Interview Date: Tuesday July 21, 1970
Interview Location: PA
Interviewer: Mary Alice Mayer
Collection: Penn State Collection
MAYER: This is an interview with John Walson conducted by Mary Alice Mayer for revision and updating of a manuscript on CATV.
WALSON: This is John Walson of Service Electric Co. which is now Service Electric Cable TV Inc. I started in the CATV business in June of 1948. My past experience with the Pennsylvania Power & Light Co. got me interested in this type of work. Because of my vast experience with the company I have quite a bit of knowledge about poles and electrical appliances.
Some of my work with the power company involved repairs to the electrical appliances and also running power lines to customer's appliances and increasing the size from two‑wire to three‑wire services for people who modernized to electric ranges.
The town of Mahanoy had a population of about 10,000 people and it was mostly a coal mining area. In and around 1945‑1955 the coal mines started depleting and new industries started developing in Mahanoy City. I was an employee of the power company for about 14 years prior to 1955, and had become interested in the appliance business when the Pennsylvania Power & Light Co. decided to get out of the appliance business which was part of my work, repairing their appliances. They were selling different appliances to build up the load for their company. When the power company had decided that it became a conflict of interest to sell appliances in competition with the dealers in the area, I had decided to take on the General Electric franchises as of February 1945. I bought a franchise from Lara Electric Co, of Williamsport and became very active in selling appliances. I became their A‑No. 1 dealer and won many contests and trips throughout the time of being in the appliance business. I started selling TV sets about 1947, and it became very difficult to sell TV sets in a place like Mahanoy City because Mahanoy City is a community that is completely surrounded by mountains.
In 1947 television started from the Philadelphia channels. The only place that television sets could be sold by me in my appliance stores was in the mountainous areas at the top of the mountains. There were several communities built on top of mountains such as Frackville, Pennsylvania; Volcan, Pennsylvania; Hazelton, Pennsylvania; which were complete cities on top of mountains. As a matter of fact Hazelton was the highest city in the state of Pennsylvania. I decided to sell TV sets and it became very difficult to sell those sets without being able to demonstrate.
People used to come in and ask for TV sets. At that time, those TV sets were 14 1/2" screens and they were very heavy. The TV sets that were brought out at the time were just experimental and they were very clumsy to carry. The only way that I could demonstrate those TV sets was to build a tower site on top of a mountain, and put a building up there. I would, from time to time have people come into my store, and they would see the set that they would like to purchase and they would ask to have it demonstrated, and I would drive those people to the top of this mountaintop and demonstrate the TV set and make sure the TV set was working. If the customer was satisfied, they would pay anywhere from $450 to $575 for a TV set which was a 12 1/2" black & white. They didn't want to invest this kind of money unless they could have the set demonstrated.
MAYER: If they didn't link onto the system would they pay the same price for the television set?
WALSON: Yes, the set would be charged the same price regardless of whether they connected it to the system or not.
MAYER: But definitely connecting to the system was free?
WALSON: Yes. One of the things that I did at the time was to demonstrate the set up there and bring the set back, and deliver it to the customer. The customer felt satisfied first because the TV set worked and secondly because they saw a picture on the TV set. In order to increase my business, I was always looking to try to sell more TV sets, but the demand got smaller and smaller because the only place that you could sell them was on the mountaintop.
I wanted to increase the sale of those sets, so I decided one day that instead of demonstrating the TV sets on top of the mountain, I would actually bring a cable down. This cable was an Army surplus, heavy duty twin lead cable that was purchased at Reliance Merchandising which was a surplus house in Philadelphia. It was on Arch Street, the upper part of Arch Street. The reason that I don't have receipts on this was that back in 1952 I had a fire at my warehouse and all of those old records were destroyed all the way up to 1950.
In June of 1948 I went to Philadelphia and bought some twin‑lead cable from Reliance Merchandising, and this twin‑lead cable was run from the top of the mountain from an ordinary antenna and amplified every 500' with a top‑of‑the set booster made by ElectroVoice which is a broadband amplifier. They are the same people that manufacture speakers and microphones today. The boosters were bought and they were just small top‑of‑the‑set boosters with a relay in there so that when you turned the set on, this would automatically pre‑amplify the signal going into the TV set. What I have done with this booster, I have modified it and disconnected the relay completely and cut the booster through, and amplified the signal every 500' with the heavy‑duty twin lead cable. The amplifier only had about 6 Db of gain. It amplified 12 channels at a time, but there were only three channels available. I essentially, in June 1948 had a broadband twin‑lead system just as they have today, 12 channels which are modern. The system was only carrying three channels, not because it wasn't capable of carrying 12 channels but because there were only three channels available. Those three channels were 3, 6, and 10 out of Philadelphia.
