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    Bill Bresnan

    Bill Bresnan

    Interviewer: Tom Southwick
    Interview Date: Wednesday August 04, 1999
    Interview Location: White Plains, NY USA
    Collection: Hauser Collection

    SOUTHWICK: My name is Tom Southwick and we're here to do an oral history for The National Cable Television Center and Museum made possible by funding from The Hauser Foundation with Bill Bresnan. It's August 4, 1999 and we're in Mr. Bresnan's office in White Plains, New York. Bill, I wonder if you could start by telling us a little bit about your background, your parents, where you grew up, that kind of thing.

    BRESNAN: Sure. I grew up in southern Minnesota, a little town, Mankato. My parents were, my mother was of German descent, my father of Irish descent. They lived in a little Irish enclave outside of Mankato, about twelve miles outside, called Madison Lake, that's where he grew up. They were both first generation American citizens. They had four children; I was the third of them.

    I have an older sister, I had an older brother who passed away several years ago and I have a younger brother, Pat, who's in the business with me. My father died after a lingering illness when we were very young. I was five at the time, my older sister was nine and Pat was two. So my mother had quite a struggle to raise us, particularly in those days they didn't have a lot of welfare assistance. She had been a seamstress; made custom draperies for people before she got married and so she went back to that trade and made these draperies for people out of our home. That way she was able to keep an eye on the kids, keep the family together and yet earn money. She had a tremendous influence on all of our lives. She was very loving, still is, she's still alive by the way, she's 101 years old. A very loving person and she worked very hard for us and was extremely dedicated in getting the family raised. She didn't have much time for any kind of social life other than through church and those kinds of organizations. She never dated or anything. She just raised the family.

    SOUTHWICK: What's her name?

    BRESNAN: Ann. Ann Marie. She taught us a lot of very valuable lessons. One was just because you find yourself in a difficult situation doesn't mean you have to stay there; that you have it within your power to move on. Also, don't dwell on the past, she used to often say, "Don't cry over spilled milk." Just move on. She's a tremendously kind person and got along with everyone. Never had a mean word, as far as I know, with anyone and yet in a very quiet way, a very determined person. I owe an awful lot to her.

    SOUTHWICK: What was your schooling?

    BRESNAN: I went to both elementary and middle school and then also high school was all a Catholic school system in Mankato, Minnesota. St. Peter and Paul's in middle school and Loyola High School and our teachers in those days, they didn't have lay teachers, really, they were all Notre Dame nuns and Jesuit priests. So I have knuckles to prove I've been whapped a few times, been whapped on the ear a few times, but it didn't hurt me any. Then I went to a Mankato commercial college, which was an accounting, money school. I also attended what's now known as South Central Technical College, at that time it was really known as a vocational school and that was a two-year program in radio and electronics. I studied radio and electronics there and graduated from there.

    SOUTHWICK: How did you get interested in radio and electronics?

    BRESNAN: I don't know. It was something I took to very, very young and I started fixing radios for the neighbors when I was about twelve years old and I hung out down at a local radio shop, which was about a half a mile from my home and I learned a lot just by hanging around there after school and doing errands for them or doing menial jobs for them and I picked up a lot from them. Then I started fixing the neighbors' radios and these were all tube type radios, you know, and they were generally big floor-model sets. What I'd often do was just take the tubes out and take them down to this radio shop and test them and quite often find it was just the tube. Then I'd replace the tube and make a few bucks. If it was something more involved, as I went on I got better at finding other problems, but if it was something that I couldn't fix, I would take the works out of the cabinet and put it in my little red wagon and drag it down to the radio shop and they would fix it. I'd bring it back and put it in and charge a little mark up for my work. So I was able to make, for me at that time, some interesting money. So that was kind of a sideline that I had while I was going to school, but I always had a lot of jobs because none of us ever got an allowance. We used to hear friends had gotten allowances, the parents would give them money, my mom couldn't afford that, so if we needed money we had to earn it. She obviously would pay for our schooling and stuff like that, but if we wanted any spending money we had to earn it. So we all had paper routes, I caddied at the golf course, set clay pigeons at the local gun club. You name the job and I probably did it. Radio fixing was always kind of a steady thing, not every day, but once a week or two somebody would need a radio fixed.

    SOUTHWICK: Before I forget, when were you born?

    BRESNAN: December 5, 1933.

    SOUTHWICK: So you developed this interest in radio and electronics and pursued it after high school and then what?

    BRESNAN: I worked during school at this radio shop, the one that I told you about that was close to my home. I'd developed a good relationship with those guys and worked there and then was hired by a radio and electronics supply company out of Minneapolis called Northwest Radio and Electronic Supply and became a sales engineer with them. I traveled the southern part of Minnesota, worked out of Mankato, which is about 75 miles south of Minneapolis and we had a little satellite store there. When I was working for them, some entrepreneurs were going to build the cable system in Mankato and I heard about it and went down to see if I could sell them cable or any other supplies they may need and found that they would be willing to buy cable from me if we could get a certain brand of cable. It happened to be Times Wiring Cable at that time and our company didn't have distributorship for that. At that time, a cable sale might be a thousand-foot role of microphone cable or something to a radio station or a TV station or something and the concept of selling miles and miles of cable was attractive to me. So, I talked to the president of our company about it. He was very negative, you know, you'll never get the sale, but he told me if I could get the distributorship, if I on my own could get the distributorship for his company and could sell the cable, fine. So I was able to do that. I got a hold of the right people. At that time, the national sales agent for Times was Jerrold and I got a hold of the right people there and set our company up as a distributor and then sold all the cable. One of the surprising things, kind of disappointing things to me, is that they had two sales commission structures. They had one where they would pay you 3% of your gross sales...

    SOUTHWICK: This is the company you worked for?

    BRESNAN: The company I worked for, Northwest, yes. They'd pay 3% of your gross sales and then they'd pay your expenses and they'd give you a car, kind of a stripped down Ford or Chevy car and they'd pay your motel expenses, that's where we usually stayed, and some per diem for food. Or they'd pay you 5% of your sales and you'd pay your own expenses. So I took that deal when I signed up and so it was much more lucrative for me to make a big sale, obviously, and after I did that sale and made this guy a lot of money, his remark was, you have to be a five percenter.

    SOUTHWICK: All that he could think of was that 2%.

    BRESNAN: Yes, that he had to pay me an extra 2%. That company is no longer in business. No problem here of telling tales out of school.

    SOUTHWICK: When was this?

    BRESNAN: That was in 1955 or '56. That sale was over a period of probably '55 to '56. Mankato was one of the first cable systems to be built in Minnesota and as a result of selling them that order, which was a big order for me, I spent a lot of time working with their engineer and helping him lay out the system and helping him tally up the bill of materials from the maps and so forth and I was learning from him, just sort of an apprentice. Because the benefit to me was as we would get a section of town laid out and a bill of materials tallied up I could write up an order. So I became sort of knowledgeable; I became kind of an expert on cable. I didn't know much but nobody else knew anything. Then I got married in 1957 and didn't want to travel on this sales route where I'll be gone virtually all week, so I bought into a radio and TV shop with a fellow, a partner, in Waseca, Minnesota, which was about 30 miles outside of Mankato and we had a sales and service business there and then one of the fellows that had financed the Mankato system was going after the franchise in Rochester, Minnesota.

    SOUTHWICK: The cable franchise?

    BRESNAN: The cable franchise, sorry. Waseca was right on the route there, so he would stop in the shop and see me and talk about it and ask me if I would be his chief engineer.

    SOUTHWICK: Who was this?

    BRESNAN: The fellow's name was Joseph Poire, P-O-I-R-E. He's no longer alive. Actually, he wanted me as his assistant chief engineer. He had another fellow there who was the chief engineer from Mankato, the guy I'd worked with over there, and he moved him over, but that fellow had some personal problems with his wife and he took off in the middle of the night one time, never to be seen again and so I fell into the job. That was in 1958 and we built that system. I stayed on as the chief engineer of the company. It was sold in 1960. I stayed on with the new owners.

    SOUTHWICK: How many channels was that system?

    BRESNAN: Five channels.

    SOUTHWICK: Was it Jerrold equipment?

    BRESNAN: No, it was Spencer-Kennedy Laboratory equipment, SKL, and it was a five channel system. There was one local channel, an NBC channel in Rochester, and then we brought in four channels from Minneapolis.

    SOUTHWICK: What, roughly, is the size of Rochester, or was it in those days?

    BRESNAN: In those days, because it's a very fast growing town with the Mayo Clinic and IBM there, but in those days it was probably 40,000-50,000, something like that.

    SOUTHWICK: Did you get a pretty good response to cable when you built there?

    BRESNAN: Well, it was very interesting because I remember the engineer from SKL saying this is really a marginal town because people could get a local channel with rabbit ears really and with a small antenna on the roof you could get an ABC from Austin, Minnesota and a CBS from LaCrosse, Wisconsin.

    SOUTHWICK: So three pretty decent signals.

    BRESNAN: Three pretty decent with not much of an antenna, maybe a ten or fifteen foot antenna would require a rotor, but if they wanted Minneapolis, because we were about seventy-five, eighty miles south of Minneapolis and down in a river valley, if they wanted Minneapolis they really needed to put a tall antenna up. They all wanted Minneapolis because that's the capital – St. Paul and big city stations versus the small town stations in those days. So it was not uncommon to have forty-foot masts on top of the house and then a rotor so they could get the other channels as well. But, I remember the engineer from SKL, when we were putting the head end in, said this is going to be really interesting to see because this is a marginal town because they can get the three major networks. Then the interesting thing is when we were building the system through the streets and I climbed the poles – we all did everything – people would come out and say to us, kind of chastise us and say, "I don't know why you're building this system. We're not going to sign up. Nobody wants this." Probably had we taken a survey, we would have found that nobody wanted the service, but when we turned it on it was accepted very well and we were getting, first pass through, probably 40% penetration. And then it would grow relatively quickly and now that system is probably 90% penetrated.

    SOUTHWICK: Do you remember what you charged?

    BRESNAN: Yes, five and quarter a month, excuse me, five forty-five a month gross, but if you paid it by the tenth of the month, you'd get it for five dollars. So it was a dollar a channel, which is more...

    SOUTHWICK: Were there installation charges as well?

    BRESNAN: Twenty-five dollars. So this was after that period of time when companies were charging $125 installation and $3.75 a month, or something like that. We had gotten more sophisticated.

    SOUTHWICK: You remained as chief engineer there until when?

    BRESNAN: Until 1965, when Jack Kent Cooke bought the system and then he moved me to California.

    SOUTHWICK: And who was Jack Kent Cooke?

    BRESNAN: Jack Kent Cooke was a Canadian newspaper magnate, who had been a 50% partner with Roy Thompson of the Thompson Group. He sold his share to Roy Thompson and they actually sailed around the world for a couple of years and then moved to Monterey, California, actually Pebble Beach, and rented a condo there that was owned by Frank Stanton. One day, his TV didn't work and he didn't know why. He checked and found out that the cable bill hadn't been paid and that's how he learned about cable TV.

    SOUTHWICK: Frank Stanton, the president of CBS, had cable in his home.

    BRESNAN: In Pebble Beach, and hadn't paid his bill. (Laughter) Actually didn't realize, because Jack was renting the house and Jack didn't know about it, it was just a mix-up but anyway, that's how Jack... So he wanted to learn about cable and he got a hold of Bill Daniels and Bill gave him a primer on cable and then Jack moved to Southern California, bought an old home in Bel-Air, restored it and spent about a year doing that and then while he was doing that, he and Bill Daniels were meeting and Monte Rifkin was with Bill at the time. Actually Monte spent quite a bit of time with Jack and Jack decided he wanted to invest in cable. So Daniels helped Jack scout out systems and the first system I think he bought was a system in Lewistown, Idaho and then he bought a group the Daniels sold him that was financed by the Narragansett Group and then he bought our system in Rochester and systems in Winona, Minnesota and LaCrosse, Wisconsin. He was making a lot of waves. This is now in the summer of '65 that I joined him and he was definitely the guy out buying all of the cable systems in the country. He was sort of like Paul Allen is today.

    SOUTHWICK: He'd come from outside of the business and made his money elsewhere.

    BRESNAN: Yes. In Canada, by the way, he'd also been in radio and television but his main investments were with The Thompson Group in newspapers.

    SOUTHWICK: And how did you first come to meet him?

    BRESNAN: After he bought our system in Rochester, about two weeks after he bought it, he called me and said he'd heard a lot about me and wanted me to be his chief engineer and come out to California. I said, "Just a minute!" A little boy from a small town in Minnesota and I didn't really want any part of that. So he convinced me I should come out there and meet with him. So I did, I flew out there.

    SOUTHWICK: Tell me about that trip.

    BRESNAN: Well, I flew from Minnesota out to Los Angeles and he had his chief financial officer meet me in a chauffeur driven Rolls Royce, which is I think the first Rolls Royce I had ever seen. They didn't have those in Minnesota.

    SOUTHWICK: That's not what the five percenters drove then?


    BRESNAN: No, no, we drove a Chevrolet with a radio in it. I remember sitting in the back seat looking at this wood burrow and stuff in a Rolls Royce and thinking, what in the heck am I doing here? But his offices at that time were in the shops area by the Beverly Hilton Hotel, so he took me to the Beverly Hilton and checked in and met with him yet that night in his office for a few minutes. Then he and his wife took me to dinner at the restaurant there in the Beverly Hilton and it was kind of an awesome experience for me as a small town boy. He had, this is the gourmet restaurant at the top of the Beverly Hilton, in the Escoffier Room and we had the little trio of violins, three violins, playing at our table and I remember he asked me, "What would you like to drink?" And before I could answer he said, "You'll have a scotch. Give him a scotch and soda." So I had the scotch and soda and then a little bit later, when it was time to order the meal he said, "What would you like to eat? Give him this Dover sole; I just had this sole flown in from Dover, England, I want Mr. BRESNAN: to have this." So he was ordering for me.

    SOUTHWICK: Kind of a take charge guy.

    BRESNAN: A take charge guy, but in a very nice way and extremely charming. His first wife, Jeannie, was there and was extremely charming as well. He then asked me about my family and we talked a lot about family and when it got to my brother Pat, he got very interested in Pat. Pat at that time was selling display advertising for the local newspaper in Mankato in the Mankato Free Press. He said, "You know, Pat ought to come out here and work on our marketing." I said, "Well, you know, it's not fair. Pat's got a job. You bought the company out from us so I don't have a choice but to be here talking to you. But Pat's got a job." He said, "Nonsense, nonsense." I said, "How do you know you're going to like me? Maybe you ought to see if you like me before you take on my brother too." He said, "I know already. I love you." So he said, "I'll tell you what you do," and this is something I learned about him that he often did. When he had a difficult decision to make, he would gather as much information as he could from as many people as he could. He would ask opinions of anybody that he respected in that particular field and did as much homework as he could do. But then, if he still couldn't make up his mind, he would when he first woke up in the morning before his mind was cluttered with anything, he would ask himself, what should I do. So he explained that all to me that night. So he said, "I'll tell you what you do now. Two hour time difference in Minnesota, Pat probably goes to work at 8:00, right?" "Yes, probably." "Okay," he said, "you probably should call about 7:30 their time, it's a two hour time difference, so you set your clock for 5:30, put in a wake-up call for 5:30 at the hotel and soon as you wake up you ask yourself, should I or should I not call Pat. Is it or is it not right for Pat? But you can't argue with yourself. You've got to make that decision instantaneously because if you argue with yourself, your mind gets cluttered." So he said, "Do that tomorrow morning." So I did. The next morning I did it, I asked myself is it right or is it wrong. Well, maybe on one hand on the other hand... I argued with myself. So I didn't call him. So I get to the office about 7:30 and he was there and he said, "Did you call Pat?" "No." "Why?" I said, "Well, I got to debating it in my mind and you told me I couldn't do that." He said, "Well, that's right. Try it again tomorrow." So the next day I did the same thing and I had the same struggle. I wasn't sure I wanted to stay there and I didn't want to pull Pat all the way out there and have him quit his job and get out there and find I'm gone. So, anyway, I went through the same thing and came in that next day and he asked the same question and I said, "No, I didn't call." "Try it again tomorrow." So the next day is the third day and I kind of went through the same thing and I said, "Oh, the hell with it. I'll call Pat and let him make the decision." So I did. I called Pat and I said, "I don't know about this guy, but here's the deal. Are you interested." And Pat said, "Yeah, I'm interested." So came on out and spent a little time there and then moved up to a system he bought in Key, New Hampshire to run that and get that brought into the fold and then moved on to several others. So he was with us the whole time, but it was an interesting experience for me and it gave me an insight into how he made some very important decisions. He's extremely disciplined in his way of dealing with difficult decisions.

    SOUTHWICK: So he hired you as chief engineer for all of us systems and you moved to California?

    BRESNAN: Right. Actually, he made me vice-president of engineering and then a couple of months later, executive vice-president and then later, president of the company.

    SOUTHWICK: What were the issues that you had to deal with running these systems, which he'd assembled from disparate owners?

    BRESNAN: At that time, the new state of the art was twelve channels and all of these systems are either three or five channel systems. And so it was rebuilding the systems and buying coax and amplifiers and so forth and bidding that stuff out, testing the equipment and we set up a little laboratory in the basement of the building and tested equipment. At that point, aluminum cable was becoming very practical and so we were rebuilding using aluminum cable.

    SOUTHWICK: The advantage of aluminum cable was?

    BRESNAN: Lower loss and more permanent, too, but the big advantage was lower loss.

    SOUTHWICK: That refers to the sheeting that goes around the cable itself.

    BRESNAN: Exactly, the outer conductor. So we were bidding that out and rebuilding the systems. We were buying more equipment, more cable, more contractor time than anybody.

    SOUTHWICK: Were you the biggest cable company in the country?

    BRESNAN: No, we were second. But we were doing more rebuild activity. Jack was very, very smart on business and marketing and pricing and all of that kind of stuff and he could easily see that if you can buy a cable system that's got five channels, that's selling five channels for five dollars a month, and you've got to rebuild it to carry twelve channels that you can up it, not to twelve dollars, but you can up the price some and more than pay for the cost of the rebuilt through the pricing changes. Also, he could perceive that you could in some of these markets get better penetration by increasing the channel offerings.

    SOUTHWICK: And financing wasn't an issue because he had money.

    BRESNAN: He had a lot of money, yes, and he was very wealthy. But he didn't use a lot of his own money. He actually was able to, because he was wealthy, he was able to borrow, and so he'd financed most of it.

    SOUTHWICK: What did you put on a twelve channel system? How did you fill it?

    BRESNAN: Well, we brought in as many television channels as we could.

    SOUTHWICK: Using microwave lines?

    BRESNAN: In many cases microwave, or tall towers, but the CARS-band microwave services had come out about then, if I remember right, so that we could own our own microwaves. Prior to that, cable companies could not own a common carrier microwave signal company, or facility, I should say, that served itself. Common carrier had to be separate and offer services to anybody that wanted them and was willing to pay for them. But then the FCC had authorized these community, I can't remember what the acronym CARS stands for anyway, but it's community antenna relay system, I think. But anyway, a cable company could actually own and operate its own microwave system. That came along somewhere along in there. We also carried a weather channel, which was a camera scanning back and forth over the local weather dials that had time and temperature and humidity and wind velocity and wind direction and so forth. We had a news channel, which was a camera focused on a teletype machine planking away. We never did it, but some companies in order to fill channels actually focused a camera on a fishbowl or an aquarium. There were kind of unique things. We had message wheels that we rigged up where we could run messages.

    SOUTHWICK: It would be a little 3 x 5 card that would appear on the camera and then switch to another one?

    BRESNAN: Yeah, exactly. You could rent those card spaces out to local vendors and merchants and so forth. We once rigged up a flowing message wheel with Archie 59 cable reels and a barbecue spit that turned it. We had to make do.

    SOUTHWICK: Was a lot of your job traveling around to these systems or did you pretty much stay put?

    BRESNAN: Yes, quite a bit. I had to travel to all of them, particularly as we had the rebuilds going on. I was probably gone half the time.

    SOUTHWICK: How many subscribers were you serving roughly?

    BRESNAN: We hit a peak in 1967 of about 110,000-112,000 customers, 110,000, I think. We were the second largest cable company in the business at that time. And then we sold off two of them. Jack decided that he wanted to get out of the business. He had then also bought one sports team. He bought the Los Angeles Lakers and moved out to LA from Minneapolis by Bob Short. He applied for the NHL expansion franchise for LA when the NHL was expanding. This was in '65, also, and he was competing with a number of people for the LA franchise including some movie stars, Jack Lemmon and people like that, and he ultimately won that franchise but in order to do it, he ended up having to build his own arena, which turned out to be The Forum. The reason he had to do that is one of the applicants for a franchise was Dan Reeves who had the football team, Dan Reeves, Sr., had the football team in LA and they played at the LA Coliseum and next to the LA Coliseum was the LA Sports Arena and that Sports Arena/Coliseum complex was run by the three government entity coliseum commission, which was LA city, LA county, and California state and because Reeves was a big tenant there, he had clout with the coliseum commission. He was able to get the coliseum commission to say that the only applicant of all of the applicants, and there were several of them for the NHL franchise, the only one that could have guaranteed play dates for the Coliseum would be Reeves. Play dates are very important because the whole league gets screwed up if you can't guarantee your play dates. So at that point, Jack said, "Heck with them. I'll build my own arena." I'll build an arena in Inglewood, California, named The Forum and that's what he did.

    SOUTHWICK: But he needed some cash to do that?

    BRESNAN: He needed cash to do that so he was getting a little bit stretched out. He decided to sell the cable and we sold off a couple of the pieces. We sold Barstow, California and Laguna Beach, California. So we were down to 92,000 customers at that point and then he did a deal with H&B American, which at that time by the way, was the largest cable company and they had about 125,000 customers and we had 92,000 and we merged those two companies together. H&B was a survivor but Jack was the largest shareholder of H&B. He had about a third of the outstanding stock of H&B and I became president of the new cable entity known as H&B American Cablevision Company. The chairman of that company was a fellow here in New York, he's no longer alive, but he was the president of the New York Rangers hockey club, and Jack happened to know him through their sporting enterprises. His name was Bill Jennings and Bill was a non-active chairman but he was the chairman of H&B and a lawyer with New York law firm, ????, Simpson, Thatcher and Bartlett.

    SOUTHWICK: So you ran the combined cable company?

    BRESNAN: I ran the cable company.

    SOUTHWICK: Which had what, 250,000 subscribers?

    BRESNAN: Yes, a little less, about 220,000, something like that. And then we got that up to a little over that when Jack got talking to Irving Kahn about merging H&B in with TelePrompTer. One of the things, when Jack's company was privately held and then we merged this company with H&B, we merged it into a public company, and one of the things that concerned Jack is that H&B, while it was a good cash cow, the H&B systems were all pretty much the same as the former Cooke systems which were classic type markets. So they're very predictable cash flow, you could upgrade them and extend them, you could do things, but Irving Kahn, at the time chairman of TelePrompTer, was expanding into major markets and was betting on PAY-TV. He was betting that pay TV would ultimately be cable's mission and that to do that successfully had to be in the major cities, and so he was getting franchises in major cities. His price earnings ratio, his stock, reflected a lot of pizzazz. The PE ration of H&B reflected a cash cow – stable. He wanted ultimately to sell his H&B stock.

    SOUTHWICK: Jack did?

    BRESNAN: Yes, he wanted to monazite his holdings in cable and was trying to find the best route to do that. So he was smitten with the idea of merging H&B into TelePrompTer.

    SOUTHWICK: Because it would have created a company with a higher PE ration and his stock would have been worth more?

    BRESNAN: Right, and the company would have more pizzazz. And we complemented each other fairly well in that we had the cash cow, they were getting the new franchises and the cash from H&B could help build the franchises. Bill Shea, his lawyer in New York at the time and a fellow sportsman, the guy that...

    SOUTHWICK: Shea Stadium.

    BRESNAN: Shea Stadium was named after him. Shea & Gould was the name of the law firm at the time, and Bill Shea urged Jack to merge with TelePrompTer. Bill Jennings, the H&B chairman, urged that we do a deal with Chuck Dolan, Sterling Manhattan at the time, because Jenning's thought was that if H&B needs some pizzazz, getting into New York City will give it that.

    SOUTHWICK: And there were two operators in New York City, Dolan and Irving Kahn.

    BRESNAN: That's right. Sterling Manhattan had the lower half of Manhattan and that was Chuck Dolan's company and TelePrompTer had the northern half of Manhattan. Interestingly, Irving Kahn chose, as I understand the story, you'll probably get this from Chuck Dolan, but as I heard the story, they had a drawing or a coin flip or something to see who got the choice of the markets. Irving had the choice and Irving chose northern Manhattan, which includes a lot of residential area but a lot of poorer demographic areas and so to sell pay TV in those markets was kind of hard. He chose that because he said that's where the people live, whereas in lower Manhattan you have a lot of businesses and offices and so forth and he didn't see people watching TV there, but of course you have tremendous opportunity for data transmission and telephony and so on, which Manhattan Cable has been able to tap into.

    SOUTHWICK: What did you think at the time? Did you think that cable could make it in the big cities?

    BRESNAN: I was very concerned about it and I remember coming back to meet with Chuck Dolan at that time and it was the first time I met him, which was probably in '69 or so, '68 or '69. First of all, I didn't have the same vision Irving had on PAY-TV. I couldn't see it, you couldn't touch it, you know, and how you're going to offer it... the technology wasn't there to offer it.

    SOUTHWICK: Was he talking about PAY-TV as sort of a monthly service as it evolved, or pay-per-view?

    BRESNAN: Pay-per-view, yeah. Nobody had thought of the monthly concept yet then, of the monthly subscription concept. All of the efforts that had been directed for pay TV at that time were on a pay-per-view basis and there was the Midwest Video thing in Bartlesville, Oklahoma, there was a famous players test up in Canada, there was a test up in Hartford, Connecticut, and these were all pay-per-view. The technology, this was before...

    SOUTHWICK: Primarily movies, theatrical films?

    BRESNAN: That's right. Well, TelePrompTer was doing some sporting – they were doing fights. Because TelePrompTer actually started doing theatrical exhibition of prize fights on large screen projectors and that's how he got into cable. It was a natural extension of his audience there. So the technology, with having a technical background, my concern was how do you deliver it, how do you collect for it, how do you pay for it? I just didn't see how you could do it. And you couldn't. We didn't have chip technology at that point so all this stuff was specific circuits and very expensive to make, but if we were going to do something in New York, I much preferred to do it with Dolan because I didn't trust Irving. Neither did – there were two people really close to Jack at the time regarding cable; Jim Locker, his chief financial guy and myself – and neither of us really trusted Irving and didn't really want to do that deal with him but Jack was absolutely smitten. The main reason we didn't really want to do the deal with him was Irving insisted on having a voting trust on Jack's stock. Jack and Irving were very opposite characters.

    SOUTHWICK: How so?

    BRESNAN: Well, Jack was a very polished, charming guy and Irving was kind of a rough and tumble guy. They both were very smart, but I mean, I don't want to get into a lot of negative on Irving, but they were not cut out of the same cloth. And Irving knew that, and Irving insisted on this voting trust, that Jack's stock would be in a voting trust.

    SOUTHWICK: That would be controlled by Kahn?

    BRESNAN: That would be controlled by Kahn and that really did not seem wise to Jim Locker and myself.

    SOUTHWICK: Effectively making Cooke a passive investor with no real control over the company.

    BRESNAN: Exactly, right and at the time, Jack had, by doing that deal, his approximately 33% of H&B got converted into about 16% of TelePrompTer, whereas Kahn had somewhere around, I think, 5 or 6% at that time and maybe even less. So Jack was far and away the largest shareholder and Kahn was getting control of his stock. But anyway, Jack just wanted to do the deal so bad that he did it and I guess about four or five months, maybe less, three or four months after we closed that deal, which was September of 1971, I think it was - no it was '70 - we learned a few months later that Kahn was being investigated by a grand jury for bribing a city council and mayor in Johnstown, Pennsylvania. So here we had just merged with this guy, given him control of our stock and the guy is being investigated for federal crimes. And sure enough, he was indicted a month later or so and that was I think in January of '71. At that point, Jack requested Kahn to resign, to step down.

