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Speaker 1: Get in tech with technology with Text Stuff from Stuff

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Speaker 1: technolog Hey there, and welcome to Text Stuff. I am

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Speaker 1: your host, Jonathan Strickland, and today I wanted to take

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Speaker 1: a look at a company that has become an enormous

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Speaker 1: powerhouse both on and offline, Comcast. Anyone who has listened

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Speaker 1: to me on various shows knows that I have some

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Speaker 1: pretty strong opinions, but I am going to do my

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Speaker 1: best to be as unbiased as possible. I do not

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Speaker 1: promise that snark will be completely kept out of my

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Speaker 1: voice through the entirety of this episode, but I will

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Speaker 1: do my best. Um, And also just know that this

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Speaker 1: is a huge topic, so I am already going to

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Speaker 1: tell you it will be a two parter. Otherwise it

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Speaker 1: would be an epically long podcast, So we're gonna split

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Speaker 1: this up at a two parts. So the reason why

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Speaker 1: I wanted to look at this, the thing that that

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Speaker 1: kind of spurred me into talking about Comcast, actually comes

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Speaker 1: from a recent experience I had. So I'm recording this

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Speaker 1: on Thursday, the twenty two of October two thousand fifteen.

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Speaker 1: But on Monday, October nineteen, something special happened and I

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Speaker 1: wanted to take part in it. That's something special. Was

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Speaker 1: that Star Wars episode seven, the Force Awaitkens the the

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Speaker 1: advanced tickets went on sale, and it was announced that

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Speaker 1: they went on sale a little earlier than what people

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Speaker 1: had originally anticipated. So I rushed to try and buy tickets,

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Speaker 1: and uh. One of the many things I tried to

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Speaker 1: do was use Fandango. But it was very clear that

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Speaker 1: there was an amazingly huge rush on tickets for the

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Speaker 1: Fandango servers, as well as all the other services out there,

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Speaker 1: and you could say that the servers for Fantango weren't

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Speaker 1: fully operational in the parlance of Star Wars, and I

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Speaker 1: started getting irritated. But then I remembered that Fandango is

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Speaker 1: owned by Comcast, and then I thought, anger leads to hate.

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Speaker 1: Hate leads to podcasts. But I promise I will do

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Speaker 1: my best to remain objective and dispassionate as we look

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Speaker 1: at the company, its history and the role it plays

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Speaker 1: in their entertainment. And it's a really long history too.

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Speaker 1: So before I talk about Comcast in particular, let me

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Speaker 1: set the stage with some history about cable television. Now.

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Speaker 1: Cable tv got its start back in the nineteen forties

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Speaker 1: in the United States, and there was a need for

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Speaker 1: an alternative to over the air broadcasts because some people

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Speaker 1: lived in remote locations that were too far away for

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Speaker 1: over the air air waves to make it to their

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Speaker 1: homes with any sort of fidelity, or they might live

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Speaker 1: in areas where radio waves had trouble reaching, like in

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Speaker 1: mountainous areas where a mountain might be blocking the radio waves.

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Speaker 1: So cable TV was the solution, and the basic model

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Speaker 1: was pretty simple in its design. In fact, the earliest

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Speaker 1: models just involved people setting up an antenna on a

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Speaker 1: really tall structure or a mountain or something like that,

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Speaker 1: and then physically running a cable from the antenna to

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Speaker 1: their television sets. But beyond that you started to get

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Speaker 1: actual organized businesses that would do this on behalf of customers. You,

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Speaker 1: as a customer, would pay the business for the access

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Speaker 1: to these over the air broadcast that otherwise you would

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Speaker 1: not be able to reach. So you would have a

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Speaker 1: broadcast station that would send out television along a certain

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Speaker 1: channel or frequency of radio waves, and your cable station

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Speaker 1: would essentially just be a set of receivers antenna in

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Speaker 1: other words, which would pick up these broadcasts and then

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Speaker 1: feed them through physical cables to their destinations, So early

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Speaker 1: cable was still very much reliant on over the air broadcast.

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Speaker 1: It was just an alternative way to get that that content,

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Speaker 1: and channels don't take up much bandwidth on a physical cable.

