Interview Date: October 31, 1990
Interviewers: Pennsylvania State University student (name not available); E. Stratford Smith; Michael McKinley
Collection: Penn State Collection
STUDENT: Thank you for taking time out of your afternoon to join us, here with E. Stratford Smith who is also going to ask some questions this afternoon, and also one of our Club advisors, Professor Michael McKinley. Once again, thanks for joining us this afternoon. My first question is—I understand that you became involved in the cable industry with your father. What exactly got you to really get into it?
BARCO: My father was the one who started the interest, and he is unusual among cable people, rather he was, because his interest was mainly because he was interested in having cable television come to the community, so that he could see television. And the whole interest was on the part, as you might say, of a consumer, which he was in this particular instance, to get television available in his own home. That's what started us. And of course I supported his effort. Later, our interest became much broader and much more related to the industry, rather than the original interest that got us into it.
STUDENT: Obviously, first and foremost a lawyer, can you give me some examples of some of the litigation that you participated in regarding the cable industry, things that you got involved in as a lawyer?
BARCO: Yes, I can tell you that, but let me say that I have to tell you, as Strat Smith, who is listening understands, my father and I worked as a team. While we were both lawyers, and have been lawyers all of these years, since 1952, I also have interests directly as a cable operator. I was general manager of the system which we started here from 1953 to 1959 and actually was involved in the day-to-day operation. Throughout our involvement in MMA at Meadville, I was directly involved in the day-to-day of the business. However, I was also involved in the legal aspects. My father was mainly involved in legal aspects. Now, to answer your question, I worked with my father during the period when he was the General Counsel of Pennsylvania Cable Television Association, and he was General Counsel from 1955 to about 1979 or '80. Our primary efforts in the beginning years were to establish the right to be in the rights-of-way of the municipalities at all. Much of this was done by negotiation and by efforts to persuade people from time to time. At the very beginning, the question was whether you were going to be allowed to be in public rights-of-way at all and whether telephone companies and utility companies would allow you to get on the poles. Now, let me just lead through. On the telephone issues, my father as General Counsel and I assisting him, just worked in many, many ways trying to get better terms on a negotiated basis. Then, we were involved in several suits between the Public Utility Commission; the first one as to the question of jurisdiction over cable as a public utility. This was in Pennsylvania. And there were several times at which this issue came up in one form or another. One of these times, we were of the opinion that this was really instigated by the telephone companies in order to have us be regulated by the agency, that they had such strong involvements in being able to affect the decision. So, to repeat then, we had these issues on public utility regulation. Then, there were a series of cases involving the regulatory rights of municipalities over cable television. Second class townships especially and we had favorable results in a number of these cases. But there was a case of Scotdale against National Cable Television Corporation where it went to the Supreme Court of Pennsylvania, and in which it was decided that the municipality had authority to regulate. My father and I always were of the opinion that municipalities did not have the right to regulate cable television, but the adversary was not only the municipalities but also the cable television industry that preferred this form as against others. Then, related to that, was my participation in 1972 and '73 on the division of regulatory authority as between the federal, state and local government in which I took an opinion that was different from the industry, and from the report that was filed with the FCC, I again took the position that the industry should not be regulated at the local level, that it should be regulated only by the FCC. This was against industry position, but in effect, in time it became, I think, the position that the FCC took, in the sense that it withdrew from its requirements related to local governmental regulation. We took an excise tax case involving one of our people here at the same time that Strat Smith's firm was involved in a parallel case involving the excise tax and we took several cases on the non-duplication rules. There were three of them in which we were involved. Probably the most important thing we ever did was on the copyright issue in which my father was responsible for the industry, I don't say solely responsible, but certainly was a foremost speaker in favor of our litigating the issue of whether or not we were subject to copyright under the original act and then we did an awful lot of work in the negotiations that followed over the years ending in the mid 1970's when the Copyright Act was finally adopted. We did an awful lot of work in attempting to influence the way in which that Act was finally passed. I may have forgotten one or two things, I frankly didn't expect you to get into the legal side of this thing, I have to tell you.
SMITH: I'd like to take you back a bit to the franchising and regulatory problems locally. Did you and your father apply for the franchise in Meadville? Or did you take the position at the outset that they didn't have the authority to grant them?
