Interview Date: Wednesday November 01, 2000
Collection: Hauser Collection
KELLER: This is the oral history of Eugene A. Iacopi, a cable television pioneer, a son of a cable television pioneer, a major market developer in San Francisco and the San Francisco area, a founder, and president in 1966-67 of the California Cable Television Association, and a member of the board from almost day one. Gene was also a member of the National Cable Television Association board of directors, was awarded the outstanding committee chairman in 1972 and '73, was chairman of the legislative committee, and has been part of the driving force of the California industry from late in the '50s through the present day. This oral history is made possible by a grant from the Gustave Hauser Foundation, and is part of the Oral History Program of The Cable Center. The date is November 1, 2000. We are at Gene's home just north of Sacramento, California. Your interviewer is Jim Keller. Gene, tell us a little bit about your background before you got involved in cable television, and then how you got involved in the industry.
IACOPI: Well, Jim, it's kind of a combination of background in the cable TV and another profession I was in. I was, quite frankly, professional a school teacher. I taught school for five years, but we originally started to build the cable television system officially in September of 1953. Of course at that time, I was in school and working toward my degree.
KELLER: Where were you at school?
IACOPI: I went to San Francisco State College; it was referred to at that time. Now it's San Francisco State University, but at any rate, while I was going to school I arranged my classes so that I would have time available to work with my dad while he was building the cable system. I went on to get my degree and then I went over to the community of Hayward in the East Bay and I taught school in the East Bay in the city of Hayward for five years, and at the end of that five year period I then came back, or during that five year period I came back on an interim basis during the summers when he was building the cable system, actually doing the hard construction, putting up the strand until we got the utility companies to put the strand up for us.
KELLER: Gene, your father, Marino, was a rather unusual man in developing the products necessary to build this cable television. Would you go into a little bit of a background of your father?
IACOPI: Well, he was the technical guru of the system. He was an engineer, and his background quite frankly was primarily in radio, and then when World War II came along, rather than be drafted into the service, the military put him to work for Delmo Victor. Pretty basically, what he was doing there was he was a part of a team that was to develop radar that was to be located in our fire planes. We had radar in our bombers, but you have to remember at that time they were dealing with gas vacuum tubes, so it was pretty difficult to get something that was compact enough to fit into the fighters, but that's where he had his first experience with radar, so when the war ended he came back, he had a business, which was a radio sales business, which turned into radio-television sales along with other appliances that he sold, and in the process of selling those television sets he also had to make a determination whether the people were going to get any reception on those television sets. Of course in San Francisco with the hills and the buildings, there were a lot of areas that were almost shaded completely from the signals that were coming from the transmitters that were at that time located on Mount Sutro and Mt. San Bruno, so the northeastern sections of the various hills along with the high rise buildings that were on top of those hills blocked a lot of areas from getting reception, and so he found that when he was selling television sets – and at that time I was working with him, assisting him in putting up antennas – we both found that there were just a lot of areas where people couldn't get any decent reception and in some cases no reception at all.
KELLER: So what did he do?
IACOPI: Well, when he got back from when World War II ended and he came back and tried to resurrect his business, one of the things that he did was he went around to the various large retail houses like The Emporium and Sears and Ward's, and he said, "I'll become your service department," and in the process of doing that, one of the large houses, Sherman Clay, had contracted him to put in radio master antennas in a lot of these high-rise buildings because radio had developed to a great degree during World War II and was developing even more after the war along with television. So he built these master antennas in these high-rise buildings and one day he came to me and he said, "You know, if we can do this with a master antenna for radio, we can do this with television." And then he started looking into that, and he found that the equipment that was available to do that, the commercial equipment that was available to do that type of thing was pretty much limited to doing a master antenna system as he had done with radio, but with television and video signals it was a little bit more complicated. So he proceeded to start the process of building a cable system, and that evolved into a test that he did over in Golden Gate Heights. Golden Gate Heights is an area that's in the western section of San Francisco. It's bordered on the bottom by 19th Avenue and on the top side you would be looking at Mount Sutro, in effect. What happened was that the television signals coming off of Mount Sutro were going right over the top of these people that were located in Golden Gate Heights, and of course on the western side was the Pacific Ocean so there weren't even any mountains over there for the signal to bounce off of and those people were getting absolutely nothing. What he did was he set up an experiment. He put an antenna on top of one of the homes that was on the upper part of the hill, he ran some coaxial cable – I remember it was old RG-11 U – he ran that down the side of the hill. He rented a tenant's or owner's garage, and he decorated the garage, put a bunch of television sets in there, and we went around and passed out invitations in the neighborhood, and we had quite a group of people that came in and were really interested in the quality of pictures that we could deliver. Well, that experiment being very successful, he then proceeded to go to the city of San Francisco to get the necessary permits, which turned out to be, in that case, just a business license to begin with.
KELLER: What year was this, Gene?
IACOPI: That was, I would say, when he was able to acquire the business license, I think it was like the latter part of 1952. Then he had to proceed to find a location where he was going to place the antennas, or in effect the headend, but then he found the equipment, as I mentioned earlier, was not commercially available, so he literally had to build his own strip amplifiers, which he used in the headend, and I can remember him building those. He located the first headend in the Russian Hill-North Beach area, and he did that because he felt, and I worked with him to a slight degree then, you remember, I was a student going to school, and we did some surveys. We did some house counts, dwelling counts, and we found out that the density in that particular area was higher than what it was, for example, out in Golden Gate Heights where we had originally done the experiment. So he located the headend at, at that time, the tallest building. It was not necessarily the highest in the way of stories, but because it was located on Greene Street – and I'll never forget the address, it was 1101 Greene Street – and it was owned by a doctor, so he had to go in and negotiate with this doctor to place these antennas on the roof of this tall building. He did that; the pictures were absolutely crystal clear, and then we had to bore through concrete floors on the service entrance of the building floor-by-floor. I remember, we wore out I can't tell you how many masonry drills in getting through that concrete, took the cable down through the building and out, and in the interim while this was all going on, he managed to go to the telephone company and the power company, with a lot of difficulty, and negotiate a pole attachment agreement. So when we brought the cable out of the building we actually put it on the poles, and in the early stages of the construction we actually did all of the hard construction, as I mentioned earlier. We put the strand up, we took the slack out of the strand with coffin hoists, we climbed the poles, we lashed the cable, we spliced in the amplifiers, and in those days the amplifiers were all made up of gas vacuum tubes, so you literally had to have an electrical cord that came out of the amplifier housing and plugged into a regular 110 AC outlet. Of course in those days, the amplifiers with the glass vacuum tubes, we had them contained in old surplus; I guess they were ammunition boxes that we mounted on the poles. A lot of areas where they were building cable they had problems with heat, but being in San Francisco with that fog that comes in frequently, we were able to keep the amplifiers cool enough that we could keep them operating. We did that. At that time, Jim, there was no financing available, so in the initial stages of constructing that system it was primarily done with our own personal funds, most of the money of course coming from my father. I can remember through our accounting firm going to various banks and talking to them about the possibility of borrowing money, and they would just laugh you out of the bank. There was just no way that they were going to loan you money when you were putting cable up on a facility that belonged to a utility company, and there was no guarantee at that time because of the television licensing that the television stations would be around for any guaranteed period of time, and there was really no knowledge on the part of the federal government, I guess the FCC that was granting those license, as to how close in adjacency in the frequencies they could have those channels. I can remember the first channels in San Francisco were channel 4, channel 7, and channel 13, and you could see the separation – 4, 7 and 13 – there was a lot of separation of frequency. 13 later on and it came out of the East Bay instead of out of San Francisco, so later on, of course, they found that they could grant the licenses and have the channels relatively adjacent, but that they had to have a separation. For example, if they had a channel 7 in San Francisco, I think the next closest channel 7 license that was issued was out of Redding, which is many miles north of San Francisco. So the FCC began to get more comfortable, and then they began to issue more licenses, and then later came the license for channel 5, which of course is adjacent to channel 4, and then channel 2 came along later, and there was license issued for channel 2, and that was coming out of Oakland, but they were all in the Bay Area. And then of course with PBS, at that time they called it educational television, they granted a license to channel 9. So eventually, locally, there were like, I think six channels that were available, and that's what we ultimately had on the cable system.
