Speaker 1: Welcome to tech Stuff, a production from I Heart Radio.
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio,
Speaker 1: and how the tech are you? It is time for
Speaker 1: a tech Stuff classic episode. This episode is called the
Speaker 1: Comcast Story Heart one. I bet you can't guess what
Speaker 1: next week's is called. This episode originally published on November four,
Speaker 1: two thousand and fifteen. It is of course covering the
Speaker 1: cable company Comcast, which had an interesting growth period. Uh
Speaker 1: and now, of course things are at a point where
Speaker 1: Comcast is kind of reaching a saturation point and requires
Speaker 1: other sources of revenue besides expanding into new markets. But
Speaker 1: we'll cover some of that in part two and clear
Speaker 1: this is one of those episodes where I could do
Speaker 1: an update because you know, two thousand fifteen to two
Speaker 1: thousand twenty two, we've been seeing a lot of changes
Speaker 1: in the cable space, not so much the I s
Speaker 1: P space, but definitely cable provider space. So I'll probably
Speaker 1: touch on that again by the end of the episode,
Speaker 1: but first let's listen to Part one, recorded and published
Speaker 1: on November four, two thousand fifteen. So the reason why
Speaker 1: I wanted to look at this. The thing that that
Speaker 1: kind of spurred me into talking about Comcast actually comes
Speaker 1: from a recent experience I had. So I'm recording this
Speaker 1: on Thursday, the twenty two of October two thousand fifteen.
Speaker 1: But on Monday, October nineteen, something special happened and I
Speaker 1: wanted to take part in it. That's something special was
Speaker 1: that Star Wars episode seven, the Force Awaitkins the the
Speaker 1: advanced tickets went on sale, and it was announced that
Speaker 1: they went on sale a little earlier than what people
Speaker 1: had originally anticipated. So I rushed to try and buy tickets,
Speaker 1: and one of the many things I tried to do
Speaker 1: was use Fandango. But it was very clear that there
Speaker 1: was an amazingly huge rush on tickets for the Fandango servers,
Speaker 1: as well as all the other services out there, and
Speaker 1: so you could say that the servers for Fandango weren't
Speaker 1: fully operational in the parlance of Star Wars, and I
Speaker 1: started getting irritated. But then I remembered that Fandango is
Speaker 1: owned by Comcast, and then I thought, anger leads to hate.
Speaker 1: Hate leads to podcasts. But I promise I will do
Speaker 1: my best to remain objective and dispassionate as we look
Speaker 1: at the company, its history and the role it plays
Speaker 1: in their entertainment. And it's a really long history too.
Speaker 1: So before I talked about Comcast in particular, let me
Speaker 1: set the stage with some history about cable television. Now.
Speaker 1: Cable tv got its start back in the nineteen forties
Speaker 1: in the United States, and there was a need for
Speaker 1: an alternative to over the air broadcasts because some people
Speaker 1: lived in remote locations that were too far away for
Speaker 1: over the air air waves to make it to their
Speaker 1: homes with any sort of fidelity, or they might live
Speaker 1: in areas where radio waves had trouble reaching, like in
Speaker 1: mountainous areas where a mountain might be blocking the radio waves.
