I believe that before retransmission fees, the operators aired the local broadcast signals without paying or being paid. There is an FCC must-carry rule for broadcasters above a certain power. It used to be that broadcasters (especially the non big 4 ones) would force themselves on the operator's line-up with this must-carry rule. Operators did not, as far as I know, receive payment to carry. Sometimes (more in the old days than now) CABLE networks would pay for carriage in early years a of a deal, especially when they were trying to get to critical mass of homes. But I think even that has become rare.