Interview Date: Wednesday March 04, 1998
Interview Location: Denver, CO
Interviewer: Jim Keller
Collection: Hauser Collection
Note: Audio Only
Cable television innovator Carl Williams passed away on November 27, 2015. He was 87.
Williams was born in 1928 to a ranching family in Douglas, Wyoming. After graduating undergrad, Williams joined the U.S. Air Force and Air National Guard in 1952 and fought in the Korean War. During his six years of services as a fighter pilot, he simultaneously earned his Juris Doctorate from the University of Wyoming.
After graduation from law school, Williams joined Bill Daniels as an original partner in the cable brokerage firm Daniels & Associates. “Bill wrote a check for $600, and I wrote a check for $400 and we started Daniels & Associates by applying the funds to buy an ad in a broadcast magazine,” said Williams in his oral history.
After branching out on his own, he went on to build Televents, Inc., with systems throughout Wyoming, Colorado, California, Montana and Florida. The company merged with Western Telecommunications Inc., and was purchased by TCI in the late 1980s.
In 1968, while building Televents, Inc., Carl was elected to the Colorado State Senate where he served as the Chairman of the State Senate Affairs Committee. He later went on to serve as Chairman of the Colorado Republican Party. He remained active in state and national politics for the rest of his life.
A tireless philanthropist, Carl actively pursued and fought for the advancement of ethics and values in education, which lead him to establish and fund programs including the Carl M. Williams Chair for Ethics at the University of Wyoming, and the Carl M. Williams Institute of Ethics and Values at the University of Denver.
Williams, long a generous supporter of the University of Denver, is best known on campus as the namesake of the Carl Williams Tower, an elegant architectural landmark that heralds the University’s presence to anyone traveling on I-25 and visiting The Cable Center. The tower is home to the 65-bell Williams Carillon, one of the largest carillons in the country.
KELLER: This is the oral history of Carl M. Williams, taken this fourth day of March, 1998 at the offices of the Cable Television Center and Museum, Denver, Colorado. Mr. Williams is a cable television pioneer, entrepreneur, philanthropist, attorney, politician, aviator and scuba diver. These, I believe, are all important so you get to know the type of people that formed and shaped the cable television industry. As we start out, could you give us please, just a thumbnail sketch of your background prior to getting into the cable television industry?
WILLIAMS: I was born in Wyoming, a genuine cowboy too. My father was born in Wyoming and my grandfather arrived out there in about 1875 to be engaged in the livestock business and went on to become a sheriff and a state senator and extensive landowner. My roots come from Wyoming; I've never forgotten it. I moved down to Denver after law school in 1957.
KELLER: Where did you go to law school, Carl?
WILLIAMS: At the University of Wyoming, Class of 1956. Admitted to the Bar in Wyoming. It was at that juncture that I got acquainted with cable television.
KELLER: You went to law school and you also were in the service as I remember.
WILLIAMS: I was a graduate of the University of North Carolina in 1950, with a degree in economics, a focus in statistics. The Korean War came on that summer and I joined the Wyoming Air National Guard in the fall. I graduated in the fall of 1950. I applied for pilot training and was sent to pilot training in June of 1951. I had been called to active duty in February of 1951. I was stationed at Goodfellow Air Force Base in San Antonio, Texas, Williams Air Force Base, where I got the jet training, and in Clovis, New Mexico, and finally back to Cheyenne, Wyoming. My ambition was to go to law school because I recognized that with a degree in economics and a narrow focus in statistics, I still needed an education. Not that the law school gave me everything I should have had, but it finally got me functional. Out of law school, as fate would have it, I was looking for employment as a lawyer. In Casper, Wyoming hardly anyone wanted me. I don't know how I found out about... one of the premiere oil promoters in Wyoming offered me space in trade-out for a modicum of legal work - a retainer of $300.00 a month. I took that, took the office, and got a lot of pro bono work from the court. It wasn't going too well, but it let me get close to one of the more renowned promoters. That promoter, Tex English, drove me down to Boulder because Tex wanted to meet Allen Lefferdink, who's got to be one of the most notorious promoters in Colorado. I got to see Allen Lefferdink, up close. I thought it was prophetic that I would wind up later on associated with Bill Daniels, the premiere promoter of the day.
So that's about how it happened. The practice of law wasn't going to well, so a friend of mine came into the office, his name was Bob Laidlaw. He was an accountant, had a large family that lived on a modest income, but he had the idea of taking over what was called a community antenna television system in Thermopolis, Wyoming. This was in early 1957. I said, "I don't know what a community antenna television system is." He explained it was television by wire. I said, "Sounds interesting." The Thermopolis system had a mortgage held on it by the American Legion. It was in default and the Legion was foreclosing on the system. Bob's idea was to buy this out of the bankruptcy. I suggested that we buy the note prior to bankruptcy and take it over that way. I agreed to be his lawyer, and we worked at the thing until he realized he didn't have enough money to do it. I committed some of my money to do it too. We wound up undertaking the effort together. It was really interesting.
We went up to Thermopolis, Wyoming. It all came to a head early in July of 1957. The public sale on the steps of the courthouse, was to take place on the 5th of July. We spent the 4th of July making offers to the American Legion to buy their note. We'd make an offer and they would say, "Let's see." And they'd come back, "We've got a better offer. Can you do better?" The people on the other side, bidding against us were Roy Bliss and Tom Mitchell. To leap forward, Bob Magness and I finally bought him out, and Tom Mitchell went to work for me in California. My first effort to get into the cable television business was frustrated. I was unable to buy the note and Roy Bliss prevailed and became the proud owner of Thermopolis, Wyoming. A television station located in Thermopolis, Wyoming, owned by Mildred Ernst and her husband, later on, boiled up into the '60s, complained to the Federal Communications Commission about Roy Bliss and Tom Mitchell bringing microwave into the cable system in Thermopolis, since it would be competitive to her television station there.
KELLER: Where were they importing the signals from?
WILLIAMS: I believe it was Billings and I think it was Idaho Falls. I think it was Casper too.
KELLER: Was she carrying a combination of the networks?
WILLIAMS: Yes, she was cherry-picking all over the place. She was getting a canned product and doing no local origination. It was a mixed bag, it was a very, very sketchy operation, not a very good signal. They were barely able to make it play. They owned the radio station there too. I think it was the radio station that was really supporting the television station. It was pretty close to a start up. This became an industry case in the sense that the National Association of Broadcasters took great interest in it and funded Mildred Ernst's petition and appeals and finally got a firm decision that the Federal Communications Commission had the Constitutional right to limit microwave service, or the granting of licenses in a community that had a television license that would be economically threatened.