KELLER: I think the viewers should be interested in the fact that no other major market in the country, perhaps with the exception of New York City, was building a cable system at all with the availability off-the-air of as many as four, five, six signals, and in New York even more. So this was really a pioneering effort on your part and your dad's part in building in these kinds of markets.
IACOPI: That's true. I'm not familiar with when they started cable in New York, but I don't think it was as early as 1953.
KELLER: I think you're right.
IACOPI: With all of the process that my dad, Marino, had to go through in order to build a cable system, he actually got started and the experiment which took place in Golden Gate Heights, which I mentioned to you before, was like in 1953. So it took him almost three years from the time that he conducted that experiment to the time that he was able to actually build a cable system, and it was in the latter part of 1953, as I mentioned before, in September of 1953. So we built a cable system. As I mentioned, there was no financing, so pretty basically nobody knew at that time in the entire industry what was going to happen, how many licenses they were going to issue. So the theory was you pretty much had to get your money back on an instantaneous basis because we didn't know how long the pole attachment agreements were going to stay in effect, what the FCC was going to do with the licensing. So what we did was we would construct an area, we would put the cable between one amplifier location and the next amplifier location, we'd terminate the cable, and then we'd proceed in the evenings to go down and to sell cable television installations at 150 dollars a pop. And then we would take the 150 dollars and we'd put it in the bank, and then when we had enough in the bank we'd go and buy the next amplifier, we'd buy the next reel of cable, and we'd build the next extension to the system. Because of the limitations in the equipment at that time – there was no thermal or automatic in gain loss, which we referred to as AGC – so you were limited in the number of amplifiers that you could cascade, and I remember that there was, at that time...
KELLER: Meaning put in sequence.
IACOPI: Put in sequence, right, because there is a noise factor that enters into it. Of course today with automatic gain and loss control and with fiber those kinds of problems are not something that is even considered today. We as a result were limited in the amount of area that we could take in or that we could build a cable system in, so what happened was we next went from the Russian Hill area and we went over to Telegraph Hill and we located another antenna site there. And then later on, we build another headend on Pacific Avenue out in Pacific Heights. Then the last headend that we built was on city property, it was a fire reservoir out on Twin Peaks. So the reason for the four headends was because of the limitation on this cascade ability with their being no way to control the fluctuation of the signal when it went up and down as the temperature would go up and down. I'll never forget, there was an amplifier, I believe it was made in Canada, and it was called a Delta Super 60, and it had an output of 60 db. I think the amplifiers today, at a maximum, have outputs of somewhere between 30 and 35 db, which keeps the signal level down, it keeps the noise level down, and so the equipment is far more sophisticated today, but at that time that's what we had to work with, so we made it work.
KELLER: What were you charging in the early days?
IACOPI: The monthly charge ended up being $5.32. Originally we were going to charge $5 a month, but then we weren't sure whether there was going to be a user's tax added on to that, so to play it safe that's what the .32 cents was for. So for years, the rate remained at $5.32, but you've got to remember at that time we were only delivering six signals and there was no color television, it was all in black and white. People in the shaded areas of San Francisco were very, very delighted to have the service, and they paid $150 to get it connected. It wasn't until I came back and joined my father in the company – by the way, the name of the company was Television Signal Corporation – and I took a leave of absence from my school teaching position and I came back in the summer of 1962, and the business was getting to be a real business at that time. It was not just a business to extend the ability of people to get reception where my dad was selling them television sets. We were getting a lot of people that were inquiring about installations, and in some cases where we were in high-density apartment type dwellings, people quite frankly couldn't afford the $150. We then lowered the installation charge I think down from $150 to $35, and then we ran some specials at $25, and then ultimately like a lot of other cable operators, we were practically giving the installations away because we recognized that the value was in that continual monthly income that was continuing to come in.
KELLER: At this time, had you been able to acquire any debt financing or any bank loans?
IACOPI: In 1962, when I got back and started working for the company on a full-time basis Marino pretty much handled the technical end of the business and I became more involved in the business end of the business. We had been doing our banking with Wells Fargo Bank for a number of years. Marino had banked with them earlier when he was in the radio appliance business. So we had some contacts at Wells Fargo Bank and we went down to Wells Fargo Bank and we explained to them what we were doing. We were doing some expansion at that time into the Marina district of San Francisco, and I can remember us meeting with the bank, and the banker – and I forget his name presently – the banker was inquiring with the typical questions about how long we were going to be there, we were on somebody else's poles, but we had had a track record at that time, and we were able to show him that we had this residual income that was coming in every month and that was growing, and that we wanted to go into the Marina, which was a pretty high density area, and so he finally said, somewhat reluctantly, he said, "If you can do me some projections as to what you think you're going to get in the way of revenue and how you're going to pay the loan back, I might be willing to consider it." So we went back and we developed some projections, looking at what we had done historically over in the Russian Hill, North Beach, and Telegraph Hill area, and we took those numbers and just converted them over and went back to the bank, and lo and behold, he looked at it and said, "Well, if you guys can do this, I'll go ahead and loan you some money." So our first loan was for $50,000, and in today's scheme of things $50,000 sounds like a drop in the bucket, but in those days, $50,000 was a lot of money and it helped us get out into the Marina. We then went out, we built the system in the Marina, quite frankly did a lot better than the projections that we had presented to the bank.
KELLER: What did you project in percentage of homes taken in service?
IACOPI: It was fairly low at that time. It was about 20-22%, but we were in such high density areas that 22% that we would deliver in the way of subscribers was beyond what people in the suburban areas, and the people that were even in more remote areas could deliver because we were passing, as I recall, somewhere between 280 and 340 dwelling units per mile. And another reason why the percentage was low, the penetration percentage was low, was because we had that high installation fee, and when we lowered that high installation fee then the percentage of penetration almost doubled.
KELLER: I'd like to put that in perspective. 20% of the 300 homes passed per mile is 60 subscribers per mile. That generally would equate to 60% penetration in markets that had only 100 homes per mile.
IACOPI: That's true, and a lot of markets that were in remote areas, which in the history of cable television, that's really where it started, we were fortunate to be able to start a cable system in San Francisco, but in many of those remote communities, which later on in my experience I got involved in, were 60 homes per mile, period.
KELLER: But by that time you were getting 75-80% penetration.
IACOPI: That's true. But like I say, once we lowered the installation charge and made it more affordable, then the rate of penetration went up to 40% and ultimately it was 50% and better, but the success of that, getting back to the bank, was that after that situation we were then able to go back to the bank, and I think the next loan that we received was like for $75,000. So we were on a roll. We were going ahead and building a lot of areas. The next one to come along, which turned out to be a very expensive area because it was all underground and we had to do a joint trenching project was up on Twin Peaks, and that project up there burned up a lot of capital, I'll tell you. It was a very, very expensive project, but it turned out that the Twin Peaks headend site became the ultimate headend site for the whole San Francisco system, and it may be to this day because it was centrally located with a good part of the city going to the west, and the rest of the city heading out to the east, and then of course north and south from that point.
KELLER: So you had built the Marina by this time, you had built the North Beach area by this time; you had built up on Twin Peaks. Where did you go after that?
IACOPI: Well, around and about that time, and because of the Twin Peaks project, it was very, very difficult for us to raise the capital that we needed to raise in order to go into the rest of the areas that needed to be built because we were still concentrating at that time on the shaded areas, but now we were getting out of the high density areas and we were getting into the single-family home neighborhood areas. That coupled with the capital costs of the construction on Twin Peaks, and this is going to knock a lot of people's socks off, but the constructions costs in Twin Peaks was in excess of $100,000 a mile because in San Francisco you had to take out an entire flag of sidewalk, you were digging in shale rock, it was a tremendously expensive project. So around about that time, we decided that we needed to go out and look for an equity partner that would be able to bring some financial strength to the system. So we did that, and in that process, there was a group of Canadians that had built the major metropolitan areas of Vancouver and Victoria, British Columbia. So we ventured up to Vancouver, British Columbia, and we met... that was the Sid Welsh Group that owned those systems in those days.