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Speaker 1: Each channel is six mega hurts, and a cable is

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Speaker 1: capable of holding hundreds of mega hurts of signals, and

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Speaker 1: using compression, you can even send multiple stations down a

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Speaker 1: single six mega hurts channel, So you can blast a

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Speaker 1: huge amount of channels through a single cable, and the

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Speaker 1: cable box or television at the other end of that

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Speaker 1: cable can tune into specific channels and block all the

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Speaker 1: others out. So, in other words, imagine that you are

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Speaker 1: in a room and there's every actor you've ever known

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Speaker 1: about in that room, and they're all acting their hearts

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Speaker 1: out at you at the same time, but you have

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Speaker 1: the ability to tune into a specific actor and tune

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Speaker 1: out everybody else. That's basically what's going on with cable

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Speaker 1: on a technological level. And when you opt into a

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Speaker 1: cable bundle often that means that you're also getting the

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Speaker 1: cable company to decrypt information. So what's happening on the

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Speaker 1: cable side, the cable operator side, is that they will

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Speaker 1: encrypt certain channels, like pay channels that otherwise you would

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Speaker 1: get for free. If you didn't have that encryption, then you,

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Speaker 1: as a customer would be able to access everything a

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Speaker 1: cable channel operator had to offer. But by encrypting it,

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Speaker 1: then the cable company can control which channels you can

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Speaker 1: actually view and which ones are off limits. When you

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Speaker 1: opt in to a cable bundle, like you you subscribe

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Speaker 1: to a specific cable service, they essentially send a message

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Speaker 1: to your television or a cable box and that allows

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Speaker 1: you to decrypt the signal on your end so that

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Speaker 1: you can actually watch it. And the United States, communities

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Speaker 1: in Pennsylvania, Oregon, and Arkansas were among the first to

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Speaker 1: receive cable service, and by that I mean people were

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Speaker 1: actually going out and setting up these antenna. By n two,

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Speaker 1: there are about seventy actual cable systems in the entire country.

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Speaker 1: So these were actual companies that had taken the same

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Speaker 1: sort of model that these enterprising individuals had followed and

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Speaker 1: actually made a business out of it. They only had

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Speaker 1: about fourteen thousand customers back in nineteen fifty two, but

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Speaker 1: cable television had a big advantage over home antennas in

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Speaker 1: that if you use a sophisticate antenna and you were

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Speaker 1: able to put it on a really tall building or

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Speaker 1: a mountain or some other really tall structure, you could

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Speaker 1: pick up signals from much further away than folks who

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Speaker 1: are just using regular rabbit ears on their televisions, Which

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Speaker 1: meant that cable customers sometimes could pick up signals from

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Speaker 1: other broadcast regions, so you might be able to get

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Speaker 1: content from multiple large cities. If you lived kind of

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Speaker 1: in between two big cities and you had this cable,

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Speaker 1: it might mean that you were able to double your

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Speaker 1: programming options. At least it may be that, you know,

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Speaker 1: the two elliots of of a major broadcast station are

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Speaker 1: showing more or less the same thing, but throughout the

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Speaker 1: day you would have some different options available to you,

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Speaker 1: which made cable fairly attractive. It was sort of the

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Speaker 1: beginning of cable's advantage over over the air broadcast, although

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Speaker 1: as we'll talk about a little bit later, over the

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Speaker 1: air still had a lot of other advantages. So interesting

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Speaker 1: cable TV began to grow, particularly among people who just

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Speaker 1: couldn't get over the air easily. By nineteen sixty two,

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Speaker 1: the number of customers had grown to more than eight

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Speaker 1: hundred thousand people in the United States, So in ten

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Speaker 1: years it went from fourteen thousand customers to eight hundred

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Speaker 1: thousand in the US. Cable TV was becoming a viable alternative,

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Speaker 1: even in communities that didn't have problems accessing over the

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Speaker 1: air signals. But it was also one of those things

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Speaker 1: that cities were starting to look into because if you

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Speaker 1: lived in a city with lots of high rise buildings,

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Speaker 1: sometimes that would block radio signals too. So it was

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Speaker 1: one of those things that that you could see the

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Speaker 1: the benefit, the potential application, but it was still going

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Speaker 1: to be really expensive to roll out the infrastructure. All right, Well,

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Speaker 1: that that sets the groundwork for what the cable industry

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Speaker 1: was like in the early sixties. Let's take a look

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Speaker 1: at Comcast specifically. The company actually traces its history back

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Speaker 1: to nineteen sixty three. That's when Ralph J. Roberts, Daniel

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Speaker 1: Aaron and Julian A. Broad Ski purchased a small cable

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Speaker 1: TV operator called American Cable Systems, which was in Tupelo, Mississippi,

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Speaker 1: and that service had just one thousand, two hundred subscribers

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Speaker 1: and that was it. The three businessmen spent five hundred

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Speaker 1: thousand dollars on that purchase. So who were these guys? Well,

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Speaker 1: Ralph J. Roberts grew up in New York and in Philadelphia.