Speaker 1: So cable TV was the solution, and the basic model
Speaker 1: was pretty simple in its design. In fact, the earliest
Speaker 1: models just involved people setting up an antenna on a
Speaker 1: really tall structure or a mountain or something like that,
Speaker 1: and then physically running a cable from the antenna to
Speaker 1: their television sets. But beyond that you started to get
Speaker 1: actual organized businesses that would do this on behalf of customers. You,
Speaker 1: as a customer, would pay the business for the access
Speaker 1: to these over the way air broadcast that otherwise you
Speaker 1: would not be able to reach. So you would have
Speaker 1: a broadcast station that would send out television along a
Speaker 1: certain channel or frequency of radio waves, and your cable
Speaker 1: station would essentially just be a set of receivers antenna
Speaker 1: in other words, which would pick up these broadcasts and
Speaker 1: then feed them through physical cables to their destinations. So
Speaker 1: early cable was still very much reliant on over the
Speaker 1: air broadcast. It was just an alternative way to get
Speaker 1: that content, and channels don't take up much bandwidth on
Speaker 1: a physical cable. Each channel is six mega hurts, and
Speaker 1: a cable is capable of holding hundreds of mega hurts
Speaker 1: of signals, and using compression, you can even send multiple
Speaker 1: stations down a single six mega hurts channel, So you
Speaker 1: can blast a huge amount of channels through a single cable,
Speaker 1: and the cable box or television at the other end
Speaker 1: of that cable can tune into specific channels and block
Speaker 1: all the others out. In other words, imagine that you
Speaker 1: are in a room and there's every actor you've ever
Speaker 1: known about in that room, and they're all acting their
Speaker 1: hearts out at you at the same time. But you
Speaker 1: have the ability to tune into a specific actor and
Speaker 1: tune out everybody else. That's basically what's going on with
Speaker 1: cable on a technological level. And when you opt into
Speaker 1: a cable bundle, often that means that you're also getting
Speaker 1: the cable company to decrypt uh information. So what's happening
Speaker 1: on the cable side, the cable operator side, is that
Speaker 1: they will encrypt certain channels, like pay channels that otherwise
Speaker 1: you would get for free. If you didn't have that encryption,
Speaker 1: then you, as a customer would be able to access
Speaker 1: everything a cable channel operator had to offer. But by
Speaker 1: encrypting it, then the cable company can control which channels
Speaker 1: you can actually view and which ones are off limits.
Speaker 1: When you opt in to a cable bundle, like you
Speaker 1: you subscribe to a specific cable service, they essentially send
Speaker 1: a message to your television or a cable box and
Speaker 1: that allows you to decrypt the signal on your end
Speaker 1: so that you can actually watch it. And the United States,
Speaker 1: communities in Pennsylvania, Oregon, and Arkansas were among the first
Speaker 1: to receive cable service, and by that I mean people
Speaker 1: were actually going out and setting up these antenna By
Speaker 1: nineteen fifty two, there are about seventy actual cable systems
Speaker 1: in the entire country, So these were actual companies that
Speaker 1: had taken the same sort of model that these enterprising
Speaker 1: individuals had followed and actually made a business out of it.
Speaker 1: They only had about fourteen thousand customers back in nineteen
Speaker 1: fifty two. But cable television had a big advantage over
Speaker 1: home antennas in that if you use a sophisticate antenna
Speaker 1: and you were able to put it on a really
Speaker 1: tall building or a mountain or some other really tall structure,
Speaker 1: you could pick up signals from further away than folks
Speaker 1: who are just using regular rabbit ears on their televisions,
Speaker 1: which meant that cable customers sometimes could pick up signals
Speaker 1: from other broadcast regions, so you might be able to
Speaker 1: get content from multiple large cities. If you lived kind
Speaker 1: of in between two big cities and you had this cable,
Speaker 1: it might mean that you were able to double your
Speaker 1: programming options. At least. It may be that, you know,
Speaker 1: the two affiliates of of a major broadcast station are
Speaker 1: showing more or less the same thing, but throughout the
Speaker 1: day you would have some different options available to you,
Speaker 1: which made cable fairly attractive. It was sort of the
Speaker 1: beginning of cable's advantage over over the air broadcast, although,
Speaker 1: as we'll talk about a little bit later, over the
Speaker 1: air still had a lot of other advantages. So interest
Speaker 1: in cable TV began to grow, particularly among people who
Speaker 1: just couldn't get over the air easily. By nineteen sixty two,
Speaker 1: the number of customers had grown to more than eight
Speaker 1: hundred thousand people in the United States, So in ten
Speaker 1: years it went from fourteen thousand customers to eight hundred
Speaker 1: thousand in the US. Cable TV was becoming a viable alternative,
Speaker 1: even in communities that didn't have problems accessing over the
Speaker 1: year signals. But it was also one of those things
Speaker 1: that cities were starting to look into because if you
Speaker 1: lived in a city with lots of high rise buildings,
Speaker 1: sometimes that would block radio signals too. So it was
Speaker 1: one of those things that that you could see the
Speaker 1: the benefit, the potential application, but it was still going
Speaker 1: to be really expensive to roll out the infrastructure. All right, Well,
Speaker 1: that that sets the groundwork for what the cable industry
Speaker 1: was like in the early sixties. Let's take a look
Speaker 1: at Comcast specifically. The company actually traces its history back
Speaker 1: to nineteen sixty three. That's when Ralph J. Roberts, Daniel
Speaker 1: Aaron and Julian A. Broad Ski purchased a small cable
Speaker 1: TV operator called American Cable Systems, which was in Tupelo, Mississippi,
Speaker 1: and that service had just one thousand, two hundred subscribers
Speaker 1: and that was it. The three businessmen spent five hundred
Speaker 1: thousand dollars on that purchase. So who were these guys? Well,
Speaker 1: Ralph J. Roberts grew up in New York and in Philadelphia.