KELLER: And that group became Premerit Cable of Canada.
IACOPI: That's correct. And they had some association with CBS.
KELLER: CBS had bought a portion of their operation in Vancouver and Victoria.
IACOPI: That's correct.
KELLER: They were in the same position you were. They needed an equity partner with deep pockets.
IACOPI: Right, and that was exactly the same reason why we were looking for an equity partner, but they intrigued us to a great degree because they, in Vancouver and Victoria, had a lot of the same kinds of problems that we had in San Francisco – tall buildings, if you look at Vancouver it's got hills and valleys, the same kind of situation. They did, however, as we found out later on, have one advantage over us in San Francisco, and that was that they were, at that time the Canadian government would not allow color television on the local Canadian television stations. So they were importing television stations, network and independent both, out of Seattle and delivering color signals to Canadians that were really hungry to get color signals. So it turned out that when we started building areas after this partnership was formed and developed, of which the Canadians had a lot of input into it, along with CBS, out of those discussions that started with the Canadians, CBS and the Canadians came in and purchased a percentage of our equity. We still remained in an equity position and were still involved in the operations. And as a matter of fact, that's about the time that you, Mr. Keller, entered into the picture. But we found, later on, when the Canadians came in and we started building all of those areas, a lot of the areas in the Mission District and going out into the Sunset District where people had pretty decent off-air reception that our rate of penetration was not all as attractive as those areas where we had concentrated on the shaded areas.
KELLER: Had you built Chinatown by this time?
IACOPI: No, no we hadn't. Chinatown, as I'm sure you will recall, was very difficult to penetrate. The Chinese community kind of keeps to itself and they're very protective of their privacy, and so ultimately what happened was you had to get what they called, I believe, the Tong chief that was in a particular neighborhood area, and if you got to him then he would be of assistance to you. That kind of happened by mistake. There was one of these gentleman that owned a building on, I think it was 1750 Broadway, and he had, oh, I don't know, I think it was about 75 or 80 apartments in this apartment building. In the Pacific Heights area we had wired a lot of the buildings around him, but he was rather independent. So I got in and met with him, and finally one day I was able to get his attention and I took him up on the roof of his building and he had an antenna farm up there like you couldn't believe. Everybody and their uncle in the apartment building had put up an antenna and there were all these guy wires coming off these antennas, and it was a real hazard. I got him up there, and his name was Peter Chu, and I said, "Mr. Chu, if you ever have a fire in this building, you've got a real liability up here with all these antennas," and he kind of said, "Yeah." I said, "You know, if you put cable into this building, we'll eliminate all these antennas. We'll take them all down for you. We'll cut them all down." And that was one of the very first bulk programs that we were able to put together where he paid for the cable in all of the apartment buildings because he really wanted to get these antennas off the roof. Well, anyway, when we finished the job, he was so pleased with it that I went and visited with him and I developed a relationship with him, and told him of the difficulty that we were having in getting into Chinatown, and he introduced me to various gentlemen. So that kind of opened that area up for us and we were able to proceed and start placing cable in Chinatown.
KELLER: Now, as I recall, and correct me if I'm wrong, but using the head of the Tong in these areas down there, they in turn recruited salespeople for you, is that correct?
IACOPI: That's correct.
KELLER: You would then compensate the Tong leader, as well as the salesman, with the commission that would have been paid to a salesman going into that area?
IACOPI: That's correct. That's kind of the way that the system works there.
KELLER: It worked very well. You wouldn't have been able to penetrate Chinatown without it.
IACOPI: Right, right. Like I say, it's a very ethnic and very closed community. So, yeah, that was a rich experience and I really enjoyed working with those people once I was able to get my foot in the door.
KELLER: How was the relationship with the Canadians working at this time?
IACOPI: The relationship with the Canadians got a little bit strained, and that was primarily because they felt that in addition to building cable systems that they wanted to manufacture some of the electronic equipment, and they did that. At that time it was a company by the name of Cascade. So as we started building out new areas in San Francisco, we were being delivered these Cascade amplifiers and looking at them in the lab and looking at their cascade ability and the automatic gain and loss control and all the new bells and whistles that they had put in the equipment, they really looked good. The problem was that they had put a stainless steel lock-down wing bolt and nut on the amplifier housings, and the amplifier housings were aluminum, and so what you had was you had a situation of two unlike metals in a high salt spray area, and as we found out later on what happened was that the amplifier housings would deteriorate, and they also found that to be true in their systems in Vancouver and Victoria, which are also very near salt water body. So we eventually had to eliminate the Cascade amplifiers, and then they eventually in the longer term stopped manufacturing them. At that particular time we had contracted with Anaconda to bring in their amplifiers.
KELLER: Were you receiving capital directly from CBS, or was CBS funneling it through the Canadian operation?
IACOPI: It was being funneled through the Canadian operation.
KELLER: Early on.
IACOPI: Early on, right, until the Canadians were almost completely out of it and that was shortly after the time that you had arrived and CBS began to take a more active role. And I think I need to say something about that. Jim was hired by CBS to be their cable television guy and in effect come out to San Francisco and see exactly what the various problems were that we were having, and it's very difficult to sell cable television to customers, which is supposed to be more and better pictures when the amplifiers are falling down off the cable. And so Jim came out and very early on he was very helpful in making the determination that we no longer needed to deal with the Cascade amplifier, and he and I worked together cutting the deal with Anaconda so that we could bring their amplifiers in. In addition to that, we had another significant problem in San Francisco, and that was because of the close proximity of the transmitters to the customers' television set, and in those days, the customers' television set had, rather than coaxial cable coming from the back of the television set up to the tuner, they had a piece of twin-lead that went from the back of the television set to the tuner, and we found out that in many cases where the reception was better, where we were getting into these more competitive areas rather than in the shaded areas that the customers' television set was receiving the signal from the transmitter prior to the time that the signal was coming through the cable. And so what that created was a situation where you had ghosting and you had a very distinctive ghost that was to the left side of the image, what we called a leading ghost, and so the customer in those situations was getting, rather than clear reception, was getting double images. When they were looking at a football game, they had 22 football players on either side. There were 44 players out there instead of 22. So that was a significant problem, and I remember that we did a lot of things. We had some reservations about getting into the customers' television set, but we took a number of television sets that had that twin lead from the back end to the tuner on our own, we went out and we bought them, and we experimented by putting coaxial cable from the back of the television set up to the tuner, and that worked to a degree. But finally we determined that the way that we needed to solve that problem was to go to converters, which was a unit that we would put on top of the television set and today we still have converters in effect, and most everybody has one on top of their television set. But the reasoning behind that was that we could take the converter and convert the signals to a specific channel where we weren't receiving that kind of interference, and then after that signal had been converted, going into the converter. For example, with all of the channels that they had in San Francisco, if you took a converter and had it tuned to channel 3, which the closest channel 3 was in Sacramento, that whole group of signals would be converted then to channel 3, then you could take via the converter and put those channels back on their assigned channel, but the customer had to get it through a converter and had to have this extra box sitting on top of the television set, and I can tell you that that created a number of problems because it was very difficult to get people to learn how to use their remote controls on the television sets when they first came out. Now they no longer could use that remote control unit that came with the television set, but they had to use the unit that came with a converter, and the early converters did not have remote control so you had to physically get up and walk up to the box and tune the channels in at the box, and a lot of people just didn't like the looks of the box. So from a marketing standpoint it presented a number of problems, which as a result of the industry being as ingenious as it is in developing things technically was ultimately resolved because converters were made to look more attractive and the remote control units, even though they replaced the remote control units that came with the television set, were more attractive, easier to handle, and so in the long run that problem was solved. From a marketing standpoint we had the two problems: the direct pickup, solved it with the converters. The converters were ugly, people didn't like them, so it was a very difficult situation for our door-to-door salespeople to convince people that they should have these boxes so that they could get more and better cable television.
