Released in 1980, the VIC-20 was the world’s first low-cost computer, at a list price of under US$300. Compared to other computers of the time, the VIC-20 had a tiny memory (5 kilobytes) and an odd 22-column-wide text display (because its video processor was a re-purposed video-game chip) but its affordability made home computing available to many for the first time. The VIC-20 would sell over 800,000 units in 1982, making it the top-selling computer of the year.
Introduced at 1982’s Winter Consumer Electronics Show, the VICModem was the product of six months of frenzied development. Michael Tomczyk, the Commodore executive responsible for managing the development and manufacture of the VIC-20, wanted his new computer to have a low-cost telecomputing option, in part because Tomczyk wanted to provide technical support through CompuServe, a national on-line service (a precursor to the Internet.) Other manufacturers’ modems (MOdulator-DEModulator, referring to the way it transferred data) were very expensive – the cheapest was over US$400 1981 dollars!
Commodore’s engineers were too busy to take on the project, so Tomczyk contacted an outside company, but they were unable to come up with a design that could be manufactured at a low enough price.
At the 1981 Winter Consumer Electronics Show, the outside company’s engineers caught Tomczyk outside his hotel room door, apologising for the cost of their modem and attempting to explain the reasoning for it. Tomczyk pointed out that the VIC-20’s “user port” (an edge-connector that allowed external peripherals to connect directly to microchips inside the computer) had lines that led to an RS-232 communications interface (that could be interacted with by software programs) and so all the engineers needed to do was build a “cartridge” that modulated the data to and from a telephone line – a much simpler method of solving the problem than the engineers had previously devised, which likely involved connecting through the VIC-20’s I/O port, and would have needed additional circuitry.
They agreed that Tomczyk’s solution was feasible, and went to work. The finished product couldn’t even dial a phone number (this had to be done manually) but it worked and it was cheap! In March 1982 the VICModem was delivered for sale, and became the first modem to sell over a million units.
Tomczyk developed a user community called the Commodore Information Network on CompuServe where users assisted each other with their computer problems. It became so popular, CompuServe paid Commodore several tens of thousands of dollars for all the user traffic they were generating.
And so, thanks to the VICModem, over a million VIC-20 users gained the ability to call on-line services and bulletin-board systems, a privilege previously reserved for owners of expensive computers and telecommunications equipment.
The first version of the VICModem was so no-frills you had to type in a terminal program out of the user manual in order to use it! It also couldn’t dial phone numbers on its own – you had to dial the number manually using a telephone, then unplug the telephone and plug the modem into the wall socket. The number of calls missed by those who forgot to plug their phone back in we can only speculate, but was probably not a small number. The VICModem placed downward price pressure on the modem market in general, and telecomputing eventually became more affordable for users of other computers as well.
The VICModem came with US$200 worth of vouchers for CompuServe, The Source (a competitor) and Dow Jones stock market information. That may seem like a lot, but these services charged by the minute, and you could really rack up a large bill, prompting some CompuServe users to nickname the service “Compu$pend”.
CompuServe, founded in 1969, initially rented time on its mainframe PDP-10 computer systems. In 1978, it started MicroNet, an information service for residential customers – it was successful and renamed Compuserve when the company opted to make it its core business.