KELLER: The importance of this is that this is the first time that the FCC took over any regulation of the cable television industry, after having said two years previously that they had no jurisdiction over the industry.
WILLIAMS: I don't think it was just that way, Jim. It wasn't regulation over the industry; it was regulation over microwave licenses. The new ground that they plowed was that economic hardship to a licensee in a competitive hearing was admissible. Or a license could be denied based on economic hardship to another license. That had never been allowed before. That made the Thermopolis thing a marginal operation and extremely costly to Roy Bliss and Tom Mitchell, and affected their systems in Worland and Greybull and Basin, and their further efforts to cable into Riverton and Lander.
KELLER: All of which were being served by microwave at that time?
KELLER: This was one of the very early FCC decisions about cable television, which was known as what?
WILLIAMS: The Carter Mountain Decision.
KELLER: And it was the first case which lead to the eventual First Report and Order, where they took over full jurisdiction over the industry. Is that right?
WILLIAMS: I think so. You asked me earlier what signals were being imported into Thermopolis and it was Idaho Falls, Idaho. The transmission facility was on Carter Mountain, which is in extreme northwestern Wyoming. Doing due diligence on Thermopolis took me on a cold turkey call to the cable television system in Casper, Wyoming. I announced at the front desk that I would like to meet Mr. Daniels if he was in, or the manager. I told them that I was an attorney representing a client who was interested in cable television. I got issued into Gene Schneider's office, who was a vice president and manager of the cable system and got to meet Gene and Bill Daniels and Winston Cox and one other member of the board of the Casper system. I explained to them that I needed some help of an engineering nature; that I didn't really know what a cable system was. Acting as attorney, I needed some expert advice. We talked quite awhile and I guess they took a liking to me because they called Richard Schneider in, Gene's brother. Richard was the engineer of the team, and a brave one. And I met Richard there, that same day.
KELLER: You mentioned a man by the name of Winston Cox.
WILLIAMS: Winston Cox was a grand man who was early on associated with Bill Daniels through the oil industry. Bill, returning from the Korean War as a fighter pilot, opened a casualty insurance agency in Casper, Wyoming. He had learned that business from his father and with his brother in Hobbs, New Mexico, but he wanted to branch out. He was very effective marketing his insurance programs, and became well acquainted in the oil industry. This was the day in the early '50s, of quite an expansion of some important fields up there. Winston Cox was one of those land and oil operators that Bill became acquainted with, and Winston took a shine to Bill. And there were others too but Winston, above all others. Winston had been a school teacher and a devoted father and family man from Billings, Montana. The interesting thing about Winston is that he had a withered left arm and hand and was slightly hunched, a little bald and he wore fairly heavily corrected glasses. He was an extremely intelligent man, but awfully sensitive. When he focused his mind on a business matter, or business problem, he had an uncanny way of putting his finger right on the heart of the issue. Winston was an investor in the cable television system in Casper, Wyoming.
KELLER: So this was the catalyst for bringing all these people together, and this is how you got introduced at that point.
WILLIAMS: That's right. Winston was an investor in the Rawlins, Wyoming system, and in the Farmington, New Mexico system. That group had those three systems when I first got acquainted with them. Winston went on to become my associate for a long time in Televents and of course, tragically, took his own life in about 1975. He was just one of those all time good guys. He served on the board of directors with me of Television Communications Corporation and that had been an amalgamation of a bunch of systems that Daniels and Associates... I'm getting ahead of myself. I was talking about Winston. He would go into New York four times a year and sit in their austere boardrooms and win incredible respect. So he was never non-pulsed no matter what environment that he was in.
KELLER: You walked in and met all these people in the Casper system.
WILLIAMS: Yes. Richard Schneider agreed to travel with me up to Thermopolis, Wyoming and take a look at this cable television system.
KELLER: What was your connection with the Thermopolis system at this point?
WILLIAMS: A prospective buyer.
KELLER: Bliss had thought about putting it on the market at that point, is that it?
WILLIAMS: It was under foreclosure, it was definitely on the market. We met the manager Joe Henry. Joe Henry, incidentally, later went to work for me in California, worked under Tom Mitchell. Joe was a very creative guy, and he showed us around the system. It was an awful thing. They weren't really on poles, they were buried. It was on top of the ground, splices were made by taking the center conductor and twisting it together. The braid was twisted up and taped up, and you couldn't believe it....and then buried. Somehow it worked, but not very well - obviously wasn't going to last very long. Richard said "Now here, take a look at this; this is not right."
WILLIAMS: Yeah. So we spent the whole day, from early in the morning to late at night. I still have the check somewhere, where I paid him 25 dollars for consulting that entire day. That launched me into at least an inkling of understanding what a cable system was.
KELLER: What year was that?
WILLIAMS: This was still 1957 and I'm still in the late spring. To go forward to July 4th, I just backed out. I knew I was getting sandbagged locally by Roy Bliss who lived right over the hill in Worland, Wyoming and I wasn't about to get this. So I didn't bid anymore and Roy took it over. Then we went into the Carter Mountain thing and I went on to do something else. But I had a call from Bill Daniels, that mid-summer.
KELLER: Forgive me, Carl. We went back to where you had lost the initial bid to Roy Bliss, then the Carter Mountain Case and then it was under foreclosure through Bliss, at that point? Or Bliss was under foreclosure in the Thermopolis system when you brought Schneider in? I'm losing the chronology there.
WILLIAMS: No, Joe Henry was under foreclosure and Roy Bliss wanted to add that to Hughes' string of systems.
KELLER: So we're still in the first go-around on the buying of the system, so it was only foreclosed once and the American Legion held the note on it, is that correct?
WILLIAMS: That's correct, yes. Anyway that whole deal blew up and my first attempt at getting into the cable television business did not gel.
KELLER: So as part of your making your bid for the system, you hired Richard Schneider to do due diligence with you on the system itself.
WILLIAMS: At that time, my only investment in cable television was out of pocket and opportunity lost running around the country trying to do something. So, I got a call after that was all over, from Bill Daniels, who suggested that I go to Denver and participate in developing a new company that he had formed called Televents. He offered me 700 dollars a month to come down and act as counsel for Televents and apply for pay television franchises in the west. I remember a telephone conversation. I said "Look, make it 500 dollars and give me some stock." And Bill said, "Well, we'll see about that." So that was never resolved at the time I arrived in Denver in September of 1957, to engage in furthering the efforts of Televents to get pay television franchises. An interesting sidelight was that Bill told the corporation was all formed and ready to go. I got down there and found out it wasn't a registered corporation at all. The money that Bill said he had all lined up to undertake this project...it wasn't there either.