I later developed the technique of building a five adjacent channel system and I had a fellow by the name of Luther Holt develop an amplifier which would develop on the low band part of the system, a commercial amplifier. That was about 1949, and that was a five adjacent channel system. The adjacent channel system was thought to not be able to work at the time. Engineers had explained that it wouldn't be possible to work because of the adjacent channels found interfering with the picture. My thought was to put a trap in the adjacent channel sound to lower the sound down by about 10‑15 dB. You load a picture‑carrier, therefore the sound would not interfere with the adjacent channel picture. Therefore they made a successful adjacent channel system work back in 1949. This system was originally a five‑channel system in '49.
Later on I experimented with an expanded low‑band system which included the FM band up to 108 megacycles. I inserted two channels in the FM band. The only people who could receive these extra two channels, equaling seven channels at the time, in 1949, were people who had a Crosley Tuner.
A Crosley Tuner was a continuous tuner which would tune in all channels, even in the FM band. What I did to improve my business was to increase my channels by two by putting two channels in the FM band. The only people who could receive the extra two channels were people who had a Crosley Tuner, so therefore it was very impractical and later on the Crosley people discontinued the continuous tuner and went into a click tuner so it made the systems inadvisable to use because some people could receive it and some people couldn't.
This later started me developing the concept of 12 channels. I later developed the concept of 12 channels and 12 channels were able to be developed, but the coaxial cable for long‑distance runs wasn't practical because it was just an archy type of a cable with shielded cable which was not quite 100% moisture‑proof and the VSWR of this cable wasn't quite good enough to cascade 12 channels for any distance. The temperatures would affect this cable very rapidly and you would have a condition between up and down of signal, that wouldn't be stable. Therefore a 12 channel system with the old type coaxial cable wasn't as efficient as the modern cables that are used today, which are aluminum cables.
When aluminum cables came out, all of my systems were changed to 12 channels and they were successfully changed to a transistorized amplifier. Then systems are presently carrying 12 channels as television TV channels plus 45 FM channels including stereo.
MAYER: When you mentioned about the sheathed cable, was it true that with the twin‑lead, the quality of the picture actually varied with the weather, so that when it rained you didn't have good pictures and it wasn't a reliable system?
WALSON: That was when I first started in 1948. I started with the twin‑lead cable, and what would happen with the twin‑lead cable was that whenever it rained you'd get a different VSWR and you would have a condition where your impedance would change and you would have a condition where you'd get snowy pictures. So it wasn't very practical and the phone would almost ring off the hook. At that time I had 725 to 727 customers connected to this twin‑lead cable. We would have 725 calls at that time. That started me to think about running it into a coaxial cable which I studied about back in 1933.
I was going to electrical school in Chicago. I took up electronics at that time and they had cables at that time. I worked at different kinds of RF equipment at the time. My education was mostly RF and super‑heterodyne radios had first come out and I got the fundamental principles of electronics at the time. I've got a book called Radio Physics and I learned the properties of different cables. I decided to use an RGA cable and an RGA‑59 cable which is a 52 ohm cable which is not the same thing that is presently used. The present cables are 72 ohm cable. The mismatch was so insignificant that I was able to get away with a 52 ohm cable, and this solved the problem of losing pictures on a rainy day.
MAYER: You also mentioned that you did work for the power company.
WALSON: Yes, I also worked with the power company mostly running lines from the poles to the homes. Which gave me a lot of experience on pole lines.
MAYER: Were you working for them when you started to build the system?
WALSON: Yes, I was still working for Pennsylvania Power & Light Co. at the time, and I decided that I would go into my own business later, and that I would give them, six months notice and leave, and develop the CATV business. When I developed the CATV business I discontinued the sale of TV sets because it became a conflict of interest. I spent most of my time developing CATV systems.
Presently I am the largest single‑owner CATV owner, with 85,000 subscribers in systems all owned by myself and my wife. Those communities are such as Allentown, Bethlehem, Wilkes‑Barre, Kingston, Mahanoy City, Frackville, Girardville, Sinclair, Hazelton, Tamaqua, Sunbury, Bloomsburg, Selinsgrove, Sparta, New Jersey; Hamburg, New Jersey; Ogdensburg, New Jersey; Newton, New Jersey. Most systems are in central and eastern Pennsylvania and northwestern New Jersey.
MAYER: Could you tell us about the antenna that you described for the importation of New York signals?
WALSON: Originally, in 1950, in order to fill in the complement of five channels, I decided to bring in New York channels, and those New York channels were very difficult to get because they were 150 air miles away from Mahanoy City and I was only receiving the very snowy picture with one antenna. I decided that to be able to improve this picture I would increase the capture area by stacking antennas, that I could improve the reception and improve the fading ability of the TV signals. By stacking as high as 32 antennas for one channel, I stacked for channel 11 and channel 9 out of New York, I was able to bring in these New York channels with a viewable picture and had eliminated most of the snow. It made the system more successful because I had a competitor in and around that time, 1950, and I had to do something to try to get the subscribers over and above what the competitor was getting.