    SOUTHWICK: What was your role at that point? Had you moved to New York or were you still in California? Who were you working for?



    BRESNAN: No, I had not moved to New York. I was working for Kahn. I was working for TelePrompTer and I was vice-president in charge of the west coast – a job they actually created for me because I just didn't want to have anything to do with this guy. And actually had told Jack that I really wanted to leave and start a company and he said, "No, please stay with me until we get through all this." I didn't want to move to New York. I didn't like the man, Kahn, and I didn't think I'd get along there and I'd move out and before long I'd be gone. I was itching to start a company. But he leaned on me pretty hard to stick with him until he got through that. So I did and they made me vice-president in charge of the west coast, which is really not much of a job, frankly. We had the old H&B...

    SOUTHWICK: But you didn't have it very long, either, did you?

    BRESNAN: No, I didn't. I reported to Hank Simons, who was Irving's vice-president of operations, I guess was his title, maybe senior vice-president of operations. Hank was a very nice guy. I liked Hank a lot, but he and I were kind of at different ends of the spectrum in that he, obviously, was very loyal to Irving and reported to Irving and I was loyal to Jack and kind of was the odd man out as far as Irving goes. But Hank was a gentleman and that made it possible for us to exist under those strange circumstances.

    SOUTHWICK: So Irving gets indicted. What's Cooke's reaction?

    BRESNAN: Cooke asks Irving to resign, to step down as chairman and to resign from the board and to let the company fight this out.

    SOUTHWICK: What was the impact of that indictment in terms of the cable industry in general?

    BRESNAN: It had a very negative effect in general. One of the things that bothered me a lot, was you'd hear people say, well, this happens all the time. He just happened to get caught. And that's really not true. I mean, there may be a few cases of it, but I had never gotten involved in anything like that. I didn't know anybody that had gotten involved in anything like that and I thought it was really an injustice that the industry should all be tarred by saying this is what always goes on. But Jack wanted Irving out of there because it was a real black eye, not just for the industry, but particularly for the company.

    SOUTHWICK: Right, and the stock went down fast.

    BRESNAN: Yes, it went down like a rocket in reverse. Kahn refused to – this was his company, he founded it and he was going to captain it all the way until wherever it ended up. So then Jack brought an action to force him to resign. He also brought an action to rescind the voting trust and he engaged in a proxy battle. I don't know, not being a securities expert, but this is the only case I know of where you bring a proxy battle where the opposite side has the voting trust on your own stock. It was a difficult situation to be in, but that's the situation he was in. Kahn was ultimately convicted in late '71, I guess.

    SOUTHWICK: We can check that.

    BRESNAN: And then he was removed from office and the voting trust was nullified and we had a special meeting of the shareholders and elected a new board and a new chairman, Ray Shaffer, the former governor of Pennsylvania was elected chairman of TelePrompTer and then we started the arduous task of digging through things trying to find...

    SOUTHWICK: And that left Jack Kent Cooke in effective control of the company?

    BRESNAN: Yes, he then had effective control of the company.

    SOUTHWICK: And what did he ask you to do?

    BRESNAN: The company was losing money at the time because they had built into major markets. We still didn't have any equipment to offer pay TV, by the way, but these major markets were being built into it.

    SOUTHWICK: New York, primarily?

    BRESNAN: New York, St. Petersburg, Seattle, Tacoma, Tampa, some markets in New Jersey – he had gotten the franchise in Trenton, he hadn't built that yet. He had started systems in a lot of markets and the problem is you had nothing to sell the people that they couldn't get without cable. The other big market was LA and they were in with Hughes Aircraft Company. Both LA and New York, by the way, were joint ventures with Hughes Aircraft Company.

    SOUTHWICK: Oh, really.

    BRESNAN: In LA and New York, you had some reception problems. In LA, in the canyons of the Santa Monica mountains, is mainly where theta cable, at that time, was located because down in the flat lands, the valley or the LA Basin itself, people got very good reception from Mt. Wilson, but in the canyons they needed cable. In New York, because of the buildings...

    SOUTHWICK: That would block the broadcast signals. Otherwise you could get them clearly?

    BRESNAN: Right, so cable could get some penetration there but it wasn't great. It was in the 20-35% range, somewhere in that penetration.

    SOUTHWICK: Now, there was another problem that was created in those urban areas and that was the ingress and the ghosting problem. Was that something you were involved with because as I understand it, Dolan went to – that's how converters came to be used, I guess. Is that correct?

    BRESNAN: Yes. That's right. That was a company called International Telemeter, I think it was, that built those first converters or at least to lay claim and I think successfully got the patent claims adjudicated in their favor. Theirs were the so called Mendel patents on converters.

    SOUTHWICK: And those were the first converters used for cable television?

    BRESNAN: Yes, that's right and that was yes, to resolve the problem of ghosting and they'd just convert all of the channels to an unused channel. In this case, channel three and in there would be no ingress in the TV set on that channel because there was no local channel on that. So anyway, TelePrompTer had built into all these markets getting very low penetration, 15%, 18% maybe, and losing a lot of money. Along with that was the fact that the company, then totally distracted with all of the legal problems and money was being spent defending against the Cooke legation, the proxy fight, against the criminal allegations, I mean it was just a...

    SOUTHWICK: A mess.

    BRESNAN: A mess, yeah. A real mess. So we had to figure out how to bring the company cash flow positive.

    SOUTHWICK: What was your position in the new company when it was restructured?

    BRESNAN: Let's see, I was president of the cable division and appointed to that in 1974, I think it was. I moved back here, or I shouldn't say back here, I moved here in 1972.

    SOUTHWICK: To New York?

    BRESNAN: Yes. So one of the big loss problems was right here in Manhattan. TelePrompTer had claimed that they had somewhere around 55,000 customers, if I remember right and we couldn't make that jibe with the revenues we were getting. So we did a lot of work trying to figure out what really was going on and what had happened is they were counting free – they had a lot of free outlets they were giving to building supervisors, building owners, building lawyers, anybody connected in any way with a building got free service – but counting them as a customer. And then there was an awful lot of illegal connections; people stealing the service. I remember coming back after, I spent a lot of time in northern Manhattan at the cable office in uptown Manhattan, and I remember coming back to tell Jack Cooke – I think they were counting 54,000 customers at that time – I said, "Jack, we'll be lucky if we got 34,000."

    SOUTHWICK: Wow. What was his reaction?

    BRESNAN: He was not surprised. He was very upset, but not surprised. So we had to do a lot of things all at once. We brought in a number of our senior people from the field to do budgets. We had to get the banks satisfied that we had this company under control. So we did projections system by system what we thought we could do. In many cases it was to stop construction. Systems that were partially constructed, we stopped them. As painful as that was, because we had money tied up already in them, at least we stopped further outflow of cash. There were many systems that we just turned the franchises back to the cities, to the communities, that hadn't been started yet. We just said, "We're very sorry, we can't do this." It was very painful, obviously, but we shed a lot of those systems and therefore those capital needs.

    SOUTHWICK: Did you have to layoff employees as well?

    BRESNAN: Yes we did. We laid off, I think if I remember right, around 500 people and that was probably the most painful part of the whole thing. All of the families that were affected by that, but we absolutely had no choice. The company was that close to bankruptcy and I think the only reason that we didn't take it into bankruptcy was just we were all too stubborn. Cooke was determined and we were right with him.

    SOUTHWICK: Kahn had borrowed very heavily to finance the construction in New York and the other major markets?

    BRESNAN: That's right and he actually had, the banks had extended his credit beyond the limit that he had. If I remember right, he had a $40 million dollar loan, something like that. It seems like small numbers today, but that was a big, it was the largest cable facility at the time, and I think he was up to about $50 million when we took over.

    SOUTHWICK: And these were all bank loans, not insurance company...

    BRESNAN: No, bank loans. So we had to negotiate with the banks to a work out plan, in effect, and fortunately we got through it all. We had the help of some very talented people. Jerry Green was our chief financial officer. He's the fellow that the Jerry Green award is given in honor of at the NCTA, the Vanguard Award. He was unfortunately killed in a plane crash a couple of years later. We had Jeff Marcus was our vice-president of sales.

    SOUTHWICK: You brought in some hotshot marketing, young marketing...

    BRESNAN: Marc Nathanson was our VP of marketing.

    SOUTHWICK: Did you hire them?

    BRESNAN: Jack actually hired them and then they worked for me, but he actually hired them.

    SOUTHWICK: You had to get the number of subscribers up to what level?

    BRESNAN: Well, we promised the bank we'd hit a million customers by the end of '73.

    SOUTHWICK: There was a slogan.

    BRESNAN: "A million or more by '74." That was the slogan, that's right. You remember that?

    SOUTHWICK: Uh huh.

    BRESNAN: And Jeff Marcus grew a beard and we had an agreement that I would shave his beard when we hit a million customers and I think you have a picture of that.

    SOUTHWICK: We have a picture of you doing that. Did they develop some new marketing techniques that hadn't been used before?

    BRESNAN: Yes, Jeff really cranked up direct sales, that had been his forte up until then in the industry and he had created direct sales forces throughout the country for us and had some very aggressive budgets that he was able to get close to meeting. Marc did a tremendous job on the overall marketing plan. They were very good. We had some really good people.

    SOUTHWICK: There were some things going on in Washington during this time as well, in terms of regulation in the late '60's and early '70's. Did that impact the business?

    BRESNAN: Yes, because you couldn't bring distant signals into these markets. Of course, one of the problems of Kahn building into the major markets was they had the major signals, the major market signals, already in their market.

    SOUTHWICK: They had the three broadcast networks and probably a couple of independents.

    BRESNAN: And the independents, so it wasn't like some of these other markets where you were trying to import distant signals, but in many of them even then, what were considered at that time semi-classic. Take Rochester, that's now considered a classic market but at the time it was considered more of a semi-classic market because they had some local signals, but they wanted the distant signals from Minneapolis. If there were local signals available in a market, even like I mentioned Rochester had from Austin, Minnesota and LaCrosse, Wisconsin, you couldn't bring in the distant signals.

    SOUTHWICK: You had to carry the closest ones first before you were allowed to bring in anything further.

    BRESNAN: That's right. So we went through, there was a whole series of FCC rulings starting with, I guess it would be in the late '60's, the Carter Mountain Decision, where they determined that if the importation of a distant signal into a cable market of any size had a negative financial impact on a local broadcaster you couldn't bring it in. In other words, the FCC thought that their job was to protect the local broadcaster and it wasn't important what the people got to see on television, what was important was that that local broadcaster would be healthy. Now their argument for that, obviously, was that the local broadcaster is serving the public, serving all of the public and they need to be financially healthy to do that and that if cable comes in and drives the broadcaster...

    SOUTHWICK: Takes away viewers.

    BRESNAN: Takes away viewers, impairs his finances, that he then may go out of business and not everybody has cable or can get cable even and therefore the public is harmfully impacted. What really turned out in many of these cases is that when cable came in it actually helped the local broadcaster because he cleaned up his act. I know in the case of Rochester, for example, where I started, the local broadcaster, an NBC station, consistently ran over, his news and sports would run over so that The Tonight Show – they'd cut in and you'd miss the opening part of it, you know. Cutting into the network was always very sloppy and you'd miss the first part of the show. When cable came and we started importing the Minneapolis signals where they hit the network right on time, pretty soon the local channel started doing that and as they cleaned up their act, all of the local citizenry liked it, including the local merchants who said, well, maybe I'll advertise now that you're running a real TV station. So, in actuality, the local station did a lot better after cable came. And that's true throughout the country.

    SOUTHWICK: Is it also true that you brought the signal to areas that maybe couldn't get the reception as well of the local station off-air.

    BRESNAN: That's right, because we carried the local channel on our system and so people didn't need an antenna. They'd get it and they'd get it clearly.

    SOUTHWICK: But the broadcasters didn't see it that way?

    BRESNAN: No, they were worried at first.

    SOUTHWICK: Were you involved with the NCTA during this period? When did you first become involved?

    BRESNAN: I first became involved in '66, I think '66.

    SOUTHWICK: As a member of the board of directors?

    BRESNAN: As a member of the board, yes. Cooke was at that point the second largest operator in the business and NCTA wanted somebody and I remember I resisted at first because I was so busy doing everything I was doing. George Barco was the one that I remember called me and said, "We've got to have Cooke represented," and at that time Frank Thompson was the manager of the Rochester system, which Cooke owned, and I said, "Well Frank's on the board." He said, "We want somebody from the home office on the board." So finally I agreed to serve and I think I went on in '67 and been on ever since except for a year, I guess it was.

    SOUTHWICK: Probably the longest tenured director ever on the NCTA board.

    BRESNAN: I think so, probably. I went off during '74 when TelePrompTer was going through all the problems, I just couldn't take the time. Then I went on and after we got the problems resolved I went right back on.

    SOUTHWICK: I don't want to divert too much, but I did want to ask, between that experience on the NCTA board, and also, I would assume many appearances before city councils and city governments around the country, you who had an engineering background primarily and a technical background, became involved much more in an essentially political process. Was that a difficult transition for you?

    BRESNAN: I never really thought of it. I would just go in there telling them what we were doing and what we proposed to do and it was just sort of what you had to do to get by, you know.

    SOUTHWICK: And everybody did everything that was necessary.

    BRESNAN: Yes, so I never really thought about that.

    SOUTHWICK: Okay, getting back to TelePrompTer, we were talking about getting a million or more in '74, which you did do and I guess got the banks settled and what was the next step in the evolution of that company?

    BRESNAN: Well, then we continued to grow it for awhile and then other companies were coming on our heels. For awhile TelePrompTer was the largest and ATC was coming on strong, American Television Communications, which ultimately became Time Warner's property, and TCI was coming on strong. Jack Cooke was not active in running the company at that point. He had moved from California to Washington. He had earlier had 25% of the Washington Redskins and he had an option on most of the rest, which was owned by George Preston Marshall's estate and he ultimately got that. That was his love, was the Washington Redskins, so he moved to Virginia and took charge of them. We were faced with a situation where we either had to get some serious equity infusion and do some growing or we were going to be an also ran.

    SOUTHWICK: Before we get to that, there was a technological development in terms of transmission of cable programming.

    BRESNAN: Oh, yes!

    SOUTHWICK: That came along and kind of changed the business a bit.

    BRESNAN: Changed it a bit, thank you. In 1973, yes '73, TelePrompTer did a test of satellite transmission using the Canadian Anik satellite. The U.S. had not put any satellites up yet then; hadn't authorized any satellites, I should say.

    SOUTHWICK: How did that come about? How did you get involved in this? Did you inherit this?

    BRESNAN: Yes, actually Irving had started it and Hub Schlafly mainly. Hub had done a lot of work.

    SOUTHWICK: Hub, who was Irving's deputy?

    BRESNAN: Well, he was Irving's senior vice-president, or executive vice-president, I can't remember, but his chief. He was co-founder of TelePrompTer with Irving and...

    SOUTHWICK: And he stayed on after...

    BRESNAN: Yes, he stayed on for awhile. Hub actually is the inventor of the original TelePrompTer prompting device. That was TelePrompTer's original mission, to rent these prompting devices out and run them and operate them, and then they got into cable. They got into the fight promoting and then into cable, but Hub had been the senior engineering guy and co-founder of the company with Irving and Hub got very interested in satellite transmission. At that point, the telephone companies were trying to control the whole concept of satellite transmission because they had all of the long line...

    SOUTHWICK: Meaning AT&T?

    BRESNAN: Yes, AT&T. All of the long line microwave services that were carrying the network signals around were controlled by AT&T and they saw, obviously, the satellite as a replacement for the microwave and they wanted to control that. So they had proposed that they would put these satellites up. Actually, originally they were non-stationary and non geo-stationary, so they'd have a whole string of them up and complex tracking systems at the receivers and transmitters. Hughes Aircraft Company had come up with its concept of the geo-stationary satellite where you could put it up 23,000 miles above the equator and it would be revolving at the same angle and velocity as the Earth was rotating.

    SOUTHWICK: And Hughes was a major shareholder in TelePrompTer?

    BRESNAN: They were the second largest shareholder in TelePrompTer. They were the largest before the merger of H&B and TelePrompTer and Cooke became... So we pushed that concept along, or I should say really, Hub pushed that concept along and we hired a fellow from Comsat, a guy named Bob Button. We contacted the FCC and said, "We really want to show how simple it is to use satellite receivers and that the cable industry could really afford to buy a satellite receiver and put it in its hometown and receive these signals and provide service that we couldn't afford if we had to rent services from a complex system set up by AT&T. We want to prove that." By this time, Canada had put up a satellite, the Anik satellite, so if we can get special permission to send signals around the county using the Anik satellite, we'll provide the FCC with the results of this test. We got permission from the FCC and the Canadian CRTC, their body, to do this. So we sent signals from different from different places in the U.S. to the Anik satellite, and from places in Canada for that matter, and received them in different places around the U.S. We bought a portable Earth station, it was an 8 meter dish, about 25 feet in diameter, approximately. It came apart in sections like pieces of a pie and mounted on a tractor trailer with a little head end building behind the cab and the thing could be set up in a matter of three or four hours, if I remember right. We took this all around the country and showed that anywhere from the Northeast to the South, anywhere, that it worked very well. We even went to the Rochester, Minnesota cable system, which was my first system, where IBM had a very large facility at the very end of the cable plant at that time and we sent data from their facility in upstate New York to the satellite and down to the Rochester head end and then through the cable system and showed that the cable system also could send the data. It wasn't pictures, just data, in that case. So the FCC ultimately did open up with a ruling that allowed the users to own satellite receivers and for private parties to own satellite transmitters so it was open to all qualified entities and citizens. That made a tremendous impact on our business because then we could send signals from one spot to all over the country. In the meantime, by the way, HBO had developed the subscription pay TV concept. About the same time HBO was doing that, Theta Cable was doing it also. They'd created a channel called the Z Channel, which was movies.

    SOUTHWICK: In Los Angeles?

    BRESNAN: In Los Angeles. Just to digress for a moment, we bought two 2 inch ampex tape machines, big machines that stood on the floor and cost about $600,000 a piece, if I remember right. We were just about broke, but it was a good investment because it was a tremendous hit in Los Angeles.

    SOUTHWICK: To show movies over the cable.

    BRESNAN: To show movies, yes. The Z Channel. We sold the Z Channel for, I think, $9.95 month, if I remember right. So that really gave us a shot in the arm and at the same time, HBO was doing it here in New York, starting it in New York and by microwave down into New Jersey and Pennsylvania. So we thought if we could get those movies and the pay services around the country that that would be a good shot for the industry and would also help us in these markets that TelePrompTer had built into that were getting 15-18% penetration because we weren't able to offer them anything they couldn't get, and it proved to be true. In the fall of '74, I guess it was, I think that's right, you can check that date, HBO put a signal up on satellite, a fight to Vero Beach, Florida, a UA Columbia system. But prior to that, I got a little ahead of myself, in 1973, part of our trip of the satellite truck was to the NCTA Convention in Anaheim, California and we had the then Speaker of the House, Carl Albert, address the Convention from his office in Washington D.C. We microwaved the signal from Washington from the capitol to Germantown, Maryland where there was an up station that we were able to use, sent it up to the Anik Satellite and down to the Anaheim Convention Center.

    SOUTHWICK: And you were chairman of the NCTA that year?

    BRESNAN: I was, yes.

    SOUTHWICK: And you introduced that and threw the switch to make it happen.

    BRESNAN: That's right and it was a pretty amazing thing because most people hadn't seen it yet. So we had the truck parked right outside the convention center so people could tour through and look at the thing and they couldn't believe it. Most of what we were receiving was French language television from the Anik Satellite, we were just demonstrating the downlink during the several days of the convention, but for the opening session we actually were able to send Carl Albert from Washington. So that had a big impact and we continued the tour the rest of that year and then submitted our report to the FCC and the CRTC and then we're back to where I was.

    SOUTHWICK: When HBO decided to go up on the satellite, did they come to you and ask you to participate? How did that evolve?

    BRESNAN: Yes, they were trying to get the various cable operators to participate. They came to us and to others – Bobby Rosencrans at UA Columbia, he was the first one. ATC had an early one in Jackson, Mississippi, I think it was. We needed help badly because we were bleeding pretty badly from a cash flow standpoint and so we came up with a plan that if we put these dishes in each of our major systems that we'd get the cash flow we needed to get healthy.

    SOUTHWICK: These are big ticket items!

    BRESNAN: Yes, they were.

    SOUTHWICK: $100,000 a piece?

    BRESNAN: Yes, at that time, the FCC did not authorize the small aperture dishes so these were 10-meter dishes, about 33 feet in diameter. So they took a huge concrete pad to hold them down and they were around, anywhere from $85,000 to $125,000 installed, depending on the local situations.

    SOUTHWICK: Why go with HBO? You were TelePrompTer, why not start your own movie service. Why did you need them?

    BRESNAN: Well, they were up and running with a good product and we needed cash flow immediately and that was the best thing we could do. So we bought, I can't remember how many of those dishes we bought, I think 25 was our first order, from Scientific Atlanta. That was a very difficult thing for me because Hughes Aircraft was our second largest shareholder and they decided - about that time they were building the satellites but not the receivers. They looked at that as almost a consumer electronic kind of thing. They were into the real big ticket items, but they decided that there were going to be thousands of these sold and that they wanted to get into it. So, we had two board members, the chairman and CEO of Hughes Aircraft Company and the chief financial officer were on our board, on the TelePrompTer board. But they were real gentlemen about it, they bid and Scientific Atlanta bid and we ground them both a little bit and we were able to grind SA a little bit more than Hughes. It's one of those things you never forget, I was at Scientific Atlanta's offices and excused myself from the meeting so I could call Hughes to tell them that I was going to give the order to SA. I tell you, they took it like real gentlemen and agreed it was the best thing to do because they had the best price and so we put these around the country and voila! The cash flow started coming in. It was a transformational event for the whole industry because prior to the satellite, the industry was made up of a bunch of isolated systems all around the country and just overnight, as these satellite receivers started popping up we had a national network. We had an interconnected, national network, which totally changed the industry.

    SOUTHWICK: What was the first one that TelePrompTer put in and actually got up and running? Do you recall?

    BRESNAN: I can't remember.

    SOUTHWICK: You had some colleagues there. What was your relationship with Russ Karp?

    BRESNAN: He was the president of TelePrompTer Corporation. TelePrompTer had three divisions. It had the cable TV division, which was about 85% of our revenues and then the other two divisions were Muzak Corporation, the background music company, and FilmMation Associates, which made animated cartoons for Saturday morning television.

    SOUTHWICK: And you were president of the cable division and reported to Karp?

    BRESNAN: I reported to Karp, yes, and Karp reported to Cooke.

    SOUTHWICK: What was his background?

    BRESNAN: Russ has a financial background and was a lawyer, actually I should probably say he was first a lawyer with a very strong financial background. He had been with one of the movie studios prior to joining TelePrompTer. A good man.

    SOUTHWICK: And so the satellite came along, all of the sudden you were able to sell HBO to many of your customers...

    BRESNAN: Yes, plus we got our basic penetration up because people would take basic in order to get the HBO, so we had a lot of basic lift by offering HBO.

    SOUTHWICK: And did you, at that time, start to think about getting into the business of creating your own program?

    BRESNAN: Well, we had a contract with HBO, I can't remember the duration of it, it was a multi-year contract and I believe, if I remember right, we had the ability to get out of the contract by notifying them a year in advance. This is going back. Anyway, we could give them a notice in advance and get out of the contract and we started talking to HBO and this was really Russ Karp's idea because we were far and away the largest affiliate of HBO's at the time. He thought that we should have more benefit than we were getting. So he had some negotiation with HBO and then he started talking with ShowTime and...

    SOUTHWICK: ShowTime had been started by...?

    BRESNAN: By Viacom, at that time it was called Vee-a-com. And then what he wanted to do, was he made a proposition to ShowTime that we'd buy half of them and that we would throw all of our systems, all of our systems would become ShowTime affiliates. That was rejected by Viacom but eventually they came around and decided that they would allow us to do that. And so we notified HBO that we were going to be dropping our affiliation with them and go with ShowTime, because at that time, we thought erroneously that you could only sell one service – you had to be either affiliated with ShowTime or HBO.

    SOUTHWICK: That the customer only wanted one.

    BRESNAN: That the customer only wanted one and therefore, it only made sense to carry one.

    SOUTHWICK: So you had to change all of your...

    BRESNAN: We changed all of our customers from HBO to ShowTime.

    SOUTHWICK: Hundreds of thousands, perhaps. What was the reaction from you customers?

    BRESNAN: It wasn't bad. A few little hiccups but considering the enormity of the transaction, it was relatively minor. And then of course, we ended up owning half of ShowTime and then I can't remember how long thereafter, maybe a year or two thereafter, ShowTime came up with the idea that maybe we can, because HBO had the majority of the cable companies as affiliates, so it was to their benefit to try to get the cable companies to try and take on ShowTime, too. So they did a test, I think down in Louisiana somewhere...

    SOUTHWICK: Thibodaux.

    BRESNAN: Thibodaux, yes. Thibodaux, Louisiana. They put in ShowTime as a second pay service and low and behold, they found that they had more total pay customers with two than they had with one.

    SOUTHWICK: So they were a multi-pay, then.

    BRESNAN: That's right, they were a multi-pay.

    SOUTHWICK: Talk a little bit, if you will, about the technological challenges of delivering pay television. This was the era, I assume, of traps. Was that the first way that it was done?

    BRESNAN: Yes, traps and converters were the two. Converters were easily defeatible and so traps really were mainly and mainly the negative traps at that time, trapping out the HBO signal.

    SOUTHWICK: So the signal would go to the whole system in the clear and then you'd put a negative trap on the drop cable that goes into the house where they don't want it.

    BRESNAN: That's right.

    SOUTHWICK: Can't they just go out and take that off?

    BRESNAN: They could and in some cases they did but the biggest negative to that was the cost because you had to buy traps for your non-pay customers, so the cost was inversely related to your revenues.

    SOUTHWICK: I see.

    BRESNAN: If you had more pay customers, you had fewer traps – fewer pay customers you had more traps so it was kind of a crazy economic formula or financial formula.

    SOUTHWICK: Was the trap a device that had been around or was this something that had to be invented?

    BRESNAN: Well, traps had been around for other purposes. We used them principally at our head ends to trap out interfering signals or adjacent signals, so these kinds of traps had been around. They were mainly tunable and you had them in the head end to get rid of interference and unwanted signals of any sort. So it's just a case of taking the concept and mass producing them - so they'd be relatively inexpensively because the ones we used in the head end were expensive – mass producing them and making them fixed so that they didn't vary at all and because they're extremely sharp, you want them to trap out the same... You don't want them tunable, you want them to just trap that signal out and keep it out. So they had to make them fixed, they had to make them non-tamperable – the only way they could do it is just take them out – and they had to make them relatively inexpensively. So that was a challenge and that was met by a number of the passive equipment makers. So there was a big trap business created in the mid-70's, I guess it would be.



    SOUTHWICK: Let me make sure I understand this. You'd go into a town and you'd put traps on all of the home and then sell HBO and when you sold one, you'd take the trap off? Is that the way it worked?

    BRESNAN: Well, or in many cases what we'd do is go in and offer a free trial, a 30 day free trial and then we'd trap those who didn't want it.

    SOUTHWICK: I see. So that saved you trapping a lot of homes. And what did this do in terms of the financial situation at TelePrompTer?

    BRESNAN: Tremendous impact. We went cash flow positive. Of course, we'd done a lot of other things by peeling off the negative operating system results and so we were cash flow positive before that, but it was a tremendous shot in the arm getting the additional revenue for the pay service, but as I said also, we got lift for basic service as well.