KELLER: So you continued then with the CBS relationship up until...?
IACOPI: Well, CBS was regulated out of the business, and what they ultimately did was they spun the cable television companies that they had, and after they got involved with us they went into an acquisition program and they purchased a number of other cable systems in and around the Bay Area. But they spun that all off to what is known today as Viacom.
KELLER: First Teleview though, right?
IACOPI: No, no. They had acquired Teleview which had a number of cable systems over in Marin County and the East Bay, and they had acquired that company, then the people from Teleview joined in with us in the operations, but then ultimately that whole thing, both Television Signal Corporation and Teleview were spun off to Viacom. And then Viacom became the primary equity holder and at the time that it was spun off to Viacom, Marino was then able to negotiate a deal with Viacom where we sold out the remaining portion of our equity to them.
KELLER: But right around that time, the franchise that you had in San Francisco was expiring, is that right? You had to get a new one about then?
IACOPI: No, this all happened, I'm trying to think, this all happened in the late '60s, the early '70s, and it was a ten-year franchise that we had and we acquired that franchise, I believe it was in '63, so the franchise had run about seven years and had a three year period remaining. So yeah, you're right, it wasn't yet expired but it was getting close to that period of time where it was necessary to get back with the city officials and start renegotiating a franchise renewal.
KELLER: In the name of Viacom?
IACOPI: In the name of Viacom, that's correct.
KELLER: And did that ultimately occur?
IACOPI: Yes, it did, and John Goddard was very active in that process. Even though at that time I wasn't working for CBS or Viacom, I was able to provide John with some information, was some help to him from a political standpoint in getting that franchise renewed.
KELLER: Let's just digress just a little bit. At the same time that you were building the San Francisco system, you were also forming the California Cable Television Association.
IACOPI: Well, I didn't form it, it was...
KELLER: No, but you were a part of the original group.
IACOPI: It was a group of cable operators, most of whom were from very, very remote areas, places like Yreka, Dunsmuir, Ukiah, these were all areas that were extensively more remote than San Francisco was. I think the closest system in the Bay Area at that time was in Martinez. So this group of cable operators, some of them being, I remember there was one gentleman from Barstow, and there were a lot of remote areas. These operators all came together to form an association because at that particular time there were a lot of problems that were beginning to develop in the franchising process. The cities, as is typical with cities, began to get greedy. They wanted a large percentage of the gross revenues in order to give franchises and licenses to operate. There was a situation that came up where the translator sales people went to the California state legislature.
KELLER: A translator being what?
IACOPI: A translator is like a retransmit facility. You put it up on top of a mountain or a hill, it receives signal and then it retransmits that signal into what otherwise would be an area that you wouldn't be able to get into. You could liken it to a repeater, in effect. So these translator people were trying to sell translators and so they had gone to the California state legislature and had one of the prominent California state senators introduce a bill that would have set up utility districts wherein the translators could be constructed and developed, they would deliver signals into these various shaded areas but then everybody would be taxed, in effect. So our problem, the cable televisions systems' problem with that was that in effect the counties in these areas, or the cities in these areas would become the collection agency by taxing people when all people may not have had an antenna where they would be receiving the signals, the difference being that when a person wanted to subscribe to cable they had a choice of subscribing or not subscribing. If they didn't subscribe, they didn't have to pay for it; if they did, they had to pay for it. We felt that it was inequitable to set up a situation where everybody would be paying their translator fee and we had to go out and handle our own collections. So that was a major issue before the California cable television operators. So it was a gentleman by the name of Walter Kaitz, and at that time the legislature met every other year, and so Walter Kaitz was a legislative representative, a lobbyist, who was up in Sacramento who came to us, and I believe Dean DeVoe from Barstow was the one that had found Walter through some other contact that he had because in addition to cable he was also in the real estate business and had had some experience with Walter, so Walter Kaitz was retained as our legislative representative, lobbyist if you will, and Walter also happened to be an attorney. So Walter was retained and we all got together and we had a meeting, and the association was officially formulated. Walter took care of most of the paperwork, it was as a non-profit organization. I believe Dean DeVoe, and I may stand corrected on this, but to the best of my recollection, Dean DeVoe was the first official president of the association after it had officially been formulated. I think it was kind of an informal group that had been together earlier, but it wasn't an officially formed association. There may have been other individuals that functioned as the leader or the president of that non-formed organization. But Dean DeVoe was to my knowledge the original president of the association.
KELLER: What year was that?
IACOPI: It was 1961, 1962?
KELLER: It probably had to be '61 because I think Dean sold in '62, I think he sold.
IACOPI: That could be correct, but to the best of my recollection... it might have even been back as early as 1960, but Dean was the first president, and one of the reasons why he was elected president was because he was a very astute businessman, he was an older gentleman, he was financially more heeled than the rest of us cable operators at that time. He had his own airplane, so he could fly from Barstow to Sacramento for the various meetings that were necessary to have, and he remained, I believe, the president of two years, and then I remember a situation where we were at the El Mirador Hotel, which is no longer a hotel, it's now a senior citizen facility, but at that time it was a hotel and this was right across the street from the state capital. We were all sitting in a room, and I believe there was probably eighteen or nineteen cable operators that were sitting around one of those formica, where the legs fold up, tables, and Dean DeVoe was talking to the group and then Walter Kaitz came in after we had convened the meeting, and Dean was saying, "Look I no longer can be the president," and maybe because as you pointed out, it might have been that he was considering selling his system, but he said, "It's getting to be very expensive, I've got to fly my airplane here." And at that time, the various presidents of these various associations throughout the country were kind of a member at large to the NCTA board of directors, which was a formal group that had been founded, I guess, by Bill Daniels. So Dean used to take these trips back to Washington D.C. at the time that the NCTA board of directors would convene.
KELLER: That's the National Cable Television Association.
IACOPI: National Cable Television Association, that's right.
KELLER: I think in the early stages it was called the CATV association.
IACOPI: Right, it was. Later on they changed the name. Yeah, you're correct. But anyway, Dean was saying that it was difficult, it was expensive to go back to Washington and that he needed to resign as president and we needed to elect another president. So I can remember a good friend of mine by the name of John Muir, who happened to be one of the cable operators that were all sitting around the table, got up to go to the restroom, and so we all looked at John going out the door to the restroom and then somebody said, "I nominate John Muir," and I seconded it, so we voted and when John Muir came back from the restroom everybody was clapping their hands and said, "John, you're the new president." He was working, I believe, for a larger cable company that owned some cable properties down in Palm Springs and several others down in the southern California area, and as best as I can recall, the name of the company was H&B American. The hope was that John's company would be able to sponsor some of the activities that was necessary for the president to participate in. So, yeah, we were there having a meeting and we were heavily discussing this translator problem that we had, and that of course is a story all in itself.
KELLER: Let's hear it.
IACOPI: Walter Kaitz had done a good job of coaching us and making lobbyists out of us at large...
KELLER: Excuse me, before you do that, describe Walter Kaitz.
IACOPI: Well, Walter Kaitz is beyond description. He was a man of many, many talents, but he was a very gregarious, outgoing person. He had a personality that everybody loved, everybody loved Walter Kaitz. But Walter, from the first time that I met him was always on the heavyset side, so Walter would have played the part of Santa Claus extremely well.
KELLER: A Sidney Greenstreet type.