BARCO: We always took the position they had the authority to grant, we didn't call it a franchise, we called it a permit to use the rights-of way. We always felt that the municipalities had the right in the exercise of police power to make certain that our location did not interfere with public travel or safety or property safety. But, we felt that there was no franchise, in a sense that there an authority to control your business, to regulate your business or to involve anything having to do with what I used to call the "bundle of rights" that we needed to operate. And we needed more than permission to be in the rights-of-way. The franchise, in our view, had to encompass the total kinds of permits that one would need to operate. Dad did, early on, arrange to get a permit. Then when there was a case decided in Pennsylvania which stated that all permissions to use the rights-of-way had to be by ordinance, and this had only been by resolution, he then arranged to get a twenty-year permit to use the rights-of-way and this was done by ordinance. Then in 1985 we went back and asked for a franchise, and termed it as such because at that time the Cable Policy Act of 1984 had been adopted and was in effect. In fact, I think we were one of the first to have to go forward under that, which we did because our franchise was terminating in a year or two.
SMITH: At the time, did you see the question of home rule having anything to do with the authority that municipalities or townships might have with respect to regulating cable?
BARCO: It never has been either in Meadville or in the other areas a significant factor, because when the Supreme Court of Pennsylvania decided, they decided that the police power by implication gave the other power as well. Now, you should be interested to know... this is not in the decided cases... but the Supreme Court case was decided and there was a dissenting opinion, but it was decided by a person who had been appointed to the Supreme Court by Milton Shapp. His name escapes me now but he was Milt's lawyer for many years and a close personal acquaintance of Milt.
SMITH: That would have been Isadore Pachel?
BARCO: That's right. As you know, Milt was liberal and Pachel was liberal. We were told by the Supreme Court, one or two members afterwards, informally, after the opinion, that they all deferred to the opinion of this man or to his views because they knew that he knew a great deal about cable and had been associated with Milt. So this decision was really decided by this man who I would say did not have very much depth. I think the decision is a poor one, it's decided on policy considerations rather than on the law. I will say also, returning to your question, that home rule had no relationship with the decision, it was a decision that in the Commonwealth Court had to do with the fact that they considered the arrangement, which was an ordinance, to be a contractual undertaking, and that ordinance, in that case had provided for rate regulation. So they reasoned in the Commonwealth Court that there was a contractual under- taking without regard to authority the company would be bound by it. On appeal, it was decided that the implication from the police power of rights had with it the authority also to generally regulate the operation. And then, there were policy considerations like you had to control a company that has no competitive pressures on it and there was that kind of language that was the additional support for this decision. Home rule has not taken part in any of these decisions in Pennsylvania.
SMITH: If that decision of Judge Pachel went so far as to use the police power to justify rate regulation, I would say that was carrying it pretty far. Was that the impact of the decision?
BARCO: Yes it was, and he did carry it very far. But you see, one of the problems, and we saw this again and again as lawyers, in attempting to deal with the regulation of cable television, and one reason that I personally was in favor of the FCC, is that the knee-jerk reaction of the man on the street, is that it looks like a public utility, acts like a public utility, it must be a public utility and somebody has to regulate it. The more information that they would learn over time, the opinions would change. This, for example is what happened at the FCC. The FCC at the beginning apparently believed that we needed to be regulated as to rates. Partly because of the industry position, it seemed that there had to be some regulation. The first reaction of the FCC was that we had to be regulated as to rates. Over time, they simply saw that this wasn't the way to do it. And we had similar reactions, often, in other ways. If you could keep the local governments being the same people time after time it would not be so bad either but they were constantly changing. I would say that unfortunately, the Court that decided these regulatory matters in Pennsylvania...We won a lot of cases, we won four or five cases, that's not a lot, but we won a lot of cases on second class townships not having regulation which involved basically the same law. But when you went to the Supreme Court or to the Commonwealth Court their political philosophy would come up first, rather than the law, as such. That was my reaction or my belief. Yes, that's exactly what Pachel decided. There is language in there that goes beyond just rate regulations. It talks about controlling the operation generally because of its being essentially a monopoly. That was the finding. There are no facts here, this is a pure question of law. The background, feelings, ideas and even experience with cable television as a subscriber, played a part in these decisions.
STUDENT: A lot of us think of cable television systems not providing local programming to the community, but the system that you operated along with your father was different. Could you explain how?