    SOUTHWICK: Particularly, I assume, in the urban areas, which had been the biggest...

    BRESNAN: That's exactly right.

    SOUTHWICK: And this became, then, attractive for these urban areas that didn't have cable to have them, which led to your franchising effort. Tell me about how you set that up at TelePrompTer.

    BRESNAN: I guess we started actively going after franchising again in about 1978. Some of the major cities were starting to want cable because of the pay services. Also, by the way, after the satellite we had ESPN and C-SPAN, so we had some services that were in addition to the pay services.

    SOUTHWICK: USA Network, or the Madison Square Garden Network which became USA.

    BRESNAN: Yes, exactly. So cable was starting to become attractive in the major cities because they could get some programming that they couldn't get without cable and so cities were starting to issue our requests for proposals. Once that started, it got going very quickly, it got going very fast, I should say, too fast for any of us. I think if you ask anybody in the business, they'd say we wish it would just slow down a little bit. But it was sort of like the last big buffalo hunt because once these franchises are granted, they're granted. The only other way you could get them would be to buy the system or buy the unbuilt franchise. So, all the major companies were mobilized quickly to go after cable franchises. We hired Norville Reese to be our vice-president of community development and Norville had been with Governor Shapp's office. He was the Secretary of Commerce for Pennsylvania while Governor Shapp was the governor. When Dick Thornburg unseated Shapp, Norville served in the transition team that turned the government over to Thornburg and then at that point, he was out looking for a job. I can't remember how we found Norville, or how he found us, but anyway, we found each other and he's a great guy. He was a terrific asset to us and he organized an effort to go after these franchises and then later on, a person you know, Jane Hartley joined us after she was in the Carter White House and when Governor Carter left the White House, she joined us. This was after, our efforts were getting more cranked up, more cities and more activity and a lot of it in democratically controlled cities at that time, so she and a number of her former associates at the White House came on board and worked a lot of the communities. That was about the time that Time Warner, or I guess it was Warner at the time, not Time Warner, came up with the Qube concept, which was two-way interactive television. And they really kind of dominated the franchising for a while because they were offering Qube and none of the rest of us had that. As it worked out, it was an impractical service at the time but they got a lot of franchises. Of course, TCI benefited from some of those by buying them back from Warner at a discounted price. A deep discount from the investment that Warner had put into those systems and converted them from the interactive Qube system back to plain Jane cable systems.

    SOUTHWICK: Describe for me, if you will, the process in how you at TelePrompTer dealt with it. I gather it would begin by a city issuing a request for proposal, inviting everybody in to bid on the system.

    BRESNAN: Yes.

    SOUTHWICK: What would you then do? How would you decide whether or not to bid and how would you decide what to bid?

    BRESNAN: We had a team of financial people in the home office. Actually, I should say a team that included financial people, marketing, engineering and operating people and they would take a market – the engineering people would decide what kind of a system to build. And they would work really with the marketing people as to what the marketing people thought you had to offer in order to win the franchise. So between the marketing and the engineering people, they'd come up with a proposed franchise - a proposed system, I meant to say - and a proposed channel lineup. Then the financial people would take a look at it and we'd model it to see whether we could make it make sense financially.

    SOUTHWICK: Was there a tension there in terms of trying to stretch it a little bit?

    BRESNAN: There was very much a tension, yes. To the community development people, the most important thing was to win the franchise, period. But as far as I was concerned and Russ Karp when he was there and others, and the board and so forth, it doesn't make sense to win the franchise if you're going to lose money on it. They'd say, "But if you don't offer this, you won't win the franchise." Okay. So, yes, there was a lot of tension. Part of what really went on in the industry was that franchises were won promising one thing and then delivering something else. That was always a difficult thing for me to deal with because I really didn't want to be party to promising something I knew we weren't going to deliver, even though I knew that you could probably fast talk your way out of it later.

    SOUTHWICK: And the other guys were doing that.

    BRESNAN: Yes, they were doing that. So, we still won a significant number of franchises and built in a significant number of areas, but never really had to go back and say we're not going to do what we promised we would do. That kind of thing still goes on. The FCC had their auctions for the wireless licenses a couple of years ago and guys were bidding high prices and then coming back and saying, well we really can't do what we said we'd do, and so forth. I have a real problem with bidding something when you know you can't do it.

    SOUTHWICK: When you say that, are you referring to technically can't do it or financially can't do it?

    BRESNAN: Financially can't do it.

    SOUTHWICK: Too many channels, too many...?

    BRESNAN: The technical cost of doing what you're promising to do doesn't work financially so that you know you've got to come back and tell them you can't do it. So we didn't do that.

    SOUTHWICK: I don't want to get off too much, but also during this period, after the launch of the satellite and through the end of the '70's, things began to change somewhat in Washington as well. You got some more favorable rulings from the FCC. Can you talk a little bit about that?

    BRESNAN: Yes, well first of all, from a marketing standpoint with the satellite in place and the satellite receivers... By the way, another first that TelePrompTer did was install the first small aperture satellite, which was up in Lake Kalispell, Montana. We got permission from the FCC to experiment with a small antenna, which I think at that time was four or five meters, four and a half meters, maybe, in diameter.

    SOUTHWICK: As opposed to the ten meters?

    BRESNAN: As opposed to ten meters. The potential negative of those is they have a broader reception beam and so if the FCC wanted to move the satellites closer together and drop satellites in between, potentially you could have interference with the smaller dish. We installed this one with their permission, and by the way, they were licensing the satellite receivers at that time, and it worked fine and took a lot of measurements and so forth, and finally they authorized the use of those. When that happened, then you could put the dishes in much smaller cable systems, they were much cheaper to install. With the ten meters, you had huge concrete requirements and because they were so big, they were kind of ugly and we had a lot of unique zoning problems. The most unique of which, by the way, was Santa Cruz, California, where we had to build a house façade to hide the dish, so we had a phony house front. It looked like a house but it was really a dish. We had to dig holes in some places. We had to make a hole to put it down in or look out of a hole so just maybe the rim would stick out a little bit and put some bushes around it. So those installations got very big. Once we got dealing with the smaller ones, it was much less expensive, so that made it possible to get into a lot of the smaller markets. Further, it created the market for the programming, which created more programming. It caused more programming to be created, so that the industry got much more influential. People wanted our service. The FCC started to come around to see where they had to accommodate us a little more in order to accommodate the public more. The big cities wanted us; originally we were just little small towns. Now, big cities wanted us.

    SOUTHWICK: You were kind of the good guy on the block.

    BRESNAN: We were becoming good guys, yes. So rulings started to ease up. We were able to bring distant signals into markets. We had quite a copyright controversy over copyrights, which we finally got resolved in '78, I think it was, with the Omnibus Copyright Act.

    SOUTHWICK: You had the pole attachment legislation?

    BRESNAN: The pole attachment legislation, that's right. The phone companies were denying us access to the poles, so we got pole attachment legislation passed. That was '78, too, I believe, which allowed us to get on the poles. So things were really starting to go our way.

    SOUTHWICK: Now, talking about programming, there's a fellow from Atlanta who came on the scene about then, in the late '70's.

    BRESNAN: Actually, he came on the scene in the early '70's, because I remember when I was chairman of the NCTA, which was in '72-'73, he requested to come to a board meeting...

    SOUTHWICK: This is Ted Turner.

    BRESNAN:...Ted Turner... to speak to us about...

    SOUTHWICK: Did he call you on the phone and say, "I want to come."

    BRESNAN: Yes, if I remember right.

    SOUTHWICK: Did you know who he was?

    BRESNAN: Yes, because we were carrying his signal on the microwave in Alabama. We had created a joint CARS-band service with GE and TelePrompTer. I think there was one other company involved, I can't remember, and picked up his signal and brought it down across through Mobile and southern Alabama and then brought it up north into our TelePrompTer systems. He was delighted with that obviously because it extended the reach of his UHF TV channel, which had a relatively small radius in the Atlanta area. Now he was reaching way over into Alabama. So he was delighted with that, and then he came down with Roger Rice, I think it was, and wanted to promote better relationships between the independent broadcast channels and cable systems and maybe do more of these kind of arrangements where we could put in a CARS microwave system and extend the signal out. So that was sometime during the summer of '72 and the summer of '73. I think it was a board meeting we had in Florida. He was just as entertaining then as he is now.

    SOUTHWICK: Tell me about it.

    BRESNAN: I can't remember much. It was a breakfast meeting and I know he had us in stitches the whole time, but he did a good job of presenting that but then we didn't hear much more until, obviously, until he got on the satellite. When was that? Seventy...?

    SOUTHWICK: It was shortly after HBO, so probably '76, maybe?

    BRESNAN: '76, probably.

    SOUTHWICK: And then he conceived this idea of a news channel. Did he come to you?

    BRESNAN: Yes, he came to TelePrompTer. I remember Russ Karp and I met with him in Russ's office. He had a cigar; he always had a cigar at that time and pacing back and forth like he still does and had this concept. If I remember right, he needed 20 million dollars. I think he was going to launch it with 20 million dollars and he was looking for the top cable companies, if I remember right, the top ten cable companies, to commit customers, commit systems serving customers to take his service. If we'd sign up then he could finance it and get going.

    SOUTHWICK: He was also asking you to pay, wasn't he, on a monthly basis per subscriber?

    BRESNAN: Yes, he asked us for, I think it was 15 cents a month he wanted per customer.

    SOUTHWICK: Was that a new concept?

    BRESNAN: That was a new concept, yes, because all of the broadcast stations were getting network compensation from the networks.

    SOUTHWICK: It worked the other way around.

    BRESNAN: It worked the other way, yes. The networks paid the local broadcast station for the coverage. But he said he needed this because he wouldn't have any audience at first; he wouldn't have any viewership at first and so he needed to have this revenue and then as advertising revenue came in, he could lower that. So he said it will start out 15 cents a month, but then we'll drop it to 10 and then we'll drop it to 5 and then 0 and then eventually I'll be paying you guys. It didn't work out that way. It didn't work out that way, but I don't think even Ted envisioned that the service would be as terrific as it is.

    SOUTHWICK: What did you think of a 24 hour news channel?

    BRESNAN: We thought it was a good concept. We were concerned that he couldn't do it for the 20 million. And I was really deferring more to Russ Karp there, because he had a broadcast background as well, and a production background, so he had a pretty good sense of what those kinds of costs might be and he just didn't believe it and he was right. It turned out that he couldn't do it for what he had hoped to do it but thank God he did it.

    SOUTHWICK: I wanted to ask you about a couple of other programmers. What was your first contact with Brian Lamb at C-SPAN?

    BRESNAN: Brian came around looking for money and at that time, he was, I think, managing editor if I remember right, for Cablevision Magazine.

    SOUTHWICK: He was their Washington Bureau Chief.

    BRESNAN: That's what it was – Washington Bureau Chief – of Cablevision Magazine and he had talked Bob Tisch, and who was Bob's partner there? I don't remember, but anyway, I guess he had talked Bob Tisch into giving him kind of a free hand to try to create this thing and I think he, bless Bob, Bob says, "Go ahead, try it. If you can do it, bless you; if you can't, you've still got a job." So it was a good thing and Brian came around. He was looking for, I believe, $25,000 from the top ten companies and that would give him $250,000 which he thought he could start the thing with. TelePrompTer, we were one of them, UA Columbia was one. I think UA may have been the first one to sign up.

    SOUTHWICK: Yes, I think Bob Rosencrans was.

    BRESNAN: Yes, I think he was, and all of the major companies signed up really. That was a tremendous move on our part and we didn't realize it at the time, how brilliant we were. (Laughter)

    SOUTHWICK: It was an amazing time when a guy with an idea could just make it happen. I don't think that's true anymore these days.

    BRESNAN: It's a lot harder. You sure as heck can't start a television channel with $250,000 now.

    SOUTHWICK: And probably not if you're an individual anymore, either, because it's the big companies – Discovery and Viacom and everybody – who are doing it. So TelePrompTer was kind of riding high but had to build all these franchises and Jack Kent Cooke was beginning to look elsewhere for his future, what took place next?

    BRESNAN: I sat down one day and wrote a long letter, a handwritten letter, to Jack. He didn't like getting handwritten letters because they're hard to read and if he got one he would have his secretary transcribe it and so I seldom wrote him a handwritten letter and when I did, he knew it was because I wanted it super-confidential. And I wrote him a several page, on a legal pad, handwritten letter telling him where we are in the industry, what's happening in the industry and that we're really at a crossroads where we either have to get a major equity contribution to grow or be satisfied by being a second tier operator because that's what we will be. If that's what he wants, that's okay, but this is what's going to happen. I took him through the whole thing and he called me right after he got it. He read it, he did not have it transcribed due to the sensitive nature of it and said he thought I was right and that we ought to look for buyers. The awkward thing for me at that point is that I had not shared this with Russ Karp and he had not shared it with Russ Karp. I knew Russ wanted to run the company and he wanted to keep it going because I'd had some discussions with Russ about where things were going and all that. I thought the welfare of the company and the investment and the shareholders and everything was greater than our jobs and that we really needed to deal with this.

    SOUTHWICK: What was the prime motivating factor in your mind that made you come to that conclusion?

    BRESNAN: Well, the major market situation was starting to heat up and that would take a tremendous amount of capital. That was really the main thing. So if we even wanted to bid on these things we had to be bigger. We could take on debt but you have to have a certain amount of equity to do that.

    SOUTHWICK: So, Cooke called and said I agree with you, then somebody had to break it to Karp?

    BRESNAN: Cooke did that, but the awkward time was then he had me log – we did kind of an exhaustive study of who the potential buyers might be and he had Jim Locker on the West Coast, his financial fellow on the West Coast, doing a lot of that, too. So, he and Jimmy and I were doing a lot of analysis of who the buyers might be and even though the company wasn't all that big, it was small by today's standards, but at that time it was a big deal. He came up with Westinghouse.

    SOUTHWICK: Cooke came up with Westinghouse?

    BRESNAN: Yes, Cooke came up with Westinghouse. That was one of the names we had, but he picked them because they had a lot of money at that time.

    SOUTHWICK: And they were broadcasters.

    BRESNAN: And they were broadcasters. I can't remember how he made contact with Dan Ritchie, but did.

    SOUTHWICK: With Ritchie, but not Danforth?

    BRESNAN: Well, Danforth at that time was co-chairman, and the chairman was Bob Kirby, but I think if I remember right, he contacted Dan Ritchie first and then Ritchie contacted Kirby. I remember we then had a meeting in the Waldorf, in Jack's suite in the Waldorf, in New York with Dan and I didn't meet Kirby until a little bit later. Now, by that time he had talked with Russ Karp and Russ was on board so we were kind of through that awkward period and then it moved pretty quickly. Bob Kirby, who was the chairman of Westinghouse Electric at the time, was very aggressively trying to change the company and I think he was moving it in the right direction, changing it from a manufacturing company to a services company. Dan Ritchie was the chairman and CEO of Group W Broadcasting and Bob was very sympathetic to the things Dan wanted to do. Dan wanted to expand the broadcasting, the production company, Group W Production, Group W satellite, the satellite business, getting a lot of support from Kirby. Danforth on the other hand, who was at that time vice-chairman, not co-chairman, vice-chairman, was more of a factory oriented guy and he kind of resented the capital that we were absorbing. We'd spend 50 million dollars building a city and he needed 5 million to build a new relay plant or something, so there was quite a tug of war within Westinghouse - the electrical company people versus the broadcasting and cable people. And Kirby was very much in our camp and really saw the industrial age is passing and the information age is rising. Kirby was right, as it worked out. Then Kirby mandatorily retired and Danforth took his place.



    SOUTHWICK: In terms of the sale of TelePrompTer, why pick one buyer? Why not go out and say, "We're for sale," and see who came up with the best price?

    BRESNAN: Well, because we were going after cable franchises at the same time. We were in the heat for these major city franchises and all of the competitors were looking for edges against their competitors. If we were to disclose that we were for sale, that would have hurt the effort. We just wouldn't have won anything because the competitors could say, "You don't know who your provider is going to be if you give it to TelePrompTer because they're going to be sold."

    SOUTHWICK: And Westinghouse was probably an asset, in terms of the franchising, because they were a known name and respected and had tremendous capital resources.

    BRESNAN: That's right and that's one of the things we were looking for was somebody that the cities would recognize had the capital to do.

    SOUTHWICK: Do I understand it correctly that Kirby was chairman when the acquisition was made, but then stepped down and Danforth, who had not been really excited by it took over?

    BRESNAN: More than that, what happened is that Kirby didn't even tell Danforth that he was doing this deal because he knew Danforth would be opposed to it. So the deal was done and I was told, and I don't know whether this is true or not, but I was told that Danforth read about it in the Wall Street Journal the next day. So he was very angry, and philosophically, he wasn't aligned with the whole concept, so it was kind of double whammy. But he was a gentleman, he had a different philosophy. I mean, I certainly enjoyed working with him but not as much as with Kirby because Kirby wanted to nurture us and was enthusiastic about it, but Danforth was a real gentleman and doing what he thought was right for the company.

    SOUTHWICK: What was your role after the sale?

    BRESNAN: I became chairman and CEO of Group W Cable. Russ Karp resigned and we changed the name of the company from TelePrompTer to Group W Cable and that was a wholly owned subsidiary of Group W Broadcasting and we changed the name of Group W Broadcasting to Group W Broadcasting and Cable.

    SOUTHWICK: And you reported to Dan Ritchie?

    BRESNAN: Yes, to Dan Ritchie, and I went on the board of Group W Broadcasting and we had meetings, I guess it was quarterly if I remember right, in Pittsburgh at the Westinghouse Electric Company because Bob Kirby was on our board and some of the financial people were on our board.

    SOUTHWICK: How did that change life for you? You'd essentially worked for Jack Kent Cooke for many years before that, who was an entrepreneurial guy, who had great confidence in you and you could go to him and there'd be a decision made and that was it. All of a sudden you're working for a huge electronics company of which you were a part. How did...?

    BRESNAN: Right, it made things a lot more difficult. Working with Dan Ritchie was great, because Dan is much more entrepreneurial, too. But he was bound as we all were by the rules and the committees and all of the things. They had a whole structure which included, if we wanted to do something we'd have to, first of all it'd have to be in our budget which is understandable, it'd have to be in our strategic plan, which is also understandable. You revise your strategic plan every two years and they have half of their business units one year and half of their business units the next year so they have an even flow of these strategic plans.

    SOUTHWICK: So if you wanted to do something, you conceivable had to think of it two years before?

    BRESNAN: Yes, if you wanted to get it through quickly, that's right. I mean relatively, I shouldn't say quickly, relatively quickly. It had to at least be in your strategy. You wouldn't necessarily need the exact project but it had to be in your plan. And then they had what they called a management review committee that we would meet with every quarter and they would review everything that went on in the company. They had what they called a MPRC, the major project review committee, and any acquisition or disposition of 5 million dollars or more had to go through the major project review committee. And these committees were made up mainly of staff officers, staff level people at the Westinghouse Electric Company, financial people mainly. So the thing about it was that it gave you tremendous insulation that if you screwed up, there was nobody to blame. Because if it was in your strategic plan, or if it complied with you strategic plan I should say, you had it budgeted and your board approved it and your major project review committee approved it, and it went bust, well, it's nobody's fault. It gave me great insight on how a lot of these large companies operate and how inefficient they are because there's really nobody accountable. They can cross the responsibility from this guy to that guy.

    SOUTHWICK: There's so many fingerprints on it, you can't tell who's really done it.

    BRESNAN: Exactly. So it just happened, if it blows up it's nobody's fault.

    SOUTHWICK: What was the impact on TelePrompTer of this kind of process in terms of the way the company worked, the system level or however you want to describe it?

    BRESNAN: It slowed things down quite a bit, obviously.

    SOUTHWICK: So if you wanted to do an upgrade or bid on a city, it took a longer time to get a decision?

    BRESNAN: It took a longer time and we learned in a short period of time, I was only there three years from '81-'84, but we kind of learned how to live with the process. We found that they had some companies that helped them with the strategic planning process and we had some good people at Westinghouse Electric that gave us some good tips. We had one fellow that joined us, Howard Miller was his name, and he had been through the processes there at the electric company a lot and he knew kind of how you had to do things. And one of the things, he put us in touch with one of these consulting agencies that does work for the government, for NSA, down in Virginia and we went down there. They spent a couple of days with us working on our strategic plan and we knew that if we had them help us that it would be a respected strategic plan. So we went down there and we had a round table that we had a discussion at and they had kind of a coordinator, a proctor, a guy that would draw questions out of us and they'd have a guy on a computer running this stuff on a big white board. And then there was a pipe coming down from the ceiling that shot ozone into the air because that's supposed to make us think more clearly.

    SOUTHWICK: Did it?

    BRESNAN: I don't think so because I remember we ended up, my last comment the last day was garbage in, garbage out and I think that's what we got. We spent three days there, I guess, breathing in this ozone and the guy was ruining the computers putting this stuff up on the wall and it was pretty weird. But we had a strategic plan that Westinghouse Electric bought off on. So we got their blessing.

    SOUTHWICK: How did you evolve the process of deciding to leave Group W?

    BRESNAN: What happened is just prior to the deal, Cooke told Westinghouse he'd sign all of the officers up for three years, three year contracts, and we all agreed to that. Even before we closed the deal, I told Dan Ritchie, you know we have this three year contract, if he wants me he's got me for three years, if he doesn't, don't worry because I don't want to be here if he'd rather have somebody else. He assured me he wanted me and so we got along fine. I think he appreciated my giving him that opportunity and Dan and I had a good relationship, but as we got to the end of the second year, which was 1983, on my birthday, the Friday before my birthday, I had just celebrated my 25th anniversary in the business. Westinghouse had a great big party in New York for it and I had my 50th birthday coming up the following Monday. And I had been wanting to start a company for many years, even before moving from LA to here in the late '60's. Jack would keep saying, stick with me through this and then when we agreed to sell, I said, this is a good time for me and he said, no, no you've got to wait until I sell, so I kept on. But anyway, I realized that I was turning 50, I'd been in the business 25 years, if I don't start this company, I'm never going to do it. So I talked with Dan that night, it was a Friday night and I said, "I really think that I would like to leave at the end of my three year deal." So this was a year prior, actually, almost a year - December of '83 versus October of '84, I think it was October, and he said, "Well, think about it," he understood, I was consulting with him like a brother almost and "we'll talk again Monday." Then that Saturday, I called Jack Cooke at home to get his advice and he strongly encouraged me to do it – now.


    SOUTHWICK: Now that you weren't working for him anymore.

    BRESNAN: He said, "Willie! I've been wanting you to do that for years!"

    SOUTHWICK: He called you Willie?

    BRESNAN: Yes, at times, about half the time. When he was happy, particularly. So anyway, he encouraged me to do it and then I went in to see Ritchie that Monday and told him that's what I wanted to do. So he went along with that and what we did is we put an announcement out that I was planning to do this and I would stay with the company, stay with Westinghouse, through the end of my contract and then work part time for them and part time setting up. So it was all above board and I didn't have to sneak around or anything. I got a lot of calls from people asking what am I going to do, would I like to do something with them and I kept a yellow legal pad and I ended up with – when people would call in, I'd write them down – and I ended up with three pages of calls from people. A lot of them were flaky but there were a lot of very good ones and I had breakfast with John Malone early on, I guess it would have been probably January or so, January or February of '84, in New York and he suggested that I should consider doing a partnership with them.

    SOUTHWICK: And you'd known John for a number of years?

    BRESNAN: John and I had been friends since he entered the business in the early '70's because I was at TelePrompTer then and we were Jerrold's biggest customer at the time, I guess. So, we'd been friends since then and he said I should consider doing a partnership with them and it sounded pretty good. In the meantime, I had visited with a number of friends – I had visited with Gus Hauser to get his thoughts, Steve Simmons, Doug Dittrick, John Saeman, Gene Schneider, all kinds of people that had made changes.

    SOUTHWICK: And Hauser, having done essentially the same thing you did.

    BRESNAN: Exactly, as did Steve Simmons and Doug Dittrick and so just to get their thoughts on what they did and what they thought they did right, what they thought they did wrong, what they'd recommend and that was one of the most rewarding things because it was just really heartwarming, the camaraderie that's in the business. These guys would just open up and tell you exactly how they did it, what they felt they did right, what they felt they didn't do right and how they would do it if they did it over and spend as much time as you want. That's one of the nice things about this business is the people in it, but after having done all that and then I met with John and his idea just kind of gelled with what these people were recommending. So I told John, let me think about it and talk to Barbara, my wife, for a day or two and I'll get back to you. So I called him back a couple of days later and said, "I'd like to do that," and he said, "Good." So we had a handshake over the phone, in effect.

    SOUTHWICK: Tell me a little bit about Malone. What is he like to work with?

    BRESNAN: He's a terrific guy. I really love the guy. I mean he's just a genuinely decent person. If it weren't for him I wouldn't have this company, obviously. Very supportive, doesn't interfere, he picks people he trusts, obviously, and if he finds out he can't trust them or they're going a different direction then he wants to go, he just gets out of the partnership. He really lets you run it.

    SOUTHWICK: So this was structured how? TCI provided the financing and you provided the management?

    BRESNAN: Essentially that's how it worked out. How we structured it first is a 50/50 partnership. The concept is we'd borrow as much money from the bank as we possibly could and we'd put in – let me back up – we put in a million dollars each of equity, we'd borrow as much money from the banks as we possibly could and then what additional money we needed, TCI would put in as subordinated debt. Then I had one more request as we got on; I had one more request of him. As we started putting the deal together, I realized that I had paid a fairly large amount of income taxes when TelePrompTer was sold to Westinghouse because I had shares with TelePrompTer and I had unexercised options that had large spreads on them because some of the options were granted in the four dollar range and we sold TelePrompTer to Westinghouse for 36 ¼, so there was a lot of gain there. So I paid a lot of income tax for the year 1981, the tax year 1981. You can carry losses back three years to recover income taxes that you paid.

    SOUTHWICK: You wanted the losses from the company?

    BRESNAN: I wanted the losses from the partnership, the depreciation and interest and so forth. So we structured the deal in a way that I got 99% of the losses the first two years, which allowed me to recover these taxes, so I was going to recover 3 million dollars, I think, or maybe it was more than that, almost 4 million dollars of taxes. So, originally I was going to raise my million dollars of equity by selling securities that I had but then, when I realized I was going to be able to get all these taxes back, I went to John and said, "John, why don't you lend me the money, the million dollars and I'll just pay you when I get my taxes." He said, "Fine." And so we did. So, a year and a half later, whenever it is I got the government tax check, refund check, I was able to pay him off. So, the bottom line is, we structured the deal where I didn't have any of my own money in it at that point, and John was very cooperative in doing that. And then we bought 28,000 customers from Group W that I knew they wanted to sell in the upper peninsula of Michigan. We also, at that point TCI was in the process of buying Marquette, Michigan from somebody else, so he agreed he'd put that into the partnership, too, because it was in the upper peninsula also so we'd have...

    SOUTHWICK: The cluster?

    BRESNAN: Yes, so we had 44,000 customers in one partnership there and at then we agreed to buy Midland and Bay City, Michigan from the Garrity Estate and then had to put another million dollars in, so I did that. And then, at that point, I guess TCI and I each had 2 million dollars of equity in. I think we had around 22 million dollars of subordinated debt from TCI and then the rest was bank debt and then about that time, Doug Danforth, who had taken over Westinghouse, decided to get out of cable. So TCI and others were buying up Westinghouse's cable companies. So I got two more systems; I got Duluth and Brainard, Minnesota and Superior, Wisconsin out of that deal. I think, if I remember right, at that point we were still 50/50 partners and then John suggested that if I wanted to take some cash off the table that they would buy and option to take up to 80% of our company. So they would raise themselves from 50 to 80%. So I did that, knowing full well that that would be worth more later probably, but at the same time, it gave me the opportunity to take almost 20 million dollars off the table, which I thought with the uncertainty of where the phone companies were going to be, where satellite DBS is going to be, it probably would be prudent to take the security, even though I'm probably giving up future gains, which I did. I did give up future gains, but it was the right thing and so it was good for us, for Barbara and me because it gave me the security, and it was good for TCI because they were able to buy some of that at what turns out to be relatively low prices.