KELLER: A situation that you found many times in the next few years.
WILLIAMS: We all did in the cable business in those days. We had our neck out a mile all the time. I incorporated Televents, and set out a plan to travel to the major cities in the West. I can't remember where our first presentation was but from north to south, I went into Great Falls, Montana, Billings, all the big cities in Montana.
WILLIAMS: Helena, yes, and of course Winston Cox who was one of our stockholders, and he was able to give me some entrees into those cities. I went into Salt Lake City and Ogden, Utah, and of course Colorado Springs. I went into Grand Junction, Fort Collins, Greeley, Loveland, Longmont, Boulder – no we didn't go into Boulder and I don't remember why - Denver and Pueblo. In the Pueblo application we went in league, and this is still the fall of 1957 with Larry Pae who was a cable operator in the San Luis Valley. He had built and was operating in Salida, where he lived. He also had Alamosa and Monte Vista, La Jara, and Antonito. I'll come back to that one a little later. We didn't go into anything in Nebraska. We didn't go into Cheyenne. So it was really Colorado, Montana and Utah. I did a lot of traveling that fall. In the Denver metropolitan area, we applied everywhere. The only thing we were really granted, was Aurora. Aurora was granted in December of 1957.
KELLER: Tell me something about the applications in these various markets. What were you promising, or what were you proposing in these markets. You used the term pay television as opposed to cable television.
WILLIAMS: Yes, and that was the thought. The franchise application, proposed ordinance that we laid before them, would first of all license us to do business in the distribution of pay television. It would allow us to go on telephone poles, if we could make arrangements with the telephone company and the power company. And that's all it amounted to. It really allowed us to go into the public ways.
KELLER: Easement type of thing.
WILLIAMS: The issues, the emotion that came from this thing, the fear ...people came out in droves to fight this. They were absolutely livid and paranoid about it. I can remember up in Greeley, and other cities, they just didn't like it. They threw all kinds of questions about copyrights. The reason we only asked to do pay television is that Bartlesville, Oklahoma had been started that same fall and one of the things that we did was to go down and observe that operation. In Bartlesville, Oklahoma, they built a cable system capable of delivering one channel. They had an enormously elaborate headend with film chains and the latest of video multiplexing equipment, all done intensely; a promotion like the film industry would do. But on the outside, they used the minimum of cable, the minimum of amplification. I think Jerrold built the amplifiers, and they were so narrow that all they would do was pass one channel.
KELLER: Did Vuemore have a cable division at that point or were they just involved in.....so Larry Boggs headed up the cable portion of Viewmore.
WILLIAMS: That's right. Their core business was theaters. It was in that same timeframe that Bob Lewis went to work for Viewmore Video. I've got about six weeks longevity on him. The thought was that all you needed was one channel to do pay television. So that's all I was asking for. It was a fallacy. Actually if Bartlesville, this is just my opinion, in long range retrospect, had been built with a maximum capacity amplifier available of the day, which you could probably eke eight channels out, it might have survived, if they had taken all the channels from the surrounding cities and put them on; added that to the pay television. It might have gone.
KELLER: But their theory was they delivered movies that had been licensed by Viewmore Theaters and delivered to the homes.
WILLIAMS: That's true. Their thought was that they would get the first runs and first cut at displaying movies. And, of course, it didn't work. Again, the television stations went into apoplexy around Bartlesville. Threw the most films on their stations in broadcast form that they had ever seen. I can remember a survey made that indicated people were not satisfied with the service or the cost because they couldn't use it all the time. At five dollars a month, if they only watched one movie, it wasn't worth it.
KELLER: You were visiting the Bartlesville system in relationship to your applying for pay television franchises in Montana, Utah, Idaho and Colorado.
WILLIAMS: Yes. This was in the early fall of 1957. Gene Schneider, Bill Daniels and I traveled together down to Bartlesville, Oklahoma. That's the closest Gene Schneider and I came to doing the deal together, maybe unfortunate for me.
KELLER: No, that Bartlesville experiment folded very shortly. The "cable television system" just kind of rotted away at that point. It was never reactivated at that point.
WILLIAMS: No, until some years later. The franchise effort followed that and we capped the year by getting the Aurora franchise, starting in 1958. I think we were a little short of money.
KELLER: Who was financing this effort?
WILLIAMS: I will tell you this story about my buddy, Bill Daniels. When I had arrived in Denver, he had an office and his secretary had an outer office, and that was all. I had set up office in the Shirley Seboy Hotel. Bill finally expanded the office and got a little office for me within the Mile High Center, in Denver at Broadway and 17th. We moved from the third floor originally to the eleventh floor. We were right next to the bank . Bill was going to go over to the bank and get Televents to borrow some money. He was going to put his personal guarantee on it, and he was going to submit a personal financial statement. He handed me his financial statement that he had made up and asked me to comment on it. I said "Bill, don't you owe any money?" He said, "Well, yeah, I owe some money." I said "Well, you've got to put it on here." He said, "Well, why?" I said, "Well look, you own a house, you have a mortgage on it, don't you?" He said, "Sure, but it's not due. I put down my current payables." I couldn't believe it. I've always said that if the man had had an education, he would have been dangerous. But he's a quick learner.
KELLER: And a hell of a salesman.
WILLIAMS: And a hell of a salesman. And one rich son of a bitch.
KELLER: Carl, right now this brings up a point and it may not be the right point to talk about it. As much money as has been lent into the cable television industry over the past 50 years, and the fact that Bill and many of the other people established their businesses here in Denver, why is it that the Denver banks never really provided a substantial amount of capital into the cable television industry? All of it had to come from New York or Chicago or Boston or Los Angeles or other places. For some reason or another, there seemed to be a big void in the Denver banks not wanting to touch the business.
WILLIAMS: The gravity would be toward saying "Well, a bunch of cowboy bankers, and they weren't sophisticated," but I don't think that was true. Fact of the matter is that the Denver capital accounts of the banks just weren't big enough to take that on. The banks, as large as they were, weren't really strong enough to take on the risk of this brand new industry.
KELLER: They were in later years, but still didn't put any substantial amounts...