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Speaker 1: He served in the United States Navy before going on

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Speaker 1: to work several different jobs. He gradually he earned enough

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Speaker 1: money to purchase a business of his own. He and

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Speaker 1: his brother went into a business. They invested in, a

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Speaker 1: company called Pioneer Suspender Company. It turns out there was

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Speaker 1: money in Suspenders because he and his brother decided to

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Speaker 1: sell the business off later on, and with that money

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Speaker 1: it allowed them to invest in other companies. So Ralph

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Speaker 1: Roberts ended up looking into the world of TV, and

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Speaker 1: it was reportedly Roberts who came up with a name

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Speaker 1: Comcast in nineteen sixty nine. So several years down the

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Speaker 1: road he would combine the words communications and broadcast together

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Speaker 1: to create the name Comcast, and he would serve as

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Speaker 1: Comcast Chief executive Officer for more than four decades. Uh.

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Speaker 1: Ralph J. Roberts passed away in June of two thousand

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Speaker 1: and fifteen, so very recently as of the recording of

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Speaker 1: this podcast now. Daniel Aharon was born in nineteen twenty

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Speaker 1: six in Giessen, Germany. His family escaped Germany during the

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Speaker 1: rise of the Nazi Party in World War Two, and

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Speaker 1: they settled in Queens, New York. Now Tragically, when he

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Speaker 1: was just thirteen years old, he lost his mother. She

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Speaker 1: committed suicide, and less than a month later, his father

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Speaker 1: also committed suicide. Daniel Aaron was orphaned and he was

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Speaker 1: not yet a citizen. He continued to live in New

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Speaker 1: York and eventually he would be drafted and sent to

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Speaker 1: Germany during World War Two. When he returned, he pursued

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Speaker 1: a career in journalism and public relations. Eventually he entered

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Speaker 1: the cable business and that's when he met Roberts and

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Speaker 1: agreed to co found Comcast. In his obituary, he was

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Speaker 1: referred to as the conscience of the company, famously even

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Speaker 1: buying coffee for picketing employees who were in a labor

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Speaker 1: dispute with Comcast. So he was sort of the working

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Speaker 1: man's representative among the three co founders of this company.

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Speaker 1: He passed away in two thousand three. Julian Brodsky grew

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Speaker 1: up in philade, Alphia. He had served in the United

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Speaker 1: States Army and he became an accountant after he left

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Speaker 1: the service. So Bronsky served as Robert's accountant, Ralph J. Roberts,

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Speaker 1: So he was actually the accountant for Ralph J. Roberts

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Speaker 1: and was approached by Roberts and by Aaron when they

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Speaker 1: were preparing to purchase this company, this little cable company

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Speaker 1: in Tiple of Mississippi, and Brodsky's main role was to

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Speaker 1: raise money for the company. In two thousand eleven, Brodsky

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Speaker 1: retired as the vice chairman of the company, and of

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Speaker 1: the three founders, he is the only one who is

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Speaker 1: still alive as of the recording of this podcast. Now.

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Speaker 1: Daniel Aaron is credited with having compared the three co

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Speaker 1: founders as three people trying to drive a single car,

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Speaker 1: and he said that Brodsky was the guy who had

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Speaker 1: his foot on the accelerator as he was raising capital

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Speaker 1: for the venture. Uh. Meanwhile, his own foot, Aaron, his

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Speaker 1: own foot was on the break to make sure the

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Speaker 1: company was a good corporate citizen, stepping on the brakes

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Speaker 1: to slow down the company if he thought that they

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Speaker 1: were about to do something reckless or damaging or or

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Speaker 1: just unethical. And meanwhile, we're alf Dave Roberts. His hands

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Speaker 1: were on the steering wheel, guiding the company along. In

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Speaker 1: those early days of cable the company faced some pretty

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Speaker 1: big challenges. According to the founders, they actually had to

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Speaker 1: act as door to door salespeople on occasion in an

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Speaker 1: effort to grow. So they were physically going out knocking

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Speaker 1: on people's doors and telling them about cable service in

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Speaker 1: an effort to get more customers. They came to the

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Speaker 1: conclusion that expansion would require purchasing other cable companies, and

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Speaker 1: this is a philosophy that Comcast has stuck with time

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Speaker 1: and time again over its long history. They have purchased

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Speaker 1: numerous companies that I will go into in some detail

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Speaker 1: throughout these two episodes. Now, originally they focused on other

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Speaker 1: cable services in the state of Mrs Sippy, So they

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Speaker 1: began to expand both in eastern and western Mississippi and

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Speaker 1: really focused on that state. But they were still finding

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Speaker 1: it difficult to get enough customers to make a profit

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Speaker 1: after going through the expense of setting up and maintaining

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Speaker 1: cable systems. So, in other words, they're operating expenses were

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Speaker 1: too close to the amount of money they were bringing in.