    SOUTHWICK: Bresnan Communications is a family enterprise as well. You involved Pat?

    BRESNAN: My brother Pat's involved.

    SOUTHWICK: And your sons.

    BRESNAN: My sons, Mike, Bob and Dan are all in the business.

    SOUTHWICK: What were their roles in the company?

    BRESNAN: Well, the oldest boy is Mike and he has an engineering undergraduate degree and an MBA. He worked for TRW in their space communications when he first graduated from college, or from university with his engineering and then later got an MBA. He joined us first in our Marquette system and ultimately ended up managing that and then came back here about ten years ago, I guess. He now runs our U.S. operation. Number 2 son, Bob is a lawyer; he's our general counsel and Dan, our third son, also has an engineering undergraduate degree and an MBA and he runs our international operations. He's really the longest term employee, even though he's the youngest son, because when he was in college, he was in charge of our MIS part-time. And then, my brother Pat, who's been with me since those early days with Cooke, is in charge of our community development.

    SOUTHWICK: And you kind of hit the curve just right, because you were getting up and running just as the 1984 Cable Act deregulated rates and the great boom started. So it was a good time to...

    BRESNAN: Yes, we closed out deal with TCI on October 31st of 1984. You know, kind of a funny story to go back to, Westinghouse versus Malone, because Malone, again, is an entrepreneur, very much like Cooke. When I knew Westinghouse wanted to sell those upper peninsula properties, I talked to Dan, Dan says fine, but he says, "I'll need to clear it with Westinghouse Electric." I said, "Yes, I understand. Fine." So he talked to them and they were okay, but they wanted to have the process go through their acquisition and disposition group, which was fine, and they did all that. So it was an arm's length transaction and I understood that, because I was an officer of the company, but then when we got all done negotiating the deal and agreed upon it, it took forever to get a contract drafted that everybody in Pittsburgh would agree with. So it went for months and word was kind of getting out in the systems that something was going on.

    SOUTHWICK: Hurts morale...

    BRESNAN: Well, they wanted to know what's going on. I remember we convinced them they needed to issue a press release and they didn't want to issue it until the agreement was signed and so we got them to issue it saying it was in the preliminary stages or something. So they horsed around with that and I think we went through several drafts of a press release that would announce that they're in the early stages of negotiating a sale to me. I remember when I called John Malone, I said, "Yes, we've got this press release but they keep changing it all the time." He said, "Wait until they're done changing it and then I'll see it." So I said I'd send it to him after they're done changing it. I think they went through nine drafts and this was over a month and a half or something like that. They'd draft it and then they'd go to the legal department in New York, and then the legal department in Pittsburgh and back and forth and they'd change a word and this and that. Finally, when they're all done and they all signed off on it, I said, "Okay, now before we release it, I want to run it by Malone and see if he wants to do anything." So I call John, and I say, "Okay, John. They're finally done. They've got draft number nine and they tell me this is ready to go, so do you want to see this on?" He said, "Does it look okay to you?" I said, "Yes." He said, "Well, then it's okay with me." And it was a good object lesson as to why he was growing and they weren't. He was spending his time doing important things and they spent weeks of laboring over a stupid press release. And again, it wasn't anybody's fault, because it's just the process that has to go on.

    SOUTHWICK: And everybody feels they have to make a change because it's their job.

    BRESNAN: It's their job, I guess.

    SOUTHWICK: And then everybody else has to sign off on the change.

    BRESNAN: So, the end to that story though is that then we negotiated a bank agreement with the Toronto Dominion Bank. We went to them and said, "We need money right away because we need to close as soon as possible during '84," so that I get the tax benefits that I referred to. So we don't want a fully documented loan; we want a demand note and fortunately having TCI on my side helps with that. That's kind of a strange request for a guy not in business going in and saying, I want to borrow 20 million dollars on a demand note, but TD, bless their souls, went along with it. We later converted it to a fully documented loan, but I got a demand note for 20 million dollars and I got TCI to agree to sell those systems and to put the subordinated debt in and we got Westinghouse to agree to sell the system, but nothing was signed until the day we closed. Westinghouse took all that while to negotiate the agreement so we signed the agreement and closed it on the same day. We'd gone to the franchise authorities and gotten the franchises transferred without a signed agreement. I had nothing signed with Malone, it was all a handshake – a handshake over the phone – but I felt perfectly comfortable with John on that because that's the kind of guy he is.

    SOUTHWICK: Amazing. It's very characteristic of this business, isn't it, that people can do that.


    SOUTHWICK: Tell me a little bit about the involvement of BRESNAN: outside the U.S. How did you come to decide to do that and what was the experience?

    BRESNAN: Well, you remember when the telephone companies were getting very active; Bell Atlantic was getting active and they were going to buy TCI and prior to that there were other incursions?

    SOUTHWICK: Right.

    BRESNAN: We got concerned, it turned out erroneously, but we got concerned that we may not have an opportunity to grow in the U.S. and so we should look into other countries. Our whole philosophy had always been to try to build value by, in effect, sweat equity. We've never really gone out in the market and just bought cable systems at the market price because we weren't flush with money, we weren't a bank, we weren't a venture capital fund; we were guys that had some knowledge of the business and wanted to create value by running them, building them, whatever. Blood, sweat and tears. So that's the way we built the U.S. operation and that's when we thought about maybe some opportunities, if not in the U.S. now if the phone companies are going to be buying up everything, we can't compete with them from an acquisitions standpoint, so we'll look overseas.

    SOUTHWICK: This is the early '90's?

    BRESNAN: Yes, and we developed kind of a screening process for countries that we would look at. We wanted a stable government politically, a stable economic system, an honest government – we weren't going to go in and pay bribes and stuff like that – we wanted an honest court system, hopefully you don't need it but if you do, you want to be able to get a fair shot. Most importantly we wanted a safe place for our people to go to, at least as safe as you are in the U.S. We didn't want a place where executives are kidnapped and stuff like that. So you go through that kind of process and you eliminate a lot of countries. Also, I should say, the developed countries, Western Europe for example, we thought, again, we'd have to go in and pay market price so not as good an opportunity to add value and build value. So we ended up looking for the developing countries, emerging countries that have a good promise but aren't way on the bottom, they're part way up.

    SOUTHWICK: What did you end up with?

    BRESNAN: We ended up with Chile for Latin America, we picked Chile. Not a big country, but it met all of our criteria and in Central Europe we ended up with Poland, and they too were very good. Good markets.

    SOUTHWICK: And where did you build systems?

    BRESNAN: In Chile, we bought a system first in Santiago. It was a small system in Santiago and then we built out Santiago, Val Paraiso, Vina del Mar, a whole large group of systems built out that country pretty well. The central part of the country – we didn't go up into the desert and we didn't go down into the Antarctica area, but the central part of the country. In Poland we did kind of the same thing. There we bought, our first opportunity was to buy 49% of the operator, and operator I should say, in Warsaw. We ultimately bought them out entirely and we bought out a bunch of other operators in Warsaw and we rebuilt the system and built out the system. So we just recently sold Poland, but prior to our sale, we were the largest operator in Warsaw, the second largest operator in the country. We had systems in Warsaw, Krakow, Katowice and Szczecin and Grajew. In Grajew and Szczecin we have a telephone system over the cable.

    SOUTHWICK: And did that prove to be profitable?

    BRESNAN: Yes. Everything we built was 750 megahertz hybrid fiber coax system and everything we rebuilt was to that standard and we were probably 85% rebuilt when we sold. So it was virtually all 750 hfc, a fiber ring around the downtown area of Warsaw and downtown Krakow. We got the first, and as far as I know still the only data license. They actually license data separately there and we got that in Warsaw and provided two megabit internet service there. In Grajew and Szczecin, we offer telephone service over our cable system using cable telephone interface units, two Lucent 5BSS switches. The interesting thing is that where we offered service, and we intentionally of course first started offering it in areas we thought we'd do the best, half the people we offered it to took the service.


    BRESNAN: And then as we got into some of the areas that we thought wouldn't be quite as good, we got 35-40%. So we beat our expectations.

    SOUTHWICK: You had a great response.

    BRESNAN: Yes. The people there have to wait about three years to get a telephone from the state run telephone system, whereas from us they can get it in about three days. It's really a culture shock for them. And the phone works! And all the bells and whistles – they get multiple lines, we give them two lines, and they get call waiting and caller ID and conferencing and it's all there with this technology.

    SOUTHWICK: How many customers did you have in Poland when you sold?

    BRESNAN: We had about 390,000 total customers, about 60,000 were what is the equivalent of MATV customers here. Because you had to offer that in the buildings, it's required by the state that people can get some TV. And about 330,000 basic cable customers and where we started out the telephone systems, we had about 6,000. We'd just started those.

    SOUTHWICK: When TCI made the decision to sell out to AT&T, how did that affect you because TCI had been your largest partner, I mean your partner? Did you then have AT&T as a partner?

    BRESNAN: Yes. We were excited about it because it gave us the opportunity to offer telephone services because we were gearing up to do it at that time in Poland and we since did it and we knew it worked and it was a great business. So we were excited about the opportunity of being able to do AT&T branded telephone service here. We had rebuilt virtually all of our systems. As you know, we did a restructuring of our company last February where we tripled the size. We had in the U.S. here, we had about 220,000 basic customers and we did a deal with TCI and brought in the Blackstone Group as additional equity partners and acquired another 440,000 customers from TCI. So we tripled our size. Virtually all of our systems at that point had been rebuilt. 92% of our customers at that time were on hybrid fiber coax systems and about 77% were on 750.

    SOUTHWICK: And you'd begun offering data services and internet access?

    BRESNAN: We began offering data and internet access and local area networks, private networks, virtual private networks for business customers and institutions. We were doing distance learning, doing a lot of advance services. So we saw the AT&T partnership, or alliance as a natural development of our efforts to use cable for non-traditional cable services.

    SOUTHWICK: But your partnership didn't require you necessarily to sell to them?

    BRESNAN: What we did is we decided that we were going to do an initial public offering because the market was good and we wanted to grow and the market was good for cable and communications stocks in general.

    SOUTHWICK: This was last year?

    BRESNAN: Earlier this year. We only did the partnership with TCI and Blackstone last February, February of this year. And then we decided that we would do an initial public offering. So we were in the process – let me back up. In conjunction with that deal with TCI and Blackstone, we also issued some high yield securities, high yield bonds and that went very well, we were way over-subscribed and we were looking to raise, originally, 295 million and the brokers had orders for over 2 billion. So we knew that we were well accepted in the market place and we ended up taking around, I think, around 400 million. We knew we were very well accepted in the market place, so we thought this would be a good time, probably, to do an IPO. So we started that process and we had drafted the S1's and we got about half way through the process and we started getting inquiries from people who wanted to buy us. My first reaction was, no, we're not for sale. We're doing an IPO. Then all of the sudden it occurred to me, that's not for me to say because we do have partners here I'd better check with. So we decided we'll listen to what they have to say. And then we decided, well, if we're going to listen to what they have to say, we'd better listen to what others may have to say. So, Goldman-Sachs was going to be the lead underwriter in our IPO, so we told Goldman to just hold back on the IPO right now while we look at our options and we also engaged Waller and Daniels to help Goldman, since they knew the cable people real well. So then those bankers invited the logical interested parties, well first to ask them if they're interested, if they are, sign a confidentiality agreement and we'll give you information on the company and then if you want to you can bid. So we did that and to my surprise, we got some very high offers and decided to sell.

    SOUTHWICK: Did you go to sleep and then make that decision when you woke up in the morning, first thing?


    BRESNAN: No, it wasn't that hard a decision. It wasn't one of those. I mean it was hard in that I had mixed emotions because this was my baby. This is our fifteenth anniversary we'll be celebrating October of this year and we built some tremendous relationships in the communities. We have a great team of people here and in the field. Great relationships with our customers and with our communities and I really love this company, I love this business. In all of the things that we had been working on for so many years, the high speed data and the telephone stuff was starting to go. We were really getting momentum and our company, with the high yield deal we did and the tremendous success of that, we would have had a great IPO, I know. So we had the momentum going and based on, if all the deals close that have been announced, and we didn't sell, we'd be number 11 in the market, in the business. So, once you get to there.... So we really were starting to get it going good, but on the other hand, the offer was very good. There was kind of a unique feature in our deal, in that we ended up as a result of all of the transactions, we ended up with a fully funded interest of 10.2% in the new company, but we had a promote, a carry, based on the return on investment that our partners would get, Blackstone would get. And because they were getting such a tremendous return over such short term...

    SOUTHWICK: So quickly after they had made their investment.

    BRESNAN: Yes, so quickly, which was really the key, they had several hundred percent return which triggered our deal, which gave us in effect another 10 percentage points of the economics of the deal. If we'd kept going that would just go down. So it was just a decision that you couldn't turn down.

    SOUTHWICK: And who ended up as the ultimate buyer?

    BRESNAN: Paul Allen, the Charter Group.

    SOUTHWICK: And you expect to close next February?

    BRESNAN: Next February, yes.

    SOUTHWICK: Terrific. What are you going to do now?

    BRESNAN: I don't know yet, but we'll do something. I want to keep as many of our team together as I can. It will be a much smaller team. First of all, Charter will take on, I believe, all of the field people. They're great people and Charter, from the due diligence they've done, they realize they're great people and they've indicated to us they want them all. So the only part of our team that I have to be concerned about is our team here in White Plains, which is about 70 people. Our international group only represents about 12 of those.

    SOUTHWICK: Does the sale cover the international properties?

    BRESNAN: No, they were sold, let's see... We sold Chile to TCI a couple of years ago and we sold Poland to a Polish company and just closed on that in July of this year. So they're fresh out of business right now and they're looking at other countries right now as we speak. So, we actually have people off shore right now doing some work. So I think that we'll probably continue the international. The question then, is on the U.S. side what we can do because I think it's going to be hard, it's going to be impossible to do exactly what we've done in the past here because of the consolidation that's gone on. Leo Hindery mentioned the other day that when all of these deals close next year, 97% of all customers will be operated by 7 companies. So there may be some niche things that you can do, but I have a deep love for the CLEC, the Competitive Local Exchange Carrier business. I was with Bob Brooks when he formed Brooks Telecommunications, which later became Brooks Fiber Properties, which we sold to WorldCom a couple of years ago. That was a very successful deal and we're doing a lot of CLEC type business in our systems now. So we understand that business pretty well and like it. We did quite a bit in the internet area and that's very interesting. So we'll probably do something in related fields to cable and telecommunications and the question we haven't resolved yet is how much of it will really be operating and how much will be more venture capital type activity. I don't know the answer to that yet. Right now we're busy just running the systems we have and getting them ready to sell to Charter. One of the deals by the way, when we took over the TCI systems they were about half rebuilt so we had to do the rest and we have a, I think it's a 90 million dollar capital budget for this year and one of the things we've represented to Charter is that we will continue our capital budget so that when they take them over, they'll essentially be mostly rebuilt. So we're continuing with the capital projects. We've got the franchises to get transferred in several hundred communities, so we've got our plate full right now. But as soon as that's done, early next year, we'll be looking to do something else and I'd hoped to hang onto as many of our team as we can, although those people will be very employable. They're top of the line people and they'll do great and they're well taken care of financially. This promote that I mentioned that gave us another 10% of the business we had distributed that, of course it was intended to be a seven year business plan, so we had seven year vesting for all of our key people to participate in the equity and over 70% of that promote is allocated out to our people. So they'll all do very well. When we close, there will be 30 millionaires made, which is nice. They helped build the company.

    SOUTHWICK: Wow. That's fantastic. Well I wanted to, if we've got a minute or two left on this tape, I wanted to ask you a little bit about your involvement with The Cable Center and Museum and how you got involved with that to start off with and what you hope to do with it?

    BRESNAN: I got involved in, I think, about '86 or '87, somewhere along in there. The Cable Center had a representative from the NCTA Board on The Cable Center Advisory Board, and that had been Ed Allen and Ed's health was failing so he wanted to reduce his travel. He called and asked if I would take his place. He and I had been friends for a long time. I told him I would and so I guess I attended my first meeting somewhere along about '86 or '87 and I was surprised to find we were just an advisory board. I had pledged a $50,000, what they called a major contribution; that's what they were asking for at the time. I paid it by the way and I found out that the check had to be drawn to the university because they had the 501C...

    SOUTHWICK: Penn State?

    BRESNAN: Penn State University, yes. They had the 501C3 corporation and so forth to be tax deductible. It had to go to them and then I found out that we were only an advisory board; that Penn State actually made all the decisions. Of course, I found by going to the board meetings that it's a very difficult place to get to. My first trip I tried to travel commercially and I flew to Pittsburgh – I traveled a half hour to get down to LaGuardia, then flew to Pittsburgh and hour – and then waited for a couple of hours and got a commuter flight into State College and so I'd spent several hours and a very miserable flight through the weather in Pennsylvania on that little plane. And so this is no good. And then I started driving and it was about a four and a half hour drive in my car and that was no good. Ultimately, in the meantime, I'd bought a private plane and so I could fly down there more comfortably in a jet that would go above the weather. So that made it a little more tolerable but I thought to myself, how many people are going to be able to do this? So it was hard to get to and it was a situation where we didn't control – the industry who was raising the money – didn't control our future and then we had a difficult relationship with the then dean of communications. They later got a terrific person in, Terry Brooks, but the person before her was very difficult and didn't really respect cable, didn't respect cable operators and saw us as a way for him to get a new communications school built. So, we just had a lot of trouble relationship-wise there and we were down in the sub-basement, two stories below ground level, and non-air conditioned, non-temperature controlled, non-humidity controlled, I mean and it was not a place to put archives or anything. So a group of us decided we had to change so we formed a group, we put money in out of our own pockets to pay our out-of-pocket expenses, legal fees or whatever, we paid our own personal travel expenses and other expenses and hired whatever people we needed to hire, which was mainly legal advice to get ourselves extracted from there. Ultimately we were able to negotiate a favorable settlement with them and I think made both sides happy. We formed a couple of committees, by the way, in that process, Ben Conroy had resigned as chairman and so I ended up as chairman, and we formed a couple of committees to do legwork. We formed one to select a new site and we had suggestions of a number of potential sites. We ultimately selected Denver.

    SOUTHWICK: Where Dan Ritchie, your old colleague, is chancellor of the university.

    BRESNAN: My old colleague, Dan Ritchie, is chancellor of the university. Dan was very proactive in wanting to get The Center there, made it known that he would do whatever he could, whatever would be possible to do to make sure that he accommodated our needs and one of them was that we said we really needed to have our own free-standing building and facility that we owned and controlled. We needed our own legal entity, we needed to have our own board that ran that legal entity and ran The Center and all that he went along with. So the university leased us property on campus for a dollar a year for 99 years. We're putting our own building there, it's our own board of directors – the university has one member on the board, Dan Ritchie – and we've set up our own 501C3 corporation three or four years ago, so that all the contributions that come in, come to The Center. So it's totally structured in a much more appropriate way for our industry.

    SOUTHWICK: What do you hope that it does?

    BRESNAN: It has several functions. It will have the library, The Barco Library, which will house all the archives and studies on cable, the whole documentation on cable, which by the way is being converted, is being digitized and will be available on the internet. We have our own web site, www.cablecenter.org and some documentation is now on there, it's our goal to have it all on there so it will be available around the world for anybody doing research or any studying. That's part of it. There will be a museum, which will house some of the old, earlier equipment and so forth. That's a relatively small part of it, but it will be there. There'll be a video tower, which will have about 100 screens for all of the programming to be shown and demonstrated and it will be one of those digital deals where you can break the screens up or make them into big screens or little screens. There will be a demonstration academy where we'll have all the latest technical equipment on display and demonstrated. We expect to get that contributed about 10 million dollars worth from the vendors that serve our industry and that those who contribute it will upgrade it, give us upgrades and equipment and software as they have upgrades. They'll be a Hall of Fame where people that have contributed a lot to the industry will have their biographies there, they're pictures and you'll be able to call that stuff up digitally on the screen. There will be programming pods where you can sit and look at programming and a lot of these things will change. We'll have a number of themes – how programming has helped society and democracy, how has it helped financially, the economy, how it's provided news – and there will be a lot of themes that will show how the cable industry, through its programming has served society. Then I think, the most important part in my view, is the Institute, which is a joint venture between the university and The Center for educational functions. We will provide everything from one day seminars, or two day seminars, all the way up through post-graduate degree courses in cooperation with the university. So we'll have advanced management programs where you can go for a month or six weeks or whatever, we'll have multi-day seminars on specific things and we'll have undergraduate degrees and post-graduate degree programs in all phases of cable, which can be marketing and technical and legal and business and accounting and financial and so forth. I think, with the way the industry is changing so dramatically, the need for trained people is just mind boggling. We can't get enough network administrators, for example, out of these computer sciences colleges. So that's exciting and it's a need that really needs to be filled in the industry, but it will be a place where scholars can go; where public policy people can go, congressman or majors and city council members who want to know about cable if they're renewing a franchise and want to learn what's going on in the cable industry. It will be for students, researchers, journalists can get information on the industry and you won't necessarily have to go there, you can also get it over the internet.

    SOUTHWICK: We're talking about The Cable Center and you indicated that a good deal of this information is going to be used by scholars and people doing research and how you're making that available.

    BRESNAN: It's all being digitized and will be available on the internet so that people from all over the world will be able to access this data – www.cablecenter.org.

    SOUTHWICK: Very good. We mentioned a number of figures going through this – John Malone, Ted Turner, Jack Kent Cooke, Irving Kahn and others. My sense is that Leo Hindery had a great deal to do with your company in the last few years.

    BRESNAN: Leo did. Leo and I were friends back when he and I were both partners with TCI – he with InterMedia and me with Bresnan Communications – and we hit it off together a lot because we had a lot of the same philosophies and same beliefs. We both were very grateful to TCI for what they've made possible through their faith in us and their support of us and I was delighted when Leo joined TCI, the parent, because he really understood the relationship, what the partners can do and what their concerns are. He has been just wonderfully supportive. Leo's a very unusual man. He's tireless; I don't know if he ever sleeps because he's up at three in the morning, or some such time, and I know I've talked to him as late as 10:30, 11:00 at night, so he doesn't get much sleep. He's tremendously dedicated, has some very strong beliefs in what's right and what's wrong, morally and ethically and lives by those beliefs and so he's been a wonderful person to be able to relate with at the company. He also, because of his faith in us, he was very instrumental in this last expansion that we had where we acquired the additional 440,000 customers from TCI.

    SOUTHWICK: Which helped TCI because it got them off the books – TCI got that debt off the TCI books – that was the strategy?

    BRESNAN: That's right, that's exactly right. It took not only TCI's debt for their own properties off the books, but it lowered their ownership in our company to the point where they could take our debt, which was on our books for our company, because they were more than 50% owner they had to consolidate onto their balance sheet, too. So they not only dumped their own debt that related to the systems they were transferring over; they dumped our debt off the balance sheet. So it was very significant to them. It gave them the opportunity to concentrate on their major markets. These were mid-western, secondary, tertiary markets, which is what we do well, and so it gave them the opportunity to shift those systems - the rebuilding of them, the upgrading and so forth - to us where they knew that we'd be doing it well because we're very hands on and allowed them to focus on...

    SOUTHWICK: Pittsburgh and the bigger urban markets?

    BRESNAN: Exactly. So it was good for them; it was good for us. Leo and John saw that and I'm very grateful.

    SOUTHWICK: Terrific. Thank you very much. I appreciate it.

    BRESNAN: Thank you. The pleasure is mine.

    SOUTHWICK: This has been an oral history of Bill Bresnan, conducted for The Cable Television Center and Museum here in Mr. Bresnan's office in White Plains, NY on August 4, 1999. This oral and video history is made possible by The Hauser Foundation Oral and Video History Project of The Cable Center Oral and Video History Program.

  • Charlotte Field

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    Charlotte Field

    Charlotte Field

    Interview Date: November 9, 2015
    Interview Location: Denver, Colorado USA
    Interviewer: Leslie Ellis
    Collection: Oral and Video History Collection

    Ellis: I’m Leslie Ellis and I'm here at the Cable Center in Denver, Colorado, to record a conversation with Charlotte Field as part of the Gus Hauser Oral and Video History Series. It is Monday, November 9, 2015, and Charlotte, I want to welcome you here first of all. And I want to give you a little intro of my own making which is that most of us who know you find it difficult to think about any element of a cable system, ecosystem that you haven’t worked on. You're an engineer’s engineer; you have a EE from Michigan Technological College. Your father was a Bell Labs engineer. When I first met you fifteen or so years ago, you were talking about something hardly anyone talked about then, but everybody talks about now, which is continuous improvement and finding the right operational metrics to make a difference, finding problems before they become problems, putting the customer first. You're the kind of engineer in my observation who can go super-wide and super-deep, super-fast on any topic. You can size up the trade-offs of a particular technology lickety-split on multiple levels, like Voice Over IP is the one I remember. You can communicate clearly about it from architecture to strategy to what vendors to use to what particular types of equipment they have and you know all these things plus you're probably no more than two degrees of separation from any exact right person to inform that topic. Thank you for being here today, Charlotte. It is a true pleasure to have this conversation with you. Everyone who knows you is richer for it.

    Field: Thank you.

    Ellis: You're welcome. All right. By several accounts, and long before multitasking became an everyday term, you were an accomplished multitasker. This I've heard from many people that you will be—and this is before digital—that you will be like monitoring a call about an outage, you’ll be sending an email about something else, you’ll have something going on on walkie-talkie back in the day. And you’ll have someone sitting in front of you having a conversation and everyone gets your full attention. I think that’s rather remarkable. I don’t know anyone who can do that. So I want to talk to you first about like, how do you do that? How does your brain work? You know what I'm talking about, right?

    Field: Yes, I do. When I was a kid, my dad was an only child. Unfortunately, though, he grew up during the Depression and he lived with about nineteen other people in the apartment. So, very young, he had to listen to a lot of different conversations. So when he had all of us—I'm one of seven children—he basically said, “You need to understand and pay attention to a number of different things. So we always had the TV on, the radio on, people were playing their instruments, and we had multiple conversations occurring. And he would say, “You should be able to basically separate your thinking in multiple areas and you should be able to listen to what's going on and as soon as it’s a clear indication if something comes up about a topic, you should be able to grasp it.” I mean, he taught us from a very young age. I don’t even think he was actually thinking about multitasking. He was just thinking about how the world has so many different things going on in it and you have to be paying attention to everything that’s happening.

    Ellis: So are there dos and don’ts about how to be a good multitasker? What works and what doesn’t work when you have all these, like one is an outage call, one is a person wanting your opinion on something, like all these things are happening and you’re serving each one perfectly. What works and what doesn’t work?

    Field: Well, you have to know when to do it and when not to do it. When you're involved in a personnel situation as an example, you need to make sure that you're paying absolute attention to the individual and you need to make sure that you have eye contact with them and that you're empathetic and you're not even looking at pieces of paper on your desk, etc. But I think one of the things you always have to remember is ensuring you understand which of the topics you're involved in are the most important at that time. So if it's the outage issue that’s going on and that is the most important at that time you need to have a keener ear to it versus the casual conversation that you're engaged in. The second thing is you need to make sure that people understand that it isn't a sign of disrespect. So I'm not disrespecting you by having a conversation with you and also listening to an outage call and maybe looking at email at the same time.

    Ellis: So do you level-set that on the front end, like, I'm going to talk to you, I have this one thing going on that I kind of have to keep an ear open for.

    Field: Yes, I always try to do that so that people understand that at a certain point in time I might say, “Pardon me one second.” Get off the mute button on the outage call and say, “Yep, I think—have you checked this? Have you checked that?” I think that becomes most important to make sure that people understand again that it's not disrespectful, but that you do have the capability to listen to them. Sometimes what you have to also do, which is basically number three, is recite back to them, especially if you're having a conversation with somebody while doing an email, while listening to an outage call. You need to make sure that you say, “Yes, and I heard you say this. Did I get that right?”