Speaker 1: He served in the United States Navy before going on
Speaker 1: to work several different jobs. He gradually earned enough money
Speaker 1: to purchase a business of his own. He and his
Speaker 1: brother went into a business they invested in, a company
Speaker 1: called Pioneer Suspender Company. Turns out there was money in
Speaker 1: Suspenders because he and his brother decided to sell the
Speaker 1: business off later on, and with that money it allowed
Speaker 1: them to invest in other companies. So Ralph Roberts ended
Speaker 1: up looking into the world of TV, and it was
Speaker 1: reportedly Roberts who came up with a name Comcast. In
Speaker 1: ninet lines of several years down the road, he would
Speaker 1: combine the words communications and broadcast together to create the
Speaker 1: name Comcast, and he would serve as Comcast Chief executive
Speaker 1: Officer for more than four decades. Uh Ralph J. Roberts
Speaker 1: passed away in June of two thousand and fifteen, so
Speaker 1: very recently as of the recording of this podcast. Now.
Speaker 1: Daniel Aharon was born in nineteen twenty six in Giessen, Germany.
Speaker 1: His family escaped Germany during the rise of the Nazi
Speaker 1: Party in World War Two and they settled in Queens,
Speaker 1: New York. Now. Tragically, when he was just thirteen years old,
Speaker 1: he lost his mother. She committed suicide, and less than
Speaker 1: a month later, his father also committed suicide. Daniel Aaron
Speaker 1: was orphaned and he was not yet a citizen. He
Speaker 1: continued to live in New York and eventually he would
Speaker 1: be drafted and sent to Germany during World War Two.
Speaker 1: When he returned, he pursued a career in journalism and
Speaker 1: public relations. Eventually he entered the cable business and that's
Speaker 1: when he met Roberts and agreed to co found Comcast.
Speaker 1: In his obituary, he was referred to as the conscience
Speaker 1: of the company, famously even buying coffee for picketing employees
Speaker 1: who were in a labor dispute with Comcast. So he
Speaker 1: was sort of the working man's representative among the three
Speaker 1: co founders of this company. He passed away in two
Speaker 1: thousand three. We'll be back with more of Comcast's history
Speaker 1: after this quick break. Julian Brodsky grew up in Philadelphia.
Speaker 1: He had served in the United States Army and he
Speaker 1: became an accountant after he left the service. So Bronsky
Speaker 1: served as Robert's accountant, Ralph J. Roberts. So he was
Speaker 1: actually the accountant for Ralph J. Roberts, and was approached
Speaker 1: by Roberts and by Aaron when they were preparing to
Speaker 1: purchase this company, this little cable company in Tiple of Mississippi,
Speaker 1: and Brodsky's main role was to raise money for the company.