BARCO: I'm going to have to start with the law again, although I didn't plan to. When the Second Report and Order came out in 1966 there were noises in it to the effect that perhaps cable would not be allowed to originate. I've often said that was one of the few things the FCC did to allow or to encourage cable to progress because when we heard in Meadville we might not be allowed to do this, we thought we should immediately start doing it. So that was the start of it. And in September of '66 we hired a person who spent until June of the following year deciding how to do it. Now in those days they didn't have the equipment developed. There were very few signals that had been originated and passed on cable, there were a lot of things that had to be learned. We started then in June of 1967 and we cable-cast on a regularly scheduled basis. Now we didn't do this as a lot of companies did, occasionally, we had a schedule. We started out with a locally originated religious program, we're talking about local churches, we're not talking about the kind of ministries of the air, we're talking about community churches that had programs on regularly, we're talking about public affairs programming. We started cable-casting gavel-to-gavel the city council, the school board, early on. We had a lot of special programming, programming that we produced ourselves—game shows and shows that were wrapped around films that we purchased and other things. We did this consistently and on a program schedule that was established in advance and made available down through all of the years. After we withdrew from operational responsibility of this system which we did in 1987, the successors continued the gavel-to-gavel coverage and the special events coverage but they did not produce other programming as we had done all those years. We are still doing gavel-to-gavel coverage, much like the C-Span type of thing, setting the camera on important meetings from beginning to end. They cover a number of municipal subdivisions. And again, they're done consistently, every meeting, week after week after week, which is what you have to do. You cannot do this kind of thing occasionally.
SMITH: Can you comment on an article I read relative to the FCC's handling of the 1st Amendment during the first 40 year period of its history. I had to come to the conclusion that it wasn't that the FCC was against the 1st Amendment, it just didn't know what it is.
BARCO: One of things that I always felt was extremely interesting about my father was that he always viewed cable mostly, in terms of Constitutional law. In the beginning, 1952, '53, there wasn't a great deal of track. There wasn't a track on anything. There wasn't a track on the technology, there wasn't a track on the financing, there wasn't a track on the law. It's amazing how much support he got for what we wanted to do, just from the Constitution and a general practitioner's idea of the Constitution. Interestingly, I think that the industry used the 1st Amendment to rescue it, and I think appropriately so. I think they had good grounds. But they used this to rescue themselves from the position that they had backed themselves into. You would have to have attended the meetings that I did on the federal, state and local advisory committee to the FCC that was established after the 1972 Cable Television Rules, to hear the industry espouse the view that we should be regulated by what they said is the "most local level of government." And they pushed for that, pushed for that, pushed for that. You remember the excesses of the cable franchising that went on in that period. Then they had to get out of it or not survive. Then the 1st Amendment came to the rescue. The 1st Amendment helped them to extricate themselves from the regulatory morass that they had played a big part in getting involved in.
SMITH: It certainly did that. There are going to be any number of continuing cases until the 1st Amendment issue gets back up to the Supreme Court again, possibly in the Preferred case and we still don't know how far it's going to go. I think it just fascinating going back to the FCC and their attitudes about it, to consider that, as you said, in the Second Report and Order, they fiddled around with the idea that cable systems should not be allowed to originate programming, and the a few years later, turned around and ordered them to do it. That kind of suggests to me a rather confused understanding of the 1st Amendment, if they were even thinking about it at the time.
BARCO: I don't think they were thinking about it at all, but my father was. When we went in 1969, after we'd been operating for several years, and built this building, which you saw, particularly with the cable-casting in mind when we opened it and dedicated it, we invited Ken Cox to come down and see what we were doing. Now this was before they adopted those other rules, requiring.. He was impressed with the kinds of programs that were being provided, and I think he saw that this was quite different. I don't like to think that that's what made him decide that it ought to happen. He was very impressed with what he saw here, and thought it was a very good service for the people.
STUDENT: I'm going to ask a question about educational TV. You were instrumental in the start of Pennarama. Why did you start Pennarama, and what exactly do you think its role will be in the future?