    Ellis: Then you’d probably remember that later. Like I think you have some kind of photographic memory for listening. That’s my hunch about you.

    Field: I have a really good memory and I usually don’t forget a lot of different things. I think one of the things you said about me is very true. I believe in large networks and I believe in understanding what people bring to the party. So I know that there are certain people that if I have an issue with this or I have a thought about that, that I can utilize them as people to either verify that I'm correct or basically say, “You know, have you thought about it this way instead of the way you're thinking about it?” And you know, I embrace those kinds of relationships with individuals. I used to have a boss and he used to call it “the sandwich lady.” Everybody needs several sandwich ladies.

    Ellis: What does a sandwich lady do?

    Field: The sandwich lady or man is the person who’s listening in the background that may not necessarily feel all that comfortable telling you what's on their mind, but you as an individual have to tell the sandwich lady or the sandwich man that you want them to share in confidence what's going on. They may hear there's a little bit of issue associated with this or that and by providing you input you may be able to deal with it prior to it becoming a larger issue for the organization. You may ask them “What is really happening from your perspective?” And you need to make them feel comfortable, you need to make sure that they understand if they want to stay in the background, they can stay in the background. But you use that network...

    Ellis: Why are they called “sandwich?”

    Field: Because when people are on a line, getting their sandwich, there were people in the background that nobody really paid attention to. But they heard about all the different things that were going on within a company.

    Ellis: OK, excellent. Excellent advice, thank you. You also told me once if you walk into a room and you're about to have a meeting with someone who disagrees with you or is angry at you—do you remember this? You said, sit next to them. Don’t sit across from them, because you take the tensions away...

    Field: One of the things you always have to recognize is body language in a number of different ways. The worst thing you can do is sit across the table from someone and then push back from the table because it essentially says, I'm getting ready for the big fight. If you sit next to them and you talk to them, before the meeting starts, and even if you have a different opinion you basically cut the tension.

    Ellis: Disarm them.

    Field: Yes, basically you want to make that connection with the individual prior to dealing with a situation where the opinions may differ. You want them to understand that first there is the relationship and then there is business. I might have my opinion, you might have your opinion, let's work together and see what the best answer is for the business based on what we are trying to optimize for.

    Ellis: OK, let's talk a lot about your storied and long career. By my math, you have 25 years on the telco side, and now about 13 years on the cable side.

    Field: That’s about right.

    Ellis: So you're twice as long on the telco side. What do you see as the significant differences? These probably have changed over time but having done both sides for so long and so well...

    Field: I think on the telco side, I would essentially say that their processes, procedures, etc., were very well-documented, from—you know, back in the 30’s and 40’s, and even the 50’s. Essentially they understood the value of quality, basically when they had a number of significant issues that occurred. Example is—many people may remember this but one of their key locations on Thomas Street basically had a bad situation where the battery plant didn’t...

    Ellis: Thomas Street. Where is this?

    Field: In New York City. It is a location that supported Wall Street and part of mid-town. The battery plant went awry due to lapse in maintenance and essentially impacted this critical part of NYC on a week day. They hadn’t really planned for the proper level of maintenance required.

    Ellis: What year is this?

    Field: It was probably in the mid-80’s, 1985, 1986, 1987, something like that. And ultimately that actually gave them another focus on quality. Focus on methods and procedures, focus on making sure you don’t save a dime, but then spend millions to resolve the issues or lose customers. So I think they were ahead on that from a technology perspective. I think they were a lot like many, many companies that they had people worrying about the future of technology but they were not necessarily as innovative as the cable space was/is. They didn’t really do the follow-through. As soon as something went a little bit awry, they didn’t really want to pursue it. So I think that was what was going on. And actually if you think about it, at Bell Labs, way back when, Bell Labs was a free-for-all. And a good free-for-all. They basically brought in the most intelligent people around the world, gave them a position, helped them get their Master’s, but they also did something else which basically gave people notions of what they might want to do. So I was mentioning to someone earlier today that my dad was in the Korean War and after he came back from the Korean War, he got married, had two kids, was going and getting his Bachelor’s and Master’s at Brooklyn Polytech. He started at Bell Labs and the first day they said to him, “well, we’re really interested in some new technologies here. We don’t know whether they have a place or not but one was basically a push-button telephone, and one was this thing that didn’t really have a name at the time. But wouldn’t it be cool if you could actually have the written word here and we could actually get it to there. And they said, go think about it.”

    Ellis: Like Teletext?

    Field: Like Facsimile

    Ellis: Like FAX.

    Field: So they basically said to him and a couple other folks that he was working with as a team, they said, “just go back and think about it”. And he told me, he said, “You know, I came home and I said to my wife, ‘Oh, my gosh, I don’t really have a job. I have to think about something.” And he told me, “Two years is not a problem.” He meant they expected it would take two or more years and they were fine with that. So he spent the next couple of years working on that with a couple of other people and he received a patent for some of that activity. So to me that was like the interesting part of AT&T, which was really Bell Laboratories, but clearly that all changed in the mid-80’s with what happened to AT&T, Bell Laboratories, everything being split, and in the past they were a resource for the universities sharing some of their basic and applied research. After 1984, they became much more focused on product delivery from a Bell Labs perspective whether AT&T Communications or the Western Electric group.

    So when I came to cable, what was really interesting to me was...

    Ellis: Let’s stop there. So what brought you over? Who brought you over?

    Field: There was a guy named Frank Ianna who was running the network for AT&T Communications and he received a request from AT&T Broadband about who are some people who were really good in the network management area. And I just happened to be one of a cadre of names that were provided by AT&T Communications. At the time I was doing a number of other things out here in Denver and so my name was put up as well as a number of other people from the communications part of AT&T as well as a number of internal people. So that’s really how it started.

    Ellis: This was at the time when cable was getting into circuit-switched and then IP telephony.

    Field: Yes. They were into circuit-switched and also they were getting into IP telephony and they really didn’t have a concept of a national operations center, but they knew they needed something different than what they had for some of the new products, data and voice in particular...but really data and voice.

    Ellis: Especially because 911, all of a sudden you were like—people could die.

    Field: Yes.

    Ellis: My view is, the telco side is generally those are people that go deep on a particular topic but not necessarily wide and cable is sort of the opposite. Have you found that to be true? A lot of generalists, but not the segmented jobs, at least not when you came and maybe more so now.

    Field: I would essentially say that AT&T and the telecomm companies, the traditional telecomm companies, basically had two approaches. It was almost like the education system in England. They made a determination of whether you were really, really good at being specialized or whether or not you had the ability to rise in the company. That way, you actually were identified as an individual that could go wide. In fact they worked on getting you wide opportunities. I was an engineer, I worked on video, audio and technology for the broadcasters, then I went in on long range planning, then I went designing fiber optic systems, then they decided I was too much of an engineer so they sent me out to be an operations person in downtown Chicago. Then I was an outside plant person in Chicago and I had Illinois, Indiana, Wisconsin, and then they decided they wanted to send me to school. So they sent me to school. And then when I got out of school, I did HR for six months.

    Ellis: This is what I mean. You’ve done like every job!

    Field: So they actually identified me and watched my career and gave me different opportunities and they would talk about you. But that was a very, very small cross-section. Everybody else basically grew, as you said, in a very siloed environment.

    Ellis: So this year, 2015, started for you with a decision to join the fulltime team again after being a highly sought-after technology consultant. What made you decide to come back to the fulltime world with Charter?

    Field: Well, it was interesting because I was really enjoying consulting and I was working with a number of people and a number of companies I really liked. And I thought, well, shoot, an opportunity came up and somebody asked me to do some consulting for Charter. A couple of guys at Charter said, “Hey, if she’s interested in doing some consulting for us, let us talk to her about a fulltime opportunity.” And they had been talking to me previously. And so I talked to them and I said, “Well, what are you thinking about? Are you thinking about things that quite candidly I have a huge amount of background in, whether it be network, whether it be voice...”

    Ellis: Operations.

    Field: “Whether it would be applications, etc.” And they said, “We have a need to really get somebody who really understands how to get things done from an operations standpoint, but we already have somebody on the voice side. And we already have somebody doing some of the network things but we have a significant number of applications including video that we really need a lot of help on, both for the current technology, the near future technology and the way future technology.” So they gave me a group which includes a number of different disparate functions. I have network security, video applications both new and sustained, email, DNS and regional data centers. So it's a wide distribution but they are areas I've worked on before. It’s pretty impressive that you can come into work every day and impact five, six, ten, twenty things each day, including people, which I really love—working with people.

    Ellis: I remember you telling the story about how you had a co-worker who went skydiving and broke every bone in his body and you stood by him until he could actually walk back into work.

    Field: That’s true.

    Ellis: Great commitment to your employees.

    So as fulltime Senior VP of Application Platform Operations, give us a snapshot of the kinds of things you're working on right now.

    Field: We’re working a lot on things like hardening our DNS structure even further than it's been hardened in the past.

    Ellis: OK, let's stop on DNS. Domain name...

    Field: Servers. That basically is...

    Ellis: Your web stuff.

    Field: Yes. Well, basically everything. Almost everything needs to be routed. The domain name servers are really saying where are you wanting to take that action and where are you going to route it to? So they're really, really important and if a DNS server gets in trouble, as an example, it not only impacts what you think about, like webpages, but your voice, video and data infrastructure is dependent on DNS. So that’s super-important. We have a number of locations that are up and we are continuously looking at how we can make it better, more resilient, capable of withstanding any issue that may come. We do more than 25 trillion views on DNSs each year and that’s only going to grow. So to us that’s pretty important. We have an email platform and we manage the vendor who provides the back end of the platform and also we manage the operations of the portal which integrates into the backend and also provides linkages to company information and the ability to link to videos. We work with the software engineering team that is accountable for developing the software associated with the front end. They give us code and we stage it and push it to production and manage ongoing operations. Security is always an interesting area because there are always changes happening due to known and unknown threats.

    Ellis: Security like conditional access and DRM or beyond that?

    Field: Beyond that. So if you think about it, every person on any network can be a target. In some cases we may have a Charter subscriber who has been targeted and in some cases a bad actor may want to use our customer computers who have been infected through botnets to attack a person, a website, a DNS infrastructure etc. In some cases, you could have a bad actor that just wants to try and disrupt or gain inappropriate access to your network. Network security is all that and more....

    Ellis: Denial of Service?

    Field: Denial of Service. So we have threat mitigation techniques that we use not only on the individual but also to protect our network and we’re continuously looking at it. One of the things—and I try to be very proactive—the discussion I always have with the security people is, whether it be on the engineering side or the operations side, is I want to get more proactive. I want to understand what's coming before it comes. We utilize a lot of resources to get ahead of issues but are always looking at ways to figure out where the bad actors might try and do something. We react very quickly when there is an issue but our focus in the future is how do we understand what those issues could be even before they hit you.

    Ellis: That could be a product differentiator, too, if you become the company that customers trust to keep them safe from cyber threats.

    Field: Right.

    Ellis: And pay extra for that.

    Field: Right. And ultimately I think a lot of ISP’s such as ourselves are really trying to protect the mom or pop who may not know that other people are trying to attack their computers. This is one of the reasons that we offer a security suite to our customers.

    Ellis: That’s definitely my mom and pop.

    Field: Malware and things of that nature. In some cases, we’re constantly looking at ways to understand the malware out there and what we are going to do about it. The industry is looking at that in total as well as the government. Obama has a very key focus on cyber security and how to protect the infrastructure.

    Ellis: You mentioned data centers, too. It seems like a lot of things like the action right now is more so the data center than the traditional headend. So what's happening in the data center? Is that synonymous with where the cloud is? Or what are your views on what's happening based on the fullness of time, what you’ve seen in data centers over the years?

    Field: Back in the mid-80’s, people used to call it network computing.

    Ellis: Right. “The network is the computer.” Scott McNealy.

    Field: Exactly, exactly. My take on it—I just was talking to somebody the other day and they said, “I didn’t really understand that the cloud was stuff that wasn’t really, really close to the person but was actually providing the capability and that you could have that capability internally. You could have that capability externally or you could have a hybrid or an internal cloud.” So if you actually look at a number of things that are going on, there are more and more things that are being pushed out of a traditional headend into a cloud-based solution which may have components that are close to the market or further up in a hierarchy.

    Ellis: Or a set-top.

    Field: Absolutely. Right.....even for set-top capabilities. You could have a dumb machine and more capabilities that are further in the network. So if you actually think about a video when you think about content distribution networks and the ability to access huge amounts of libraries, that’s really in the cloud. When you think about the guide, instead of having all the guide content pushed down to the set-top box, you have an interaction between the set-top box and an interactive guide, so you might have a very thin guide at the set-top box but a highly interactive guide further up in the network in the cloud. And then you really have this notion of hierarchies of data centers. Because essentially there’s some that you actually only want to have a few of, which might be a...

    Ellis: Like archival.

    Field: Like an archival, a super-capability. The first time somebody asks for the brand new James Bond movie after it's been released, it may go up all the way to that main data center or multiple main data centers and then pull down, and then basically based on the viewing patterns of the individual or individuals, actually be kept closer to the customer base in a regional data center, etc. So that’s one example. Voice is another example. I mean, the bottom line is you can essentially have a dumb box in your home and you can do all of the capabilities that you want to do back in the network, in the cloud. Whether it is for business services such as cloud based voice services or whether it is for residential services. A lot of people don’t necessarily think about that—because they have a device in the home—about how cloud computing is actually helping them. So to me, cloud is just further on into the network that things are happening instead of actually being physical entities in the home. And cloud based systems utilize a lot of virtualized servers.

    Ellis: Virtual—another big term now.

    Field: Another very big term. So virtualization allows you to more efficiently not only utilize the capacity of the servers but also allows you to do things like energy management. If your server isn't fully loaded, there are technologies that allow you to basically...

    Ellis: Spin it down.

    Field: Spin it down which is pretty cool.

    Ellis: Is there a rule of thumb in terms of how you think through what is best local and what is best—what is best to keep local versus put in the cloud? Because it probably depends on the situation.

    Field: I think it's dependent on the specific application but I think it's basically how do you keep the things that are in the home that you have to upgrade 18 million of them at a minimum versus basically being able to take care of it further up in the environment so you'll have reduced issues associated with distribution.

    Ellis: Easier troubleshooting.

    Field: You think about it, like set-top boxes. Many of us have been involved in many downloads that have occurred where all of a sudden all the set-top boxes might go, “One moment please.”

    Ellis: It's a brick.

    Field: And it becomes a brick so if you can actually...

    Ellis: I've never had that happen.

    Field: If you can actually have an agent on a set top box which effectively communicates with the cloud based solution, knows how to respond, keeps statistics if the company wants them etc. I think that can be a much more desirable environment. Hence, the heavy lifting is further up in the network and minimizes the number of places that the code needs to be upgraded for performance improvement, additional functionality etc. But the more you use cloud the more you need to think about resiliency in the environment. So you need to make sure you don’t have just one center that basically is serving, let's say, Denver. You need to make sure that one center is backed up with a second center which is backed up with a third center and you can seamlessly go to any of those locations without interruption from a customer perspective. I think that’s one of the things that we as an industry, since I've been here, have really been focusing on. Things such as in-service upgrades that are not customer-impacting or seamlessly transferring a customer’s service from one environment to the next without the customer seeing any issue so how do we get better delivering services to our customers 99.9999% of the time? And if we have a problem, they don’t know we have a problem.

    Ellis: Continuous improvement.

    Field: Continuous improvement.

    Ellis: So when I think about you, or when we think about you as Senior VP of Application Platforms, it's not necessarily applications like solitaire, Crossy Road, things that—my nephew’s favorite game. It's more like the business becomes a series of applications.

    Field: If you think about it, video is a multitude of applications because essentially...

    Ellis: Everything is in that sense.

    Field: Because essentially we’re delivering video via charter.net, we’re delivering video on our TVA application, we’re delivering video on TV, you're delivering video on Roku, but every single one of them is an application. Even in the most standard way that you deliver linear video today, you still are reliant on a number of applications that sit at the controller environment to deliver those services to our customers.

    Ellis: So what is the biggest challenge in managing all of that?

    Field: The biggest challenge I think is letting people know that change is going to be continual and they have to adapt.

    Ellis: Key people and employees?

    Field: Yes.

    Ellis: So are you doing the whole Agile DevOps moving to working at mobile speed, web speed?

    Field: We are continuously evaluating that. So DevOps to me has both a positive and negative reputation based on how it has been interpreted and implemented by different organizations.

    Ellis: Because you're an ops person. So operations people say DevOps is a jam down, and DevOps people say DevOps is great, because they kind of get to call the shots.

    Field: Well, I think it's actually interesting. I just listened to Gene Kim talk about DevOps and there were a whole bunch of people from the development organization as well as the operations organization in this group that was listening to Gene Kim.

    Ellis: I don’t know who Gene Kim is.

    Field: He's a guru for DevOps.

    Ellis: For Charter.

    Field: No. He’s the guy in the industry who talks about the good, bad and ugly of DevOps implementations. He’s written a number of different books and one of the things I think a lot of people assume is DevOps is about pushing it and then basically dealing with the issues that come out. Very quickly, hopefully versus basically one of the things that he said is that DevOps is really about ensuring that you have the right hooks, the right metrics in place, the right “how are we doing with this?” in place. So that you know right away if there's an issue or a problem. One of the things that I think people found really interesting—he was talking about a specific company—and he said, “How many times do you think they pull back their code?” People were going like ten times, fifteen times. He said, “No, this company pulled it back 2,500 times...”

    Ellis: Per what?

    Field: In a year.

    Ellis: So that’s like you're about to send something out, but you know it's going to potentially throw a wrench into ops so you say, reset and go back...

    Field: Well, you have the measures in the code so when you put it out there, it's not responding the way you thought.

    Ellis: So you pull it back.

    Field: You understand exactly how it is supposed to respond and when it doesn’t, you pull it back. And then you basically say, what did I miss in this scenario, what's happening?” I think the other challenge for development to seamless production is to ensure that all the environments are the same, which is a continual problem, where you have the development environment and then development has a testing environment and then you have a staging environment, you have a production environment. One of the biggest issues that the industry has to ensure that we deal with is basically ensuring that all of those environments look the same. So what comes out of code is tested and implemented in an absolute like environment to eliminate surprises.

    Ellis: So it really is a partnership between development and operations.

    Field: I think in some cases, the other thing you need to understand is when you push something, you have to say, what is the customer impact? If the customer impact is very, very minimal or there’s a way to deal around it—like, as an example, with virtualized servers, if you have a disruption associated with—you know, you're seeing a certain command not happening as quickly as possible or not clearing as quickly as possible, you can scale horizontally. And you can deal with the situation by giving it more capacity so it’s not customer impacting. In that scenario, then you can work on the customer’s problem or deal with code that isn't working as effectively as one thought it should. So that’s an example that we actually used last week where I said, “Can we scale horizontally to get us out of trouble on this particular piece of the code?” The developers and my people said, “Yes, we could do that.” And I said, “Yes, we should do it.” A virtualized environment allows us to spin up servers almost instantaneously.

    Ellis: Right, right. That’s the whole point of it.

    Field: That’s the whole plan. So I think we have a long ways to go associated with—we’re developing a lot of code, and we’re doing really good at it, but we have a long ways to go to ensure that we have the right mechanisms in place to ensure that our code is absolutely solid or that it's in trouble very quickly on, right? Which is one of the reasons we have implemented a stage environment to catch it prior to any true customer impact

    Ellis: OK. Let’s talk about the early days of you, starting from the very beginning. What did you want to be when you grew up and when did you know you were meant to be in technology?

    Field: Initially when I was a little kid, I knew my dad was an engineer, but my only concept of an engineer was really a train engineer and I thought that was pretty cool.

    Ellis: Get the little hat.

    Field: So I thought about doing that for awhile. To help myself get through school I also sang in bars, which I always thought that was a lot of fun.

    Ellis: What did you sing?

    Field: A little rock and roll.

    Ellis: I didn’t know you were a singer.

    Field: Well, not anymore. My voice is probably dead now. But then what happened was...

    Ellis: So you paid your way through school?

    Field: I paid my way through school.

    Ellis: I did, too.

    Field: Essentially when I was in high school, I decided to finish high school in three years, which I did. I went to work for actually an insurance company. Prior to that when I was in my sophomore and my junior year I worked at a furniture factory, so I can tell good furniture by the way because I sewed the cushions and the backs and the skirts. But after that, I finished high school and I went to work for MetLife...

    Ellis: Where were we now?

    Field: I was in Illinois. I had several promotions and one of the women who was the highest level female person in MetLife, she was a manager by the way, she said to me, “Charlotte, you need to quit this stuff and go back to school.” I said, “That was my plan—to go to school.” And she said, “Not part-time, go fulltime.” She said, “I've been here for thirty years and this is as far as I'm going to get. I'm the number one manager... I've trained every single person that’s at a higher level than me.” So I ended up going back to school and initially I thought I wanted to be a biomedical engineer actually. So I took a lot of biology, a lot of science, etc. But the problem was that was a commitment not only for a Bachelor’s but a Master’s and clearly I didn’t want to go into a lot of debt. I had worked at the school and I basically really liked electrical engineering, especially transmission engineering. I had a professor that—I worked actually in the engineering department as well as a cook as my side job...

    Ellis: Singer, cook, engineer.

    Field: Whatever came along to pay the bills? This professor really got me interested in transmission engineering and he was actually doing a lot of projects with radar and sonar and with sonograms, and he was a very interesting guy talking about what you could accomplish with sounds and what you could see in the body and understand what was happening with the soft structures within the body And he said, “You know what? Complete your Bachelor’s in electrical engineering and you could always come back.” I never really did come back to biomedical but I still read a lot about medicine as a spectator.

    Ellis: So, if I may and I'll go first, mine was $114.68. How much was your student loan payment every month for the rest of your life it seemed like at the time?

    Field: It was around the same; it was about $109.00 and I paid a lot because I was working about sixty hours a week while I was going to school but I enjoyed it.

    Ellis: Goes back to the multitasking thing.

    So we've talked before but I want to hear your story about your first job out of college, out of Michigan Technological University with your EE. I'm remembering the story about the ladder and the dress. Was that your first job...?

    Field: That was my first job.

    Ellis: What was your job? Then we’ll get to the ladder.

    Field: So I was working for AT&T—specifically General Departments which was a unit and...

    Ellis: So you moved to New Jersey.

    Field: I moved to New Jersey. And I was working for a person named Nino Caserta and Nino was an ex-New York Tel guy. He said, “Look, we’re going to work on video/audio technology so I think it's a good thing we go in and see the broadcasters.” So we went to see ABC, CBS and NBC. And he said, “I also think it would be really cool to see the control room.” At that point in time in my life, if you were a woman, pants were not OK...

    Ellis: This was the late 70’s.

    Field: Late 70’s. Pants were not OK, you had to wear a skirt, you had to wear high heels, etc.

    Ellis: My God.

    Field: So I took the train in, met Nino downtown New York City and he said, “Well, we’re going to 32 Avenue of the Americas,” which was the corporate headquarters of AT&T Long Lines. The control room was on a specific floor but the antennas were on top of the building. So he said—it was a beautiful, beautiful summer day—and he said, “We’re going to go see the antennas. “ And I go like, “OK. How do we get there?” And the guy goes to the ladder and says, “Ladies first.” I said, “No, after you.” I said, “I'm not going up first.”

    Ellis: He probably never even thought of it until later.

    Field: I didn’t think of it?

    Ellis: He didn’t. It probably never occurred to him what happens when a woman in a skirt goes up the ladder...

    Field: It definitely could have been that. I was kind of angry with Nino. I said, “If you told me I was going to climb ladders, I would have worn a pair of pants.” So all the guys went up and I went up last and of course, I went down first and the rest of the guys went down after me. And my boss was like, “Oh, my God, I didn’t realize this, I didn’t realize this.” Then he said, “I should have realized it because every single one of the antennas, we have to climb a ladder because we also have antennas on top of the Empire State Building.” [I saw them] at a different point in time. So that was almost my first day at work, it was within the first week.

    Ellis: Within the first week. OK. What prompted the MBA in finance in 1986 from Fairleigh Dickinson University?

    Field: Well, as I was looking around...

    Ellis: Still at AT&T?

    Field: I'm still at AT&T and I was looking around and I thought, I want to be that person. And that person—if you looked at the credentials of the people that were leading a large part of the business, you have two types. You had really, really good engineers who AT&T helped develop and secondly, you had some finance people. So I essentially said, “You know what? In the school I went to we had to take a couple of liberal arts classes like sociology, psychology, etc., but there was never actually an option for finance.” So I said, “You know, I think it would be a good thing for me to understand a little bit about finance.” It was also the same point in time that my dad, who had many, many degrees, he decided to go back and take the CPA exam. And he said, “You know, it's always good to...”

    Ellis: Overachievers!

    Field: He was an overachiever and so he said, “Understanding money is a good thing.” So I went to Fairleigh Dickinson and got my MBA in finance and I learned a lot.

    Ellis: Does it help you to this day?

    Field: Yes.

    Ellis: Like you're reading a balance sheet and all that stuff?

    Field: That and also it's amazing how many engineers don’t understand accruals. They don’t understand the purpose of accruals. They don’t understand the whole notion of controls, like financial controls of systems.

    Ellis: What should engineers know about accruals? I'm only asking because I don’t know so I'm pretending like...

    Field: Well, as an example, I can buy something today with my 2015 budget money, OK? And even if I get it in, but the payment terms don’t call for it to be paid in 2016 I accrue for it since the obligation was in 2015...so it goes against 2015 dollars and our 2015 financial statements. So you really want to understand exactly when the purchase is, when you receive the goods what the terms of the payment are and things of that nature. I mean, I was just talking to a very, very brilliant young man the other day and he said, “What is FOB?” And I said, “Oh, my gosh.” So I took time with him and I explained it to him and he said, “Why would a vendor ever do FOB?” I said, “Because they want to get it out of their hands so they can do revenue recognition.” So he says, “What is revenue recognition?” I'm thinking, “Oh, my goodness.” I actually have a director, a brand-new director on my team, we promoted him about six months ago, and I asked him some finance questions and he didn’t know any of them and I said, “Wouldn’t it be really cool if you worked with the finance team on how to do Finance 101 for new directors?” So he did that and took me through it and I said, “What about this? What about that?” And he goes, “Oh, I didn’t think about that, I didn’t think about that.” I said, “OK, now we are going to review it with the finance guys.” But I think in a lot of cases, an engineer or computer scientist, they don’t necessarily learn that until they're further up in the company and they really should learn it at a lower level. Which is why, when I was on University of Colorado’s engineering board and also Michigan Tech’s engineering board we discussed the need for engineers to understand business at some level and why universities have pursued interdisciplinary programs that foster cross disciplinary learning. From my perspective, engineers that have a holistic view of the business will be more successful in their careers.

    Ellis: You're also on the FCC Technical Advisory Board. What happens there? When was the last time you met? How often do you meet?

    Field: Well, they meet several times a year. I'm no longer on it right now but I was on it for about six years. It's a really interesting group to be part of. It's really led by someone who’s appointed by the FCC Commissioner to look at a number of technology issues and problems that may exist with a whole host of people from various technology firms, the services and also a number of venture capitalists. So, as an example, when I first got on it, one of the big things was IPv6. What are we doing as an overall industry relative to IPv6? And do we understand what’s the so-what of IPv6? What it means, if a company isn't ready, etc.—it was really interesting on that particular one because there was a lot of...

    Ellis: Especially in that timeframe because there was “The v4 is running out, we’re all going to die!”

    Field: But there were companies that basically said there isn’t a v4 problem. Some of those are companies that you know that you go, like, whoa...

    Ellis: Starts with the letter “A”...

    Field: Yes.

    Ellis: You used to work for them.