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Speaker 1: It wasn't really a fast growing company. It wasn't a

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Speaker 1: fast growing business, and they were trying to find new

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Speaker 1: ways to add to that as quickly as they possibly could.

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Speaker 1: In the company, which at that point was still known

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Speaker 1: as American Cable Systems, purchased another company called Storecast Corporation

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Speaker 1: of America. Here's the difference. Though Storecast was not a

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Speaker 1: cable service company, it was a marketing firm. And only

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Speaker 1: was it a marketing firm, it was a marketing firm

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Speaker 1: that had a very specific kind of clientele. They were

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Speaker 1: chiefly known for helping food companies work with supermarkets to

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Speaker 1: maximize sales prices are sales of the products, by placing

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Speaker 1: those products in prominent locations. In other words, they would

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Speaker 1: go into a supermarket on behalf of a client, Let's

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Speaker 1: say Wonderbread. I'm just taking that as a random example.

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Speaker 1: I don't know if Wonderbread was actually one of their clients.

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Speaker 1: But let's say they go into a supermarket they're representing Wonderbread,

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Speaker 1: and they go to the bread aisle and they look

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Speaker 1: around and they say, well, this is not great for

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Speaker 1: our client. We recommend you move this to this shelf.

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Speaker 1: If you're gonna move more product this way, you're gonna

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Speaker 1: increase your sales. Our client will be happy, You'll be

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Speaker 1: happy that's the kind of work they were mostly known

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Speaker 1: for doing, so a little odd that Comcast or at

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Speaker 1: that time, American Cable Systems would purchase this type of company.

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Speaker 1: Comcast continued to try and grow through acquisitions during this time,

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Speaker 1: and in nineteen sixty six, Ralph J. Roberts turned his

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Speaker 1: attention to Philadelphia. Keep in mind, that's one of the

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Speaker 1: cities he grew up in New York and Philadelphia is

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Speaker 1: where he spent his childhood, and he bought cable systems

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Speaker 1: that were serving the suburbs of Philadelphia, and later on

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Speaker 1: he would also purchase a few that we're serving Western Pennsylvania.

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Speaker 1: Philadelphia is in the east part of Pennsylvania. He then

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Speaker 1: began to expand that service into neighboring communities and an

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Speaker 1: effort to scale up operations, so instead of just acquiring

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Speaker 1: cable businesses, he was actually trying to lay out the

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Speaker 1: infrastructure to connect these various areas and scale up the

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Speaker 1: entire operation, kind of consolidating them. In nineteen sixty eight,

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Speaker 1: they would make another slightly weird purchase. Comcast or or

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Speaker 1: American Cable system still at that time, bought a Musaic

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Speaker 1: franchise in Orlando, Florida. You're probably aware of music. Music

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Speaker 1: if you're if you never directly experienced it, you definitely

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Speaker 1: have a right. I'm guessing you've heard the term music

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Speaker 1: is a company that would create and distribute very soothing music,

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Speaker 1: sometimes very soothing versions of popular songs that would play

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Speaker 1: in the background of things like elevators and grocery stores

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Speaker 1: and you know other places, dentist office, that kind of

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Speaker 1: stuff where it's supposed to, you know, lull you and

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Speaker 1: relax you. And it often makes me angry because often

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Speaker 1: I can recognize the original song that the music is

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Speaker 1: doing and it doesn't necessarily make me happy to hear

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Speaker 1: it in a very laid back kind of approach. At

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Speaker 1: any rate, they wanted to purchase a franchise in Orlando, Florida.

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Speaker 1: And one of the reasons this might be the case

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Speaker 1: is because Ralph Roberts's brother, Joe, was an executive vice

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Speaker 1: president of the Music Corporation, which might raise a few

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Speaker 1: eyebrows today that two brothers are essentially doing business with

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Speaker 1: one another and doing acquisitions of companies, one selling to

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Speaker 1: the other, But at any rate, that's what happened. In

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Speaker 1: nine In n the company finally changed as changes its

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Speaker 1: name to Comcast and reincorporates, this time in Pennsylvania. In

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Speaker 1: nineteen seventy, the company reorganized so it sold off its

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Speaker 1: Florida operations, which had just bought two years earlier, to

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Speaker 1: another company called STORER Communications, which will come back into

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Speaker 1: play a little later in the episode. And Comcast began

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Speaker 1: to expand into other markets, primarily Maryland at that point,

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Speaker 1: and also explored options and limited partnerships rather than outright acquisitions,

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Speaker 1: which gave the company a bit of an advantage in

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Speaker 1: that through a limited partnership, Comcast could get access to

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Speaker 1: customers but not have to commit so much of its

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Speaker 1: operating funds to expand the company, and this way it

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Speaker 1: would allow the company to grow without having to spend

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Speaker 1: millions of dollars is acquiring other cable systems, although it's

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Speaker 1: still pursued that as well, and the music party continued.

