. Let’s say that Cedar Grove, New Jersey is having trouble receiving CBS because one of the Watchung Mountains is in the way. CBS plants a translater on top of one of the mountains where it can receive the CBS signal from New York, and then broadcast it down to Cedar Grove on the far side of the mountain. By the 1980s, the nets were using over 4,700 translaters around the country to extend their reach.

The U.S. started dabbling with communications satellites in the early 1960s, but this didn’t make a big change in how the nets conducted their business. Early satellites like Telstar and Relay flew in low orbits giving earthly broadcasts a short window of 20 minutes or so before the satellite passed out of range. With satellites, the nets could receive signals from and send signals to anywhere in the world, but because of this limited window, satellite transmission was restricted to relaying footage of international news and sports events to be incorporated into regular network newscasts. Live coverage was done via satellite, but rarely. But then, who needed satellites? Broadcasters had a perfectly reliable and long-standing terrestrial system which worked just fine, thank you (the nets would not move to full-time satellite broadcasting until the 1980s).

That signals originated in New York in TV’s early years made for a problem on the West Coast in regards to live programming (and a lot of early TV shows were broadcast live) because of the three-hour time difference. The best that West Coast affiliates could offer their viewers were kinescopes of a live broadcast. A kinescope was simply a film camera set up in front of a TV screen to film the live broadcast. The quality of kinescopes was never very good, but until videotape came along later in the 1950s, it was the only way for western stations to time-delay East Coast live broadcasts. In the meantime, West Coast stations kinescoped East Coast live transmissions and then aired them at their scheduled times.

By the early 1950s, the three major networks had established affiliates in approximately 200 market areas throughout the country, with each market centered on a well-populated urban area (some of these stations were O & Os, meaning Owned and Operated directly by a network; FCC rules on how many stations a net can own have changed over the years, and now currently use a formula which factors in radio stations and newspapers owned by the same entity in a given market). Although program production would eventually migrate to Los Angeles, New York would — and still does — remain the home of the flagship stations of the Big Three nets, meaning their biggest stations: WABC, WCBS, WNBC (the practice used to be that stations east of the Mississippi had call letters beginning with “W,” and in the west with “K,” but that system has long since been abandoned).

But even with those 200 affiliates and despite translaters stitching over the gaps, there were still dead zones in the broadcast universe: areas cut off by obstruction and distance from what was fast becoming the entertainment and information source of the age.


There has always been some form of cable carriage in TV. Cable was there before over-the-air broadcasting had been perfected. All the early TV development work, going back to Paul Nipkow, involved getting a visual signal from one place to another over wire. Without getting into a whole, long scientific discussion, let’s just say it’s a lot easier to get information signals from here to there by wire rather than over-the-air, and that’s why wire always came first in the history of electronic transmissions. The telegraph came before the Marconi wireless; the telephone came before radio; video on wire came before over-the-air broadcast.

But cable was never a serious, long-term consideration as to where the TV business needed to end up. In those pre-Internet days, wire was a one-to-one communication technology. There was one person — or machine — at one end, and one person — or machine — at the other; one sender, one receiver. Think telephone, think telegraph.

The industrial developers of TV (RCA for example), and radio before that, were not interested in intimate conversations with the people Out There. On wire, you talked with someone. TV developers were interested in talking at them, and as many of them as possible at once. That was going to be the most cost-efficient way of getting across their message (remembering why RCA got into the broadcast business to begin with, that message would be, “Buy more RCA stuff”), and be most attractive to advertisers (“Buy more stuff from this guy buying time on our channel”).

Why do you think they call it broadcasting? Because you cast your message out to the broadest possible audience. Cable might have its uses getting signals from one broadcast transmitter to another, but outside of that, well, TV on cable? What was the point? You could hook up your transmitter to a bunch of houses individually, but what kind of insanity would drive you to do such a dumbass thing? Why spend all that money and time when you could hit everybody you wanted with a nice big broadcast transmitter?

The bottom line is the decision was based on the bottom line. You wanted to make money with TV as a programmer? As an advertiser? As a programmer trying to get advertisers to advertise on your programs? Then you broadcast. End of story.


Broadcasting may be the most cost-efficient way of hitting a large audience simultaneously, but that doesn’t mean it’s the most comprehensive. It hits the most, yes, but not every. It has its limits.

