By Gerald S. Schrage, U.S. Department Of Agriculture
REA developed an interest in television and other video services for rural areas as an outgrowth of its work in bringing improved telecommunications service to people living in rural areas. One of the earliest attempts to develop this capacity was a paper distributed in 1962 by Claude Buster, Chief of the Transmission Branch at REA, to the communications industry.
In this paper Claude recognized the tremendous potential capacity of coaxial cable and explored the idea of a total integrated communications facility that could deliver voice, video and data services using analog transmission techniques to the home. This idea was slowly nurtured and by 1977 the 3M Company was actively developing its analog CS system which would provide a total integrated communications system over coaxial cable to the home. Also, in May 1977 the Office of Telecommunications Policy, now part of the National Telecommunications and Information Agency (NTIA), formed an interagency task force on Rural Communications to which REA was invited to participate. This task force in its report recommended that in order to improve rural communications that REA finance rural cable systems and that the crossownership ban on Telco ownership of cable systems be modified by the FCC. Up to that time REA had only financed a portion of the educational statewide television network in South Carolina.
Since that time the 3M Company has abandoned its CS2 development as too costly. Another company has picked up the idea and is developing other equipment designs using digital transmission techniques to provide voice and data services directly to homes on coaxial cable facilities. The REA, while prohibited from directly financing commercial CATV systems under the RE (Rural Electrification) Act, did receive delegated authority from the Secretary of Agriculture to administer a loan program for CATV systems utilizing funding under the Consolidated Farm and Rural Development (CFRD) Act. Under the RE Act,. REA can only finance educational television systems. The FCC in Docket 78-219 in 1978 eased the cross-ownership waiver requirements on Telco ownership of CATV systems and granted a rebuttable presumption of infeasibility for any system with an average density of 30 homes per route mile or less.