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Speaker 1: At the same time, Comcast bought franchises and multiple cities

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Speaker 1: like Detroit, San Diego, and Hartford, Connecticut. By nine two,

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Speaker 1: Comcast was able to hold an initial public offering was

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Speaker 1: able to launch as a publicly traded company. Stocks were

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Speaker 1: traded on the Nasdaq stock market and the ticker symbol

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Speaker 1: was c M C s A, and it continued to grow.

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Speaker 1: It would acquire smaller cable companies and incorporate them into

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Speaker 1: its own service, and the company spread across the United

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Speaker 1: States using these sort of acquisitions, but it was still

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Speaker 1: finding it challenging to penetrate markets through other means. In

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Speaker 1: other words, they were having trouble selling the idea of

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Speaker 1: subscribing to Comcast. They found it easier to purchase the

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Speaker 1: cable systems people were already using and then lump them

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Speaker 1: under Comcast, and thus the people became Comcast customers by default.

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Speaker 1: It wasn't necessarily that they chose Comcast, but rather that

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Speaker 1: the company they had been a customer of before now

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Speaker 1: belonged to Comcast, and that also included expanding its hold

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Speaker 1: on music. By nineteen seventy three, Comcasts Music Network division

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Speaker 1: was the largest independent musach operator. So music operates under

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Speaker 1: a franchise system, which means that when Comcast would buy

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Speaker 1: up a franchise would buy up one region and other

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Speaker 1: franchises would remain independent of Comcast. But Comcast kept on

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Speaker 1: doing this and thus became the largest independent musaic operator.

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Speaker 1: So if you're a child of the early seventies and

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Speaker 1: wondered where that easy listening music came from. There are

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Speaker 1: good odds that Comcast was ultimately responsible. And also in

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Speaker 1: nineteen seventy four, Ralph Roberts's son Brian started working at

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Speaker 1: Comcast officially UH, specifically working for Storecast as an intern,

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Speaker 1: and by the following year he would start training as

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Speaker 1: a cable installer, which included home installations and climbing poles

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Speaker 1: to hook connections from drops to the home the home area,

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Speaker 1: and by three he would become the general manager of

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Speaker 1: the Trenton system for Comcast, and by four he would

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Speaker 1: become vice president of operations for the cable division. So

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Speaker 1: within a decade of starting to work for the company officially.

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Speaker 1: There are some reports that say that Brian Roberts was

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Speaker 1: working at Comcast when he was just seven years old,

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Speaker 1: which brings into questions some child labor laws, But at

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Speaker 1: any rate, he within a decade he would go from

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Speaker 1: intern to vice president of operations with a cable division.

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Speaker 1: And UH this also raised some questions because, I mean,

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Speaker 1: he's the son of one of the founders, so there's

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Speaker 1: a little bit of legacy issue going on here, But

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Speaker 1: he consistently showed that he was very dedicated to the company,

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Speaker 1: so I don't mean to suggest that he didn't deserve

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Speaker 1: this position. He certainly has been a great deal maker

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Speaker 1: for Comcast and has led the company to some massive,

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Speaker 1: massive business deals that we'll talk about in a second.

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Speaker 1: But uh, it's still raised some eyebrows in the community

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Speaker 1: of cable industry. In nineteen seventy six, the co founder,

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Speaker 1: Daniel Aharon would become the chairman of the National Cable

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Speaker 1: and Television Association, which is essentially a lobby group. It's

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Speaker 1: it's kind of an advocacy group for cable companies, cable industry,

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Speaker 1: cable service providers, and was really focused on helping shape

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Speaker 1: policy in the United States that would remove challenges, obstacles,

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Speaker 1: and restrictions facing the cable industry. And in some cases

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Speaker 1: these were restrictions that were entirely arbitrary and unfair. I

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Speaker 1: don't mean to suggest that they were working to completely

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Speaker 1: leverage everything so that cable companies could dominate all telecommunications industries,