There’s geographical and technological limitations. Signals fade over distance. Mountains and tall buildings interfere with the signal. Living next to power lines interferes with the signal. If your brother’s in the bathroom using his electric shaver, or your sister’s using her electric hair dryer, or dad’s using the vacuum cleaner, or mom’s using her new power sander, that can interfere with the signal.

And there’s the biggest limitation of all: money.

Let’s say we have a town called Niceville. We’re in the TV biz, so we put up a transmitter in the middle of Niceville. Let’s also say that it costs us $5,000 an hour (these are just numbers out of the air; real costs vary depending on what you’re trying to do, where you’re trying to do it, and with what) to send out a TV signal five miles in every direction. So, within that five mile radius, Niceville TV blankets all of the Niceville metropolitan area which contains about 50,000 people. We’ve got six minutes out of every hour we can sell to local advertisers, we decide on a price of $1,000 per minute, the advertisers think that’s not a bad price to get their message to 50,000 people, so every hour NTV is making $1,000 profit on ad revenue.

Now we start considering widening NTV’s reach. Bigger’s always better, right? The more people we can reach, the more money we can make, right?

We decide we want to widen our market area by another five miles in all directions. But that puts us out into the boonies, and increasing our geographical reach by another ten miles only brings another 1,000 people into our market area. Pushing the signal that much further is also costing us another $2,000 an hour for more powerful transmitters, higher electric bills, and other sundry costs. If we don’t raise our ad rates, we’ll be running a thousand bucks in the red every hour. To keep the same profit margin we had before, we have to raise our rates by another $500 a pop. But the advertisers don’t want to pay.

“Another $500?” they say. “For what? For another lousy thousand pairs of eyes? It was costing us a nickel an eye before! What’s so special about these other thousand people that we should pay a buck an eye for them?”

“Well,” you say because you can’t say much else. There isn’t anything special about those extra eyes. So, you either decide to cut your profit margin to keep the price of advertising at a cost-effective point for advertisers, or you save everybody a lot of trouble and aggravation and just don’t bother pushing your signal, settling for the Niceville metro audience instead.

The bottom line, then, on who was going to get TV and who wasn’t for a lot of TV’s early history was — here it is again — the bottom line. Even as more and more stations opened up around the country in the 1950s, and even with the use of translaters to get around obstacles and extend transmitter reaches, it was plain to see that there were always going to be people who just couldn’t get TV because it wasn’t worth the time, effort, materials, and — especially — money to reach them.

That was the gap that cable filled.



Depending on who you ask, you could get the impression nobody really knows who the first person to set up a cable system was. A few of them all seemed to spring up within a short time of each other. When I was with HBO, the story everyone liked to tell had to do with a Pennsylvanian named John Walson. Walson’s story is a perfect illustration of the problems that produced cable and why (in 1978, both the U.S. Congress and the National Cable Television Association — NCTA — recognized Walson as the inventor of cable TV).

In 1947, John Walson owned a General Electric appliance store in Mahanoy City, a pleasant little burg of 10,000 nestled in a basin among the hills and mountains of southeastern Pennsylvania near Allentown (remember those hills!). One of the appliances Walson was stocking was televisions.

It was a good time to be selling televisions. The country had been through sixteen years of Depression and war, but now people had a little money in their pockets, some spare time, no big, pressing worries other than the international Communist conspiracy but Joe McCarthy was taking care of that. The war had been over for three years, and what people were now looking for, after all the hard times, was a little fun. John Walson thought he had the answer for them sitting in the front window of his store.

But what would happen would be this. You’d go into Walson’s store and say you’d heard about this television doo-dad and about how funny Milton Berle was in drag and your kids were all cranked up to see Howdy Doodie, so you were interested in maybe buying one of these tele-majiggers. And Walson would show you this thing that looked like a cross between a hi-fi cabinet and an aquarium. Then he’d tell you how much it cost — anywhere between $450-575 for a picture the size of a good-sized kerchief — and you’d gulp and start wondering if it was worth it. You’d say before you spend that kind of money, you want to see what it was you’d be paying for. In answer, Mr. Walson turned to the nearest demo set, hit the “on” knob, and got…

Not a damned thing.

Walson hooks up a set of rabbit ears, fiddles with them a bit and you still get…

Not a damned thing.

Walson seems like a nice guy, so you buy a toaster so you won’t feel bad about buying nothing, but you leave proud of yourself for not being one of these suckers dropping a half a grand on this over-hyped gizmo.