BARCO: We, of course, started Pennarama long before the present vogue, and you know that cable has been trendy, like culture generally is. Today the talk is about education and cable. But, again, I have to refer to my father who said to Marlowe Froke many times, that he believed that when the final chapter is written on cable television, its most important contribution will have been to education. That's what he said fifteen years ago, before this happened. It is complicated to tell you exactly how this started, but I just want you to know that it started primarily because of my father's long-time interest in education, unrelated to television. He has always been doing something important in education, all of his life. He had a lot of basic views, let me tell you one or two or them because they're important. He felt that education was not only important for the obvious realization of what human beings can have under the democratic form of government, that is what makes you equal in the end. But he also believed that education was absolutely essential to the system working. When the literacy problem became such an extreme thing, ten to twelve years ago, he became alarmed that when the population became illiterate and uninformed or uneducated, unknowledgeable, that the system would break down. We cannot have a democracy without an informed, educated population. So it was his interest in the law and in the system and in government that was also involved in this other business. He was also interested in people advancing themselves, but that was secondary. So, he had a lot of things going all the time, he had a lot of connections with people in state government. He had represented the Department of Public Education in state government, and they came up to him when they knew he was in television, (this was in 1972 or '73) because they knew him well, and said "George, don't you think, could we have channels of television available only for education." And they wanted multi-channels. So he was chairman of an educational committee at the state level here in cable, Pennsylvania association, and they started exploring ways of doing this. There were a series of meetings over several years. There's some history here that's very interesting, that we don't have time to talk about today, but in the end a group of 12 cable companies, some large, some small, TCI, the largest in the world is one of them, and the smallest is a system of 600-800 subscribers, Times-Mirror is one. Mostly, the leadership came from independent pioneers in Pennsylvania. They decided to undertake the responsibility of inter-connecting cable television systems for the distribution of one channel of television which would be dedicated to education. That started in 1979. There was a partnership between the cable television industry on one hand and institutions of higher learning on the other hand to do this. Cable was supposed to provide the distribution system which we did. Penn State was the one to manage participation by the other institutions of higher learning. We've come a long way. But I would say that our expectations were that we would be a lot farther along than we are. I don't want to concentrate on where we'd like to be.
We have come a long way. We have provided 24-hour educational opportunities. But we need to do a great deal more. To answer your question, as to where we're going to be, I believe that we have got a revitalization, a re-direction. We have some questions of determining exactly what our role would be in this interconnection. It took a year or two to get that worked out. I think we came to realization which my father never thought was necessary, but we must do it; great deal more on promoting. One must sell education, just as one must sell the entertainment programs. We haven't done that, and we're going to do that. I think that it is extremely important and while we have enlarged the kind of education that is being provided, the important emphasis is on continuing education, continuing adult education. I think there is more and more understanding that we have to give attention to this in a variety of ways. I believe television will end up being the most effective and do-able way of doing this. This whole issue of continuing education is just beginning to be recognized as being something that we have to structure and make available, and do a lot better than we've done it. And cable television can play a very important part, and I think Pennarama will be some very important leadership in this area. Let me make another point. Another important thing about Pennarama is that it is not nationally involved. There were several things that I'm concerned about in cable television today. One of them is, the focus is all on national programming. The local origination, which was of great interest in the period I mentioned, there's still some interest, but it isn't where it ought to be. I think cable television's next area of development has to be to get into some state and regional kind of expression. I don't think it's good to have everything coming from one place, or from a national focus only. The country depends on all of the things that happen at the state and regional level as well.
STUDENT: Another form of education, I would imagine is the Cable Television Center and Museum. That was another thing which you helped to create.
BARCO: It was my father again, who was one of the founders there, yes, that's true. That ties in with his interest in education. He was never interested in it as a place to keep the history, although he was interested in the history. It was the learning part of it that interested him.
STUDENT: What's your view today of the Museum as it continues to grow. What hopes do you have for the Museum for the future, for people to come see how cable got started. Many people really don't really have the true historical knowledge of cable as they might of broadcasting.