IACOPI: Right, but Walter had very, very good contacts over at the state legislature and primarily why he did was Walter was very honest. Whenever he said he was going to do something, he did it, and the legislators loved him, and at that particular point in time there were no restrictions on what lobbyists could do and Walter was a great entertainer. I can remember times of having gone up to Sacramento because I was working with Walter on various legislative things and he and I would go to dinner together and we'd walk into a restaurant and Walter would see senator whoever, and assemblyman whatever, and he'd walk over and he'd visit with them, and he'd take me over and introduce me to all the people at the table. He'd call a waiter over and he'd order drinks for the table, and we'd sit down and have dinner and he'd call the waiter over and say, "When the check comes for that table, I'll pick it up," and so Walter was a really talented individual. As a result of him being as outgoing as he was, the legislators just loved him, and it made it a lot easier for us when we would go visit with the legislators because we could mention Walter's name and it was always an entrée into getting in and visiting people. But Walter Kaitz, I have to tell you because I worked with him and Spencer, in Spencer's early days with the association, a lot in the legislative program. It was what they called the governmental chairman of the governmental committee for the CCTA for a number of years, and then that position was then converted from chairman to vice-president, governmental relations, and now the person that has that position is the vice-president of the association. But in working with Walter, both in the state legislature and back in Washington D.C. at the Capital, this was a man, as heavy as he was, that had energy that was just unbelievable. I would walk the halls with Walter, both at the state legislature and back in Washington D.C., and at night I'd have to take my shoes off and put my legs up and I was just exhausted, and here Walter was packing around all this extra weight and he was just a dynamo. He just wouldn't quit. I think Walter's strength was in his ability to understand people, to bring the best out of people, and the fact that he was so honest with the various legislators that he dealt with... he had one of the best reputations, both on Capital Hill and at the state legislature. When we went back to Washington, Walter was a great help to us because a lot of the people that were in the Congress of the United States were former assemblymen and senators on a state level. So this ability to communicate carried over both in Sacramento and in Washington.
KELLER: Gene, we're about at the end of the first tape, so I'd like to pick up on the next tape when we reconvene with some of the early problems of the California Association which started out, as you said, a very small organization, very informal, and is today probably the premiere state cable television association in the country, and has more effect on the national level than any other association. Let's pick that up when we come back on the next tape.
KELLER: Gene, after we left the first tape, we had discussed the formulation of the association, and your initial problem being the translator problem. How did that play out?
IACOPI: Well, that in itself, Jim, is a very interesting story. Again, with Walter Kaitz coaching all of us because we were all kind of green behind the ears as it related to lobbying, we proceeded to go across to the capital, and this happened to be before an assembly committee, and I think there were like eight or nine members of that committee, and we proceeded to go in to the various offices of the various assembly people, and many of the operators, as a matter of fact, were constituents of some of these members of the committee. So actually we chose those members to visit first so that hopefully we would be able to get, again with Walter Kaitz's coaching, we'd be able to get some of them to lobby the other members of the committee if we could sell them on the fact that what they were doing with the translator bill was not equitable. We explained to them that many of these gentlemen in these remote areas had spent their hard-earned money to build a cable system to bring a service that was really needed in these communities because a lot of these communities received absolutely no television reception whatsoever. We explained to them that the situation where the translators would be having their monthly fees collect in effect by the county on a tax basis was extremely unfair and discriminatory to the cable operator. We also explained to them the fact that a lot of us cable operators had experience with receiving signals from translators, because remember, the translator comes off the top of a mountain, you could have a cable operator on the next mountain over who would be able to receive the translator signals, but the community that he was serving wouldn't be able to get the translator signals because they'd go right over the top. In many instances, cable operators who were delivering translator signals into the communities that they were serving found that when the translator had a technical problem and the signals went off the air, it was like pulling teeth out of an elephant to get anybody to come and repair the translators. And so this was one of the arguments, in effect, that we used. So we went around and visited in various groups with all of the assembly people, and the issue came before the committee, and I remember it was late one afternoon and we were all there, all seventeen, eighteen of us were there in the committee room, and so finally probably at about 6:00 P.M. at night, the chairman said, "Well, we've gone along, it's not 6:00 P.M. I'm going to have to break. The committee's going to have to go get some dinner and we're going to have to reconvene. We'll be back here at 8:30." So we all were very disappointed, we broke, we went back across the street to the El Mirador Hotel, Walter had arranged for us to have dinner there at the restaurant at the hotel, and one of the members, in fact, the vice-chairman of the committee was an assemblyman named Quimby. He was a handicapped individual, you'd see him the halls of the state capital, he'd be moving around in a wheelchair. He happened to be one of the individuals that we had visited with, and seemed to be pretty friendly. So Walter, in his very gregarious way, saw Assemblyman Quimby coming in and said, "Assemblyman, come on over and have dinner with us," and so he sat down and had a couple of drinks and had dinner, and we all visited with him, and he said, "You know, you guys have a great argument. This bill is going to be killed." And so here we were these novice lobbyists, and we thought, man, did we do a great job! So we were all feeling pretty good about that, and anyway, we go back over to the state capital, we go back into the meeting room where the committee was meeting, and we sat down and we thought, "This is it! We're going to kill this bill." Unbeknownst to us, what had happened after the vice-chairman had left having dinner with us and having drunk our booze, he comes back over to the capital, apparently runs into the chairman of the committee, and the chairman tells him that he's made a deal with the senator who introduced the bill and whatever happens he wants Assemblyman Quimby to sit now as the chairman because the chairman wasn't going to come back into session, and he wants Assemblyman Quimby to be the bad guy and gavel the bill out. Well, they both being of the same party, Assemblyman Quimby being a good soldier, in spite of what he had told us over dinner, gets back into the room and brings the issue up for hearing and the arguments that were made, both pro and con, and we had some representatives at that time, I think John Muir was the president, and John got up and presented the association's position on the translators and the people that were advocates of the translator sales people got up and they presented their side. So anyway, the committee takes it under consideration and they call for the vote, and they go around and everybody votes, and by the votes we won! The bill was dead! We had the majority of votes. There were only, I think, two assemblymen that voted against us. Quimby turns around and said bang! Hits the gavel and says, "The bill moves out." Well, the chairman has the authority to gavel a bill out in spite of what the vote is, and this was just shocking to all of us. I'll never forget that one of our members, a good friend of mine, and probably yours also, Jim, Ray Miller. Ray Miller stands up and says, "That's a crock of ..." expletive, you know, and Walter Kaitz kind of grabs him and leads him out of the meeting room. We all got outside and we're looking at Walter like a bunch of puppy dogs saying, "What happened? We won the vote." And So Walter explained to us this business about gaveling a bill out. Anyway, a long story short, the bill came out of the committee, it went before the entire assembly, on the floor of the assembly, the last day...
KELLER: Had it already passed the Senate?
IACOPI: No, it hadn't passed the Senate, but the last day that the assembly was meeting the bill had... Walter was able to get it put off and down to the end of the period of time that the assembly would meet, so it was on the last day and we were able to go around and lobby almost the entire assembly, which is a lot of seats in California, I forget the number, but there are a lot of assemblymen in California. Assemblymen are almost like U.S. Representatives, you know, they have the two-year term and then the Senate, I think, has six years. There's fewer senators than there are assemblymen, but anyway, a long story short, we were able to just barely get the votes to kill the bill, and so the bill finally died on the last day of the assembly meeting. But that was an education in the politics that take place in Sacramento, and one of the things that always stuck in my mind was that no matter how badly we felt, and I'm sure that Walter felt really bad because Assemblyman Quimby had indicated to us that he was going to kill the bill, and I think that Walter, like the rest of us felt good about it, but under those very trying circumstances, Walter always remained calm, he never got excited, and he just proceeded to go ahead and do what he needed to do to get the thing delayed to the last day of the assembly meeting, and helped us kill that bill. That was just one of the many attributes that Walter had. He was just, quite frankly, a very nice man and a nice person to be around. I kind of looked upon Walter as being a second father to me because he really educated me on the way of politics and political lobbying, which helped me when I went on and was elected to the NCTA board and chaired that governmental relations committee.
KELLER: When you became president of the association, I think in what? '66?
IACOPI: 1966, right.
KELLER: What major issues were you confronted with then?