WILLIAMS: Well, they did to the extent that they had a capital account to sustain it. The west is a capital short area. It always has been; still is. And that's because we're expanding all the time. We need more money. And frankly, the revenue of the banks doesn't create enough equity quick enough to sustain the loans that are required by the business community to do things. So that's why we're importing money from New York and Minneapolis. So I don't fault the banks for that. I will tell you that there was an era when we were blessed in Denver, when Rex Rhodes, a native of Colorado moved from the Bank of New York, where he had, as a senior loan officer, become well acquainted with cable television, and went out looking for business to cable television association conventions. Took a lot of business into New York. When Rex moved out to Denver, to the Colorado National Bank, we really had a friend who understood the business, because he had made many substantial loans. That's why I gravitated to the Colorado National Bank years and years ago and why I'm still there. I don't know what our banks are doing now.
KELLER: Well, they're all out of state now. Did Bill get a loan from United Bank at that point?
WILLIAMS: Yes, we got the statement done so it wouldn't be fraudulent.
KELLER: And they did come up with the money with his guarantee on it at that point?
WILLIAMS: Yes. That showed that we were really in a pinch, and meanwhile Bartlesville shut down and here we were with all these applications outstanding and only one that we had landed in Aurora, and really no where with all to proceed further than that, and wondering about the viability. As a matter of fact, we were twenty years early. We cast around.
KELLER: Was Televents still operating the Wyoming systems, Casper and Roswell?
WILLIAMS: Televents didn't have anything at that point, nothing.
KELLER: So the Casper system was outside of Televents.
WILLIAMS: Yes. They were all that Casper group. Call it Gene Schneider systems, they're TCI systems now.
KELLER: But Bill had a piece of it, as did Winston Cox. So that was outside of Televents. So Televents is without any operating revenue at this point?
WILLIAMS: That's exactly right. In early 1958 pay television is pretty much on ice, we somehow found out that there was a system in Miles City, Montana with companion systems in Utah.
End of Tape 1, Side A
Start of Tape 1, Side B
KELLER: Carl, we're starting on tape B at this point, so do you want to continue with the story?
WILLIAMS: Yes, we're in early 1958. Pay television is pretty much on ice. We learn about a system in Miles City, Montana. I go up to take a look at it and what it is was not a cable system, but a closed circuit distribution system in the sense that there is only a film chain at the front end that goes into RF amplifiers and out on open wire throughout the city of Miles City. This open wire is not even the structured type that's manufactured with a spacer. It's put up very carefully, so that the two wires run parallel from pole to pole. A tap was an induction type of thing that lay on there, and a smaller twin lead goes into a house. The business plan was to deliver motion pictures from the Viacom Library, and others. That's when I first became aware of Viacom, as a company. The company that promoted this was well connected in Los Angeles. There was no off air signal in Miles City. The idea was to buy film from whatever source. Also, because these people in Los Angeles were well connected in the film industry and the broadcast industry, they were able to work out a deal with NBC, that NBC would take their nightly news, and daily ship it out in a can by air to Miles City, Montana, where on a two day delay, it would be aired in Miles City. The Monday Night News would show up on Wednesday in Miles City. The local people there in Miles City would daily go out and meet the Frontier Airlines DC3 and take these heavy film cans off the airplane, and deliver back more to Frontier Airlines to ship back to New York, to NBC or to Viacom, or wherever they were going. Quite an operation, extremely expensive. It wasn't paying, it was gushing red ink. The people who started this thing did not want to continue.
So I met with the executives that came in from Los Angeles. At this point, the company had been sucked up by a much larger company and the executives of the parent, then were just trying to shed some of this hairy operation from their corporate structure. They were very erudite gentlemen meeting in Miles City, Montana to do something about this. I cut a deal with them to take the thing over for nothing down. They'd give us the stock and we'd take it over. We cut that deal, and signed it and away we went.
Our idea was not to continue to operate it that way, of course at a loss seemed like a losing thing to us, but to convert it to a cable television system. Our idea was to bring in the Billings station. I think there was only one station in Billings at the time. This was spring of 1958. We asked Roy Bliss, who had added a microwave system into his own operations in Worland and Thermopolis, to apply for the licenses and build a microwave link to pick up a Billings signal and get it into Miles City. We thought that would be the basis of a good cable operation. A couple of things happened. One is that the translators at the time, they called them boosters, were developed in the West.
KELLER: That's where they would amplify the off air signal of a television station.
WILLIAMS: Right. An unorganized association of people who wanted television would pitch in a little money. They would buy equipment that would receive a channel of television and rebroadcast it on the same channel, as directional as they could get it. They were called boosters. And that's the way a lot of the rural communities at that time, got into their first television. That had not been done in Miles City, but one started. This alarmed us a little bit but not to worry because they weren't licensed, and certainly the Federal Communications Commission would ultimately shut them down. Well, they didn't. So the number two problem came up, and that's when the Carter Mountain case again fell in our laps. They put all microwave serving cable systems, all applications, into a freeze. So we were sitting in a situation in Miles City, Montana in the fall of 1958 when we couldn't move forward because microwave applications were frozen. The boosters were coming in on us and the Commission wouldn't do anything about that. The whole thing was running in red ink, and we folded.
I went to Miles City, Montana on Frontier Airlines on December 31st of 1958 with the objective of shutting down the cable system. My first cable system, only there wasn't a stick of cable in it. It went dark on the evening of New Year's Eve. Dave Rabines was the local manager up there and he nearly wept. Peter Syler was the young high school boy who was the gofer; he did everything. Those people went on to become significant in Miles City cable operation when it got rejuvenated. Peter Syler, in broadcasting, had a good career.
I loaded up a modicum of excess things that I thought would probably disappear like a couple of 8" television sets, put them in the back of the company station wagon, which was a 1957 Chevrolet two door station wagon with no radio, no air conditioning, and drove that thing back to Denver. It was red, one of those chalky red ones. There ended 1958. I have to go back in there. We also undertook Daniels and Associates in 1958.
KELLER: That's the time that Daniels and Associates was formed, as you were going out of business in Miles City? Was this a method of getting something that would produce revenue at this point, within the organization?
WILLIAMS: That's the first thing that ever made any money at all. I'm not sure exactly when in 1958. But it happened this way. Bill had just come from I think the national convention in 1958, which was very key to the genesis of Daniels and Associates. Bill came away with the idea that the cable television industry needed a broker. He noticed that there were broadcast brokers hanging around cable. There were a lot of broadcast brokers advertised in the broadcasting publications, but no similar company specializing in cable.
KELLER: What made him think there would be systems for sale?