Speaker 1: In two thousand eleven, Brodsky retired as the vice chairman
Speaker 1: of the company, and of the three founders, he is
Speaker 1: the only one who is still alive as of the
Speaker 1: recording of this podcast. Now. Daniel Aaron is credited with
Speaker 1: having compared the three co founders as three people trying
Speaker 1: to drive a single car, and he said that Brodsky
Speaker 1: was the guy who had his foot on the accelerator
Speaker 1: as he was raising capital for the venture. Uh, Meanwhile,
Speaker 1: his own foot, Aaron, his own foot was on the
Speaker 1: break to make sure the company was a good corporate citizen,
Speaker 1: stepping on the brakes to slow down the company if
Speaker 1: he thought that they were about to do something reckless
Speaker 1: or damaging or or just unethical. And meanwhile, or alf
Speaker 1: Day Roberts, his hands were on the steering wheel, guiding
Speaker 1: the company along. In those early days of cable, the
Speaker 1: company faced some pretty big challenges. According to the founders,
Speaker 1: they actually had to act as door to door salespeople
Speaker 1: on occasion in an effort to grow. So they were
Speaker 1: physically going out knocking on people's doors and telling them
Speaker 1: about cable service. In an effort to get more customers.
Speaker 1: They came to the conclusion that expansion would require purchasing
Speaker 1: other cable companies. And this is a philosophy that Comcast
Speaker 1: has stuck with time and time again over its long history.
Speaker 1: They have purchased numerous companies that I will go into
Speaker 1: in some detail throughout these two episodes. Now, originally they
Speaker 1: focused on other cable services in the state of Mississippi.
Speaker 1: So they began to expand both in eastern and western
Speaker 1: Mississippi and really focused on that state, but they were
Speaker 1: still finding it difficult to get enough customers to make
Speaker 1: a profit after going through the expense of setting up
Speaker 1: and maintaining cable systems. So, in other words, they're operating
Speaker 1: expenses were too close to the amount of money they
Speaker 1: were bringing in. It wasn't really a fast growing company.
Speaker 1: It wasn't a fast growing business, and they were trying
Speaker 1: to find new ways to add to that as quickly
Speaker 1: as they possibly could. In the company, which at that
Speaker 1: point was still known as American Cable Systems, purchased another
Speaker 1: company called Storecast Corporation of America. Here's the difference. Though
Speaker 1: Storecast was not a cable service company, it was a
Speaker 1: marketing firm. And only was it a marketing firm, it
Speaker 1: was a marketing firm that had a very specific kind
Speaker 1: of clientele. They were chiefly known for helping food companies
Speaker 1: work with supermarkets to maximize sales prices are sales of
Speaker 1: the products, by placing those products in prominent locations. In
Speaker 1: other words, they would go into a supermarket on behalf
Speaker 1: of a client. Let's say wonder Bread. I'm just taking
Speaker 1: that as a random example. I don't know if wonder
Speaker 1: Bread was actually one of their clients. But let's say
Speaker 1: they go into a supermarket. They're representing Wonderbread, and they
Speaker 1: go to the bread aisle and they look around and
Speaker 1: they say, well, this is not great for our client.
Speaker 1: We recommend you move this to this shelf. You're gonna
Speaker 1: move more product this way. You're gonna increase your sales.
Speaker 1: Our client will be happy, you'll be happy. That's the
Speaker 1: kind of work they were mostly known for doing. So
Speaker 1: a little odd that Comcast, or at that time, American
Speaker 1: Cable Systems would purchase this type of company. Comcast continued
Speaker 1: to try and grow through acquisitions during this time, and
Speaker 1: in nineteen sixty six, Ralph J. Roberts turned his attention
Speaker 1: to Philadelphia. Keep in mind, that's one of the cities
Speaker 1: he grew up in New York and Philadelphia is where
Speaker 1: he spent in his childhood, and he bought cable systems
Speaker 1: that were serving the suburbs of Philadelphia, and later on
Speaker 1: he would also purchase a few that we're serving western Pennsylvania.