IACOPI: The major issue, well, there were several issues, but I think the major issue at that time was the delays that the industry was receiving because the industry was beginning to develop, it was going into additional communities, there was a lot of franchising activity, and the utility companies, primarily the telephone company, really became a stumbling block. They were doing everything they could to prevent cable operators from getting pole attachment agreements, and then when you got the pole attachment agreements they were slapping upon us engineering requirements that were really absurd. They were trying to escalate the pole attachment rates, the rate at which they charge us to attach to the poles. But probably within the realm of the utility issue was, I believe, an effort on their part to lobby the state legislature to get us classified as a public utility, and we didn't want to be a public utility. We were not a public utility because everybody didn't have to take our service. You could put up an antenna. Later on you could go out and get a videotape, and there were a lot of good reasons why we didn't want to become utility companies, but they were lobbying in that direction. The other thing that they were doing... So that was another problem. We were fighting at the California state legislature to prevent ourselves from becoming a public utility, but at the same time we're dealing with the utility companies, and where the utility companies really got friendly was they'd come back to us and they'd say, "Look, you want to get on these poles? They're our poles, you go ahead and build a system and put it on the poles and we'll own the system and lease it back to you, or we'll build it and we'll own the system and we'll lease it back to you." That didn't ring too well with us because here we would be doing all of the work, and besides that there was a confusing issue of where did our service begin and where did their service end. And when you had an outage, if you owned the cable system you would go to wherever you needed to go in that system and correct that outage, but if you only owned the system from the tap off device, where you connect to the cable, to the distribution cable in order to run the cable service into the house, which is what we referred to as a drop, if you only owned the cable system from the drop into the house and there was an outage and you had no control of taking care of that outage, then it was really going to be very, very difficult to deal with your customers who would think that you had the total responsibility. So as hard as the telephone companies tried, there were a couple of areas where they did enter into a leaseback arrangement with the various cable operators, and both of those areas, and I can't recall, one of them was down in southern California, but they were both very unsuccessful for the very reasons that we felt that they would be unsuccessful. The telephone company would say, oh, you've got an outage, they'd call the cable company, you'd call them, it would take them two or three days to get out and correct the outage which was something that couldn't be tolerated if you were a good cable operator. You were out there correcting that outage as quickly as you could. Those primarily were the major problems that were occurring at that time in 1966. It was a big push by the telephone company. There were certain things that were beginning to occur on the national scene, and one was dealing with the copyright issue. There were forces in Washington D.C. that wanted us to pay copyright fees, so the California association at that time, being as active as it was in 1966, we had significantly more members than the seventeen or eighteen that sat around the table in 1961 or '62. There were more and more people getting involved in the cable business. Many of the communities, almost a majority of communities in California were now either in the process of being franchised or had been franchised, so there was a lot of construction that was taking place and so the association was a lot stronger from a financial standpoint because there were more cable operators, there were more cable operators paying dues to the association, and so we were able to hire outside legal counsel to help us with some of those problems. Probably one of the most prominent of those outside legal people that we hired was Harold Farrow, and Harold came in and he was effective in dealing with a lot of the problems in Washington D.C. and Walter handled the activities that were going on in California. But strangely enough, what was going on in California with the utility companies, primarily with the phone company, was not only occurring in California, it was occurring all over the country. So to me, those were the big problems. The other big problem that we had was that telephone companies insisted on putting into their pole attachment agreements, and they kept refining them, restrictions on the cable operator as to what the cable operator would be able to deliver over the cable system. And if you look back on those restrictions, it's the very things that a cable operator is doing today. The delivery, for example, of high-speed data service was something that the telephone companies were writing in to the pole attachment agreements that would prevent the cable operator from delivering those services.
KELLER: Some of them even prohibited from delivering pay television.
IACOPI: Exactly, exactly. Not only did the telephone companies have those restrictions in their contracts, but a lot of the cities had restrictions in their franchise agreements, and that was another issue that came before the California association was this process of issuing franchises, and through the good services of Walter and the association, we were able to, even before the federal restriction, we were able to get some state legislation in California, and this was in the late '60s. It might have even been in the early '70s where there was a bill that was introduced and adopted that limited the cities to charging in excess of 5% of the cable system's gross revenues.
KELLER: That was part and parcel of the '76 Cable Act, which also required the industry to pay copyright, I believe.
IACOPI: Yeah, that was all part and parcel of it, but that's when the federal hook on the 5% came into effect, yes.
KELLER: And when did you become a member of the National Association's board?
IACOPI: I believe I was elected to the National Association board, I think it was the 1971-72 year. Yeah, it was right around that time. It's close, anyway.
KELLER: What were your major problems there?
IACOPI: As I mentioned earlier, it was you were having this business of the pole attachments and raising pole attachment fees, that was a national problem. But I think the big major national problem at that particular time was the copyright issue, and I can remember attending my first board meeting in Washington D.C. after I was elected, and at that particular time, the association was without a president, and the chairman of the association was John Gwin. So John, in effect, was functioning as the president and also the chairman of the board. I went back to Washington D.C. and we were all sitting around and talking about the various issues, you know, this business about the pole attachments with the phone company and raising rates, and telephone companies holding up construction and assisting on leasebacks, and copyright. All of these now had kind of become national issues, particularly the copyright issue.
KELLER: Also must-carry was a portion of that.
IACOPI: There was no must-carry rule at that point, but there was a push on to require must-carry.
KELLER: But if I'm not mistaken, at that time we were still prohibited from carrying signals from one market into another one.
IACOPI: Well, you weren't prohibited. What there was, was a network non-duplication and syndicated exclusivity, which in effect prevented you from delivering those signals from one market to the other. If I can remember, this is another one of these sidebar stories, I can remember sitting in Washington D.C. and we were in a board meeting and the board was talking about all these problems, so I kind of looked around the room and I forget who the general counsel of NCTA was at that time, but they got up and made a presentation as to what the various problems were, and then there was Don Andersson, two "s" Andersson, he and Wally Briscoe were kind of quasi, besides being on the public relations staff of NCTA, Don Andersson and Wally Briscoe, they were kind of quasi-lobbyists, so they got up and they made a pitch. So I kind of looked around the room and I raised me hand, I said, "You know, I'm just a freshman member of this association, but I have a question. Why is it that we don't have, like we have in California, a full-time legislative advocate, a lobbyist like Walter Kaitz to deal with these issues because it's apparent that we've got a lot of problems, but who's up on Capital Hill pitching our side of the story?" At that time, it was very strange, we'd all meet in Washington D.C. and I would hearken back to our meetings in Sacramento where Walter Kaitz would bring us to Sacramento, but every time we went to Sacramento, Walter Kaitz and the chairman of the governmental relations committee which I had served as, would see to it that all the cable operators would go across the street and visit with their legislative representatives. That was a must. And here are all these very prestigious and powerful people who were in some cases multiple system operators representing their companies, and many, at that time, many of these people were principles in their company, so they had a vested interest in seeing that things were done, and nobody would go across to Capital Hill and visit with their congressmen or their senators. And so I said to John Gwin, "I'm puzzled. Why don't we have a full-time lobbyist and why we're not actively going over to Capital Hill and as members of this board of directors lobbying our position?" John kind of looked at me and he said, "You know, you guys out in California, you do a great job out there. You're really politically astute. You know what? You've got a good point, Iacopi. I'm going to make you chairman of a committee to hire a full-time lobbyist." And so he appointed me chairman and then he also appointed Bruce Lovett, who was a former general counsel of NCTA, and he also appointed Duff Cleaver from Virginia, and Duff, in addition to being responsible for some cable operations was also a broadcaster, so it was kind of a good mix of people. Long story short, we went out and we interviewed a number of people, and the committee worked hard, and we must have interviewed probably eight or ten people. We ended up hiring a gentleman by the name of Chuck Lipson. Chuck was very well-heeled with the Democratic Party. He was a former aide to Lyndon Johnson. He was very well-liked, particularly by the democrats up on Capital Hill, and in addition to that, Chuck's wife, Jan Lipson, worked in the Speaker's, and Carl Albert from Oklahoma, she worked in Carl Albert's office and in effect was like his administrative assistant. So it was nice in hiring Chuck to also have that potential entree to the Speaker of the House. So we hired Chuck and Chuck came on and we formulated a governmental relations committee which turned out to be a very successful governmental relations committee and kind of put us on the map. We were then able to get the operators to go over and lobby on Capital Hill, and that's kind of another story in itself about the governmental relations committee and the formation of that, and how we broke the country into nine regions, and got people into Washington D.C., and a lot of the guys on the board were skeptical when we put that program together that it wouldn't work. But Wally Briscoe took a 16 mm film of various groups coming into Washington, both at the receptions and actually the individual cable operators lobbying their people, and it was great when the program was all over to show that 16 mm film, and for me to turn around to all those guys and say, "You guys said it wouldn't work. It did work, and now I want your rear ends up there doing what you can do in order for us to be exposed, to have some exposure and to be respected as an industry."