The competitor was the chief of police, A.P. McGlauglin of Mahanoy City, and I was competing with him for subscribers so in order to get the subscribers ahead of him, I devised this five adjacent channel system. The five adjacent channel system was developed and I had room to put two extra channels on it ‑‑channels 9 and 11 out of New York. Channel 11 was converted to Channel 5 and Channel 9 was converted to Channel 2.
In the early days, until about 1951 or '52, I only had five channels, but that was two channels more than the competitor had. So, I actually got about two thirds of the subscribers in Mahanoy City which was about 2,100 subscribers. My competitor ended up with 825 subscribers. Due to the fact that I was a step ahead of him, I was able to get the subscribers, even though the systems... The chief of police was a well known and well respected man but technology was the thing that got subscribers.
The next thing that happened after that was the development into 12 channel systems. That was later developed, and transistorized amplifiers in place of tube amplifiers made a substantial contribution. Jerrold Electronics which built the system for City Television in 1950, only had a three channel system. They didn't develop their five channel system until 1952 or '53 if I can recollect. They had what they called a K+W system. It wasn't the way that our system worked, it wasn't an adjacent channel in the same manner, and the trouble with this system was that there were beats...03 and 05 would interfere with 3 and 5 which would give a bar on the picture, so therefore I had a superior reception and was able to continue to get more subscribers.
MAYER: Was the reception reliable?
WALSON: The reception was reliable because it was going through coaxial cable and the distance from the tower site to Mahanoy City was only the distance of about one mile.
MAYER: Did the press cover your importation of the New York signal and the story of the crowds?
WALSON: Actually the press did not cover too much about this because the press figured that coaxial cable or cable TV would be competitive to their reading of newspapers. They felt that cable TV would put the newspapers out of business, so they didn't carry many reports.
Later on, in about 1955 or '56 we convinced them to start listening to shows. Originally they didn't even listen to TV shows or anything like that because they felt that this was a new competitor into the field of news media.
One of the things that got me interested in going into cable TV in a large way, was the crowd that gathered in front of my store when I brought the three channels down on an experimental basis in 1948. When I first put those three channels on, the street was completely blocked with viewers, people watching the pictures in the window. The television sets were displayed in the window, and the three channels with speakers outside allowed people to listen to one channel at a time. They were able to listen and they always...the old people stood right in front of the store, and they used to stay there until 12 o'clock, until the stations went off the air. They used to watch these television channels for about five or six years. This was advertising to get new subscribers on the cable and for people to buy TV sets. It became very interesting, and I felt that I would devote all of my time to CATV and discontinue the sale of appliances around 1955 and decided to go in completely with CATV.
MAYER: What was your initial movement with TV receivers once you got this thing going?
WALSON: Originally I sold something like 725 sets in 1948 and it kept increasing. I was the largest dealer for Lara Electric Co. and for Philco Distributors, which is Luckenback and Johnson, and for the Crosby distributors in Hazelton at the time. They were delivering TV sets by the car load. I was the biggest outlet of all of the distributors in cable TV. I became one of their biggest customers.
MAYER: This was in 1948?
WALSON: This was in '48, '49, '50, '51, until the system became saturated. Presently, the systems that I developed in 1948 are 99% saturated. Until today, there's nobody that can receive any TV in Mahanoy City, or Girardville, without the cable. A lot of other cities like Tamaqua cannot receive TV signals without the cable even though they have developed UHF technology and they have developed other means of higher powered stations, they still cannot receive television without cable TV.
MAYER: Would you care to comment on some of the items running to the original management? Could you tell us a little bit more about how the amplifiers were strung, you mentioned that they were in basements, at least to show how systems technology has changed?
WALSON: One of the things that we have done that they don't do today, is that we rented space in people's basements in Mahanoy City. In Mahanoy City, homes are adjacent to each other. They don't have any gardens or anything like they do in a lot of these rural communities. The homes are one right after the other.
MAYER: And there's mountains.
WALSON: It's mountainous. Mahanoy City is built in a basin and it is built at the bottom of this basin. In order to maintain the system, I never believed in having amplifiers on top of poles in order to be able to give people good service. Being a power man, I thought that it was more convenient to have the amplifiers down low on the pole. Originally when we first started we had them in the basements of homes. We used to give people free television just to be able to put the amplifier in the basement of their home or in their garage so it was easily accessible and easy to maintain.
MAYER: So they didn't have to pay the monthly payments?