BARCO: I think that the Center and Museum is very important for a variety of reasons. I think that cable developed as a do-it yourself kind of thing, and there are a lot of reasons why the Center is important in its relationship with an institution of higher learning. I think is critical to the industry's well-being and to the industry's development. Up until almost ten years ago, most of the people learned about cable on the job. We really need, in my view, to be connected, for the people who are coming into our industry and to the people who are in our industry and to a broader world of learning about technology and the relationship of our technology to other technologies. Most important of all, I hope that with a greater breadth of understanding, this has become industry-wide, but also the people within the industry will establish exactly what our place is in the telecommunications order of things. I think one of the problems that cable has is that it has not established its identity and role. I have a very definite idea as to where we are and where we should be, but I don't think the industry has ever thought about itself enough, and one of the very good things about being associated is that people interested in cable will begin to enable us to position ourselves, to understand better what we are and where we should be in the order of things. Now that's one aspect and of course there are a lot of other wonderful things that can come out of this. I originally had hoped that there might be some development in the technology itself that would come out of this association. I now think that will probably be more related to what is happening at NCTA with its Cable Labs. But I still think the industry needs to understand itself and I think a relationship with an institution of higher learning like Penn State, which has a lot of great resources in technology and in communications and telecommunications can help us do that.
SMITH: I wanted to go back to the comment that you made right at the beginning when you said a motivation for your starting the cable system, which in those days was straight-out a community antenna system...incidentally is that why the name of the company was Meadville Master Antenna, that it was looked upon as a community antenna?
BARCO: It was even before the community antenna. The master antenna was the antenna which was used on hotels and other apartment buildings. Then it became the community antenna when it moved to take care of a community. We did not have the benefit of that language concept when we started and we simply thought of it as a master antenna for everybody there.
SMITH: I'm fascinated that you said that a motivating factor was your father's desire to see television. Knowing what a wonderful community-minded man he was, that it would have been much broader in that he would have seen it as an opportunity to provide a community service.
BARCO: Oh, no, no...first of all, before I was out of law school, he and I and sometimes my sister, would spend a week in New York City. He was attending the Practicing Law Institute which was a continuing education service available to lawyers. He would go there, and I went to a class that interested me and he would attend a class, and my sister would shop during the day. At the end of our day he would save two hours a day for television, in his room. When he got there, it wasn't there and the second day, it wasn't working. He was very irritated because he wanted to see it and he had paid to see it. I was mildly interested and one day when I came back from my class and went to his room he was in the room with four or five people and he had absolutely made a nuisance of himself and insisted on seeing whoever it was who was responsible for the television in the hotel. The RCA people came to explain the master antenna system. He said "If you can do this for a hotel, can you do it for a town?" They said "We're working on that." That's how it started. For the first two or three years, my father bought first -lass from Jerrold and put a lot of money into this system, much more than people really did in those days. People did take shortcuts, but we didn't take any shortcuts, and he had paid a lot. He always identified with the subscribers. If someone called our home...in those days of cable you'd have breakdowns...someone would say "George, my television is off." Dad would say "Well I am having the same problem you're having, and I'm very upset about this. You spend thousands of dollars to get something done right, and you can't get the television when you want it. Now, you hold on. I'll see to this. We're going to get our television reception here. I'm going to do whatever is required." He always had that referent. He was never an entrepreneur, he was a viewer. He always wanted more signals. When we had only a three channel system we sent out a survey and said which channels of these do you prefer? And somebody wrote back and said "All twelve!" I brought this to the meeting and started laughing and said "This fella doesn't understand, he wants twelve." And Dad said "I agree with him 100%, we should have twelve. I want twelve." And that's the way it was. Here, he always viewed things as a subscriber. And he looked at television and liked television and was always checking programming. When we put on MTV, he was looking at Cyndi Lauper, stomping across the stage, he said "Come in here and look at this. This isn't sex, it isn't violence, what is it?" But he looked at everything. He would concentrate on the news, on sports, and in the earlier days he did like the dramatic presentations, but it was sports and news. In the afternoons, the noise of the television used to bother my mother, to her it was noise. So he had earphones. He read while he looked at television, he did both at the same time. He was a great reader too, he didn't stop reading. But he thought it was a tremendous information source. He liked to look at people on the television, public figures. He would come out with ideas on their personalities and insights based on watching them on television. He would have ideas on Anwar Sadat, he had a lot of ideas about him as a man, just looking at him and hearing him speak. He felt that television was fantastic. Fantastic. He marveled at it, always.
MCKINLEY: You talked about your father using cable television as a great resource for information. What are your thoughts about cable television being used in the classroom?