    Field: Yes, like that one. Of course it wasn’t a near term problem for them because they had a slew of v4 addresses. But also you had to bring in the consumer electronics industry, you had to bring in the small ISPs, other industries, everybody. So we did a lot of studies associated with what was going to be the impact of the Internet of Things. And we talked to a lot of industries. And when you actually talk to those industries and you saw what was coming downstream, you said, “Oh, my gosh, this is even more important.” Then also we looked at government webpages and found out that whitehouse.gov was also not IPv6-enabled. Ultimately they did get IPv6-enabled. So we looked at things like that. Other teams were looking at things like what happens with analog plant. What causes the death of analog or are rural areas going to continue to develop much slower than the rest of the country? How are you going to provide different levels of services to the rural areas so they can participate in the digital world and have their businesses excel? One team spent time on spectrum utilization and what should be available to various industries. So the FCC Technology Advisory Committee would meet four times a year and then there were these subgroups that would actually take a subject and then go out and make recommendations associated with what might happen with things like spectrum. Power: there was also a lot about power...

    Ellis: You mean like energy effectiveness?

    Field: Energy effectiveness and also...

    Ellis: Conservation?

    Field: What happens with the infrastructure? If you recall, the hurricanes that hit the East Coast, Sandy, basically the wireless infrastructure was decimated in a number of areas because in a lot of cases, people said, “If I don’t have this tower, I have microcells and I'm not too far from the next connectivity point.” But if none of the towers or microcells have power backup, and you're dependent on power for transmit and receive, you're in trouble, right?

    So some companies were hit much harder than others and then there was one company, a very large wireless player that had made a decision that they were going to have power backup. And even though they're very prevalent on the East Coast, they didn’t have the same problems as the other people in that particular industry. So then the FCC basically said, “.. is that something we should study? Backup power and what happens with backup power?”

    Ellis: OK. Let’s talk about your life of awards and acknowledgements, lots of them. The Electrical Engineering Hall of Fame from the Michigan Technological Institute in 1998; Tech Woman of the Year, regional and national; Multichannel News Wonder Woman; national SCTE Board; the FCC Tech Advisory Board. That’s a partial list. Any particular standouts? Like for me, mine was when I got the award here and I made everyone wear taped nerd glasses.

    Field: Clearly I was very, very honored and the first large award I received—and this was an interesting story—was the Electrical Engineering Award at Michigan Tech. I was a really excellent student even though I was working a lot. I probably over studied since I believed I had to have one step up every single time...

    Ellis: Were you that girl that was always in the library?

    Field: Yes. I was probably in the library, working with my work team or working to pay my bills. When I won that award, it was very interesting because there was one professor who, when I was interviewing for companies—now you have to understand where Michigan Tech is. It's in the U.P., it's around seven hours outside of Chicago, and there are two planes that come in a day, max, sometimes one. It's hard to fly in, fly out on Monday and come back on Tuesday. I mean almost everything is a two-day trip. So when you're interviewing with IBM and you're interviewing with AT&T and you're interviewing with GE and you're interviewing with Motorola, it's hard to fly out Monday afternoon and get back by Wednesday morning. I had one professor who basically held that against me. He said, “I only had one interview when I was in college and so every time you miss a class, I am going to deduct credits from you.” And it was funny, because he came up to me at the award ceremony and said, “Oh, my gosh, you were such a wonderful student.” Instead of saying, “But you're the sucker who gave me a C. I didn’t get a C because of my grades, I got a C because you deducted points because I missed your class for interviews.” I said, ' “Thank you very much. I really appreciate it.” And he said, “How’s your work going?” That one actually stuck out because it was actually interesting. A lot of the professors that basically, they knew how well I did, but a couple of the guys that were in that presentation said, “You know, we always thought you sat in the back because you didn’t know what was going on until you took the tests.” And I said, “No, I sat in the back because it was a sea of guys. So I could see all the guys in front of me.”

    Ellis: Speaking of sea of guys, so you're fond of—you and I, we do a lot of things together with women in tech and robotics and all that. From that I know you are fond of quoting Madeleine Albright, who said, “There’s a special place in hell for women who don’t look after other women.” How are we doing on that front?

    Field: I think there are a number of things that are very good. I think the WICT Rocky Mountain mentorship program that really actually started here and now has gone out to a number of the other chapters—I think that’s fantastic. I think you and I are both involved in a WICT Women in Technology mentoring program. I think that’s a very good program. It links women from various companies with current and former winners of the WICT Women In Technology award.

    Ellis: You get a lot more back than you put in, in my experience.

    Field: You get a lot more back because you learn a lot about people and then you get to see people grow a lot. I would say the prominence of senior women who donate time to either be an official mentor or a non-official mentor makes women in cable better as a whole. It also shows other women that we are willing to give of ourselves and model the behavior we would like to continue within our industry. But I think part of it is how you start at a young age and realize you can learn from others’ experiences. Usually, a person has to self-anoint themself or they have to have a boss who essentially says, “I think this might be a good thing for you to participate in.” I think some of the colleges are trying to get more focus on young women and their capabilities. I mean again, University of Colorado and Michigan Tech both have programs to bring in high school students at a very young age to explain what the heck is engineering. What are the kinds of things that are happening? I think we are seeing some real benefits associated with it, like Michigan Tech, more than 50% of the environmental engineering class are women. Electrical engineering has improved and one of the things that we did in a number of those colleges is we said, “You can't have all men professors. You have to have somebody that somebody says, ‘I could be like that person.’” So a lot of universities have tried to solicit qualified women in those roles and that has changed the dynamics within the universities and between professors and students in my opinion. I think robotics is a great opportunity because again it's actually focused on young kids and I know Doug is very involved in that and that’s actually been a great opportunity for students—my daughter actually participated in robotics here at University of Denver. So I think all of those things are really good, but I think we have to figure out how when you get women first into cable, how you provide that support before they find WICT, as an example.

    Ellis: Right, right. How to encourage more young women to come in and to encourage the women who are here to stay.

    Field: Yes.

    Ellis: That is the dual-pronged mission.

    So all of us know you as Charlotte. But your siblings and family know you as “Iola.” Tell me about that. Doug calls you Iola.

    Field: So I'm actually the fifth Charlotte Iola in my family.

    Ellis: So you're the fifth of seven children?

    Field: No, I'm the fifth Charlotte Iola. So there's me, there's my mother, there's my grandmother, there's my great-grandmother, there's my great-great-grandmother.

    Ellis: Holy-shmoly.

    Field: Holy-shmoly. Then we have Corinne, the same thing. There's Corinne, Corinne, Corinne, and Corinne. My great aunt, aunt, cousin and cousin. There are four. Anyway, so when my grandmother was Charlotte, my mom was “Big I,” actually.

    Ellis: They called her Big I?

    Field: Big I. And everybody...

    Ellis: I'm picturing a Cyclops.

    Field: Half of my younger cousins call me “Little I.” Which is amazing! They weren’t even born when I was “Little I”. Some of my cousins still call me Charlotte because they like it...

    Ellis: How many cousins do you have?

    Field: I don’t know, seventy?

    Ellis: Wow. So what is your birth rank of the seven children?

    Field: I am the “Irish twin” of my brother. He's the older one...

    Ellis: You're a twin.

    Field: Irish twin.

    Ellis: What does that mean, “Irish twin?”

    Field: Two children born within twelve months.

    Ellis: Oh, I see. OK. Never heard that before.

    Field: You learn something new everyday. So I'm an Irish twin.

    Ellis: What do you do when you're not on the clock? I know you still have a place in Michigan, right? You have a place here in Colorado. Do you still have your place in Philly?

    Field: I sold my place in Philly, although it was a beautiful location and we liked Philly food, etc. I think our heart was in Colorado so we like property so we buy property. We bought a cabin up in Golden Gate Canyon and we are working on it. It's about 45 acres so we've been building a lot of trails and things like that up there. My daughter about two years ago told me, she said, “Once upon a time, you know you told Dad liked stained glass.” And he did. He does it and he's really good at it. So my daughter said to me, “I'm going to a quilting club and I'd like you to come with me.” So we started quilting. Now she's really, really good, but one of the things I learned is that I can quilt as wll. It actually utilizes a lot of math skills because of the geometric proportions and things like that. So in this quilting bee, it's actually interesting; we only meet once a month and I work on projects for my nieces and nephews that are graduating college and high school and things of that nature. We have a rocket scientist; we have an EPA cleanup person...

    Ellis: All females or males and females?

    Field: There's one male, sometimes two.

    Ellis: Is the rocket scientist a female?

    Field: Female. And EPA cleanup person is a female who’s running the entire cleanup for a massive project in Montana. We have basically a math professor. We have a couple of writers that are there. We have a number of people that are entrepreneurs in that particular space. They do a lot of craftsy activity. We have a woman who basically takes quilting around the world to various clubs, which is pretty cool. And we have a woman who is really, really good at math and she’ll take any pattern and if you want to make it instead of 60x60, you want to make it 45x45, or 40x20, etc., she’ll exchange those proportions. It's a lot of fun for her. So I do that. I like to walk. I like to do Orange Fitness although probably not as much as you.

    Ellis: I only go on Saturdays.

    Field: I go once a week usually, sometimes twice a week. I like to bike quite a bit. I'm kind of getting ready for the snow. I ski. And then I like old movies.

    Ellis: Those are good answers. We’ll get that snow tomorrow, I'm hearing.

    Who are the people in this industry who influenced you the most?

    Field: I would say I am really always inspired by Tony Werner. I worked for Tony when I first came into the industry and I just thought he was a super well-balanced individual...

    Ellis: He's an excellent leader.

    Field: Wonderful leader and just a great sense of humor as well. Such a fast thinker....

    I think someone that inspired me and some people may say it's a negative inspiration but it was Mike Tallent, who was the CFO of Comcast when I first joined. What I learned from him was to understand the rhythm of the numbers, make sure that you can defend them. And my second introduction to him was when I was going in to my review session on my budget dollars and I was working for Brad Dusto and Brad was asked by Steve Burke, “Did you help Charlotte do this?” And he said, “No, I haven’t seen the numbers yet. I'm waiting to see them. She told me they were good.” And Mike Tallent said to me, “I've already reviewed your numbers, Charlotte.” He had a big Southern drawl. He said, “I'm not going to waste any time lookin’ at your numbers. I'm perfectly fine with what you did last year and what you're doing this year.” He said, “I need a haircut. So I'll see you later.” So basically his influence on me was very much like again, understand the rhythm of your numbers, understand exactly what your numbers are saying, make sure you have all the questions answered that you think might get asked. And if you don’t have the answer, tell somebody you don’t have the answer.

    Ellis: I want you to teach me the rhythm of numbers but not right now.

    Field: I would say Mike LaJoie on the time I was on the SCTE board. I appreciated him. Tom Gorman also on the SCTE board was another individual who I appreciated. Working with the team who was doing the @home transition from @home—which we accomplished in about twelve days—to AT&T Broadband...we worked as a team with a singular focus...that team inspired me.

    Ellis: I remember. It was quite an accomplishment.

    Field: I remember...

    Ellis: Quite a fireball!

    Field: Fireball, yes. I had to work with AT&T, specifically with Hossein Eslambolchi and I remember getting...

    Ellis: This was like that around-the-clock-switch-it-over.

    Field: Absolutely. Take all those CMTS’s, we’re building a parallel infrastructure, now we’re moving the customers over and trying to ensure we didn’t drop a customer.

    Ellis: Very exciting.

    Field: One of the things I realize is that I had a couple people in my bullpen that were letting me do what I thought was right. So maybe because I didn’t really know all the consequences of what the team was doing since no one had ever done something like this before in the time we had allotted but they let me and the team do it and basically said, “Damn the torpedoes! Let’s get it done before @Home can negatively impact our customers.”

    Ellis: Nobody knew what they were doing. You were feeling your way around and it worked.

    Field: But when I escalated to Hossein, who was an officer of AT&T, because his guys didn’t want to work through Christmas—we were having lots of problems...I got his support to address a few of the peering issues we had...

    Ellis: It was right after the Western Show when that happened.

    Field: Yes. And we still had blocking on the peering points. And his guys said, “Well, we’re going to take two weeks off for vacation.” I said, “No, you're not. We have customer issues.” And I went to Hossein and then Hossein said, “Well, Charlotte, usually an officer of AT&T Broadband would be calling me in.” I said, “Hossein, you’ve known me for years. We need to fix the damn problem.” And then he got his guys in gear. That was good.

    And my team behind me was working for Greg Braden, all of those guys basically said, “Whatever you need, just tell us.”

    Ellis: I remember that period.

    What do you hope your personal legacy in this industry will be? I realize that’s a difficult question.

    Field: The thing that I really think is valuable from my perspective is helping the industry move ahead to get better and better through people.


    Field: Through people. Continuous improvement is really big on my mind and one of the things, if you go back to some of the Japanese thought processes about quality, quality is a never-ending journey. Once you figure out how to get better there are still other things you can continuously improve. I think getting people to think about not the status quo, but what's different, how do you ask questions, how do we move the ball forward, what if. Put out an idea even though it may not be an idea that has any legs. But if you restrict your thinking, you're never going to be able to move ahead in the business. So I think mostly getting that culture more as part of everything and every person that I work with is most important to me.

    Ellis: Last question. What do you think the enduring legacy of the cable industry or the industry we used to call cable will be?

    Field: I think it will be providing solutions to people for anything that they want to do. And I also think that one of the things that is going to happen, my perspective is we are going to open up our environment even further than it's been opened up to allow people to get into the power of the cable industry.

    Ellis: So you mean like open-sourcing things and getting a bigger development community around it?

    Field: A bigger development community, yes, I do believe that. Now you’ve got to have the controls on there. That’s the big part about it. That’s something that Apple does very well, Android does, but to me that’s going to be the next big thing that essentially says, it's really about, do you need a home automation system from Comcast or do you need a home automation system as an example from five different people that do something in particular? You can purchase this particular piece from charter.net or Charter but you might be able to do this from somebody else because you're allowing certain ties and you're expanding your development community as you said, so that it's a much richer experience for people. I think that’s really where the cable industry is going to head. It may take us a while to get there but—and it's interesting because if you look at a number of solutions on home automation, many of the cable companies are basically opening up their environment......

    Ellis:.....it used to be anathema. It used to be, none of that open stuff for me. Someone could harm the network.

    Field: Somebody could harm the network. You may have to again have the security precautions to ensure that nobody does any harm. You will do that because again you are the person that’s providing those capabilities, but I think that’s where the future is.

    Ellis: All right. We’ll leave that as your last word. Thank you, Charlotte.

    Field: Thank you. Take care.


  • Ed Breen

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    Ed Breen

    Ed Breen 2017

    Interviewer: Stewart Schley
    Interview Date: December 11, 2017
    Interview Location: Denver, CO USA
    Collection: Hauser Collection

    Stewart Schley: Greetings and welcome to a next episode of the Cable Center’s oral history series. This is a really special interview and it's a really special day. This is December 11, 2017. The Cable Center christens and opens the Edward D. Breen Technical Archives later this evening, which is a managed collection of some of the key and critical technologies that helped build this industry over time. Speaking of which, we have to talk about that. Edward D. Breen himself is no less than one of the most revered and best known corporate executives on the global stage, the CEO of DowDuPont. He previously ran and resurrected Tyco International, but for our purposes, he was the face of General Instrument for a long period of time, a run in which the industry was utterly transformed, partly because of the work Ed and his team did. So thank you for being with us.

    Ed Breen: It’s great to be with you, Stewart.

    Schley: This is awesome. I love to start at the start because it's always interesting to me how people got into this crazy world that was cable television at the time. How did you?

    Breen: You know, I graduated college and was going to get married at 21. So my wife pretty much was, go out and get a job. I wanted to go for MBA. She said, “You better go get a job so we can get on with this.” And I interviewed. I had two job offers. One from IBM and one from Jerrold Electronics. I remember this because it was probably the luckiest thing I ever did, starting my career. I ended up picking Jerold Electronics and all of my friends, my family, were, “How could you possibly not take the IBM job?” And I said to them, I remember it to this day, when I went to interview, I said, “It was a like beehive around that place.” I didn’t even know what they were doing, but it was people yelling down the hallways and I said, “It just seemed exciting.” And boy, was it.

    Schley: What was your education background going up to that moment?

    Breen: So that was also interesting. I graduated a semester early because I wanted to get a jump on things. So I went to Grove City College for 3½ years, got a business and economics degree.

    Schley: And then you had heard of IBM, probably hadn’t heard of Jerrold.

    Breen: That’s correct.

    Schley: I don’t know how much research you had done, but thus history was made. You were a marketing assistant, I think, when you started.

    Breen: Yes, so I got hired in as a marketing assistant for the set-top box division, which was really just starting at the time. Back then, it was just old push button converter boxes. I didn’t really know what it was when I started because cable was still just in the small towns of Pennsylvania, a little bit out in the West. No one really knew it at the time.

    Schley: What was the state of the industry? How would you characterize it? Twelve-channel systems or less?

    Breen: About twelve channels and we were expanding just during those years, like in the late 70s, early 80s, to add channels. There was no remote control back then. I remember one of our set-top boxes, there was a big wire that went under your rug so you had a little device sitting next to your couch.

    Schley: Did you ever worry you'd made the wrong decision?

    Breen: No, I didn’t. I was in the company just months and I ended up loving it. We were working six days a week, we worked all day Saturdays. The company was growing like a weed, which is always exciting. So there was always something to raise your hand and volunteer for.

    Schley: And just to kind of set the market stage, Ed, the primary product was the converter box, right? It was the set-top?

    Breen: Well, the whole company was the outdoor equipment, the amplifiers, the taps, and all that. We were the biggest at that. And the set-top box business. But the outdoor equipment was a way bigger division at the time because the set-tops were just starting.

    Schley: Were you calling on customers? Did you have exposure to the buying community?

    Breen: Because of the job I was in, I was the key interface with the whole sales force. So really quickly, I got to know all the salespeople and they were just a bunch of great characters. They basically built the industry. They were the first generation salespeople, so that was fun. And what happened is I was in the company about a little less than two years and because all our salespeople were kind of in their 50s, they were entering their 60s, it was that first generation kind of getting close to retirement. The company was worried about, what are we going to do? And they said, let's try a couple of the young guys in the company or gals and see if they can make it. And we don’t even want engineers. Let's put them in and see how they do. So I quickly volunteered for it.

    Schley: And this is sales?

    Breen: Yes.

    Schley: Were you good at it?

    Breen: I think I was pretty good at it. I started doing that when I was 23, and that’s what really got me excited about the industry. I got a little bit lucky. I ended up working for a great gentleman who spent his whole career in the industry, John Deekman. He was the district manager for the Northeast. They gave me the state of Pennsylvania and New Jersey, which could not have been better because that’s where—

    Schley: The heartbeat of cable.

    Breen: Literally where it started. So I started calling on all the people that started the first cable systems.

    Schley: So tell me, what was a day like? What did you actually do. 8 to 5, or 9 to 5? Were you on the road?

    Breen: I was on the road 90% of the time. And traveled the whole state. I would leave Monday, come back Friday night. And I was also fortunate because two of my larger customers were Gerry Lenfest, who became a great personal friend to this day. And the Roberts family of Comcast, because they were in Pennsylvania. They became two of my friends and great accounts.

    Schley: You were well-placed. But it was an industry—share with our audience—that was not compartmentalized or consolidated. It was very diffused…

    Breen: Every town was a different owner. Some entrepreneur got found and a lot of times it was the Jerrold Electronics salesperson that would go to a town and try to find someone to actually do it.

    Schley: No kidding.

    Breen: Oh, yes.

    Schley: To obtain the franchise?

    Breen: Yes. Get the franchise and—

    Schley: You're kind of building your own business that way.

    Breen: Correct.

    Schley: You caught the eye of somebody or multiple people. You just kind of take us through the job and your career progression at GI.

    Breen: So I was in sales for I think six years and then the company, the people around it at the time, Frank Hickey and a few others, said, “Look. If you want to progress in the company, then you’ll look like you’ve got to have a great opportunity. If you want to, you’ve got to come back in and get into management.” So I ended up taking over vice-president of sales, I think, in like 1986.

    Schley: Of the converter group?

    Breen: Of the converter group, yes, which obviously I knew that inside and out at that point in time. I came in, did that for a couple of years and then, the big thing for me was they said, “All right, go back and be a head of global sales for the company.” Then I did that for quite a few years.

    Schley: I wasn’t joking on the introduction. You're known and revered as a management savant. I mean, you’ve taken companies in really difficult situations and made them whole again. But when you first had that first marketing job and you had reports—I mean that first management job, you had people reporting to you—was it unnerving, were you good at it, natural at it?

    Breen: At that point it just seemed natural. I knew everyone in the company. Maybe the thing that was a little unnatural, I was young to be in that spot so that most everyone that worked for me was older than I was. But on the other hand, we all respected each other so much. I just kind of eased into it, I thought.

    Schley: Jerrold internally was sort of a flat organization, would you say? Was there a lot of hierarchical structure?

    Breen: Very flat.

    Schley: You saw the big boss from time to time?

    Breen: All the time.

    Schley: The governor? [Milton Shapp]

    Breen: It was nice because—I considered it a small company at the time. I'm doing $300-400 million a year in business. So everyone knew everyone. The head of the company knew who you were, you were in a lot of meetings with them. So it was fortunate for me because it really, I think, helped me develop at a young age because I was hanging around a lot of smart business people. Because I went into sales at such a young age, by the time I was 30, I knew everyone in the industry and just watching them do deals and all was, I thought, was just really invaluable for me.

    Schley: You're seeing, it was just literally growing up in front of you. Were you a technologist?

    Breen: No.

    Schley: What was your relationship to the—

    Breen: I was a business background, but I knew if I was going to be successful in the industry, I needed to learn the technology, so I spent a lot of time really studying it hard. You know, the set-top boxes I knew inside and out. I was pretty much an expert. But I didn’t know all the outdoor equipment and how a system was built. So I had to spend a lot of time learning that, talking to the engineers, but it was fun.

    Schley: It’s interesting. I never quite understood the interplay between technology development and what happened on the consumer-facing side of the business. Over time, the amplifiers could spurt out more signals, and the boxes could receive and tune more signals. There was almost a virtuous cycle, right?

    Breen: You know, what was fascinating about it, I think, is one of the great secrets of the industry. I have heard John Malone say this many times. Our network, the cable network, never obsoleted. It always evolved and transformed, and we expanded on it. Where a few were a phone system with twisted-pair cables, it became obsolete. But because of the way we architected the cable systems, when fiber optics came along, all of a sudden we could start putting fiber into the network a little bit deeper and the rest would still stay coaxial cable. Then the set-top boxes came and kept adding more channels. So it was a nice evolution where nothing kind of got obsoleted, you just kept going along expanding for the consumer.

    Schley: You ran global sales then in the mid-90s, I guess?

    Breen: In the late 80s, early 90s.

    Schley: What made Jerrold/General Instrument successful? You had competitors. It wasn’t a “gimme” market.

    Breen: No, it wasn’t, but I would say we were very entrepreneurial. We moved fast. Our R&D machine was second to none. And we had an aggressive sales team that wanted to win. And it was a fascinating start to my career, such a winning culture in the company. Like, we’re going to win this deal, we’re going to win every deal, we’re going to be the biggest and the best. And the company just always had that attitude. It was great.

    Schley: Where did it come from, the attitude?

    Breen: Great background. John Malone was there and ran Jerrold. So there’s one of the key individuals right there. But we always had a leadership that wanted to be first. And we did deals. One of the best deals, and I think, the transformative deal the company did, was buying VideoCipher, which became the company that developed all the digital technology for General Instrument.

    Schley: So set the stage in terms of what you saw happening in the market in the early 90s. DirectTV goes up in 1994, they're raining down lots of digital channels on America. It's a pretty compelling product. How did that influence the direction of the cable industry and your company?

    Breen: We were working on digital technology at our VideoCipher division since the late 80s. And I think it was around ’92 or so, we went to John Malone and to some of the other operators. But John was the key person at the time. I said, “Look. We can develop this digital technology for the cable system. But it's going to take some years.” And probably there were many delays from when it was supposed to happen, but eventually we got to the point where—the key was we had the digital technology, which was the compression technology, but we were also the experts at encryption technology. And you had to secure the signal so it couldn’t be stolen. We married the two together and came out with the digital set-top box. We made our first deliveries in 1997. So the satellite industry did have a few-year jump, which was a real competitive issue at the time.

    Schley: It was, and before we talk about that transformational deal on the digital boxes, can you go back to VideoCipher and tell me what that company did and why you were attracted to it as an acquisition target?

    Breen: So they were part of M/A-Com, and there were a few great things that came along with that deal. One was the VideoCipher division. Also what came along with that was CommScope and what also came along with that was my dear friend, Frank Drendel.

    Schley: Ok, CommScope…

    Breen: CommScope was the largest coaxial cable manufacturer for the industry, and probably had two-thirds of the volume in the whole business.

    Schley: Why did VideoCipher exist at that time? What was the market for it?

    Breen: They were working on HDTV or on high-definition TV technology. But what they did is they secured all the big C-band satellites they used to deliver, and they had a virtual monopoly of that business. It was the VideoCipher technology. So they were very deep in encryption and all those types of technologies, which then morphed into let’s try to create a digital set-top platform for the cable industry.

    Schley: You may remind us there was a period of time during which if you had a big C-band satellite in your backyard, you kind of had free rein to television, right?

    Breen: You did, you did.

    Schley: VideoCipher solved that.

    Breen: That’s correct.

    Schley: They solved that. Let’s talk then about the cable industry’s—I'll call it a catch-up or an equalization play for digital video. Operators like John Malone needed a lot of boxes in order to transform their consumer base to a digital platform. And that meant a lot of money would have to be outlaid. How did they solve the problem?

    Breen: It was interesting for General Instrument and it was fascinating because we were the largest analog supplier to the industry. And we probably had 60% market share of the set-top boxes, and it was a very profitable business. We had to win the digital business or GI would have been a small portion of what it used to be. I mean, the company would have been over.

    Schley: It was clear this is where—

    Breen: It was clear the world was going there and it was clear we had to get there, and every major company and technology thought they were going to get it. Sony thought they were going to win, Microsoft thought they’d win, Cisco thought they were going to win. And here was the two embedded analog companies, Scientific Atlanta and General Instrument saying, we've got to get there first. What we did, General Instrument got there first and got the technology done and demonstrated it to the industry. The dilemma was at the time the box cost us about $400 to make it. And the industry said, we can't afford that. That was the dilemma we found ourselves in at the time.

    Schley: What was the price point for a state-of-the-art analog converter around that era?

    Breen: $100.

    Schley: It was a big leap forward.

    Breen: It was a big leap.

    Schley: What did you do?

    Breen: What we did is really fascinating. I had a lot of conversations with John Malone. I knew we needed it, we needed to roll it out in a big way in the industry, but they couldn’t because of that price point. So our big argument was, look, we need massive volume so we can really run these things like Chiclets down our production lines.

    Schley: Bring your costs…

    Breen: Bring our costs way down, and then over time would also cost-reduce the box with our engineers. But it's going to take us time. But I need big volumes, and that’s how we started talking about, look, if we can get the industry together to make a big purchase, then I could offer the boxes at a lower price point. And so long conversations with Dr. Malone turned into why don’t we do a deal where for every box that an MSO cable operator, bought, we would give them warrants or stock in General Instrument. And our thinking was, first of all that would be motivating for everyone to get going, but we assumed if we had big volumes, the stock price of General Instrument would go up significantly. And Wall Street would help pay for the upgrade. So that was the deal we constructed.

    Schley: And if I understand correctly, the deal that the good doctor [Malone] negotiated prevailed across the entire industry.

    Breen: Yes, it was so great because after months of negotiating a contract with TCI, and many other people were involved in it, we then structured this warrant deal. The way—I won't bore you with all the nuances—you had to sign every cable operator up at the same day so the warrants were done right from an accounting standpoint with the SEC. So we had one week where we did the deal with John, and then we said, we've got to go get every other cable operator to go along. So the argument was, it never happened in the industry, for everyone knew John would have the best deal because he was the largest cable operator by far. And we said we’ll just give everyone the same deal. John agreed with it. That’s what really motivated medium-size cable operators and all, like, wow, I would never get a deal like this and plus I'm going to get ownership in GI and hopefully the stock does well. So we took one week. I remember two nights in a row I slept in Ted Forsman’s office because he wanted to be updated.