WALSON: They didn't have to pay the monthly fee or the installation. We gave them that concession in order to rent a space, so they didn't charge us for the space. Later on we asked the power company to allow us to put the amplifiers down about 9' from the ground and they could be reached with a 4' step ladder. Bell Telephone Co. had given us permission to do this and Pennsylvania Power & Light Co. has given us permission to do this.
Until today it is one of the few systems in the country that is able to be maintained off of a 4' step ladder instead of having a high ladder to maintain the CATV system. An amplifier can be changed in a half‑a‑minute's time with this type of a system. With the messenger‑mounted amplifiers the way some CATV systems are built today, it takes anywhere between ten and twenty minutes to replace that amplifier. Also, the amplifier can be replaced during a real downfall of rain. You can replace an amplifier during a rainstorm, but with the messenger‑mounted amplifiers, you cannot replace an amplifier because it gets flooded and the amplifier gets full of water.
With this type of a system, the amplifier's in a shielded case and all you do is slide up the lid and remove the old amplifier and quick take the new amplifier and put it in the box and it doesn't even get wet. Therefore, service can be restored during the middle of a rainstorm. This is another technology that I've developed.
Another technology that I have developed for the CATV industry was putting antennas inside of a building so that the ice and the sleet does not affect the antennas. Even today, where we have high mountaintops where the rain is high, we put the antennas inside of a building so the antennas last indefinitely, therefore they cannot be destroyed by ice or sleet. We have had the problem of ice and sleet breaking the antennas after every storm, so we have decided to put the antennas inside a building which would eliminate that thing.
You use waterproof plywood around the building on the upper part of that building and that way you still receive a good television signal and receive it without any hampering from ice or sleet.
Other things that have been developed, we have developed a system today where you can get anywhere from 21 to 33 channels of television with the same type of transistorized amplifier all in one cable, two‑way communications and anywhere between 23 and 33 channels on this cable. It's a split band system, we amplify from channel 2‑108, from 54‑108 megacycles on one band and from 120 megacycles to 260‑300 megacycles on the other band so therefore there's no beat, no harmonics and you eliminate any problem with interference when using the mid‑band.
Presently we have developed a system using mid‑band without any beats or harmonics and systems with one cable going into the home could bring in as high as 33 channels, by this split‑band method. Another thing about this split‑band method is that if one set of channels goes out for 54‑108 megacycles, it won't interfere with the other channels. It's because they're on two separate strips. They are filtered before they go in and only so many channels can go into one strip and so many channels in the other strip and they're combined at the end. Each channel strip is separately AGC'd and therefore continues the tilt effect on the community antenna system as high as 200 amplifiers, can be cascaded on a cable system. A city the size of New York City could be cascaded or a city like Chicago could be cascaded and have reliable pictures. It means that you have a double protection because you may lose one.
If one transistor goes bad in a cascade, you may lose one set of channels but not the other set of channels. It is very improbable that two transistors and two separate strips would go bad at one time. So this is a new technology that has just developed in the last year, that has been proven.
We also have the technology of two‑way communications, in other words, from five megacycles to 30 megacycles space could be used in the opposite direction and we can originate a program in our studios through the same cable, feed the signal back through the same cable that's bringing the other 12 channels in the opposite direction. Also we could originate at any basketball court or any football court, any court that's close to the cable systems, and in anybody's home, and get two‑way communication through the cable through anybody's home with a band with approximately 30 megacycles usable space presently, and not interfere with the other channels, without any beats.
MAYER: The two‑way communication would go back to the main switching equipment. Could it operate between two of the points that are reached by the switching equipment?
WALSON: It could be originated at anybody's home. Any subscriber in the CATV system, you could go in and originate a program and have two‑way communication between there and the tower site. You could actually originate a program for college or schools.
MAYER: If you envision the CATV system like spokes on a wheel, any one of those points could have communication to the center hub switching equipment and the reverse is true. The switching equipment to the center hub could have communication to any of those outward points. Could those outside points have communication between each other?
WALSON: Yes, that's right. That could be done because of this two‑way capability. In other words, you could talk between each other. I feel that some day, the telephone company will use this technology and maybe these channels for the CATV system and use their long distance phones for this capability because there's more band‑width. More private lines could be used this way and educational programs could be used through the leasing of cables for the CATV systems, which eventually will happen. These colleges will teach their students through these cable facilities as long as there's a camera in the home and a camera in the college, you could have two‑way communication between the two points and ask questions and see each other.
The capability is here today. We have this capability in the city of Allentown presently, and we're using it for our RCA closed‑circuit operation. What we do is we do a tap from our studio into an ordinary tap which would be representing a customer's tap and actually originate a program in our studio, do it live, and monitor it coming back. We monitor it going out and we monitor it coming back. We could actually see the degradation if any on the signal all the way to the tower site and all the way back. It's all done without doing any switching and without a man going up to the tower site. All you do is press a button and automatically you can replace one channel, and replace it with a closed‑circuit channel, and be able to inject in that program or various programs.