Speaker 1: Philadelphia is in the east part of Pennsylvania. He then
Speaker 1: again to expand that service into neighboring communities and an
Speaker 1: effort to scale up operations so instead of just acquiring
Speaker 1: cable businesses, he was actually trying to lay out the
Speaker 1: infrastructure to connect these various areas and scale up the
Speaker 1: entire operation, kind of consolidating them. In nineteen sixty eight,
Speaker 1: they would make another slightly weird purchase Comcast or or
Speaker 1: American Cable System still at that time, bought a Musaic
Speaker 1: franchise in Orlando, Florida. You're probably aware of music. Music
Speaker 1: if you're if you never directly experienced it, you definitely
Speaker 1: have probable. I'm guessing you've heard the term music is
Speaker 1: a company that would create and distribute very soothing music,
Speaker 1: sometimes very soothing versions of popular songs that would play
Speaker 1: in the background of things like elevators and grocery stores
Speaker 1: and you know other places, dentist office, that kind of
Speaker 1: stuff where it's supposed to, you know, lull you and
Speaker 1: relax you. And it often makes me angry because often
Speaker 1: I can recognize the original song that the music is doing,
Speaker 1: and it doesn't necessarily make me happy to hear it
Speaker 1: in a very laid back kind of approach at any rate,
Speaker 1: they wanted to purchase a franchise in Orlando, Florida, and
Speaker 1: one of the reasons this might be the case is
Speaker 1: because Ralph Roberts's brother, Joe, was an executive vice president
Speaker 1: of the Music Corporation, which might raise a few eyebrows
Speaker 1: today that two brothers are essentially doing business with one
Speaker 1: another and doing acquisitions of companies, one selling to the other,
Speaker 1: But at any rate, that's what happened in Night In.
Speaker 1: The company finally changed his changes its name to Comcast
Speaker 1: and reincorporates, this time in Pennsylvania. In nineteen seventy, the
Speaker 1: company reorganized so it's so off It's Florida Operations, which
Speaker 1: had just bought two years earlier to another company called
Speaker 1: STORER Communications, which will come back into play a little
Speaker 1: later in the episode. And Comcast began to expand into
Speaker 1: other markets, primarily Maryland at that point, and also explored
Speaker 1: options and limited partnerships rather than outright acquisitions, which gave
Speaker 1: the company a bit of an advantage in that through
Speaker 1: a limited partnership, Comcast could get access to customers but
Speaker 1: not have to commit so much of its operating funds
Speaker 1: to expand the company, and this way it would allow
Speaker 1: the company to grow without having to spend millions of
Speaker 1: dollars acquiring other cable systems although it's still pursued that
Speaker 1: as well, and the music party continued. At the same time,
Speaker 1: Comcast bought franchises and multiple cities like Detroit, San Diego,
Speaker 1: and Hartford, Connecticut. By Nino, Comcast was a to hold
Speaker 1: an initial public offering was able to launch as a
Speaker 1: publicly traded company. Stocks were traded on the NASDAK stock
Speaker 1: market and the ticker symbol was c m c s A,
Speaker 1: and it continued to grow. It would acquire smaller cable
Speaker 1: companies and incorporate them into its own service, and the
Speaker 1: company spread across the United States using these sort of acquisitions,
Speaker 1: but it was still finding it challenging to penetrate markets
Speaker 1: through other means. In other words, they were having trouble
Speaker 1: selling the idea of subscribing to Comcast. They found it
Speaker 1: easier to purchase the cable systems people were already using
Speaker 1: and then lump them under Comcast, and thus the people
Speaker 1: became Comcast customers by default. It wasn't necessarily that they
Speaker 1: chose Comcast, but rather that the company they had been
Speaker 1: a customer of before now belonged to Comcast, and that
Speaker 1: also included expanding its hold on music. By nineteen seventy three,
Speaker 1: Comcasts Music Network division was the largest independent musach operator.
Speaker 1: So music operates under a franchise system, which means that
Speaker 1: when Comcast would buy up a franchise would buy up
Speaker 1: one region and other franchises would remain independent of Comcast.
Speaker 1: But Comcast kept on doing this and thus became the
Speaker 1: largest independent musaic operator. So if you're a child of
Speaker 1: the early seventies and wondered where that easy listening music
Speaker 1: came from, there are good odds that Comcast was ultimately responsible.