    Schley: He was your investor.

    Breen: He was our large shareholder. So Frank Drendel and I hooked up together and pretty much visited every cable operator. We were on the phone day and night, negotiating the deals. Now they were easy because we said we can't change anything. It's the Malone contract. So that made it easy from that perspective. But we got to the end of the week, we signed everyone up on the same day. We kept it totally quiet. Nobody knew what was going on because we didn’t want the stock price to run up on rumors, or it wouldn’t have been as good a deal. So nobody leaked it, nobody had a clue that we had done this deal.

    Schley: Was it a Friday…?

    Breen: It was. I forget if it was Monday we announced it or a Friday, but we announced a 15-million-unit order. It was $4.5 billion, which at the time was humongous. Our company wasn’t near that size and it was literally enough volume for a few years. But the key was, it wasn’t just the 15 million. You knew once you were in a town or a city, it was your technology. They had to continue to buy your technology. So as the person who sold it, we just wanted to get our headend and our technology everywhere, and then we had a franchise for the next twenty years.

    Schley: What happened to the warrants for the new investors you had?

    Breen: The conclusion of it was that the stock went up literally about 800% over just a few-year period, and we ended up selling GI to Motorola for $18 billion. And they all had the warrants and people could cash out at different times. But literally when you do the math, you reverse the math. Wall Street paid for the whole digital upgrade for the industry. It was really something.

    Schley: How did you and Malone come up with the inspiration in the first place?

    Breen: So the conversation was, boy, we’d like to own some stock in the company. And we also, when we did the digital deal, said to John, we should own the Headend in the Sky, the big facility outside of Denver. Because the cable industry’s not going to trust that you are going to control all the programming down to their cable system. If you remember—

    Schley: TCI.

    Breen: Yes. The small operators, which was most of the country, couldn’t afford the digital headends. They were really expensive. So what John did, which was brilliant, he built this Headend in the Sky, it was called, and he could just deliver the signals very cheaply to a cheap headend that we developed. The Headend in the Sky was all GI technology also. We built it so we knew it inside and out. We were like, not only would we do this deal, but you sell us the Headend in the Sky. We will then go sell all the cable operators the boxes.

    Schley: It's an early incarnation of cloud computing sort of, in a way, and it worked.

    Breen: Yes.

    Schley: How did that financial transaction change everything? How did it change the industry?

    Breen: I mean, look, I think fiber optics was transformative, but I don’t know another deal in all the years I was in the industry that was more transformative. It just took overnight the industry to 500 cable channels. And it wasn’t just delivering video. You could now see the evolution was now going to bring broadband high-speed Internet. It was right on the heels, it was the same technology.

    Schley: You were sending bits down the pipe.

    Breen: Correct. It was the technology that really made this industry what it is today.

    Schley: You mentioned an individual called Frank Drendel, who was part of your acquisition of M/A-Com, or VideoCipher.

    Breen: Correct.

    Schley: Why was Frank instrumental or important or influential…?

    Breen: Well, first of all, Frank’s bigger than life and he is one of the founders of the cable industry. He founded his company with $10,000. And Frank coming in to GI was the best thing that ever happened to me because he knew of me, but we had never met each other. But he always heard about me in sales. And I had always heard about him. I looked up to him, but I never had met him. When he joined the company, he kind of took me under his wing and said, “You're going places.” And I'm like, “OK, I’ll listen to that.” To this day we’re still best friends and I consider him my mentor.

    Schley: You know, I hate to put people on the spot, but in addition to Frank, maybe Dr. Malone, are there a small handful of people who were disproportionately influential in your cable industry career?

    Breen: Yes. When I was in my early 20s, a gentleman from Williamsport, PA, John Roskowski, he took me under his wing, and he built cable systems. So I sold him a lot of technology that he would then go build cable systems all over. And he was very instrumental then. But I would say, obviously, Dr. Malone, Frank. I would clearly say Ted Forsman had a big influence on me for a few years, very key years in there, because he owned the company for about ten years, and was influential in ownership in the company. And I would also put the founders of Comcast, Dan Aaron, Julian [Brodsky] and Ralph [Roberts] and certainly Brian [Roberts]. That would be my group.

    Schley: Using the Roberts family maybe as an example, what was the attitude, the culture, how would you express what the cable industry was like to be in and to work in and to have even personal relationships in?

    Breen: That’s what made it so great. I never thought of leaving through all those years. I was in the industry 24 years. And we literally were friends with each other. It was that close-knit. And the cable operators really didn’t compete with each other. They did a little bit, trying to get franchises, but you know, you're in your own territories. And everyone was friendly with each other. So it was just a fun industry to work in. Honestly, I never considered it a job. We were building an industry. And it was fun to be part of building something and you could see—you know, I started in 1978 and there weren’t many believers. And I'm not sure I was a believer. But you could start to see, oh, my gosh. There's something huge here and it's happening in front of us. We were in the middle of it.

    Schley: Do you ever allow yourself to think about how the IBM choice would have changed your …?

    Breen: I've never forgotten…

    Schley: Nothing against IBM.

    Breen: No. I would have never had the career I had and the excitement I had and the friends I have.

    Schley: Can you take us up to the acquisition of General Instrument by Motorola, how that came about and why that came about?

    Breen: This was when Frank Drendel again became very important in my career. He called me up one day and said, “Ed, I was just at a Nextel board meeting, and there was a gentleman by the name of Keith Bane on the board.” And Keith was the number two or three at Motorola. “And he said, “Frank, I've got to confide something in you. We’re seriously looking at buying Scientific Atlanta.” And Frank said, “Why would you do that when the best company is General Instrument. Have you even talked to them?” He said, “No, we haven’t talked to them. We've been talking to the other guys.” Frank said, “You have to meet Ed Breen. Just give him one day and you really need to talk to him. Even if you still want to go do another deal. You'd be making a mistake not talking.” And he said, “We will be ready to meet you at any time.” We got a call the next day. They said, “Can you come up Sunday to Chicago?”

    Schley: Motorola headquarters.

    Breen: Yes. “We want you to come on the weekend so nobody sees you here.” We went into a basement in a car and we snuck up. And Frank went with me, by the way, to the meeting and we presented for about four hours.

    Schley: To the board?

    Breen: The whole senior management of the company.

    Schley: And how did it go?

    Breen: Great. We were negotiating literally starting the next week. We very quickly had a deal done.

    Schley: I didn’t understand at the outset. This was a new category for Motorola, right? A participation they hadn’t had in an industry. I think some of us regarded them as a consumer facing CE electronics brand. How would you describe the interest and what was the appeal?

    Breen: Well, the appeal for them was they were making cable modems. They were one of the original vendors. And they saw the potential of what was happening. So they thought, wow, this is a new big opportunity. And they were good at that type of technology also. So that was their interest level, and then obviously they were studying it. So we were just starting to ship cable modems also. We had already done the digital set-top box. On the heels of that, the DOCSIS standard got set. Half the intellectual property was out of General Instrument on the DOCSIS platform. So we started making cable modems and that started going through the roof.

    Schley: Was there a general belief in that there would be this convergence of the two platforms…of Internet and…?

    Breen: Internet—at the time you could see the evolution. The set-top box came, then the cable modem for Internet and then you knew telephony was coming. That was the quick evolution over a few-year period.

    Schley: And you stayed aboard, correct, with Motorola?

    Breen: I did.

    Schley: Why?

    Breen: Well, so my commitment was, I'll stay at least a year because I loved General Instrument and they were all my friends. And we did so much together and I wanted it to go well. That was really my motivation. I didn’t necessarily want to sell the company, but for $18 billion, you do the right thing for your shareholders.

    Schley: It wasn’t for sale necessarily.

    Breen: Right. No. So that was my commitment. Motorola started having issues during my first year there, and they asked me if I would then be president of the company and help out. And get things righted.

    Schley: You know your company was so intertwined with the cable industry’s fate and fortune and we started to see competition from other telecommunications providers. Telcos, we had the satellite guys in the sky. Did you ever feel like you were at risk with your position, being so wedded to that industry?

    Breen: No we didn’t, but it was an awkward feeling because when the telephone guys said they were going to get into the business, we were there and we were winning huge contracts with them.

    Schley: With the telcos?

    Breen: Oh, yes.

    Schley: For a different version of a converter box.

    Breen: Basically the same. And you felt very conflicted, because all your friends were the cable guys, and here they are coming to compete, but in the world that’s evolving like that, you had to sell to everybody. So it was a little bit nerve-racking because we didn’t know the phone guys well. On the other hand, they didn’t have much of an option. They had to talk to the incumbents because we had all the technology.

    Schley: And the scale.

    Breen: Then we got to know them.

    Schley: Ted Turner once told me, he said, when satellite TV came in, “You know, Stewart,” he said, I can't do his drawl, of course, “we’re a television programmer, we’ll sell to anybody.” You have to adjust to the market.

    Breen: And so did the cable operators where all the programming gets sold.

    Schley: Did you have relationships between your company, a technology company, and the programming community—I am just curious—in the cable industry?

    Breen: We had a close relationship with the programmers because we sold all the DigiCipher technology, that carried all their signals securely. So HBO was a large customer of ours—they all are. Turner.

    Schley: You're enabling them. And then your exit from Motorola came when, and what were the circumstances?

    Breen: So I was there for two years and quite frankly, at that point, thought I would stay for a really long time when I was president. But it was interesting, the Tyco opportunity came along—

    Schley: You're charitable to call it an opportunity.

    Breen: Yes, and I just got really intrigued by it. It was a huge company. They had 250,000 employees. It looked like it was in real big trouble, potentially go bankrupt. And I liked a lot of the businesses they were in. I studied it a lot. So I thought, you know what? This is really, could be something real interesting.

    Schley: What is instructive about that experience? I know that you really changed out the entire senior management or a good portion thereof. You changed a lot of the board pretty quickly. Hard decisions, I'm presuming.

    Breen: Look, there were six or seven agencies investigating us, including the DOJ. And we were threatened that we were going to be indicted as a company my first week there. So I just made—sometimes you just have to sit back and say, “What do I need to really do here?” And I said, “I've got to get rid of the whole board and I've got to get rid of the whole senior management team.” Because every meeting I would go to with the SEC, the DOJ, the New York Attorney General, they were all like, “It’s a dirty company. There’s too many people that were in on the in.” So I made the decision my first month after they hired me, I went to the board and I said, “You all need to step down if we are going to save this company.” That turned into a three-month battle with lawyers involved, and eventually they all stepped down. And now the management team, I got rid of about 290 out of literally 300 during my first eight months there.

    Schley: You are a very personable human being and you seem like a nice guy, but you had to be tough, right…?

    Breen: You had no choice. I mean sometimes you have to do what you have to do it. It was interesting; when we made the announcement with the board, and when we made that announcement, I also announced a couple new board members that were very prestigious, well-known executives. And, all of a sudden, everyone started backing off. Just like, OK, it really is a different company. Ed’s running it, the board’s going to be different. He's brought in people from GE, Honeywell, and this is truly a different company. And it really helped me get over the issues.

    Schley: You know, I've always been intrigued. I can ask you this because you're an expert, you can tell me, having worked in the cable business and then gone to two industries with very different competitive dynamics, Tyco and DowDuPont. Really intensive competition among multiple providers. Did it feel different structurally moving from the cable industry to kind of a free-for-all sort of marketing environment?

    Breen: You know, the difference was when I at General Instrument, I was the head salesperson even though I was the CEO. And I knew all the customers and they knew what they needed. I was very close to them. When you go to a company like Tyco or DowDuPont, there's thousands of customers everywhere. You touch so many industries that you don’t have the intimacy with the customer base. That was the big difference. But I'm always asked, how can you run so many different kinds of companies? You know, a chemical company, a multi-conglomerate, a technology company. Your management style’s the same no matter where you go. You have a management systems-style the way you do things. I really think most people could run multiple kinds of companies.

    Schley: What was terribly tremendously fun about cable? You're in your run. I mean, beyond the financial rewards, being a CEO, and the prestige. What was fun about it?

    Breen: It was a family. It was just a family atmosphere. You never would think your customers are your friends, your best friends, but after we would do a deal or meet, we always went out to dinner together and carried on and had a great time. That’s very special.

    Schley: Is legacy important to you? I mean, we’re about to open up the Ed Breen Technical Archives.

    Breen: When I was asked about the archives, what I really liked about it was the technology people in the industry had a lot to do with what happened. And you know I'm very proud of what all the cable operators did. I mean, they were the ones who put their money on the line and risked their net worths. They were great entrepreneurs. But really there were so many great technology people that really enabled it to happen, and that makes me proud to look back at that. I just feel great that I was part of it. It’s fun building an industry and look where it is today.

    Schley: Did you ever have a moment or two of reflection where you thought, I've kind of done what I need to do as a businessperson, and go hit the golf course? You have not chosen easy successive projects.

    Breen: So I had that feeling right after Tyco. I did ten full years running it. It was great. We made six companies out of it. They all did well, and I thought, OK. Let’s go hit the golf course, as you say, and about a year into it, I'm like, this isn’t that fun.

    Schley: Interesting.

    Breen: Here I am back again.

    Schley: No kidding. What, when you look at the future of the cable industry, and you know people and you're friends with a lot of people in it, do you have any counsel or advice or thoughts about where it should be headed—it's a very changed environment, both for video and for telecom services. But you know, if you were back at the helm of a company of the stature of GI in the day, what would you be looking at investing in, or pursuit?

    Breen: Look, I think the cable industry is in as good a spot now as it's ever been. But the landscape’s changing quickly. The one thing I love about the cable industry is people know how to move and change course. And it's always been what's great about it. I'm so lucky now because I've been on the Comcast board for many, many years now, so I'm very involved still in the industry from a very big player. Just to watch what's going on. Just in the last three years, the cable operators have deployed Wi-Fi hotspots all over the country. Now we’re into the mobile phone business. Who would have ever thought? And you tie mobile together with Wi-Fi hotspots and you’ve got a competitive advantage, done right. And who would have thought that five, seven years ago?

    Schley: Someone once—Paul Kagan, you remember, he called the cable industry a “great parlay industry” because of what you just described. Does that analogy make sense to you? You can sort of fit one business on top of the other.

    Breen: You can.

    Schley: Play the game that way?

    Breen: I think we’re still at the cusp of great things.

    Schley: What haven’t we addressed that you’d care to impart or talk about as it relates to your time and influence in cable?

    Breen: I don’t know. Can you think of anything? You covered it pretty good in that…

    Schley: Here’s my thought; that you had this perch, this seat, at the helm of the biggest technology supplier, that you could see everything happening. And I think it's an unusual vantage point to, like you said, watch an industry grow up in front of you.

    Breen: It was fascinating. But you know, it was so different. I hate to say this because I'm probably considered a professional manager now, but there was no professional management. It was entrepreneurs that wanted to build. And that’s what made it so fascinating. And every year you knew that they were literally putting their neck on the line. They were living shoestring to shoestring, raising money, and I learned so much from that because you can't go in any industry; I couldn’t have taken a job at IBM and ever learned or saw anything like that. It was an incredible thing to know.

    Schley: I had the chance to have an interview with Julian Brodsky a month or so ago here. He said, “You know, we never met a cable system we didn’t want.” That’s what he said. And I can't remember who was the more risk-averse guy—was it Dan Aaron, I'm not sure.

    Breen: I would say probably Dan; certainly not Ralph. Ralph would have liked every cable system he could have gotten. But probably not everyone figured that out either. John Malone figured it out: get everything you can get your hands on. There was only five or six at the time that figured it out and started to try to consolidate the industry.

    Schley: And that was the game.

    Breen: That was the game. And it was the right thing to do. And very fascinating that, led by TCI, after everyone kind of gobbled up everything, what was fascinating is they said, you know, this isn’t put together quite right, because we've got systems in California here. And then the industry started to do a rationalization, start swapping systems, which I thought was brilliant.

    Schley: That patchwork quality was always—well, Malone has said, “It was the one albatross we couldn’t get around for a long time.” Because he's a scale guy, he wants scaling. He couldn’t get it with the quilt.

    This has been great. Thank you for—congratulations—

    Breen: You're easy. You're a good interviewer.

    Schley: Congratulations on the archives. One of the top ten interviews from the oral history series. I'm privileged to have conducted it. For the Cable Center, I'm Stewart Schley.





  • James F. Ackerman

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    James F. Ackerman

    James F. Ackerman

    Interview Date: Wednesday December 4, 2002
    Interview Location: Indianapolis, IN USA
    Interviewer: Jim Keller
    Collection: Hauser Collection

    * Jim Ackerman, age 88, of Carmel, Indiana passed away Saturday, March 2, 2013 with his loving wife of 65 years, Lois, and their children at his side.

    KELLER: This is the oral history of James F. "Jim" Ackerman, currently president of Cardinal Ventures in Indianapolis, Indiana, but for our purposes he was executive vice-president of Indianapolis Morris Plan and Economy Financing in the early days of cable television and in fact would be one of the prime movers in the early days of financing cable operators. The date is December 4, 2000. Your interviewer is Jim Keller. Jim, give us a little bit about your background before you finally made the first cable loan.

    ACKERMAN: Well, I started out going to Purdue University in 1941, got called into the Army and was in the artillery. I got out of the Army in 1946, started to work at Indianapolis Morris Plan in 1946 as a collector in consumer loan operation and I was there, except for getting called back for the Korean War during 1950-1952, and in 1958 we made our first loan to the cable television industry.

    KELLER: Would I be correct in calling the Morris Plan and Economy Financing a relatively small consumer banking organization?

    ACKERMAN: It was small compared to big banks but it was certainly the largest Morris Plan in the country. Economy Finance started out as a small loan company and eventually became bigger whereby we had some 40 offices and they in turn bought Morris Plan – they were all owned by one family – and Morris Plan became a subsidiary of Economy Finance. Economy Finance was a finance company that financed consumer loans, small loans, industrial loans, made loans that went through to cable television systems around the country, also had...

    KELLER: Don't go beyond this. You were one of the first to finance cable television operations, is that correct?

    ACKERMAN: I think that's probably correct. At that time, cable systems were financed usually by the manufacturers or maybe their loans by the manufacturer were discounted at banks but no one made the loans individually to cable operators until we started to in 1958.

    KELLER: What was interesting is that you started without taking on equity or warrants whereas the Jerrold Corporation, which at that time was the largest manufacturer and provider of equipment, was taking an interest in the systems that they financed.

    ACKERMAN: That is correct.

    KELLER: Did you have a difficult time convincing your people, your board, your bosses at that time, that cable television was a good deal, and how did you convince them?

    ACKERMAN: I don't think I had to convince them. As I said, it was a family owned operation and Bill Daniels, who we all thought of as father of the industry, came in and sold us on getting into the cable television industry as a lender. This is 1958 and we made our first loan, then, to Bruce Merrill out in Arizona. As I recall, the loan was either $300,000 or $350,000, which was a lot of money in those days for cable systems because cable systems were then valued at somewhere between $200 - $300 a subscriber. We figured out a way to make the loans at that time when no banks were making loans directly to the industry unless they were completely collateralized with something else besides cable.

    KELLER: Well, oftentimes a small-town operator knew the local banker and he was able to get at least an initial loan from the local banker. Did you ever take one of those banks out?

    ACKERMAN: I don't recall the banks doing that, really. There weren't that many.

    KELLER: Jack Crosby had one; Dean DeBull had one in Barstow. A couple of other people had one.

    ACKERMAN: There were very few, though.

    KELLER: Yeah, very few and they had substantial assets backing them up also. They had been collateralized.

    ACKERMAN: That's right. When we got into the business, we figured out that by taking, not equity, but taking an assignment of the city franchise, assignment of the pole attachment agreements, and assignment of the stock of the company we could then control... if the company went sour we would be able to take over the company without any problems because all we'd have to do is go back to the city council or whoever awarded the franchise and get their permission.

    KELLER: Did this ever happen?

    ACKERMAN: In our experience, no.

    KELLER: Did you ever have a bad loan?

    ACKERMAN: Not really. We had some weak ones, but we never had any bad loans. Not in cable television.

    KELLER: That's been the history, though, of the business?

    ACKERMAN: That's been the history of the business for all these years, up until recently.

    KELLER: Up until very recently. When you made your first loan to Bruce Merrill, did you make it to Ameco as the cable operator?

    ACKERMAN: No, just strictly to Bruce Merrill's cable company. Ameco was the manufacturing company, but we did not make any loans to the manufacturing company.

    KELLER: Do you recall what the terms were then?

    ACKERMAN: As I recall, we lent the money on what we called a 6% discount rate over a period of 5-7 years. The 6% discount rate was equal to somewhere between 13 and 14 percent simple. Later on, probably after we'd been in the business a couple of years, we then started loaning money at 6% simple or maybe prime rate plus 3. So our rates were, depending on the prime rate, somewhere between 10 and 14 percent.

    KELLER: In the early days?

    ACKERMAN: In those days.

    KELLER: You financed many companies, including – we'll go into detail on some of them – TCI, Bob Magness and John Malone; TCA, Bob Rodgers down in Texas; Jim Palmer of CCOR operations. How big of loans did you make to these companies? Let's take them one at a time. How about TCI?

    ACKERMAN: Well, at that time we didn't make any direct loans to TCI. We were making direct loans to Bob Magness before TCI was really started. As I recall, those loans were somewhere in the neighborhood of $200,000 to $400,000. We loaned money to someone like Carl Williams. In those days, in the early '70s, mid-70s, probably no one of us made more than $400,000 or $500,000. Later on the industry got bigger and when pay TV came in the amount of what a subscriber was worth went from $300 to $1,200 to $1,500 and so forth, so that of course caused the loans to become much higher.

    KELLER: And your loans were generally, in the early days, for seven years?

    ACKERMAN: Usually five to seven years. One of the biggest loans we made was as a co-partner with the bank here in Indianapolis to Telesis. As I recall at that time we had $500,000 in that loan. That was one of the biggest loans we had.

    KELLER: Dick Shively, who was a television operator.

    ACKERMAN: Dick Shively was the chief operating officer of Telesis and the fellow that built the Kentucky superhighway was the biggest owner of Telesis at that time. He was out of Evansville, Indiana.

    KELLER: How long did you stay in the Telesis loan?

    ACKERMAN: We partnered in the Telesis loan for two or three years until such time as they wanted more and more money and we thought it was relatively weak. The Teamsters union came in and took over the loans of both the bank and ourself.

    KELLER: So they took you out?

    ACKERMAN: They took us out and eventually Equitable Life Insurance Company took over that loan.

    KELLER: So then the Teamsters got out entirely?

    ACKERMAN: Right.

    KELLER: I didn't realize it had gone through that many... You had an early deal also with... well, let's go on to TCI with Bob Magness. You loaned money to the systems in Wyoming and Montana, is that correct?

    ACKERMAN: Yes, it was individual loans. In other words, this was before TCI became a reality and before John Malone joined the company. Later on, after I left Morris Plan and Economy Finance, I started a company and merged with E.G. Becker Investment Banking House in Chicago and we formed Becker Communications and we also had a corporate finance area in Becker whereby we arranged a 70 million dollar loan for TCI, which was one of the first insurance company loans to the industry.

    KELLER: And you brokered that deal, is that correct?

    ACKERMAN: Yes, we got a commission for handling it.

    KELLER: What year was that?

    ACKERMAN: As I recall that was probably around 1976. It was probably the year after John Malone joined the company.

    KELLER: So it is post-Malone then.

    ACKERMAN: Yeah.

    KELLER: You never loaned any money to TCI prior to Malone coming there?

    ACKERMAN: No, we never loaned any money to TCI at all. We loaned it to Magness before it became TCI and we arranged long term financing to TCI. '71 was one of the first of many loans that we arranged for them.

    KELLER: And that was, again, after John Malone came in.

    ACKERMAN: That was after John Malone joined them.

    KELLER: And that gave you a little more confidence in the company and of course the other lenders also.

    ACKERMAN: Well, I don't feel we had confidence necessarily in the company. We had confidence in the industry and that's what we looked at always.

    KELLER: And you did that really from the first day.

    ACKERMAN: That's right.

    KELLER: You had confidence in an industry that was just getting started when no one else did.

    ACKERMAN: We were lucky! We were in the right place at the right time.

    KELLER: You were probably one of the best early developers of cable television. You weren't an early operator, but you sure financed a lot of early operators. You subsequently came in as an operator, didn't you?

    ACKERMAN: Individually I started our first franchise here in Indiana in 1973 and built that company up to where we had 21 franchises here in Indiana and had seven offices. So there would be no conflict of interest we had an arrangement with Becker that I could operate in Indiana and no place else, so it was a separate business that I had on the side.

    KELLER: So you stayed as a direct officer or direct lender in... as Becker at that time, is that correct?

    ACKERMAN: That was Becker after 1971.

    KELLER: What happened to Economy?

    ACKERMAN: Economy later on became First Smart Financial and was sold to a company in Buffalo, New York, and this was after I left the company, six months after I left the company.

    KELLER: And the Morris Plan the same way?

    ACKERMAN: Same way.

    KELLER: They went together?

    ACKERMAN: That's right.

    KELLER: You also had deals with TCA.

    ACKERMAN: We started out with Bob Rodgers and at that time I was with Becker and we arranged financing through Fidelity Bank in Philadelphia. Becker actually had a small loan to TCA, and then later on we took TCA public as a public company and I served on the board of directors on that company from once we took them public up until three years ago when they sold out to Cox.

    KELLER: So you stayed on the board then all that time?

    ACKERMAN: I stayed on the board all that time.

    KELLER: It was a good experience, I would assume.

    ACKERMAN: A wonderful experience.

    KELLER: Those are great guys down there. How about Jim Palmer and CCOR?

    ACKERMAN: Jim Palmer and I became friends over the years and eventually he wanted to go public so we took that company public, CCOR public, and later on we did a secondary issue of stock form and this was when I was first with Becker and later on with Merrill Lynch because Becker sold out to Merrill Lynch.

    KELLER: Oh, Becker sold to Merrill Lynch and you stayed with Merrill Lynch then?

    ACKERMAN: I was with Merrill Lynch for a couple of years.

    KELLER: Did they do any cable deals?

    ACKERMAN: Only to arrange corporate finance, and then took companies public and arranged loans and so forth.

    KELLER: Did you take any other cable companies public at that time?

    ACKERMAN: All told we took five companies public.

    KELLER: Can you remember who they were?

    ACKERMAN: They were Shopper's Charge Service for one, out of Tampa, Florida...

    KELLER: Did that become Home Shopping Network?

    ACKERMAN: Yeah, that was Home Shopping Network. And then we took TCA public; we took Palmer public; off-hand I can't think of the other two. There were five of them that we took public.

    KELLER: You didn't turn down too many deals over the years; in fact you made a whole lot more deals than ever before. Are you making any cable deals today?

    ACKERMAN: The venture cable company we have is invested in a small cable system in Germany; we're invested in a distributing company out of New York City. Those are the two deals we have in venture capital at this point.

    KELLER: You said at one time you had loaned money to Gene Schneider and United. Have you done anything with him since he's been in Europe?

    ACKERMAN: No, we have not. Going back with Gene Schneider, when he was connected with cable systems in Illinois we financed them. We also financed at the same time Jack Crosby and Ben Conroy and Fred Leiberman.

    KELLER: They all came together at one time.

    ACKERMAN: I could say that probably up through the mid-80s we had either financed or loaned money to or arranged money for or took public one out of every three cable systems in the country.

    KELLER: One out of every three?

    ACKERMAN: One out of every three.

    KELLER: 33%, that's amazing. And you may have had investments in some of the others then, too?

    ACKERMAN: Probably, I can't recall offhand.

    KELLER: When did you start taking warrants in cable systems?