MAYER: Getting back to the early history of CATV. Could you tell us something about the people involved and their demand for television? I think this might be an opportunity to correct some of the names or add to the names, and their reaction to it when you showed it.
WALSON: Actually, what we had in the review, Dr. Arlen Lackwitch was one of the first customers connected to cable, but actually Bob Gray was another customer and there was another fellow named George Barlow. Mr. Gray was a manager of Pennsylvania Power & Light. He could verify that I got temporary verbal permission from him in June of 1948 to put this twin‑lead cable on the poles as an experiment to see if I could bring television into the people's homes. Mr. Gray is still living. He is retired from the PP&L and he has also made an oil painting designating when cable TV started in June 1948 at three antenna sites that we have used since we started the cable system and the progress of CATV systems. He could verify that cable TV started in Mahanoy City on a commercial basis, June 1948.
MAYER: This verbal agreement with Gray was prior to the present agreement we have here with Electronic Enterprises, Inc.
WALSON: Electronic Enterprises Inc. was just a corporation that I purchased, but I have an original agreement with PP&L and it was the first one that PP&L ever issued and that was Oct. 2, 1950. It was the first original agreement that was issued, and the next agreement was issued to a system in Lansford, Pennsylvania.
MAYER: Why don't we stay with this one. We'll have to get copies.
WALSON: Actually it was Jan. 1, 1951. This came from PP&L. I'll give you a copy of my original agreement, Oct. 2, 1950. There was no pole rental at the time, it was a temporary agreement with the power company, and there was no pole rental at all, it was free. Getting on the poles was free. Later, there was another agreement that was put out that had a pole attachment agreement which charged $1.50. The original pole attachment agreement did not charge for the use of their poles. I have a copy of it which I am hereby submitting to you.
MAYER: I'll receive it from you then.
WALSON: You'll receive it either today or next week in the mail.
MAYER: Do you have any more comments on leasing?
WALSON: There were a few more corrections on this interview with Mr. L'Heureux. In one paragraph on page 6, you said, John Walson Cable was seen moving across Mahanoy City from his poles from fences and posts and corners of buildings, but it wasn't that way, it was from pole to pole. We had a temporary agreement with the manager of PP&L. It was from pole to pole, we didn't have to go to buildings.
MAYER: Even initially?
WALSON: Even initially in 1948. We did have our cable coming from the top of the mountain down on trees because at that time we didn't install the poles. But later on, within about one month we installed poles and even then we eliminated the trees within a month after June.
MAYER: Initially it came down the mountain on trees and then later, within a month, on poles?
WALSON: That's correct. Originally I installed a 70' Class I pole which was purchased from PP&L who installed it for an antenna up on top of this mountain. Then the broadband antenna was installed which would give the people Channels 3, 6, and 10 out of Philadelphia. In other words you were able to bring the high frequencies down along with the low frequencies even as far back as 1948 because of this electra voice amplifier which was designed for on top of the set, but I modified it and used it for a line amplifier.
Also, there's another point in here that I wanted to comment on. The rate at the time, when we went to coaxial cable in 1949 was $2.00 not $2.50. The installation rate when we started commercially was $100.
MAYER: When you brought in the New York signals, did you get any written consent for importing those signals from the New York station, retransmission consent of any sort?
WALSON: The only retransmission consent that I got was from Channel 5 WNEW and they gave it to me for retransmitting it through VA microwave.
MAYER: Do you have a letter?
WALSON: I have a letter from Channel 5 out of New York, but that was later on when I went into microwave relay business. I had a written statement from WNEW allowing me to use their signals for retransmission.
MAYER: About when would that be dated, do you know?
WALSON: That could have been somewhere around 1957.
MAYER: I'm also trying to put down the first retransmission consent.
WALSON: I was also the first to microwave CATV systems to commercial customers in the eastern United States.
MAYER: What would you need to document that?
WALSON: The FCC permits would verify that I was the first. We have copies of the first FCC permits from the FCC which would document the fact that Service Electric Co. microwaved the first CATV programs over its microwave facilities.
MAYER: So what do we want to get there now?
WALSON: The FCC construction permit. I could supply you with that.
MAYER: For what?
WALSON: For microwave relaying of four channels of television from Blakeslee, Pennsylvania to Mahanoy City Pennsylvania. Blakely, out in the Pocono area of Pennsylvania, to Shenandoah, Pennsylvania. That is located near Mahanoy City.
Also, there's a notation here, later on subscribers were paying $3.00 but they were actually paying $4.00 in Mahanoy City and they were paying $4.50 in Allentown and other areas. The original system was still only $4.00 per month which was one of the lower priced systems for 12 channels plus 45 FM channels.