KELLER: So you were working with the Congress then... excuse me.
KELLER: Copyright, must-carry.
KELLER: Signals that could be brought in. Actually there was some tendency also at that time to have full rate regulation by the FCC, wasn't there?
IACOPI: No, that really hadn't started. That came later. What we were trying to do in the way of federal regulation, which we ultimately got, and you just mentioned it, was a lot of the cities, the municipalities that everybody was dealing with in an effort to try to get the franchise were wanting 20-25% of the gross revenue. So that was a big issue. Out of that effort coming from the governmental relations committee, and I can get back and describe that to you in more detail, but we were successful in putting the industry on the map, so to speak, because we used one of the natural assets that we had, and that's the video camera, and we went out and we had our people at NCTA interview various members of Congress, and then when we had these receptions, we would take television sets and place them in various spots within the meeting room. We would put on a cocktail party, and we would have wine and cocktail and hors d'vouers and it was kind of an informal thing. This was an old Walter Kaitz method. We'd bring all the legislators in in an informal, relaxed environment, and everybody would get around and talk to the different legislators, but more importantly, we not only got the legislators in there, we got their administrative aides and their staff people, we'd invite them all over, and it was important because these people, when we went up and wanted to lobby with a congressman or with a senator, you had to have an entrée in order to be able to get into their office. So if you developed a relationship with their administrative aides and various members of their staff, you pretty much were assured of getting that entrée. So what we would do is we would put various congressional representatives on the various TV sets, and you'd be surprised, the guys that weren't on TV and the gals that weren't on TV would come in and forget the cocktails and forget the hors d'oevers, they'd be looking around and saying, "How did Rodino get on television." It was a great entrée for the cable operators because we'd say, "This is cable television. There are a lot of markets that you can't get in to where network signals, the way you have to buy time on a network to get into these small networks, but many of these cable operators are doing what they call local programming, and if you tape something like this that tape can be bicycled to the cable operator and be put on," and man, I want to tell you, that got us on the map, that plus the effective method of the cable operators going around and visiting with their various representatives. When we took the country and divided it into nine regions, and I can remember sitting back in Washington D.C., talking to various cable operators, trying to get them to Washington D.C., and they'd say, "Oh, I've never talked to my congressman, it really makes me nervous. I can't do it, it's expensive, I can't afford it," and I used to be able to say, "Hey, wait a minute, I'm a cable operator also. I'm out here from California, from one coast to the other. I can't afford it either, but I'm here, and if you care about your business you'd better get here," and you'd be surprised how effective that was. Well, the NCTA staff was somewhat limited at that time, and I can remember being down on my knees with Ben Murphy and Don Anderson, one "s" Anderson, and Chuck Lipson and John Paul Johnson and Wally Briscoe and Brenda Gore, and we were assembling these packets and putting them together for these groups of cable operators that were coming into Washington and then we would do some role playing. I remember Chuck Walsh at that time was the general counsel for the NCTA and Chuck would play the role of the congressman. I'd be the cable operator coming in and visiting, and so the two of us would have a dialogue, and we'd talk back and forth and we'd get all finished and say, "See, it's easy. It's just like me sitting here talking to you." They're just another individual just like you are, and you're a constituent of theirs, so you're going to get their attention. That was very effective. That really worked extremely well. So as a result, we were able to get these nine groups of people that we had put together that were all made up of various cable operators going up to Capital Hill and it put us on the map. It ultimately led to de-regulation because we were so effective in developing our presence up on the Hill. The problem was that after de-regulation, and I think Mooney became the president of NCTA, they forgot about using the cable operators to effectively go up and lobby so we ended up with re-regulation again, and that's why today we have a lot of the problems that we have. But during the period that I was involved there, Johnny Gwin was the chairman originally, and then it was Amos Hostetter, and then it was Billy Bresnan, and through those years we developed a very effective lobbying presence on Capital Hill because of the effectiveness of the program that that governmental relations committee put together. I was the chairman, but I tell you the staff did all the work. They were the people that really made it go.
KELLER: Well, the '76 Act provided a compulsory license to the industry for carrying all signals from a broadcasting company. It also provided that copyright, we had to get copyright in order to be able to get the compulsory...
IACOPI: To get the compulsory license, yeah.
KELLER: You had some problems with that. How did the discussions go on the board about people that were for and against whatever the compromise had to be to be able to get that compulsory license?
IACOPI: I remember that very clearly. As I said, Johnny Gwin at that time when we initially started those discussions was functioning as both the president and chairman of the board. Because John had appointed me as the chairman of the committee to hire the lobbyist, I was spending quite a bit of time in Washington D.C., John and I had an opportunity to visit a lot, particularly in the evening because he was there by himself, I was there by myself. We had dinner together a lot of times, and I remember John having some very nose-to-nose and toes-to-toes discussions with Dean Burch, who at that time was the chairman of the FCC, and it came down to Burch was very persuasive in a very powerful way, in my opinion, and it came down to a point where I think he had convinced John that we, as an industry, were going to have to agree to pay copyright. If my memory serves me correct, there were two Supreme Court decisions that had in effect said we were not liable for paying copyright, we were a retransmission service and that in effect we were no different from the guy that takes an antenna and puts it on his roof and receives his signals off of it. I personally didn't believe that we needed to pay copyright at that time, and it was a very debated issue with some people strongly on one side, and some people strongly on the other side. I remember, I recall George Barco, who was very articulate, and George was a person, he was an attorney, but he in himself was very persuasive, and George Barco, and I guess a large group of people from Pennsylvania, like myself from California who were the real pioneers in this industry got started real early because of the terrain problems in those two states, he was very vocal about being against the copyright, as was I. However, John in his role as the chairman of the board explained to the board that in order, and these are my words, these are not John's words, but in effect in order for us to lift our being classified in effect as the bastard child where we're out stealing all of these signals and not paying our fair share, John felt that we should agree to pay copyright fees in exchange for getting this compulsory license, which would then allow us to bring in all of these signals, and there were provisions, as you will recall, in the copyright law that said you could even bring in distant signals but you had to pay a higher percentage in copyright fees. So that kind of solved that problem but it didn't solve the syndicated exclusivity, it didn't sold the network non-duplication problem. There were a lot things, I felt quite frankly, that would have been further negotiated out of that, but be that as it may, preceding in a democratic process, the vote on the majority basis was that we would agree to pay copyright. So John went back and met with Dean Burch, and out of those discussions came in effect the law, the copyright law, as it turned out. There was an earlier situation, and I wasn't on the NCTA board then, where the NCTA had agreed to pay copyright and there was a legislator, and I forget, I should remember his name because he really became an enemy after that, and at the very last minute the NCTA board did a flip-flop and decided that they weren't going to go along with this particular, I believe it was a senator, and he really became an enemy after that point. So that was part of our problem. So that kind of lifted this bastard child cloud that was over our head, or everybody thought it would. As it turns out, today where the cable operators have to pay retransmission consent fees and a lot of the networks, in my opinion, and I'm not a cable operator any longer because I'm retired and I can say this, is they are blackmailing the cable operators to carry the various additional channels that they've developed in lieu of paying retransmission fees. I'm from the old school, I think if it weren't for the cable television industry the broadcasting industry would not be where it is today, particularly the classic cable television industry where we, as cable operators, got the broadcasters into a lot of markets they would have never gotten into were it not for the cable operators. My own personal opinion is that the cable operators shouldn't be paying the broadcasters, but the broadcasters should be paying the cable operators, particularly where the cable operators are delivering a signal into a market where they otherwise couldn't get into. And so I think that needs to be flopped around. If you ask me what my feelings were about paying copyright, I think Johnny Gwin at the time that he was the chairman of the NCTA did the right thing because he lifted that cloud, and in lifting that cloud I believe his understanding, as my understanding, and everybody else's that was on that board's understanding was that we would have this compulsory license, be able to deliver all of these signals without all these other restrictions and this thing now of where we have to pay copyright fees on signals that we were supposed to be able to deliver under a compulsory license, and then on top of that have to pay retransmission consent fees, that's wrong. That is totally wrong. Somehow or another, this industry has to get itself in a position where it can go back and lobby and change that rule because it's double-dipping, is what it is.