Speaker 1: And also in nineteen seventy four, Ralph Roberts's son Brian
Speaker 1: started working at Comcast officially uh specifically working for Storecast
Speaker 1: as an intern, and by the following year he would
Speaker 1: start training as a cable installer, which included home installations
Speaker 1: and climbing poles to hook connections from drops to the
Speaker 1: home the home area, and by three he would become
Speaker 1: the general manager of the Trenton system for Comcast, and
Speaker 1: by four he would become vice president of Operations for
Speaker 1: the cable division. So within a decade of starting to
Speaker 1: work for the company officially, there are some reports that
Speaker 1: say that Brian Roberts was working at Comcast when he
Speaker 1: was just seven years old, which brings into questions some
Speaker 1: child labor laws, But at any rate, he within a
Speaker 1: decade he would go from intern to vice president of
Speaker 1: operations with a cable division. And uh, this also raised
Speaker 1: some questions because I mean, he's the son of one
Speaker 1: of the founders, so there's a little bit of legacy
Speaker 1: issue going on here. But he consistently showed that he
Speaker 1: was very dedicated to the company, so I don't mean
Speaker 1: to suggest that he didn't deserve this position. He certainly
Speaker 1: has been a great deal maker for Comcast and has
Speaker 1: led the company to some massive, massive business deals that
Speaker 1: we'll talk about in a second. But uh, it's still
Speaker 1: raised some eyebrows in the community of cable industry. We've
Speaker 1: got more to say about comcasts early history. After this
Speaker 1: commercial break in nineteen seventy six, the co founder, Daniel Aharon,
Speaker 1: would become the chairman of the National Cable and Television Association,
Speaker 1: which is essentially a lobby group. It's it's kind of
Speaker 1: an advocacy group for cable companies, cable industry, cable service providers,
Speaker 1: and was really focused on helping shape policy in the
Speaker 1: United States that would remove challenges obstacles and restrictions facing
Speaker 1: the cable industry, and in some cases these were restrictions
Speaker 1: that were entirely arbitrary and unfair. I don't mean to
Speaker 1: suggest that they were working to completely leverage everything so
Speaker 1: that cable companies could dominate all telecommunications industries, but rather
Speaker 1: to try and address some problems that the cable industry face.
Speaker 1: Because it was brand new, this was something, I mean
Speaker 1: even even by the seventies, this was still relatively new
Speaker 1: and still uh something that had to battle with much
Speaker 1: more entrenched systems like the telephone companies and the over
Speaker 1: the air broadcast companies. Also in nineteen seventy seven, Comcast
Speaker 1: would add HBO to twenty thousand customers in Pennsylvania with
Speaker 1: a five night preview, so customers got five nights free HBO,
Speaker 1: which was a fledgling company at that point, and afterward,
Speaker 1: Comcast received three thousand subscription orders once the preview period end,
Speaker 1: so it was a fairly successful preview. And if you
Speaker 1: listen to the story of HBO, which I believe was
Speaker 1: a three part episode that that I did, it's at
Speaker 1: least two parts at the new rate, but I did
Speaker 1: that quite a while ago. If you go and look
Speaker 1: at the Tech Stuff archives, you can find the HBO
Speaker 1: story where we talk a little more about how HBO
Speaker 1: also really shaped the cable industry as it became more
Speaker 1: and more important. In night Daniel Aaron would become UH.