MAYER: I think there was another question in regards to the present size of the system, especially the McGlaughlin system.
WALSON: The McGlaughlin system was sold within the last few months to me with 825 subscribers, and I presently have absorbed them into the Mahanoy City system. I bought the corporation.
MAYER: Here is a retransmission consent letter. This is one of the things that they try to track down too. No matter who is first, this was a problem at that time. Also, did you have any dealings with the FCC?
WALSON: I had dealings with the FCC all along in the microwave business and I had dealings in the CATV business.
MAYER: How early in regards to CATV? How did this develop?
WALSON: I wrote a letter to the FCC which I am presenting you with the original letter that was written to the FCC and I could give you the date of this. I haven't located the answer from the FCC but I think it could be had if someone could check the records of the FCC. That letter was dated August 28, 1950 and at that time we were already operating a twin‑lead system. We were worried about radiation of signal into people's homes and we started wiring the mountaintops like Frackville which was built on the top of a mountain.
MAYER: Did you have any dealings with the FCC prior to the 1950's?
WALSON: No, I haven't had. Anyway...
MAYER: And they never came to you?
WALSON: No. This letter states:
Gentlemen I am hereby applying for a license or permit to serve Mahanoy City District with television service for running a line from the mountaintop to Mahanoy City. This would involve serving customers off of a television antenna, in order to supply television service. This letter was written Aug. 28, 1950, and I haven't found a reply, but I imagine there was a reply to the letter, that may have been destroyed in the records.
MAYER: Could you tell me something about the founding of the NCTA and its development and growth and your activity in it through these many years.
WALSON: I've been a member of NCTA from its inception.
MAYER: In fact, you are one of the real pioneers.
WALSON: Marty Malarkey of Pottsville, Pennsylvania at the time, organized the NCTA, along with Bob Tarlton and the first meeting was held in the Necho Allen Hotel, and I imagine that there were anywhere between 12 and 15 people there. That's a prominent hotel in Pottsville, Pennsylvania.
Martin Malarkey was the type of person who liked to see the industry get ahead, and he contributed quite a bit to organizing and actually did the organizing of NCTA. At that time, fellows like Joseph Gans and my brother Peter, and Bob Tarlton were at the meeting and Martin Malarkey was at the meeting and George Bright was at the meeting.
MAYER: How about the Barcos. Were they involved?
WALSON: No, I don't think they were in it because they started after that. I just don't recall all the others who were there. I think there were between 12 and 18 people. At that time, there was a threat of UHF, channel 61 from WHUN, Reading starting their TV station and they would supposedly do away with CATV. There was a threat that they were going to do away with CATV by using the ultra high frequencies to distribute signals. They claimed that they could reach a radius of 150 miles with this transmission on top of a high mountain. At that time it was experimental.
At that time we only had three channels of television and at that meeting with Martin Malarkey they were worried about the channels. They were only giving three channels and these UHF stations would pop up and do away with CATV. I got up at the meeting and I said, "They won't do away with CATV because I am going to start a five‑channel system and give them more channels to meet the competition. It was only one day after the meeting, and I went up and installed five channels on my CATV system. I got the incentive to make adjacent channel operation of CATV effective. That was done by cutting the sound down, the adjacent channel picture down 15 dB in order to be able to have adjacent channel operations.
It shows you that even with competition, UHF was a threat in those days and was documented at the meeting. Marty Malarkey was there and all of those other people were there. I got up and made this speech about increasing the channel capacity from three channels to five channels. Everyone thought it was impossible to do, but I did it the next day. That was another first for Service Electric Co.
End Tape 1, Side A
MAYER: Did you have any dealings with the municipalities particularly as it relates to what they call franchises?
WALSON: In Mahanoy City, after operating for a few years, we had to get permission to use the streets and alleyways. The manager of PP&L at that time, felt that we better get permission to string the wires across the streets and alleyways. At that time, he advised me to write a letter to borough council. I wrote this letter Oct. 2, 1950 and it said:
We the Service Electric Co. located at Main and Pine Streets, Mahanoy City would like to secure permission to run television cable which is approximately one half inch in diameter across various streets within the borough. Installation of same will be done in a safe workmanship manner and will have the proper distance from the ground. If such permission is granted, will you kindly notify us? Thanking you for such consideration. Yours truly, Peter Walsonavich, Manager, Service Electric Co.
MAYER: All of this you did yourself, as opposed to being represented by counsel?
WALSON: That's right. Later on, in September 1950, the formal letter was written out. It was written to: Attention Harold Williams, Secretary of Borough Council.
Gentlemen: We the Service Electric Co., located at Main and Pine Streets in Mahanoy City would like to secure permission to run television cable carrying no voltage, which is approximately one half inch coax cable in diameter, across various streets within the borough. The installation of the same will be done in a safe, workable manner and will have the proper distance from the ground. If such permission is granted, will you kindly notify us. Thanking you for your consideration.