BARCO: I think it's a very good resource. I don't think that enough use has been made of it for education. The problem, from my experience at Pennarama is that the educational establishment has not undertaken what it needs to utilize it. This is another subject that maybe we can talk about another time. Educators are all tied to the conventional classroom and you have to have an institutional change to do it. Why I think Pennarama is so very important is that it is institution related. The other initiatives that are taking place like the Alliance for Education are mainly media things, they are not educationally based, with people who are in the business or in the profession of teaching others. The answer is yes, it's in the classroom, and educators at all levels are going to have to start figuring out how it should be done and using it. I don't think they've come to grips with it at all. It is just a resource. It has to be coordinated and integrated into an overall thing. A video should be a component of all the resources like books, like other things. I don't want to do away with the printed word, but video is important to education, should be used.
MCKINLEY: I have one more question, and that's regarding policy issues. Are there any particular issues that the students in broadcast cable or in the mass media should be aware of or should be following to get a better perspective on the cable industry ...where it is today, where it's going tomorrow?
BARCO: That is a very broad and very difficult question. I have to quote my father again. One of the important policy issues that he thought schools or institutions of higher learning should be dealing with a great deal more than they have been, involving not only cable television, but television and mass media, was the matter of ethics. He felt that there had to be a lot more attention being given to what are basic ethics that should govern people in a free society where you have a free press and you have mass media. What are the guides, what are the standards of behavior of people who are out influencing people with the powerful television media. He felt that not enough attention was being given to this in the school. I know he was hoping that in the School of Communications here at Penn State and at other places that this would be something that would be developed. He thought that was a central policy issue involving all of media that was not being addressed. As far as cable television is concerned, I think there are a lot of policy issues facing cable television today that are not identified and not dealt with. One of cable's problems over the years has been its tendency to deal with things on the basis of expediency instead of rationally developing a concept and deciding where do we stand. The most recent policy question on this indicated program exclusivity. The industry more and more has a tendency to take whatever has to be taken, figuring that somehow it will work out of it. I believe that there are 1st Amendment issues. I think there are also basic conceptual issues of what the status of cable is with relation to pictures or signals they receive off the air. I think all of these basic issues have been completely muddled up because the industry has simply decided to take the shortest, easiest, cheapest and dirtiest way of growing and getting there. I would say that many of them are simply not addressed, not looked at and not dealt with. I believe a basic issue facing the cable television industry also is what its position is in telecommunications and whether it is founded in telecommunications or in communications. This comes back to that issue of identity. I think that there are policy issues having to do with the role that cable appropriately is carrying out, both in communications policy terms and in 1st Amendment terms, that the industry chooses not to address, but I think is dealing with them just in the most expedient way because it works and they are successful enough doing it that way that they haven't had to. I think it's unfortunate.
MCKINLEY: Do you think that by the industry ignoring some of these issues that you've just mentioned, that it's for this reason that federal legislators have been brought into the game as far as...
BARCO: You're talking to a person who is an old time cable operator. There may be a paranoia here. I frankly do not believe that the regulatory furor today was caused by anything more than the outgrowth of the competitive confrontation that is developing between cable and telephone. I do not think that the public-at-large has been involved or concerned with substantial issues that have given risen to any of these things. I think that regulatory problems have been an outgrowth of strategies that have been developed mostly on the telephone side of things, because of the confrontation that is developing between cable and telephony again. We've been at this point at earlier times in our history. I do believe that some of cable's problems relate to its national orientation instead of to local orientation that it talked about so much in the 70's. While I don't think there should be regulation at that level, I think that the industry would have been better served to be more sensitive to local and state issues and involvement instead of everything being nationally dealt with. Those are just reactions. I cannot give you chapter and verse to support it, but that's my view. If you will look at complaints about cable from a subscriber's viewpoint...this has been also true over the years. We used to say in the earlier days "Nobody likes cable but sub-scribers." I don't understand where the groundswell or support has really come for the regulation. It is kind of a press-developed business. You ask the person in the street if they're well-satisfied, and they're not complaining. I think the service is good and consistent. I don't know where this has come from, really.
STUDENT: I think we've taken up enough of your time this afternoon. I really appreciate the answers. You've given me a lot of insight into your part in the history of cable.
BARCO: Thank you very much. I really appreciate the opportunity of talking to all of you.
STUDENT: We appreciate the chance to be able to listen to you. Once again, I'd like to thank you.