Independent cable networks sprang up in Arkansas, Oregon and Pennsylvania in 1948. These networks used a master antenna installed on a mountain or other elevated location in the neighborhood to receive the signal from over-the-air broadcast stations. Each subscriber's home was connected to the neighborhood antenna via cable so it could receive the broadcast signal with only a small loss in quality.
Cable television broadened its reach in the 1960s, with big-name investors such as Jack Kent Cooke, Bill Daniels, Westinghouse and Cox getting involved in this new market. There were nearly 800 cable systems in the United States in 1962 and 850,000 customers receiving service. This led the broadcast television stations to ask the Federal Communications Commission (FCC) to regulate the expansion of new cable systems.
In the 1970s, the FCC limited the cable systems even more by prohibiting them from offering syndicated programming, coverage of live sporting events and movies. These restrictions were gradually lifted starting in 1972, when the federal government decided to deregulate the cable industry to allow for new growth. That year also saw the introduction of the first cable network that charged its own subscription fee. Called Home Box Office (HBO), the network used a satellite transmission system to beam its signal to cable systems across the country.
Deregulation of the cable industry continued in the 1980s, with 1984's Cable Act setting up a standardized set of rules for all cable systems in the country. Combined with the newly available satellite delivery systems, this led to a massive expansion in the cable industry. At the end of the 1980s, there were about 53 million cable subscribers and 79 networks providing their own specialized type of programming.
The federal government had to get involved with the cable industry again in 1992, when cable prices were skyrocketing. Programming that had previously been restricted to the cable companies was now opened up to satellite providers and wireless cable systems to bring down the prices through competition. Because of these expanded opportunities to reach new subscribers, the number of cable networks continued to grow throughout the 1990s, reaching 171 by 1998.
To compete with the growing satellite industry, cable companies added new features like on-demand programming and digital video recorders. Most cable companies also expanded their offerings to include local telephone and high-speed Internet service, allowing them to offer discounts for packaged services that the satellite companies could not match.