Speaker 1: He would use his position as the Chairman of the
Speaker 1: National Cable Television Association or in c t A UH
Speaker 1: and successfully lobby the United States government to reduce restrictions
Speaker 1: on what cable operators could carry. So up to that point,
Speaker 1: there had been some limitations on some of the programming
Speaker 1: that cable operators could offer their customers, and often this
Speaker 1: was programming that their customers actually wanted access to, but
Speaker 1: the cable operators their hands were tied. They were not
Speaker 1: allowed by law to carry that programming. So the n
Speaker 1: c t A was able to argue successfully on behalf
Speaker 1: of cable operators and even reach the point where cable
Speaker 1: could offer up channels that weren't broadcast over the air,
Speaker 1: meaning that cable companies could now create or partner with
Speaker 1: creators to provide content that otherwise people would never see
Speaker 1: because there'd be no other way of getting it. That
Speaker 1: actually created a market advantage for cable over classic Over
Speaker 1: the year broadcasts because now not only could you get
Speaker 1: something that wasn't going to be affected by radio transmissions,
Speaker 1: but you could see content that would not be available
Speaker 1: to you otherwise. And by nineteen seventy eight, Comcast earnings
Speaker 1: were an excess of three million dollars, which is chicken
Speaker 1: feed compared to what they make today, but still was
Speaker 1: impressive at the time, and Comcast made its first international
Speaker 1: move in nineteen eighty three they expanded into the United Kingdom.
Speaker 1: The company was finding it increasingly difficult to acquire new
Speaker 1: operations in the United States. At that time, there were
Speaker 1: only a few major cable operators left that had not
Speaker 1: been scooped up by one of the chief competitors to Comcast,
Speaker 1: so that meant that there were only a few limited
Speaker 1: service areas, meaning there was very little potential for growth
Speaker 1: if Comcasts purchased those companies, and they were pretty expensive,
Speaker 1: so it wasn't a very attractive investment on the part
Speaker 1: of Comcast. But on the other hand, in the United
Speaker 1: Kingdom was a totally different story. Cable operators had barely
Speaker 1: touched the UK, so Comcast jumped on that opportunity. Meanwhile,
Speaker 1: back in the States, Comcast caught a lucky break when
Speaker 1: the United States government passed the Cable Act, which prevented
Speaker 1: telephone companies from entering the cable business, which was a
Speaker 1: stroke of luck for Comcast because the government had just
Speaker 1: broken up the Bell system, which you can hear about
Speaker 1: in our episodes on the History of A T and T,
Speaker 1: another multi part series that explains why the telephone system
Speaker 1: in the United States is the way it is and
Speaker 1: how the telecommunications industry changed as a result of it.
Speaker 1: In Comcast would purchase twenty six percent interest in Group
Speaker 1: W Cable Incorporated. Now that investment more than doubled the
Speaker 1: number of Comcast customers at that time, adding one point
Speaker 1: two million people to Comcast services. And Comcast also helped
Speaker 1: found a little shopping company called QVC and they invested
Speaker 1: three d eighty million dollars in the founding of that company.
Speaker 1: Now they did not own QVC, they owned an interest
Speaker 1: in QVC. And another big buy at that time was
Speaker 1: STORER Communications Incorporated. You may have remembered that just a
Speaker 1: few minutes ago I talked about STORER Communications where uh
Speaker 1: they There was the the buying of Musach and the
Speaker 1: selling of Musach. While Comcast purchased fifty interest in STORER Communications,
Speaker 1: in which propelled Comcast into fifth place among the largest
Speaker 1: cable TV operators in the US. The company now had
Speaker 1: two million subscribers, and that same year, Brian roberts was
Speaker 1: elected to the board of directors of Comcasts, so now
Speaker 1: Ralph J. Roberts Son is on the board of directors.
Speaker 1: Comcast would celebrate its twenty five years business and also
Speaker 1: acquire the American Cellular Network Corporation or m CELL. This
Speaker 1: creates a new division in the company called Comcast Cellular Communications,
Speaker 1: and over the years the division grows as Comcast acquires
Speaker 1: more cellular companies. And now we get to a complication,
Speaker 1: right because just a minute ago I talked about the
Speaker 1: Cable Act. It was an important point in the history
Speaker 1: of cable and telephone service. The Cable Act prevented telephone
Speaker 1: companies from getting into the cable business, and cable companies
Speaker 1: were likewise prevented into getting into landline telephone business. But
Speaker 1: the blossoming cell phone service industry was a different story.
Speaker 1: So Comcast could totally get into cell phones and not
Speaker 1: violate this restriction on landlines. So comcast acquisition marked the
Speaker 1: first time people in the United States could look to
Speaker 1: a non telephone company for phone service, which was massively important.