WILLIAMS: I can't tell you, I think it was Joe Serricks, whose picture I just pointed out to you in the Neco Allen picture in 1951. He was a friend of Bill's, an older man. I think he mentioned he'd consider selling a system; would Bill handle it for him. So Bill says "Let's form a company." And we formed a company with no partnership agreement at all. We just wrote checks. Bill wrote a check for 600 dollars, and I wrote a check for 400 dollars and we started Daniels and Associates by applying the funds to buy an ad in a broadcast magazine, it was not much of a cable journal. I even designed the ad. It was a stick figure of the Rodin statue "The Thinker." It had something about thinking about making money, thinking about selling. We got a listing in from Newcomerstown, Ohio and another in from Ajo, Arizona. We strutted around with this thing for awhile and somebody won the Newcomerstown system. Went in and bought it and I never did go there; it was a pass-thru deal and it came so fast. It came through the mail.
Later on in the '60s, we had a listing from the owner of the Athol, Massachusetts system. I designed this new ad that said 'We have listings from Ajo to Athol.' Ajo never did sell. As far as I know, it's still in the family down there. In the spring of 1959, Joe Serricks wanted to sell his systems. Entered into a listing agreement with him. But that was my job. I made up these listing agreements; I made up forms for people to fill in about all the information about their system. I went back and assessed the three systems that Joe Serricks had. And Joe said "I'd like a million dollars for them."
KELLER: Which were Bradford...?
WILLIAMS: Bradford, Clearfield, and Olean, New York. I think there were about six thousand subscribers among all of them, maybe seven. That seemed like a little more than the market. But Joe was a crafty old fellow. It wasn't so much over the market, he didn't think, that it should sell.
KELLER: Was there a market at that time?
WILLIAMS: No. They were all private deals, neighbors getting along. So I went back and with a Polaroid camera went through everything, and Joe Serricks gave me my second education about cable television. I clamored up towers and poles, and had him explain everything and how it worked. His crew was just so friendly. You remember Brownie. A team of guys, two big old guys, Bill Taylor and Brownie. I went back and put a presentation on this thing and made a cash flow projection on columnar pad, did it in pencil. Meanwhile, Bill had been in Rapid City, South Dakota for the opening of the Rapid City system. That system was built by the people out of Alabama, Birmingham I think. An electric power utility built that system.
WILLIAMS: In Rapid City. He met C.A. Sammons in Rapid City. Sammons said he'd be interested in a cable system.
KELLER: Sammons, at that point was in the hotel business?
WILLIAMS: His core business was insurance. He's an interesting sideline, we ought to get into him. Marvelous gentleman. I went down with my penciled cash-flow projection and presented the deal to C.A. Sammons in his five stories of offices, running his insurance company. He had accountants and lawyers on staff. They pored over this whole thing, I was grilled this way and that way. And they bought the thing. We closed in November of 1959. It was a million bucks and we made a commission of 50,000 dollars. We had to carry an interest in it.
KELLER: In what deals did you take a piece of your commission for stock in the various companies?
WILLIAMS: We set the deal and the tone of the thing right then. Sammons and his organization didn't have the faintest idea what to do with a cable system, so we said we'd run it.
KELLER: So this was the beginning of what you called...
WILLIAMS: Not yet. Systems Management Company didn't come along until just a little later. We were kind of doing this with our hip pocket.
KELLER: But none the less, as far as you know, this was the first time that there had been any sophisticated management projections in a cable television system? No outside management had ever really come in, other than the management by the entrepreneurs.
WILLIAMS: I think that was right, there had been remote management. There had been some pretty good financial [flownase] early on, when I was struggling in the Mile High Center. Irish Shahan, who ran the Farmington system, and later went on down to New Mexico, had a beautiful system down there. Irish had a good sense of the spreadsheets and how they all flowed together. Not that anyone had ever gone in with a penciled copy before and sold it.
KELLER: So you sold it to Sammons Insurance Company at this point.
WILLIAMS: Sammons formed a new corporation and named it at the suggestion of Bill, PenNy TV, a play on the fact that some of the systems were in Pennsylvania and one was in New York. And also the notion that this was a cheap way to get good television. It was low cost. It didn't last long but I thought it was very clever.
Then after that closed, in about 1960, I took off for the East, in the Miles City station wagon, no radio, no air conditioning, three bald tires, to show the Daniels and Associates flag throughout the East. During that period of time, Marty Malarkey decided that he wanted to sell. I did an assessment of the Pottsville, Minersville, Schuylkill Haven and Harrisonburg, Virginia systems. That took a lot of traveling around, but I was already back there. Worked up the presentation on that one. Took it back to Dallas and Mr. Sammons bought that too, in 1960. You've got to understand that the management that was right there at Bradford, Pennsylvania, and in Pottsville, Pennsylvania were pretty solid. They were established companies. They had worked out their administrative details. It would be unnecessary to disrupt what was in place there, in my judgement. It was just a matter of getting them to conform to our accounting and let them do what they wanted to do. Control their capital expenditures and their accounting and we'd be OK. And it worked pretty good.
KELLER: So all the Sammons deals, you had a carried interest in, as well as a management contract.
WILLIAMS: The third Sammons deal was in Athol, Massachusetts, Pittsfield, Massachusetts, Orange, Massachusetts, and Warren, Pennsylvania. I cannot remember the gentleman's name that owned it. It was personally owned by a remarkable entrepreneur who owned a light bulb manufacturing company in Warren, Pennsylvania. He had a manager there. That manager was also somewhat of an engineer and he floated throughout the Athol and the Pittsfield systems and was spread pretty thin. It was this deal that really split Bill and I, and I don't know whether I should talk about this.
KELLER: You can just say that. There was a reason for the split, and this was part of it.
WILLIAMS: We listed that system for a million, one, those three I just mentioned. That gentleman who owned the light bulb company said "I want a million, one." We wrote it out - that was clearly the listing. Bill took the thing down and represented it to C.A. Sammons as a million, three. Then gave me the job of going out and selling it to him. I took C.A. Sammons all through the system; it was the first time he'd been to a system. We drove through New England. He got a real kick out all that. The lines, what a figure eight cable was, what aluminum was. He'd never seen anything like that before. He really seemed to enjoy it. I think he was about 62 at the time. I thought he was an old man! Be he absorbed it all very quickly. I don't know what it was. I didn't really disclose it to C.A., what the listing was. He asked pointed questions "Do you think he'd take less?" I said, "I don't know. Why don't you call him." So he went down to Warren, Pennsylvania and closed the deal himself. He met the entrepreneur in Warren who owned the light bulb company. And they wrote out a deal on hotel stationary for a million, one. That was the end of our sweetheart deal with C.A. Sammons.