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Speaker 1: but rather to try and address some problems that the

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Speaker 1: cable industry faced. Because it was brand new, this was

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Speaker 1: something I mean, even even by the seventies, this was

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Speaker 1: still relatively new and still UH something that had to

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Speaker 1: battle with much more entrenched systems like the telephone companies

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Speaker 1: and the over the year broadcast companies. Also in nineteen

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Speaker 1: seventy seven, Comcast would add HBO to twenty thousand customers

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Speaker 1: in Pennsylvania with a five night preview, so customers got

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Speaker 1: five nights free HBO, which was a fledgling company at

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Speaker 1: that point, and afterward Comcast received three thousand subscription orders

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Speaker 1: once the preview period ends, So it was a fairly

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Speaker 1: successful preview. And if you listen to the story of HBO,

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Speaker 1: which I believe was a three part episode that that

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Speaker 1: I did, it's at least two parts at any rate,

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Speaker 1: but I did that quite a while ago. If you

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Speaker 1: go and look at the Tech Stuff archives, you can

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Speaker 1: find the HBO story where we talk a little more

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Speaker 1: about how HBO also really shaped the cable industry as

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Speaker 1: it became more and more important. In Night, Daniel Aaron

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Speaker 1: would become UH. He would use his position as the

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Speaker 1: chairman of the National Cable Television Association or in c

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Speaker 1: t a UH and successfully lobby the United States government

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Speaker 1: to reduce restrictions on what cable operators could carry. So

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Speaker 1: up to that point, there had been some limitations on

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Speaker 1: some of the programming that cable operators could offer their customers,

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Speaker 1: and often this was programming that their customers actually wanted

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Speaker 1: access to, but the cable operators their hands were tied.

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Speaker 1: They were not allowed by law to carry that programming.

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Speaker 1: So the n c t A was able to argue

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Speaker 1: successfully on behalf of cable operators and even reach the

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Speaker 1: point where cable could offer up channels that weren't broadcast

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Speaker 1: over the air, meaning that cable companies could now create

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Speaker 1: or partner with creators to provide content that otherwise people

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Speaker 1: would never see because there'd be no other way of

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Speaker 1: getting it. That actually created a market advantage for cable

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Speaker 1: over classic over the year broadcasts, because now not only

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Speaker 1: could you get something that wasn't going to be affected

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Speaker 1: by radio transmissions, but you could see content that would

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Speaker 1: not be available to you otherwise. And by ninety eight,

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Speaker 1: Comcast earnings were an excess of three million dollars, which

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Speaker 1: is chicken feed compared to what they make today, but

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Speaker 1: still was impressive at the time, and Comcast made its

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Speaker 1: first international move in nineteen three, they expanded into the

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Speaker 1: United Kingdom. The company was finding it increasingly difficult to

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Speaker 1: acquire new operations. In the United States. At that time,

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Speaker 1: there were only a few major cable operators left that

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Speaker 1: had not been scooped up by one of the chief

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Speaker 1: competitors to Comcast, so that meant that there were only

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Speaker 1: a few limited service areas, meaning there was very little

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Speaker 1: potential for g oath if Comcast purchased those companies, and

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Speaker 1: they were pretty expensive, so it wasn't a very attractive

402
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Speaker 1: investment on the part of Comcast. But on the other hand,

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Speaker 1: in the United Kingdom was a totally different story. Cable

404
00:25:12,240 --> 00:25:16,800
Speaker 1: operators had barely touched the UK, so Comcast jumped on

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Speaker 1: that opportunity. Meanwhile, back in the States, Comcast caught a

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Speaker 1: lucky break when the United States government passed the Cable Act,

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Speaker 1: which prevented telephone companies from entering the cable business, which

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Speaker 1: was a stroke of luck for Comcast because the government

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Speaker 1: had just broken up the Bell system, which you can

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Speaker 1: hear about in our episodes on the History of A

411
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Speaker 1: T and T, another multi part series that explains why

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Speaker 1: the telephone system in the United States is the way

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Speaker 1: it is and how the telecommunications industry changed as a

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Speaker 1: result of it. In Comcast would purchase twenty six percent

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Speaker 1: interest in Group W Cable Incorporated. Now that investment more

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Speaker 1: than doubled the number of Comcast customers at that time,

417
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Speaker 1: adding one point two million people to Comcast services. And

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Speaker 1: Comcast also helped found a little shopping company called QVC

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Speaker 1: and they invested three d eighty million dollars in the

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Speaker 1: founding of that company. Now they did not own QVC,

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Speaker 1: they owned an interest in QVC. And another big buy

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Speaker 1: at that time was STORER Communications Incorporated. You may have

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Speaker 1: remembered that just a few minutes ago I talked about

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Speaker 1: STORER Communications where uh they there was the the buying

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Speaker 1: of Musach and the selling of Musach. Well, Comcast purchased

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Speaker 1: fifty interest in STORER Communications, in which propelled Comcast into

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Speaker 1: fifth place among the largest cable TV operators in the US.