The reason poor John Walson couldn’t get a damned thing on his demo TV set was because poor John Walson’s store — along with the rest of Mahanoy City — sat on the wrong side of one of those nestling hills we’d mentioned earlier. A mountain sat between him and the nearest over-the-air transmitter which was in Philadelphia. The only way Walson could demonstrate his TVs was to truck people up to the top of that mountain where the signals could be received clearly. The novelty of making that trip wore off mighty quickly with Walson, so he started working on a way not to have to make it.

A lot of history is made by the right person being in the right place at the right time, and John Walson was one of them. You see, Walson didn’t just run an appliance store. He also worked for Pennsylvania Power & Light which meant he knew his way around wire and electricity and other sundry related hardware, and could handle them without electrocuting himself. Walson put all that PP&L know-how to work, and on a lovely spring day in 1948, set up an antenna on a utility pole atop New Boston Mountain, then ran wire from the antenna to his store. The antenna on the mountain pulled in TV transmissions from three Philly stations, and the wire fed them downhill to Walson’s TVs.

And that, my friends, is cable television.

Walson took it a step further. People in homes along Walson’s cable agreed to buy his TVs if he agreed to provide programming by patching them into his cable. This seemed like such a damned workable idea that by 1950, Walson was also stringing cable into Mahanoy City (John christened his cable company Service Electric and it’s still around today). In the same way RCA had created a network so people would have a reason to buy their radios, John Walson brought television to Mahanoy City so people would buy his TVs.

Around the same time, a fellow named Leroy Edward Parsons was getting the same inspiration on the other side of the country in Astoria, Oregon, although he wasn’t particularly interested in selling TVs. Leroy’s problem was more immediate: he wanted to watch TV. Well, actually, according to a 1986 interview on The Cable Center, it was Parsons’ wife who was nagging to see TV after seeing a set demonstrated in Chicago.

Mrs. Parsons’ problem was there were three mountain ranges between Seattle’s first television station — KRSK — and Astoria 125 miles away. Instead of planting an antenna on a mountain top a la John Walson, Leroy Parsons put his antenna on the roof of the Astoria Hotel across the street from his penthouse. His neighbors saw an opportunity to get nice, clear TV signals, Parsons saw a business opportunity, and, in a meeting of minds, he began wiring up other apartments to his antenna.

Meanwhile, back in Pennsylvania, some other enterprising souls were plugging into the same concept. Martin Malarkey — another appliance store owner — set up a master antenna to feed a cable system in Pottstown in 1949, and in 1950, Robert Tarleton, whose radio repair business had expanded into selling TVs, created Panther Valley TV Co., credited as the first commercially viable Community Antenna Television (CATV) system.

Throughout the ’50s and early ’60s, CATV systems popped up around the country in order to bring commercial TV to places broadcast stations couldn’t reach. While the hardware improved over time, the systems themselves didn’t function much differently from John Walson’s first do-it-yourself number: put an antenna up some place where it could receive signals, then feed them by wire to subscribing homes.

That doesn’t mean early cable TV was some great thing. The picture quality was often marginal, and early cable systems weren’t terribly reliable. They also had an extremely limited cable capacity. Very early systems couldn’t carry more than three channels, although they would eventually manage to expand to 12.

Expanding channel capacity boosted cable’s sales pitch. If you lived in the New York City metropolitan area, you could receive six commercial stations and one public television channel over the air, but most markets had considerably less to offer. However, a well placed CATV antenna could provide its customers with as much TV as the cable could carry, much more than anybody anywhere else was getting by over-the-air transmission. That provided a compelling reason — beyond just clearing up reception — for people to invest a few bucks in cable service.

At the very least, cable was better than nothing, and nothing was the only other choice in a lot of places served by cable. By 1960, there were 640 CATV systems in operation in the U.S., mainly in rural parts of the country, getting TV programming to people who’d fallen between the cracks of the network web.

Charles “Chuck” Dolan was a sharp-eyed, shrewd-thinking guy who saw that not all of those cracks existed out in the boonies. There were dead zones right in the back yard of the home base for the three networks.

To lift a quote from The Producers (1967), worlds turn on such thoughts.

NEXT: Chuck Dolan, The Green Channel, and the Birth of Home Box Office.

Click here to read every article in this series!



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Baby Steps

In The Beginning Was The Word: Radio

The Numbers Racket


Greener Grass

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