KELLER: Yet you did manage those systems for some time after that, as I recall.
WILLIAMS: Yes, we did. We must have had intervening acquisitions, and I can't remember what they were, exactly. They must have come along in '61, and we acquired Grand, Texas; Palestine, Texas; Barstow, California and Laguna, and Kane, New Hampshire all for the Narragansett Capital people.
KELLER: Had you acquired any in California by this time?
WILLIAMS: Yes. In 1961 we bought Martinez. We supposedly had eleven hundred subscribers, it really only had about 700.
KELLER: I want to get into the Martinez thing at some later time.
WILLIAMS: It became apparent that we weren't going to be able to make a credible showing at being the managers of all these systems with just a loose structure of each office picking up what it was. That gave occasion to the creation of Systems Management Company.
KELLER: About the time that I came in.
WILLIAMS: It was really a web at the time. It gave some legitimate structure to tying all these things together and made an accounting system that an outside owner could have some confidence in, that what he was being charged for in his system was on the up and up and carefully done. And it worked pretty good.
KELLER: Parenthetically, I want to put in this. The purpose of Systems Management Company was to manage the systems that Daniels and Associates had a carried interest in as well as waiting the time that the new people, coming into the business could form their own management team. So it was an interim type of situation, as I recall.
WILLIAMS: That's correct. I guess we thought we might go on forever. The only systems that we managed, that we really didn't have an interest in, were the Cox acquisitions. And Cox 's first purchase was Aberdeen, Washington, a big system for its day. Twelve, fifteen thousand, but it was a big system. Their additional acquisitions were Tyrone, Pennsylvania... We managed Oil City but that's one that C.A. Sammons bought but didn't want us to have a carried interest in. This was after the New England thing. Ned Cogsville actually ran it for us. Oil City was an interesting system, there must have been 25 systems in Oil City. What Ned did was go consolidate a bunch of them and buy them out, overbuild them, what have you. At the time we bought it we still only owned about 75% of the area, we had to go out and buy the rest, which didn't amount to much. They gave up pretty cheaply. The point is, the management of all the systems was beginning to be significant. This was about the time of year after Bill had built the building at Third and Milwaukee, highly modernistic building. Had basement quarters in it and I took offices down there, accounting offices. It was when Dick Zell came on board, and Carol Rice of Rice and Enright were advising us. We put this IBM 360 machine in there with all the carbs. We centralized all this accounting. It was quite an operation, I think it was the first time that a hundred thousand accounts had ever been run from one location.
' It was along in that same period that I had met Glenn Jones. I had met Glenn the summer before he graduated from law school at CU, which was the fall of 1960, I believe. We shared the same clothesline, we lived in the same apartment building. I talked about cable television, I met his father, the grand gentleman, Alvin. When Glenn got his degree, he picked a partner and started to practice law. We kept in contact. I suggested to Bill, "Let's let these young lawyers come in here and use one of our offices. It's not doing anything, we really don't have a need for it. Let's let them come in and set up their law practice. We'll throw our legal requirements to them as a trade out. That was the deal. And so Glenn had moved into the building with us. This is when you came on board, when Ed Fletcher came back from Pennsylvania, Dick Zell and Burt Gellan.
KELLER: The theory, as I recall, was that you had to have accounting, engineering, and promotion and sales within Systems Management Company. And that's what you set out to do. At that time, my partner and I had leased a portion of the building, and that's how I was introduced to you and Bill at that point. I came on board shortly thereafter.
WILLIAMS: Well, we had a good time, in those days.
KELLER: This was late 1960 as I recall, or early 1961.
WILLIAMS: That was a real good time. It really got to be a serious practice when C.A. Sammons decided he wanted to run his own systems. I think he had about 30 thousand at the time. He gave us notice that he wanted to move the management of the companies back to one of his insurance offices in upstate New York. Since he owned 80% of the deal, and 90% of the New England deal, our whole deal went in half there and then extinguished. We loaded everything on a truck, and sent it back to the city in New York where C.A. Sammons Republic Life Insurance Company had an office. The truck got a hot wheel and burned up, and a lot of the records that we sent were lost. Which I think was a great benefit to them later on in IRS audits. This triggered us to consider exercising the buy/sell agreement that we had in all our carried interest contracts with C.A. Sammons. I wish I could remember exactly when this was.
KELLER: It had to be '61 or early '62, as I recall.
WILLIAMS: I think we got into '62, Jim and somehow, Bill got acquainted with Al Stern, of the Starwood Group in New York City. Starwood was a family management company. They only managed assets for one family and that was the Julius S. Rosenwald heirs. Alfred Stern was one of those. Edgar Stern was a cousin of Alfred and Edgar Stern started Starwood up in Aspen. It hinges from the same gate there. The advisors thought that this might be a good thing for Alfred. He was looking for something to do. He had been a vice president at NBC, was only forty years old, very talented, very well thought of at NBC, very erudite, distinguished looking man. Still is, saw him a year ago. We went back to make him a presentation. Took him the statements and said, "Here are the systems. This is our right under this buy and sell. If you'll back our play, we'll give notice to Mr. Sammons that we elect to buy." The way it worked technically, from a legal point of view, is that we made simultaneous offers. Each side of it had the right to make a simultaneous offer to buy or sell, same price. At the offeree party, Mr. Sammons had 30 days to make up his mind. I remember that this was in the fall, and I had obligations in California while we were waiting. I had taken off to California in my own car and it had broken down. I brought it back and Bill said, "Well, take my Cadillac convertible." So I was in California in Bill's Cadillac convertible, at the time C.A. Sammons decided that he'd sell. Bill got hold of me, I think I was probably in the Laguna Beach office at the time. I might have worked my way up the coast and was in Martinez. "Get back here as quick as you can!" I was in the San Francisco area. As I came back through Eli, Nevada, I remember I got a little carried away on the slot machines. I didn't have very much money with me, but I blew it and I was coming all the way in on American Express cards. We set about to take those systems over. I went immediately into New York City, armed again with financial presentations and prepared to make the legal representations, to make the buyers secure. We started with the Chase Bank. Somehow the Rosenwald family had an inside track there and they were going to come in...it was a 10 million dollar offer. The Chase was going to come in for six, I believe. Mezzanine Financing was going to come in for three, and Alfred only put up a million dollars. Only! Seemed like a hell of a lot to us.