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Speaker 1: The company now had two million subscribers, and that same

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Speaker 1: year Bran roberts was elected to the board of directors

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Speaker 1: of Comcast. So now Ralph J. Roberts Son is on

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Speaker 1: the board of directors. Comcast would celebrate its twenty five

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Speaker 1: years of business and also acquire the American Cellular Network Corporation,

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Speaker 1: or am Cell. This creates a new division in the

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Speaker 1: company called Comcast Cellular Communications. And over the years the

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00:27:17,119 --> 00:27:22,160
Speaker 1: division grows as Comcast acquires more cellular companies. And now

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00:27:22,200 --> 00:27:25,760
Speaker 1: we get to a complication, right because just a minute

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00:27:25,760 --> 00:27:27,399
Speaker 1: ago I talked about the Cable Act. It was an

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00:27:27,440 --> 00:27:30,240
Speaker 1: important point in the history of cable and telephone service.

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00:27:30,800 --> 00:27:33,440
Speaker 1: The Cable Act prevented telephone companies from getting into the

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00:27:33,480 --> 00:27:36,960
Speaker 1: cable business, and cable companies were likewise prevented into getting

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00:27:37,000 --> 00:27:42,360
Speaker 1: into landline telephone business. But the blossoming cell phone service

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00:27:42,440 --> 00:27:45,920
Speaker 1: industry was a different story. So Comcast could totally get

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00:27:45,960 --> 00:27:51,120
Speaker 1: into cell phones and not violate this restriction on landlines.

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00:27:51,760 --> 00:27:55,359
Speaker 1: So Comcast acquisition marked the first time people in the

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00:27:55,440 --> 00:27:59,760
Speaker 1: United States could look to a non telephone company for phones.

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00:28:00,040 --> 00:28:05,080
Speaker 1: Of this which was massively important. It's really hard to

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00:28:05,119 --> 00:28:10,200
Speaker 1: actually express what that meant at the time, but keep

448
00:28:10,240 --> 00:28:13,080
Speaker 1: in mind, like you have telephone companies that have been told, hey,

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00:28:13,119 --> 00:28:17,520
Speaker 1: you can't get into this other industry because it's blossoming,

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00:28:17,520 --> 00:28:20,520
Speaker 1: it's just starting, and we don't want to kill it

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00:28:20,720 --> 00:28:24,840
Speaker 1: before it gets a chance to establish itself. Meanwhile, the

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00:28:24,840 --> 00:28:27,879
Speaker 1: other side is getting into a related business for the

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00:28:27,920 --> 00:28:31,480
Speaker 1: telephone industry, and so you now have these massive companies

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00:28:31,480 --> 00:28:35,200
Speaker 1: in the telephone industry kind of scared about what's going

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00:28:35,240 --> 00:28:41,960
Speaker 1: to happen because they have limited options at their disposal. Now,

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00:28:42,800 --> 00:28:45,800
Speaker 1: this is all pretty complex, but it's going to get

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00:28:45,840 --> 00:28:48,360
Speaker 1: super crazy when I go on a little bit further.

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00:28:48,720 --> 00:28:50,800
Speaker 1: This is kind of where I wanted to end part

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00:28:50,880 --> 00:28:56,400
Speaker 1: one to talk about the possibilities that were ahead for Comcast. Now,

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00:28:56,760 --> 00:28:59,040
Speaker 1: one of the things I want to really drive home,

461
00:28:59,080 --> 00:29:01,480
Speaker 1: and it's going to become more clear when you listen

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00:29:01,520 --> 00:29:06,560
Speaker 1: to the next episode, is that Comcast continuously chose to

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00:29:06,800 --> 00:29:10,480
Speaker 1: acquire other companies in an effort to grow as a

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00:29:10,520 --> 00:29:15,880
Speaker 1: publicly traded company. One of the most important uh measures

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00:29:16,080 --> 00:29:18,480
Speaker 1: of a company's success is how much did it grow

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00:29:18,600 --> 00:29:23,000
Speaker 1: year over year. That that operating really well isn't enough.