    ACKERMAN: Morris Plan and Economy never did. They were strictly lenders. When we started Becker Communications at that point we started taking warrants whereby we had anywhere from 10 to 20 per cent interest in the company if we exercised the warrants.

    KELLER: Over about a seven year period?

    ACKERMAN: Over a seven year period we had what we called a "put in call" where we could put the warrants back to them at a specified price or they could call on us after seven years at a specified price.

    KELLER: So you always did set a price upfront?

    ACKERMAN: Yeah, the prices were upfront. They knew what it was. It was in relation to cash-flow, is the way it was priced.

    KELLER: Now, when you say in relationship to cash-flow there were times when systems were selling for anywhere from five up to 20 times cash-flow. Do you recall the time period that those...?

    ACKERMAN: Usually as I recall a private company would sell from anywhere from seven to ten times cash-flow, a public company would sell around five times cash flow. The private companies sold for more than the public companies would.

    KELLER: That's because there was more interest in buying them, right?

    ACKERMAN: There was more interest in buying them, you're right. I can't say that always happened that way because there were other times that extenuating circumstances came about that led to a change in those formulas.

    KELLER: In the early '90s, I know, they were going sometimes as high as 20 times cash-flow.

    ACKERMAN: Very possible. When I sold our company, Cardinal Communications, in '93 we sold out at around $2,300 a subscriber which at that point in time was the highest price paid for a cable system. We had 87,000 subscribers here in Indiana, and I can also remember though back previously many years before that, way before we joined Becker, we had a cable system in Florida and that was sold for about $400 a subscriber, so how much it increased. Then, of course, in recent years some of the big deals that we've read in the papers, cable systems have sold for $4,000 or $5,000 a subscriber. Just recently, as I recall, a merger with AT&T and Comcast you can actually figure out that based upon what's happened they sold out for about $2,400 a subscriber.

    KELLER: But again, in those early days when you were selling for $500 a subscriber, still you were getting a cash-flow of maybe $30 a year. $5 a month is what it was and you say 50% cash-flow, so you were getting about $30 a year per subscriber, so 10 times that would have been $300. The multiples, I don't think of cash-flow today, which if they're getting an average of $60 a subscriber per month, not per year, and the cash-flow is anywhere from 35% to 40% now.

    ACKERMAN: In some companies maybe, but that's pretty high, though.

    KELLER: I think it is pretty high, but depending on what their programming costs are and that's the big thing.

    ACKERMAN: That's the biggest problem today is the programming costs.

    KELLER: Exactly right. Did you sustain a relationship with Bill Daniels over the years?

    ACKERMAN: Oh, I always was friendly with Bill Daniels. In fact, there's a funny story that Bill called me and he wanted to come to the 500 mile race.

    KELLER: Is that when he had a car in?

    ACKERMAN: This was before he had a car in, and he came to the race and it was impossible to get hotel reservations in those days here, and so he stayed at our house and he brought with him a fellow by the name of... oh boy, I can't think of him off-hand, but he was the astronaut that landed on the moon.

    KELLER: P. Conrad.

    ACKERMAN: Yes, P. Conrad. So P. Conrad and his wife, Bill Daniels and his girlfriend stayed at our house for the race. The following year Bill wanted to get a car in the race and we loaned him money to help put the car in the race. That was not a cable loan; that was a personal loan. So, we've had relations with Bill all the way up until he passed away.

    KELLER: Did you ever lend any money to any of his ventures?

    ACKERMAN: Off-hand, no, I can't say that we did other than the race.

    KELLER: But none of his joint ventures or limited partnerships. Other than Bill, what other long-term sustaining financial relationships have you had within the industry?

    ACKERMAN: We've had long-term relationships with Bob Hughes...

    KELLER: Premier?

    ACKERMAN: We've worked with him when they bought Buffalo. We've had long-term relationships with a number of the different, at that time, private entrepreneurs who eventually went public. We did business with Malone until 1978 at Indianapolis Cablevision.

    KELLER: Tell me about that Indianapolis Cablevision deal. That was a rather complicated and long-term situation, wasn't it?

    ACKERMAN: Well, Telesis originally had the franchises for the outside city of Indianapolis.

    KELLER: Did the city council divide the city up in areas?

    ACKERMAN: Well, it wasn't city council then. That was the days before you had Ginagov here in Indianapolis.

    KELLER: City and county?

    ACKERMAN: A city and a county. We were able to form a company, limited partnership, with five general partners and 20-30 limited partners and we bought the franchise for something like $25,000 because before that big cities had come up bringing distant signals so franchises weren't worth much. Then when the franchises started being able to bring in distant signals either through microwave or satellites then we could start to build the big cities and Indianapolis Cablevision was able to build the outside city.

    KELLER: Generally the county, then? Outside the city limits.

    ACKERMAN: Yeah, and Warner got the franchise for the inside city. In other words, we had the donut and they had the hole.

    KELLER: Was that Ross who was head of Warner at that time?

    ACKERMAN: I can't remember.

    KELLER: Before the merger with Time, Inc.?

    ACKERMAN: It was... what's his name? Who had Columbus, Ohio?

    KELLER: Did they promise the two-way system?

    ACKERMAN: They were talking about that. They never put it in, but they talked about it.

    KELLER: I remember what a pain that was. It never worked, anyhow.

    ACKERMAN: Anyway, we built that franchise, started in 1978.

    KELLER: You had satellite signals at that time.

    ACKERMAN: Not quite. Later on, about a year later we did.

    KELLER: Okay, because HBO was up.

    ACKERMAN: We knew it was coming. Channel 19 or 17 out of Atlanta, Georgia was one of the distant signals – Ted Turner.

    KELLER: Chicago?

    ACKERMAN: We brought in, what was that, Channel 9 out of Chicago? Then there were the three local television stations plus Bloomington, Indiana made four. We started out maybe 12 signals here and eventually built it up more. We sold the company in 1983-84 to Comcast. Comcast owns it today. The inside city is still owned by Time Warner, plus Time Warner also had some small franchises in some of the small towns around Indianapolis.

    KELLER: I'm surprised with the existing relationship between Time Warner and Comcast that there wouldn't have been some kind of a deal made to consolidate those.

    ACKERMAN: Well, they tried to do that and it didn't work out. A year and a half ago they said they were going to do it and then something blew up and it didn't happen so they're still separate. Right here in Indianapolis in my office we're on Comcast, my home's in Carmel and we're on Time Warner.

    KELLER: Who was the most interesting character that you've dealt with over the years?

    ACKERMAN: Probably the most interesting character is probably Peter Gilbert. Peter Gilbert came to us, I can't remember the exact year, but came to Becker Communications and we loaned money to his company called Petra at that time, which is out on Long Island. What was so interesting about him was that he always had a backup. If something went wrong, he always had a backup plan that he could handle it. He built that company up on Long Island to quite sizable and then sold out and bought the franchise for Buffalo. Actually he bought out two companies in Buffalo. One was on the outskirts of Buffalo and one was Buffalo city itself. He bought those two that had been built and were not operating successfully and put them together. It was one company and later on that was sold to Bob Hughes's company and then later on that was sold to Adelphia. As I said, for anything he always had a backup way to do something. He was one of the first ones to take HBO by microwave a long, long distance. He took it from New York City out to Buffalo, going out at night with flashlights and going on top of the hills to see where the microwave station should be from all the way from New York. No one else had quite done things that way. Unfortunately, Peter passed away a number of years after that from cancer.

    KELLER: Didn't they sell the systems then to Cablevision?

    ACKERMAN: Well, Buffalo was sold to Hughes first.

    KELLER: Yes, I know. I'm talking about the Long Island systems.

    ACKERMAN: I can't remember. I know we had a 10 or 15 per cent interest in both those Long Island systems and the Buffalo system.

    KELLER: Did you ever have any real or major concerns about the validity of some of the loans that you've made over the years? Any scares? Let's put it that way.

    ACKERMAN: Well, we had a couple that were borderline that we asked the owners to sell out. One we got pretty close to the courthouse steps but never went to the courthouse. In fact, talked the individual into selling out and we continued the financing of the operation and came out okay.

    KELLER: Was it because they were not legitimate operators, they weren't good operators?

    ACKERMAN: Probably a case of a few friends who were going to work whereby they start out with a small company and start building it, maybe build it too fast and got beyond their abilities to handle it. It was not a question of the industry or a question of the franchise, more a question of just management.

    KELLER: How many of those deals did you have?

    ACKERMAN: Not more than a couple. Very few.

    KELLER: At one time you had, I think, probably a questionable situation with TCI, didn't you?


    KELLER: Prior to Malone? You said you did have some money or did not have some money in it?

    ACKERMAN: Well, we had a case with Carl Williams where Carl had systems in Colorado that the distant signals started coming in whereby he couldn't compete. He was questioning whether he'd be able to continue to make his payments and when we talked to him he said, "Well, if I had microwave where I could bring in the distant signals I could solve the problem." So we said, "How much money do you need?" He told us and so we gave him extra money and he made that into a real good system.

    KELLER: That was about '64-'65?

    ACKERMAN: Right in that neighborhood.

    KELLER: I remember that. We're talking about Salida. Competition was with a translator that they had there, and not over the air signals or anything else like that. It was a translator that was causing the problem.

    ACKERMAN: One of the interesting things in the cable television industry is that there were very few cases where there was duplication franchises in one area. I remember a cable system in Huntsville, Alabama where a second franchise was awarded, so both systems had problems making it. We were lending to one of them and we finally talked the two parties into merging and that solved the problem.

    KELLER: But they weren't overbuilt. They served a different section of the city, didn't they?

    ACKERMAN: That's right. They were in different parts of the city.

    KELLER: Did you ever have a situation in which you were dealing with a system that was overbuilt?

    ACKERMAN: There was an overbuild situation in Pennsylvania. I think it was in Scranton. I can't remember exactly, but there was an overbuild there and neither one of them were making it and they finally put it together and merged.

    KELLER: That's usually the history with that.

    ACKERMAN: That was one of the beauties of the business. You could lend money, let's say to a real estate operation where they put up a hotel and somebody else put up a hotel across the street, or you'd lend money to a department store and somebody else put up a department store across the street, but in cable television it didn't work that way and that was one of the beauties of the business.

    KELLER: What do you think about the competition from satellite delivered signals today?

    ACKERMAN: I think there's a good worry there. A major cable operator today has to find other ways to bring in more income rather than just through the selling of cable signals. That's why you're seeing companies like Comcast and so forth trying to do more in the telephony and internet and so forth.

    KELLER: AOL Time Warner, the same way. The bigger companies.

    ACKERMAN: As I say, when you've got competition it's entirely different. When you've got Direct TV over the air, now they're able to bring in the city signals where before they couldn't, it makes a different competitor than we had before.

    KELLER: Would you have any compunction against financing a satellite operator?

    ACKERMAN: That actually came after we got out of the business.

    KELLER: I know, but if you had the opportunity do you think you would?

    ACKERMAN: I would think it would depend upon the operator who had the franchise for the city as to how good they were to be able to compete against the...

    KELLER: They don't require franchises.

    ACKERMAN: Satellite doesn't require them, but if you have the city franchise and you say, "Okay, do you want to finance that?" how good of operators are they? Would they be able to compete long-term wise with the satellite system?

    KELLER: Jim, at one time you were a cable operator also in Indiana. How did you get involved in that?

    ACKERMAN: We started out beginning with the period from the time I left Morris Plan Economy, we were actually able to form Becker Communications. At that time I was able to get a franchise along with Harold Ewen and Gail Oldfather in the city of Conesto, Indiana. So we started out with that cable system.

    KELLER: How large a community is that?

    ACKERMAN: Well, Collinsville is a town around 25,000 people. We got that franchise and then we were able to get a franchise for Seymour, Indiana.

    KELLER: You built those?

    ACKERMAN: We built those and later on we built New Albany, Indiana and built Monticello. We ended up with 21 franchises with seven offices. Columbus, Indiana... Many of us operators who were near those towns allowed us to expand the operation.

    KELLER: Who acquired the franchise? Who played the political game?

    ACKERMAN: Myron Patterson, who was our chief operating officer and I was chief executive officer, between the two of us we bought the other franchises and Myron operated the systems and he always used to say that I didn't know how to screw in a light bulb, but he couldn't read a financial statement. So, the two of us made a pretty good team. Myron did a wonderful job. When we sold out in 1993...

    KELLER: What year did you get in?

    ACKERMAN: We started in '71 or '72. '71, I guess, is when we got the first franchise.

    KELLER: But you started out in classic markets.

    ACKERMAN: Right, they were all classic markets until we got to New Albany, New Albany being a bigger city. In fact, we bought Corydon, which is a suburb of New Albany which at that time was owned by our present governor of Indiana. So we bought that cable system from him. Interestingly enough, that cable system didn't have poles. They put the lines up through trees.

    KELLER: Oh, they didn't build their own system?

    ACKERMAN: They actually ran the lines from one tree to another tree, so we had to rebuild the system after we bought it, but that was quite a successful operation that we had. When we sold out we had 87,000 subscribers. So, that was one facet of my operation in cable. Another facet was that when we started Becker Communications, actually, before that, when I was with Morris Plan Economy, Gail Oldfather... the first was Harold Ewen ran the cable television department and then that later was succeeded by Gail Oldfather.

    KELLER: I knew Gail when he was here.

    ACKERMAN: Both of them did a wonderful job. Gail later went to work for Carl Williams and Harold went to work for a banking company in New York City doing the same thing Becker Communication was and it was primarily owned by Malarkey and Taylor, and didn't work out so Harold came to work for us at Becker Communication in Chicago. He moved to Chicago. Later on, Harold went to work for Rick Michaels.

    KELLER: I want to go into that. You then joined CEA...

    ACKERMAN: After Becker sold out to Drexel Burnham and Merrill Lynch, Harold got Rick to bring me on board...

    KELLER: Rick Michaels, by the way, of Community Equity Associates.

    ACKERMAN: Right, and I was vice chairman of the board of that company for a couple of years. At the same time...

    KELLER: Did you ever see Rick?

    ACKERMAN: Oh, I saw Rick quite often.

    KELLER: I thought he was usually in his airplane going over to somewhere else.

    ACKERMAN: Vice chairman of the board means once a month down in Tampa. At the same time, I was with Merrill Lynch in the corporate finance department around cable television. I was more or less the cable guru. Anything that came through Merrill Lynch I was involved in, such as arranging loans with insurance companies and taking the companies I mentioned public, with a fellow by the name of David Wicks. David Wicks now is with Cablevision in the arc city. All these men are brilliant guys – Gail and Harold and David. So I had a wonderful experience working with them.

    KELLER: You always hired people smarter than you so you didn't have to do the work.

    ACKERMAN: Now I didn't say I didn't do the work; I just had people smarter working for me whereby they could do the grunt work and I could just sort of oversee. They did the detail work... well, I did all the detail work, too, initially, but they did the heavy work. Because at the same time I was involved in other things besides just cable television – minor compared to cable television. But these people – Myron Patterson and Harold and Gail and David all were wonderful people to work with and we got a lot done that way.

    KELLER: Gail was here at the time; he lived in Indianapolis.

    ACKERMAN: Gail was here. He started, as did Harold, at Morris Plan and they worked their way up whereby they were vice-presidents and ran their different divisions. Harold ran cable television one year and went over and ran commercial financing and accounts receivable financing division.

    KELLER: Gail is an accountant, isn't he?

    ACKERMAN: Yes and no. Gail worked his way up from Oregon, took over from Harold and then took over the cable television operation itself under me so that there was continuity there. Harold, Gail and I usually went to all the cable television conventions. I think I missed two cable conventions from the time we started in '58 until '93. Otherwise I was at every national cable television convention. I served on the board of the National Cable Television Association for three or four years and so did Harold after me.

    KELLER: You served on the board from when?

    ACKERMAN: I can't remember what years it was, but I remember Malone was on the board and so was Hostetter. Hostetter is another one we financed.

    KELLER: In Ohio?

    ACKERMAN: In Michigan.

    KELLER: Michigan? Monroe and that area up there?

    ACKERMAN: Jackson, Michigan and some other town. This was when he was still in partnership with his teacher at Harvard Business School. I can't remember his name. So that was another one we financed. We also arranged long-term financing for him when we were with Becker. A very shrewd businessman.

    KELLER: If you were asked, and I'm going to ask you, what the total sum of the loans that you made over the years to cable television, would you have any general idea of how much it would be?

    ACKERMAN: I have no idea.

    KELLER: One hundred million, two hundred million, five hundred million...?

    ACKERMAN: I have no idea. I've never added it up because it started out with $300,000-$350,000 loan and then we arranged financing for large sums, corporate financing. I don't how you'd put them all together.

    KELLER: Well, they're two separate things. One was direct loans and the others you brokered. How much would you say in your direct loans that you made as Economy and Morris Plan?

    ACKERMAN: I'd have to guess 40 or 50 million maybe, because in those days they were small loans. We had small individual companies until we went to Becker and started doing corporate finance.

    KELLER: You shouldn't downplay that because that was the lifeblood of the industry and I think you pumped an awful lot of blood into the industry.

    ACKERMAN: They were private entrepreneurs. I mean it wasn't the big corporations like they are today. For example, Bob Rodgers was financed early before he became a public company. We arranged a loan for him, as I recall, with Fidelity Bank in Philadelphia. We actually did a direct loan with him to buy out a company down in Louisiana. Both in that company and then when we took them public I served on the board. They in turn sold out to Cox about three years ago. So, those were big money at that time, became big money.

    KELLER: Have you ever done any business with offshore banks or with the Canadian banks?

    ACKERMAN: No. We tried to do some business in Canada.

    KELLER: With Toronto Dominion?

    ACKERMAN: No, with Ted Rogers. I can't recall if we actually... I think we probably made a loan when I was with Merrill Lynch with him, but I'm not sure. I can't remember, but outside of that we did nothing offshore or anything like that. When we had Cardinal Communications, our own company, we had loans with the bank in Baltimore because of my relationship with a fellow that used to be with Citibank in New York where we had a loan, Morris Plan had a loan, but then when he went into the cable television business he had moved to the bank in Baltimore and they in turn had a bank in Ireland, and so Cardinal was borrowing money from the bank in Baltimore and Ireland and here in Indianapolis.

    KELLER: How did you keep track of this?

    ACKERMAN: We dealt with the banks on a partnership basis. In other words, you had one bank that you did all the business with and they in turn refer everything to the other two banks, for example.

    KELLER: They never got you interested in any of those offshore properties?


    KELLER: You said today you had an investment in something, do you not?

    ACKERMAN: Yes, in Cardinal Ventures we have an investment in Europe and an investment in New York City.

    KELLER: In cable?

    ACKERMAN: In cable.

    KELLER: Who is your investor that you're invested with in New York City?

    ACKERMAN: A fellow by the name of Acker is the president of the company. It's a distributing company.

    KELLER: Oh, a distributing company.

    ACKERMAN: Of cable products. The second largest in the country.

    KELLER: Not George Acker, is it?

    ACKERMAN: No, no, he's out in California. I know George real well because anytime we had a movie I always sat next to him because of names.

    KELLER: You never loaned to any other distributing companies or manufacturing companies?

    ACKERMAN: Well, as I say, we took CCOR public, which was Jim Palmer's company, but as far as lending Jim money we didn't actually lend money to him. I think Jim referred business to us once in a while when they had a client come in to buy their product and wanted financing. Jim would refer them to us to handle it.

    KELLER: How many of those deals did you make?

    ACKERMAN: I have no idea.

    KELLER: That was straight equipment financing, though, wasn't it?

    ACKERMAN: A customer would come to Jim wanting him to build a system using CCOR products and didn't have the money arranged yet, so we would get into it at that point and make the loan.

    KELLER: Well, you've had your fingers and your hands and your toes and your whole body in all aspects of the business since 1958.

    ACKERMAN: That's right.

    KELLER: And are continuing to do it.

    ACKERMAN: As I say, it's a fun business. I'm not sure it's that much fun today. What's happened in the banking field, or rather in the stock market field whereby they said, well, here are these companies that have always run on a cash flow basis, maybe they should run under a net income basis which makes a different thing out of it entirely. That's why cable stocks are taking a beating, just because of that.

    KELLER: John Malone has always said, "I would rather pay interest than taxes." I don't know how many times he's said that.

    ACKERMAN: That's right, and the thing is that on capital expenditures for example, companies handle them different ways and the animus, if you work for the big brokerage houses, are trying to get a uniform way and it's sort of difficult.

    KELLER: Yes, it is. Some will capitalize their drop material, some won't; some will claim a portion of it, some won't. They handle multiple buildings differently in the capital investment.

    ACKERMAN: That's right. I know here at Cardinal Communications we only use capital expenditures on new product, new ideas. The expense of hooking up a customer, that was an operating expense as far as we were concerned.

    KELLER: Yeah, generally that was considered unless you needed it to put some more capital expense when you bought a company.

    ACKERMAN: I don't think that was quite the way to do it.

    KELLER: How about franchising? How did you amortize franchises?

    ACKERMAN: In those days a franchise didn't cost you that much, not unless you were buying a company because then you'd have the goodwill factor.

    KELLER: It wasn't a goodwill or did you put as much as you could on the franchises or the customer service gifts or whatever. We all did it. If we paid x number of dollars for it and we could only justify x minus something, nothing would go below because you couldn't get any better without a goodwill.

    ACKERMAN: They changed that practice now. Some of these companies are writing off goodwill now completely and hitting the bottom line in the stock market, but the analysts are saying, "Okay, it's a onetime shot and it shouldn't affect it in the future."

    KELLER: What else do we want to talk about? Some other people in the business that you'd like to...?

    ACKERMAN: Well, as I say, we did business with so many different people in the industry. There were few we didn't do business with – people who had their own muscle with family financing or very profitable at doing what they did, a good example is Comcast. We called on Ralph Roberts and Julian Brodsky and Dan Aaron many, many times but never could get their business and they did a good job of financing their own operation. That was one of the few big companies we didn't do business with.

    KELLER: Julian is a genius when it comes to financing.

    ACKERMAN: Julian and I were really good friends. It wasn't a case of not knowing each other or anything like that. We appeared on panels together, for example, but they knew exactly what they wanted and they were able to get what they wanted in the way of financing. Once a company got big and got their own internal financing area, then it was hard for us to crack that because it was basically operators in the individual systems that we did arrange quite a bit of long-term financing, but it's still the banks...

    KELLER: You gave the basis of the financing.

    ACKERMAN: But what happened was the big brokerage firms such as Solomon Brothers and J.P. Morgan and so forth, they got into the business of arranging the long-term financing so it changes the industry because of all the consolidation that went on.

    KELLER: Did you ever get involved in that tangled situation with Storer Broadcasting?

    ACKERMAN: With what?

    KELLER: Storer Broadcasting?

    ACKERMAN: No, I don't think we ever did anything with Storer.

    KELLER: That was a mess for a long time.

    ACKERMAN: As I say, there were quite a few big ones we didn't get with, but smaller operators...

    KELLER: Well, you were the lifeblood, as we said before, of these small operators. Pull out your crystal ball – where is the industry going to go?

    ACKERMAN: Well, I think the industry is going to... it's interesting what's happening right now. For example, high-definition television. The sets aren't selling that much and they're selling at tremendous prices because not enough of the TV stations have gone to high-definition, though now they're saying they have to. The FCC is saying they should. As a consequence, prices today on television sets are coming down. I just had to put in a television set for my wife – she has this macular degeneration – she couldn't see a screen such as I have there on my desk and so we bought a plasma, which is a four inch to eight inch screen and big – 52 inches across, not diagonal, 52 inches across – where now she can sit in a chair ten feet away and see it where before she had to sit right on top. Those sets start around as much as $15,000 and they're coming down now so that they're going to be cheaper and cheaper and cheaper as more and more people start buying them. Also, it's going to be real interesting to see what happens with your broadband communications as to whether we're going to use our television sets for internet as opposed to a separate computer. I know a number of my friends go on the internet through their television set. Is that going to increase? Who knows exactly? The big companies are having to find other ways to sell product other than just the programming, especially if you bought a cable system for $4,000 a subscriber, how are you going to get enough revenue to justify that cost? So that means they have to get into other areas. When I was with TCA we just started to go into telephoning. In College Station, Texas, for example, a university town, they sold a package for $75 a month whereby they could have their long distance on cable, in other words their telephone, cable products, pay products all in a package, and the students were buying it like mad.

    KELLER: Did they go into one central instrument though? Sooner or later we're going to have to come up with that one separate instrument.

    ACKERMAN: Right, that's what we did. They had a box maybe on top of the television set. You'd take students that had a small set in their room and they'd have a cable box to use for the other things. I think the big cable systems like Time Warner, which is AOL now, and Comcast, which are the two biggest, are going to have to do more and more to find ways to increase their monthly payment. I thought up until the recent merger of Comcast with AT&T that probably Cox was the most diversified in other products of any of the major cable systems. They had originally gone into big cities and bought, in Las Vegas for example, they had other cities like Omaha and New Orleans and so forth, and they were selling telephone and so forth. I think that's going to be more and more in order to compete with Direct TV, over-the-air TV, in other words. It's going to be real interesting to see who really comes out on top.

    KELLER: I see the day when the so-called cable operator is going to give away the television signals and make their revenue on these other services.

    ACKERMAN: It's very possible although I hadn't thought about it that way because I think a lot has to do with the younger people. Us older people are not as aware of how we can use broadband more. My daughter, she uses internet all the time. She's chatting with people in New Zealand, Australia and so forth around the world. I wouldn't even know how to begin to do it.

    KELLER: The high-speed internet connection from cable systems is working out quite well. I know we have it in our home. Tell me, where did you think that Michael Armstrong of AT&T made his mistake, if he did?

    ACKERMAN: I can't say.

    KELLER: Okay, I thought maybe you would speculate on that.

    ACKERMAN: First of all, I think John Malone did a masterful job of selling TCI to them.

    KELLER: I think that's pretty well accepted.

    ACKERMAN: I don't think that AT&T really knew exactly what they were getting.

    KELLER: I think that's true, too.

    ACKERMAN: So as a consequence we know that the condition of those cable systems couldn't compare to let's say the condition of Comcast or Cox and so forth. The same way with Charter; Charter's been buying older systems and haven't brought them up to date like Comcast has done and so forth.

    KELLER: Well, Carl Vogel's a good operator. He'll do all right with Charter.

    ACKERMAN: But it's a case of what do you pay for and what do you get and how much are you going to put into them, and are you going to be able to take enough of these new things to make it worthwhile for the customer and spend a hundred dollars a month or more.

    KELLER: Before we wrap this up, anything else you want to bring up, Jim?

    ACKERMAN: No, I think we've covered the field pretty well. As I say, I think it's an industry that we were lucky to get into at the right time and were able to do pretty well in it. The industry today is entirely different. We entered it in 1958 and now it's a big corporation business and it's not a private entrepreneur business. I don't know how many private entrepreneurs there are left in the industry. Very few. And yet I can remember fellows like Alan Gerry who ran an operation really big and sold out. You take all of these different fellows that were private entrepreneurs and started out with one little cable system and built it up to a large size and then have sold out or merged. There's not many left of the private entrepreneur so you're looking at a different industry as far as analyzing it, as far as financing of it and so forth.

    KELLER: Well, Jim, you have been really the lifeblood of the industry in the very early days and without Economy Financing and the Morris Plan and Jim Ackerman, the industry would have had a greater struggle than it did at the time.

    ACKERMAN: Well, somebody else would have come along probably and done the same thing.

    KELLER: But you were the one that did it and you were the first to come in with the underlying financing for cable television systems, and I know the industry greatly appreciates it. This has been the oral history of James F. "Jim" Ackerman, former executive vice-president of Indianapolis based Economy Financing and the Indianapolis Morris Plan. The date again is December 4, 2002. We are in the offices of Cardinal Ventures in Indianapolis, Indiana. Your interviewer is Jim Keller. Thanks, Jim, I really appreciate it. It's been fun.

    ACKERMAN: Thank you, Jim.

  • The Oral History Project