We felt at that time that we should have some written agreement from borough council to do this.
MAYER: The municipality never gave you any trouble?
WALSON: No, they never gave me any trouble, but they did issue a permit a very short while after that letter was written. They gave me a legal permit to cross the streets and alleyways in the borough and also, in and around the same time, PP&L gave me a temporary agreement on their behalf to go on the poles.
MAYER: So essentially the municipality gave you no trouble in regard to this. Did they subsequently, I notice there is no provision for payment to the municipality in terms of percentage of your gross.
WALSON: They still don't charge any percentage of the gross in Mahanoy City. They don't charge it in Frackville, or Tamaqua or most of the systems in Central and Eastern Pennsylvania. This percentage of the gross came about when competition tried to come in and compete with CATV systems. They gave the municipalities 2% of the gross and 4 or 5% in order to get a second franchise in the community. Allentown and Bethlehem area gave a second franchise to a competing cable company because the competing cable company offered 2% of the gross. Later on Allentown and Bethlehem made an ordinance to the fact that both cable companies would have to pay 2% of the gross. That was the only way the other cable company could come in.
Originally the cities did not want two cable companies in the community. The only reason that they did it was because they thought that 2% of the gross would be extra income for them, so this way, they allowed the second cable, the CATV system. Today there are two CATV systems in Allentown. My system has approximately 34,000 subscribers off of one antenna site. My competing system, I don't know how many subscribers, but it was estimated that they have between 12,000 and 18,000 subscribers.
MAYER: So in truth some of your systems pay the municipalities a percentage of the gross?
WALSON: Yes, that's right. The majority of my CATV systems do not pay a percentage of the gross.
MAYER: I noticed also that in the original agreement with the Power and Light Co., there was no specification for charges for pole attachment. About when did they start charging for pole attachment?
WALSON: The original agreement which was Oct. 2, 1950, they didn't charge any pole attachment at all. The second agreement came out in about 1951 and they asked for a charge of $1.50 per pole per year. Later on, ten years later, they increased it to $2.50 a pole. Presently, they are trying to increase it to $3.50 a pole.
MAYER: Do you have any other comments?
WALSON: No, except that I think it's a very interesting business and it has a great future and I think that there are a lot of things that can be done through cable TV, such as shopping by cable, and some things that could be done would be putting control data through cable.
MAYER: Do you have any reaction to some of the recent FCC rules or the talks of regulation from Washington.
WALSON: As far as I could see and as far as the FCC is concerned...
MAYER: How would it affect the operator, especially the operator who is a sole owner and not a public operator.
WALSON: Actually the FCC is trying to have an orderly development of CATV. My way of thinking, I think that the FCC has to get into the picture, because, just like any other industry, they have to have an orderly development. If CATV was allowed to expand as rapidly as they would like to, what would actually happen is that so many systems would develop so rapidly that there wouldn't be enough manufacturers to manufacture the cable. There wouldn't be enough money in the United States to finance this, and there wouldn't be enough suppliers of equipment to supply the equipment as rapidly as technology would be there to develop those systems. Therefore, the FCC feels that they would like to develop the CATV in an orderly fashion, and they would lease communities gradually as they saw fit, so it wouldn't be a rush on the industry.
MAYER: As a system owner and manager, what would your feelings be on such things as the possibility of cracking the top 100 markets with one item, the payment of 2% of the gross to the municipality. The limitation on cross‑ownership,
WALSON: The FCC is actually trying to develop CATV so that it has the stature of a broadcaster. They are trying to set up standards and ownership, and different things like you don't have a concentration of media and you don't have too many CATV systems owned by one owner, or that the newspaper cross‑ownership which would be newspaper and CATV‑‑two medias controlling the same audience or broadcasters controlling the same audience as they do on the television transmission.
MAYER: Do you expect, for the technical standards that they are setting up for CATV systems, do you think that this would tend to cause the small system operator to go out of business or might it tend to allow the existence of all reputable systems and merely protect the public interest?
WALSON: I think what's going to happen is that these technical standards are going to be severe enough on the small operator that he can't afford to reinvest enough money to come up to standards of these new rules. Those systems will merge into the larger systems. I think that they would like to have those standards updated. They would like to have better control of signals to give people better quality of signals.
MAYER: Do you think they are small or minimal standards?