End of Tape 1, Side B
Start of Tape 2, Side A
KELLER: This is session number two of the oral history of Carl M. WILLIAMS:. Today's date is March 5, 1998 and we are again at the offices of The Cable Center. Carl, yesterday when we ended up, we were ending up just about some of the transactions that your management company at that point, Systems Management Company, was going through and I believe it was the time when Al Stern and Starwood made its entrée into the cable business.
WILLIAMS: At the heart of this thing, were all the interests and cable systems that had been acquired by C.A. Sammons through various companies that he created, and in which Bill and I had minority carried interests. We had a buy/sell with Mr. Sammons, which either party could initiate. We initiated to buy and made an offer, and a simultaneous offer to sell at the rate of ten million dollars. That was for a hundred percent of the equity in those several systems. Before making that offer, Bill and I went to New York and we worked out an arrangement to get backing of that offer that we would make, from Alfred Stern. Alfred Stern was a client of Starwood Company. Starwood Company was a company that had professional management and represented only members of the Julius S. Rosenwald estate, of which Alfred was a member. So it wasn't a Starwood deal it was Alfred's deal. This was in the late summer of 1963 when I was traveling in California, this is somewhat repetitious, and Mr. Sammons made his election to sell. That put the scramble on Bill and me and the Starwood people to get about arranging the financing, specifically. So I went back to New York and spent nearly a month there, first with the Chase Manhattan Bank and arranged the principle and the primary financing, and then middle level financing came in from several foundations and trusts and employee funds. That was one really interesting thing from a technical point of view, for a kid from Wyoming to go back to New York and take part in arranging these funds.
My law credentials were understood, but my youth was probably reviewed many times. I can remember Alfred's lawyer coming in and giving me a quiz like it was an inquisition. He was sure I was trying to lift the family jewels and run away with them. We went on to become very good friends. Mutually confident.
KELLER: Did you retain the 20% carried interest at that time?
WILLIAMS: Yes, we did. We did that in a way that did not create a tax incident for Bill or me as we went in, which was a very clever thing worked out by Don Enright and Carol Rice back here in Denver. We formed a corporation, in effect, and took the stock of the corporation in exchange for our interests. Then the second stage was for the corporation, which was then going to be Television Communications Corporation. Quite frankly, at first it was Televents Corporation. That was a new corporation. The name got changed later to Television Communications Corporation, because Alfred didn't really like the identification with the other Televents group, back here in the West. That was an interesting way - that really avoided a major tax burden.
KELLER: Do you recall how many subscribers...
WILLIAMS: I think there were 30,000 subscribers in all this.
KELLER: So that still made it one of the larger companies at that point. How long did Systems Management Company manage it before Alfred took over his own management?
WILLIAMS: I think it was about two years.
KELLER: And then, as I remember, he hired Gordon Fuqua, didn't he, as his chief operating officer? While Systems Management Company was still existing, did Daniels ever do another deal with Sammons?
WILLIAMS: I don't know that he did. Mr. Sammons is a very sophisticated man, so he didn't take part in any outward animosities. But he was noted for, and we were told about this trait of his. To get on his bad side...that's it. While I think he was always friendly and congenial, we didn't do any more deals.
KELLER: At the same time, you were elected to the NCTA board, right around this same time.
WILLIAMS: 1963. Yes. It was an interesting board at that time. Sandford Randolph, I believe, in addition to Bill, were....actually I think I went on a little earlier. I think I went on in 1961 through the urging of Bill and Sandford Randolph who I'd met on my initial trip back there in 1959-60. Ed Whitney, who was from this part of the country, out here. They were all on the board. While I was on the board, Irving Kahn came on the board.
KELLER: You had sold some systems to Irving at this point.
WILLIAMS: Yes, we had sold Silver Center, New Mexico, Bruce Merrill of Ameco being our client, to TelePrompTer. This must have been in the '60s. That's when my job was to take a corporate outfit back to New York and hand it over to TelePrompTer. That's when I met Monte Rifkin. He was in the loft of this four story, kind of a dusty office building, that TelePrompTer was renting. Monte's office was in a loft there, it was a steel desk that's half the size of this one here. That's when I met Monte. We didn't talk very much that day. Monte just acknowledged "OK, got it, thank you."
KELLER: He was Irving's financial guy, wasn't he?
WILLIAMS: I'm not sure what his title was, but he wasn't the senior financial guy at TelePrompTer, he was down a level or two from Irving.
KELLER: So Irving came on the board at National Cable Television Association.
WILLIAMS: Right. George Barco was on the board too at the time, and Strat Smith was our attorney. One of the most memorable things about that period was that Rust Craft had filed copyright action against the cable systems in West Virginia, Clarksburg and Fairmont, both of which were owned by a New York financial group. This was a signal case, very serious case for the industry. Large New York law firms were pulled into the thing on behalf of the Rust Craft people. The industry was really put in jeopardy right there. And that suit had been going along for a year or so. The industry was paying through the nose, heavily assessing on the basis of subscribership, throughout the entire industry. Strat was arguing strenuously in his theory of defense for the copyright, was that we were an antenna service. Merely an extension of a television service.
KELLER: And therefore, not subject to copyright payments.
WILLIAMS: Right. And that all this had been put in the public domain, and the broadcaster or even the program owners had relinquished their copyrights, having put it in the public domain. That's really the legal issue. And actually it held up for awhile. But then it began to falter, and when Irving got on there he said "This business about being just a reception service is going to limit this industry from growing and becoming what it can be. It will limit its potential." So he was arguing to throw out this notion of being just an antenna, because he wanted to go in for closed circuit, he wanted to go in for pay television. He wanted to be in two-way. This was in the '60s.
KELLER: At that time he was distributing boxing matches, by microwave cable systems, wasn't he? That was very early programming for cable systems.
WILLIAMS: Sure. Very early. George Barco just got incredibly upset, when Irving would talk about doing these things. Was trying to get Irving kicked out of the Association, off the board, away. He really wanted to stay with the buggy whips. Irving in his extremely erudite way, bulky frame of his...I can remember the way he could hold his hands and just charm people into his way of thinking. It was quite a dialogue, very, very spirited. I was doodling on a scratch pad, and I sketched out in three dimension, a coffin. On the coffin, I had an antenna sprouting out of the top of it, except that half way up the antenna mast, it was broken and it was laying over on its side, and I captioned that little doodle "Here lies the antenna concept" and I showed that to Strat Smith who turned white! To this day, Strat remembers that. We talked about it at Bob Magness's funeral just a year ago, last November.