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00:29:23,080 --> 00:29:26,760
Speaker 1: A company has to grow to be considered valuable. And

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00:29:26,800 --> 00:29:31,920
Speaker 1: the way Comcast largely drove its growth was through purchasing

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00:29:32,200 --> 00:29:36,400
Speaker 1: other cable services. Again, it can be a challenge to

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00:29:36,480 --> 00:29:41,040
Speaker 1: add customers otherwise, So if you want to add customers,

471
00:29:41,080 --> 00:29:42,880
Speaker 1: you've got a couple of different options ahead of you,

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00:29:42,960 --> 00:29:44,760
Speaker 1: but one of them is that you just buy up

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00:29:44,840 --> 00:29:48,000
Speaker 1: other systems and then automatically you have those customers added.

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00:29:48,040 --> 00:29:53,480
Speaker 1: To you. Also, we're starting to see a world already

475
00:29:53,600 --> 00:29:58,440
Speaker 1: where major cable companies were essentially making agreements with one

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00:29:58,440 --> 00:30:03,960
Speaker 1: another to layoff in certain regions. So you were starting

477
00:30:03,960 --> 00:30:07,240
Speaker 1: to see where one cable company would provide service to

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00:30:07,520 --> 00:30:10,760
Speaker 1: an area and other cable companies would stay out of

479
00:30:10,800 --> 00:30:14,480
Speaker 1: that area. In return, that first cable company would stay

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00:30:14,480 --> 00:30:18,760
Speaker 1: out of its competitors areas, which was great for the companies,

481
00:30:18,800 --> 00:30:22,120
Speaker 1: but not so great for consumers. This is why in

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00:30:22,240 --> 00:30:24,840
Speaker 1: lots of different regions in the United States, you really

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00:30:24,920 --> 00:30:28,560
Speaker 1: don't have many options as a customer. You may have

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00:30:29,000 --> 00:30:32,720
Speaker 1: just a single major cable service provider in your area,

485
00:30:33,360 --> 00:30:36,200
Speaker 1: and you could look at something else like satellite service,

486
00:30:36,600 --> 00:30:38,680
Speaker 1: or you might be able to look at smaller cable

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00:30:38,720 --> 00:30:42,600
Speaker 1: companies that are technically just piggybacking onto the larger cable

488
00:30:42,640 --> 00:30:45,480
Speaker 1: company in the first place. And that's one of the

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00:30:45,480 --> 00:30:48,880
Speaker 1: big reasons why in Part two, we're going to explore

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00:30:50,240 --> 00:30:54,080
Speaker 1: some of the controversies around Comcast. But there's tons of

491
00:30:54,120 --> 00:30:58,880
Speaker 1: stuff to talk about in Part two, including how Brian

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00:30:59,000 --> 00:31:02,760
Speaker 1: Roberts continued his rise and in Comcast, how the founders

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00:31:02,840 --> 00:31:06,600
Speaker 1: kind of stepped away, and some of the controversies that

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00:31:06,680 --> 00:31:11,960
Speaker 1: have surrounded Comcast since it has been founded. So I

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00:31:12,000 --> 00:31:14,600
Speaker 1: want you guys to send me messages let me know

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00:31:15,360 --> 00:31:17,440
Speaker 1: what sort of topics would you like me to cover

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00:31:17,560 --> 00:31:20,120
Speaker 1: in detail. Keep in mind Part two of the Comcast

498
00:31:20,160 --> 00:31:23,200
Speaker 1: story comes next week. But if you have any suggestions

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00:31:23,240 --> 00:31:26,480
Speaker 1: for future episodes, whether it's a company or a technology

500
00:31:26,640 --> 00:31:29,720
Speaker 1: or personality and technology, or maybe it's just someone you

501
00:31:29,720 --> 00:31:31,760
Speaker 1: would like me to interview or have on as a

502
00:31:31,800 --> 00:31:34,440
Speaker 1: guest host, send me a message. I will try my

503
00:31:34,480 --> 00:31:37,400
Speaker 1: best to make it happen. The email to send it

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00:31:37,440 --> 00:31:40,640
Speaker 1: to is tech Stuff at how stuff works dot com,

505
00:31:41,000 --> 00:31:43,240
Speaker 1: where you can drop me a line on Facebook, Twitter

506
00:31:43,360 --> 00:31:46,080
Speaker 1: or Tumbler at all three. I am tech Stuff H.

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00:31:46,280 --> 00:31:50,120
Speaker 1: S W. And I'll talk to you again really soon

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00:31:55,760 --> 00:31:58,200
Speaker 1: for more on this and bathens of other topics because

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Speaker 1: it has staff works dot com Litle Little w