WALSON: They are minimal standards presently, but they will become more strict later on. What's happening is that again, there will be an orderly development of CATV and what will happen is that smaller people who can't afford to live up to those standards would have to merge. They would have a piece of the CATV system instead of owning a small system independently just like the telephone companies have worked with the smaller companies and they have merged. I think the same thing is going to happen to CATV. It will be that maybe 50 or 60 prominent companies throughout the country will own CATV, and the amount of stockholders will be controlled by the large public segment. The public will have pieces of the business rather than have one owner in a quite concentrated area. I think this is the way the FCC is looking at it. They would like to have this thing spread between a lot of people rather than to have one big owner, a monopolist to own the whole thing.
MAYER: As an owner and manager and operator, what do you think of the FCC proposed mandatory local programming rules?
WALSON: I think that they are trying to fill in a programming void, they are trying to do the things that the local broadcaster cannot do. The local broadcaster cannot devote a lot of time to locally originated programs, things of local interest, because, he doesn't have enough space. He's interested in getting his station to pay for itself, because he's got to get some of the big advertisers and things like that. He cannot spend a lot of time on local programming for all of the communities that he serves. He serves a great area and he can't concentrate on a little city like Mahanoy City and also Wilkes‑Barre, and also Hazelton and Frackville and Girardville and have a special program for those communities.
I think what the FCC wants is some local origination programs, the news and the weather show. For instance, in Allentown, we have a half‑hour show called Lehigh Valley News. We put a program on giving the local stocks, the local news, things that have happened just locally in Allentown and that area. We have been putting programs on, local basketball games that are not televised by the big broadcasters, and local wrestling matches from Lehigh University, and local bowling teams. We are not in competition with the broadcasters, we are just supplementing things that they can't do on the broadcasting facilities because they don't have the frequency space for it.
MAYER: You don't think that this would be overburdening in any way?
WALSON: It wouldn't overburden the bigger people. It would overburden the smaller people but the rules state 3,500 or more, and anyone with 3,500 subscribers I think eventually could make the thing actually pay for itself. He could make it break even I would say. I don't think that he would make any money, but he would be providing a group public service, which the FCC would like to have and to fill in the voids on the spectrum space. Today, there's not enough frequency space to have enough channels in order to cover these small communities. One station covers a lot of communities, it may cover a 50 mile radius, where with CATV, it may cover a little community here, and a little community there. It gives more specialized attention to the local public, things of local interest, political things that are going on in the community, and he could give free time to people who are running for office that a broadcaster can't afford, because it's immaterial for a person running for council in Mahanoy City to broadcast over a Wilkes‑Barre station.
There would be no interest for the rest of the public to listen to some politician from Mahanoy City looking for a councilman's job. The CATV system could put the councilman on his cable and it would be of local interest where the broadcaster could not do that because he wouldn't have enough time available during election time to put all of those small political events on. I think that CATV will fill in that void and not be competitive with the broadcaster at all. I think they will cooperate with the broadcaster.
MAYER: Do you have any reaction to importation of distant signals since it looks like they might allow it when we pay .7% of the gross. Does this hold opportunity especially for systems in areas of central Pennsylvania and northern New Jersey?
WALSON: My view on this importation of distant signals, I feel that if a signal can be received off the air with an antenna, and anybody else can receive the signals, I think that CATV should be allowed to receive the signals. Contrary to the fact that it's hurting the local UHF stations, it does not hurt them because what's actually happening... people that want to watch the network show, are going to watch the local program because it's a better quality and the station is close. As long as CATV is required to carry that station, the people who watch the network show rather than the distant signals coming in are not competing with the network show.
Most of those distant signals cannot compete with the local show that is of national origin, because the shows are so much better than the independent distant station. Therefore, the only thing that you're really doing is for the small segment of people who want to watch a special program other than this, those people who still watch it regardless, because if they can receive it with their own antenna and you can give them a little better on a cable system, there's no reason in the world that you shouldn't be able to do this without any charge. If your neighbor could do it with his own antenna, receive all of those distant signals, even if they are 50 or 60 miles away, as long as they're receivable, the CATV systems should be allowed to put them on without charge, this is my personal opinion.
MAYER: What about importing from New York to Allentown, can it now be received?
WALSON: It can be received with a normal antenna, so they should be allowed to receive it and they are receiving it. The only thing is that in Washington, they eliminate Baltimore signals from coming into Washington. Baltimore stations are able to be received on antennas in Washington.
MAYER: Almost like Los Angeles to San Diego.
WALSON: Baltimore stations are able to be received from antennas on roof tops, so why should the people on a CATV system that could be built in Washington be deprived of receiving the same thing that their neighbor could receive off their own antenna. I felt that there shouldn't be any compromise for that and there shouldn't be any fees paid for what you could normally receive off the air. I do believe that if you microwave a signal that cannot be received off the air, I think it should be paid for. I think the fees should be charged, the owner of that system should pay a copyright fee, and I think that he could get his compensation by increased rates to the subscriber. I think that this is fair and square in my opinion.
MAYER: Well thank you ever so much.