KELLER: Do you think that someday the industry will be able to do that?
IACOPI: You know, I don't know, Jim. I haven't been involved actively with the NCTA for a number of years. I think under its new president that it has a better presence on the Hill, but from the NCTA there's been a number of little splinter groups that have developed, groups that are representing small cable operators, the classic guys that I was talking to you about. I know the future of the industry's in the major metropolitan areas, but a lot of these what used to be remote areas are now becoming suburban areas, and they themselves are going to become major metropolitan areas. I don't think that the NCTA has done as good job as they could have done in representing the entire industry, and I sincerely don't think that they've done as good a job as they could have done in the way of maintaining a presence for the industry on Capital Hill. I think they could do t a lot better, and in answer to your question, if they were to exert more effort in that direction, and the effort can not just be hiring a number of hired guns, so to speak, professional lobbyists, you have to get the natural grassroots part of this industry into Washington D.C. so you have constituents talking to the various legislative representatives, and that's difficult in this day and age. Back when I was the chairman of the committee, a lot of these guys were owners of their cable systems. Now the industry has consolidated a lot, there's larger companies that own the systems, but one of the primary responsibilities of system managers should be to develop a rapport with their congressional representatives, and one of the expenses that the company should go through is allowing their people to go back to Washington D.C. to lobby these individual congressmen and senators, and consistently do it year after year after year, saying, hey, we're out there. We're a valuable industry, we provide a valuable service and we need to be recognized. One of the big issues, and maybe I'm jumping ahead right now that I can see, is that you've got the satellite providers, Dish Network, etc., they have the right to deliver local signals, but only the major networks. Now remember, you asked me before about must-carry. I remember when must-carry came along and we had cable systems that had a certain channel capacity, maybe 21, 22 channels, and all of the sudden this must-carry rule came along, and you know what? We had to go out, we had to borrow more money, we couldn't afford it, we had to rebuild our systems, we had to develop more channel capacity, and we had to put those stations on because we were required to. Now these satellite guys come along and say, "It's economically unfeasible for us to carry all of the local signals." So what happens? The independent guys get hurt, the PBS guys get hurt, and the whole philosophy behind this whole thing, the FCC said more and better television for everybody, is being pre-empted by these satellite guys because they say it's economically unfeasible for them to deliver all these other signals. I say tough. It was tough for us, it ought to be tough for them, and that's one area where I think the industry, and the NCTA representing the industry has let the industry down to allow that to happen.
KELLER: So where's it going to go?
IACOPI: I wish I knew where it was going to go. I don't mind competition. I'm an advocate of competition, but I think you've got to have competition on an even playing field. The playing field has to be level. In other words, you can't require one team to go 50 yards for a touchdown and the other team's got to go 100 yards for a touchdown. That's pretty much the way it is right now. So I think that needs to be equalized. I think the satellite providers provide a very important service. Whether they are going to be able to provide the same services as cable TV is going to be able to provide down the line, I don't know, I don't think so. My opinion is that there is a shortage of frequency space out there, and you know right now the government is auctioning off that frequency space at millions and millions and maybe even billions of dollars. Whoever buys that frequency space and has to pay for it has got to get a return on the investment, and that's going to come back to the consumer, but the cable guys now have cable and they've got fiber and they're not using any frequency space. It's all encapsulated in a conduit, so to speak, and so when that frequency space really becomes too expensive and it becomes limited from the standpoint of its availability, the cable guys are still going to be around. Nobody knows what the limits are in delivering signals over fiber. I really think that the future in communications, especially multi-faceted communications, delivery of high-speed data, telephone service, more efficient telephone service than we have right now is going to fall in the hands of the cable guys. That's why, in my opinion, you've got companies like AT&T that are making a big investment in cable TV.
KELLER: Do you feel that they're going to continue to put the various services together so that there'll be one cable coming into the home that will provide all of these services?
IACOPI: I think ultimately that's the way it'll be. Right now, it's kind of like it was back in the days when in order to deliver 24 channels we had to deliver two cables into the house and you had a switch on the back. Right now it's very confusing to the consumer. You take somebody in my age bracket who while I was in business I had a secretary and I would call the secretary in and dictate the letter and so on and so forth. I don't have any secretaries anymore, so now my grandkids are introducing me into the use of a computer. Sometimes the computer just absolutely drives me nuts. It has a lot of potential and possibility to it, but the population, in partial answer to your question, is getting older, and as people get older they don't want to be confused. They don't want to have this line over here for a telephone line, this line over here is the line that hooks up their computer to the internet, and this line over here is for cable TV. It would be much easier if you had one cable and one operator, you paid one bill, and in answer to your question, I think it's going to be the one cable thing in the end. How that's going to end up and how the government's going to deal with that from a monopoly standpoint, I don't know. But I think when you look to the convenience of the consumer, I believe that's where it's going to end up because it is more convenient to the consumer. It's easier for the consumer to deal with.
KELLER: You gave us a pretty good indication of what your feelings are and where it's going to go. Is there anything else you want to over before we wrap this thing up?
IACOPI: Well, I think, you know we were talking about San Francisco and the various problems that came along, and one of the things I think, kind of an after the fact basis that entered my mind was in the mid '60s there was this big thought of pay television, and Pat Weaver, who was former president of one of the networks went into Los Angeles and San Francisco and got the necessary licenses and permits to build a pay television system, and I can remember Marino and myself siding up with the theater owners in San Francisco because we thought that this was just a devastating thing. As it turned out, Weaver went about it the wrong way because he was going to build a cable system over a cable system rather than doing HBO and Showtime and some of the others and going out and getting the cable operators and making affiliates out of them, he was going to build his own cable system. So my recollection tells me that he went through about 76 million bucks and then the company, it's name, I believe was Skyatron went bankrupt so the system was never built. But I mention that because it's kind of strange. Today pay television is such an important part of the overall programming and services that a cable television system delivers, and as it turns out, HBO and Showtime and Cinemax and all those different services did it the right way where Pat Weaver did it the wrong way. As a matter of fact, you can remember when we were working together we purchased back some of that system that Pat Weaver had put up, not because the cable was of any value to us but the strand and the hardware was of value to us, and that helped us when were expanding the services out into the Sunset area. That's just kind of an afterthought. I think this business has been very, very rewarding from the standpoint that there wasn't a day that you came to work and represented this business where things were exactly the same. It was constantly changing, and I'm very pleased to have been a very, I feel, important part of a business that I think is going to be the future of communications in this country. The cable business was very good to me and I really appreciate being a part of it.
KELLER: Well, after you left the San Francisco area you worked for a number of companies who had smaller systems, and then you built systems of your own, did you not, in some of the smaller markets in northern California?
IACOPI: That's correct, yes.
KELLER: You finally retired from that after selling out those companies. When did you do that? Two years ago, last year?
IACOPI: No, it was just this last year, April of 1999 we sold what was known as the Westar Companies, and then I went into retirement, and so here I am.
KELLER: Gene, thank you very much. This has been the oral history of Eugene A. Iacopi for which we appreciate your time, Gene. Again, it was made possible by a grant from the Gustave Hauser Foundation, and this is a program of the Oral History Program of The Cable Center. Your interviewer again was Jim Keller. Thanks Gene.
IACOPI: Thank you.