Chapter List

1.1 Introduction

Currently, cable television service is enjoyed by nearly 65 million U.S. households. This is a market penetration of nearly 67%. Cable service is available to 96.7% of U.S. television households. ¹

Cable television is an important part of the way in which the citizens of the United States are informed and entertained. It is a means of providing large numbers of television channels to more than two-thirds of the U.S. population in a cost-effective way.

Because cable television has been so successful and has enjoyed such vigorous growth and acceptance, it has spawned competitors, including prerecorded media (tape and disk sales and rentals), direct broadcast satellite (DBS), as well as the interest of the telephone industry. Cable s high visibility has also attracted the attention of regulators and legislators. Important public policy issues are involved. Understanding what cable television is, how it works, and its economics will help decision makers in these arenas. This understanding will also aid technologists in determining which technologies are appropriate for cable television applications and which are not.

Television has long been the preferred source of information for the general public, and cable television offers viewers more choice than ever before. In fact, if cable had to be described with one word, that word would be choice. Choice is made possible by cost-effective bandwidth to deliver programming to almost 70% of the households having televisions in the United States. Since cable is available to more than 90% of television households, nearly everyone has the opportunity to subscribe to cable. In the United States, more people have televisions than telephones, and most of those people have cable.

There are more than 160 programs on the satellites that feed cable headends. Cable systems must select some of the programs they will offer to their subscribers from all those available since no analog cable system has sufficient capacity to carry them all. In addition, cable systems carry the local broadcasts and some programs locally originated or designated for local citizen access. In some cable systems, the local schools, library, or government has channels to deliver programs of special interest. In this way, the needs of a democratic society are served while citizens are well informed and entertained.

The broadband cable infrastructure can deliver an appealing analog service while adding hundreds of digital channels. This hybrid service is important for the transition to digital television since...