Speaker 1: It's really hard to actually express what that meant at
Speaker 1: the time, but keep in mind, like you have telephone
Speaker 1: companies that have been told, hey, you can't get into
Speaker 1: this other industry because it's blossoming, it's just starting, and
Speaker 1: we don't want to kill it before it gets a
Speaker 1: chance to establish itself. Meanwhile, the other side is getting
Speaker 1: into a related business for the telephone industry, and so
Speaker 1: you now have these massive companies in the telephone industry
Speaker 1: kind of scared about what's going to happen because they
Speaker 1: have limited options at their disposal. Now, this is all
Speaker 1: pretty complex, but it's going to get super crazy when
Speaker 1: I go on a little bit further. This is kind
Speaker 1: of where I wanted to end part one to talk
Speaker 1: about the possibilities that were ahead for Comcast. Now, one
Speaker 1: of the things I want to really drive home, and
Speaker 1: it's going to become even more clear when you listen
Speaker 1: to the next episode, is that Comcast continuously chose to
Speaker 1: acquire other companies in an effort to grow as a
Speaker 1: publicly traded company. One of the most important uh measures
Speaker 1: of a company's success is how much did it grow
Speaker 1: year over year that that operating really well isn't enough.
Speaker 1: A company has to grow to be considered valuable. And
Speaker 1: the way Comcast largely drove its growth was through purchasing
Speaker 1: other cable services. Again, it can be a challenge to
Speaker 1: add customers otherwise, So if you want to add customers,
Speaker 1: you've got a couple of different options ahead of you,
Speaker 1: but one of them is that you just buy up
Speaker 1: other systems and then automatically you have those customers added
Speaker 1: to you. Also, we were starting to see a world
Speaker 1: already where major cable companies were essentially making agreements with
Speaker 1: one another to lay off in certain regions. So you
Speaker 1: are starting to see where one cable company would provide
Speaker 1: service to an area and other cable companies would stay
Speaker 1: out of that area. In return, that first cable company
Speaker 1: would stay out of its competitors areas, which was great
Speaker 1: for the companies but not so great for consumers. This
Speaker 1: is why in lots of different regions in the United States,
Speaker 1: you really don't have many options as a customer. You
Speaker 1: may have just a single major cable service provider in
Speaker 1: your area, and you could look at something else like
Speaker 1: satellite service, or you might be able to look at
Speaker 1: smaller cable companies that are technically just piggybacking onto the
Speaker 1: larger cable company in the first place. And that's one
Speaker 1: of the big reasons why in Part two we're going
Speaker 1: to explore some of the controversies around Comcast. But there's
Speaker 1: tons of stuff to talk about in Part two, including
Speaker 1: how Brian Roberts continued his rise and in Comcast, how
Speaker 1: the founders kind of stepped awa a. All right, that
Speaker 1: wraps up that classic episode. Next week we will continue
Speaker 1: with the Comcast story Part two, which you know, again,
Speaker 1: we could probably do a part three after that, and
Speaker 1: maybe I will if you have suggestions for topics I
Speaker 1: should cover on future episodes of tech Stuff. There a
Speaker 1: couple of different ways you can reach out and let
Speaker 1: me know. One is to download the I Heart radio app.
Speaker 1: It's free to downloads free to use. Navigate over to
Speaker 1: the tech Stuff page just search tech Stuff in the
Speaker 1: search bar. It'll bring you right to it and you'll
Speaker 1: see that there's a little microphone icon. If you click
Speaker 1: on that, you can leave a voice message up to
Speaker 1: thirty seconds in length. If you would rather not do that,
Speaker 1: you can always reach out to me on Twitter the
Speaker 1: handle that we use for the show is text Stuff
Speaker 1: hs W. Just let me know what you would like
Speaker 1: to hear on future episodes. I look forward to hearing
Speaker 1: from you, and I'll talk to you again really soon.
Speaker 1: Text Stuff is an I Heart Radio production. For more
Speaker 1: podcasts from My Heart Radio, visit the I Heart Radio app,
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