KELLER: Needless to say, Irving won the day.
WILLIAMS: Ultimately, he did because Rust Craft case got settled, but CBS came after us. And CBS went for copyrights. It just really got incredibly tangled there. I don't remember all the parties or all the issues, but it was obvious that we couldn't hang on to that antenna theory.
KELLER: Do you recall the 1966 convention in Miami? Fred Ford was Chairman at the time. He was a past chairman of the Federal Communications Commission. He was then president of the National Cable Television Association. He got up and proposed to the meeting that he thought it was a good idea for the industry to give up their programming rights in exchange for over the air signals. What other cases or issues did come before the board?
WILLIAMS: I remember a little one, but it was fiery. We were trying to develop a public relations program for the industry. The Association decided to create a film about the industry and its history and how it got started and what it was. The genesis of the industry was the main issue. Whether it got started in Marty Malarkey's territory or Bob Tarlton's territory, or John Walson's territory. The Pennsylvania guys were just going nuts about this.
KELLER: Of course, Astoria, Oregon had a claim at that point too.
WILLIAMS: And that was the reason that the Oregon thing got into it. I was sitting on the Board and I think...frankly, I think at the time I had traveled more than anyone on the Board, being in the brokerage business created a reason for me to travel. So I went to Astoria. I went up to the hill where that antenna...There was no cable system there at the time. But I went to where the antenna site was. So I knew about this, and knew that it was in '48 or '49, clearly before any of the guys were making claims to already.
KELLER: I remember how they compromised that issue is that the first commercial system was in Pennsylvania, but the first cable system was in Astoria, wasn't that right?
WILLIAMS: Right, and that was the compromise I offered.
KELLER: OK, you were the one who offered that. At the same time, Televents was developing they system northeast of San Francisco.
WILLIAMS: Martinez. Yes. We bought that system in 1961 from Bill Gentry. And Bill was a very clever electronics fellow who built his own amplifiers and cobbled up a system over there. We bought it on a note, that is Bill took our note for a substantial part of the purchase price. We took it over in September and that's when we folded it into Systems Management Company and I hired Frank WILLIAMS: to run that. Frank was a ham radio operator, had been an engineer with Pacific Gas and Electric and knew something about outside construction. Appreciated electronics.
Frank went down to the office and there was no truck, so he volunteered his Volkswagen Beetle to the company. He'd been on the job about a week, when the only employee in the company when we bought it from Bill Gentry was the girl in the office, and she quit. So Frank was the number one new hire of Televents of California, at one time was the only employee of Televents of California.
The system was reputed to have had eleven hundred subscribers, and the contract was very quickly put together. I did not inspect that system, survey it, prior to purchase. That was one of Allen's jobs. So Allen did that one, and it was early in his career.
KELLER: Reference is to Allen Harmon who was also a broker with Daniels and Associates at the time.
WILLIAMS: So by the time we got counting exactly who was paying, the eleven hundred subscribers collapsed down to about seven hundred subscribers.
KELLER: But you had the note so you were in pretty good shape.
WILLIAMS: Yes. We compromised a little of that note. It got a little tense there for awhile. Like everything else, you make adjustments and you go on. We struggled with that funny system out there for quite some time, and finally decided that we just had to rebuild it. It was junk. Dale Coneble, who worked for me in Alamosa, had a brother. He was a nice young man and also a good worker, construction, understood what he was doing. Worked under his brother. Went out to work for Frank. So Frank and Coneble, with help from the Ameco staff, rebuilt that system out there.
KELLER: Weren't the amplifiers you used about the first transistorized amplifiers that came off the line at Ameco?
WILLIAMS: They were. Bruce had proposed to me that he use his new transistorized amplifier out there. It sounded like a good idea. There was a tube in it. There was another manufacturer that had experimented with a solid state amplifier, and I can remember him at some convention explaining what he was doing, but he couldn't quite make it work. Bruce's company was working on that too, and in order to make that last...I think it was the high band at the higher end, they finally just put a tube in to take care of that. They didn't have the solid state device to control the full band. They put this thing in, and it was a little difficult making it work. But Ameco sent crews into Martinez. This was 1961. I dealt near exclusively with Bruce Merrill for a long, long time.
KELLER: And ultimately he did make the transistorized amplifiers work and he pre dated Jerrold and all the other manufacturers in the solid state amplification.
WILLIAMS: He had quite a lead on it. Earl Hickman was alternately a consulting engineer and full time engineer for him. And Earl Hickman, I think, deserves a lot of credit for the lab work in that period of time. Incidentally, he is still a colleague of mine in San Diego. At Gillespie, he owns a hanger right next to the hanger I own out there. Earl Hickman devises this thing, and we rebuilt that Martinez system and began to expand it. Of course you know the rest is history. We wound up with 20,000 subscribers.
KELLER: You expanded into other areas.
WILLIAMS: We bought out the Time-Life operation, the ATC operation, and then we really made a big, big system out of it. I think at that time it was probably the largest privately owned cable system in California.
KELLER: Tell us about this. There were some problems with the governmental authorities in some of those communities, Martinez, Orinda, Pleasant Valley, some of these others. Do you remember what these were, how they came about, what happened?
WILLIAMS: I'll say. I wonder if it came about because at the national level, the industry was getting over promoted. Where I was winging it along on a 24-channel system and looking at a thousand miles of cable to upgrade, to do something else, the cities were on my neck to get something done. And listening to the hype that came out of the whole industry...
KELLER: This is when, early '70s?
WILLIAMS: Wow, this gets into the '80s. At the same time very liberal, control minded junior city officials came on the scene out there. This started in '80. By '81, these very aggressive city managers would hire a staff to look out after cable. They really wanted to regulate us as a public utility.
KELLER: At that time they had the right to do so.
WILLIAMS: I don't think they did. Obviously we would litigate that point too. They demanded that we do this and that, and they wanted us to execute a new franchise that had these many, many restrictions as to what we could program, what we could charge, and what we were obligated to build, in terms of plant capacity. It would have been totally onerous. They didn't care that the equity would have gone out of the business. That didn't bother them a bit.
Meanwhile, my subscribers were beginning to rumble and I just decided to undertake a rebuild of the system, even though I was coming up to the short end of my franchise. I was coming up to within 24 months of the end. I started to rebuild, and offer more signals, and promote that. Meanwhile, I thought that would be good faith, and it would moderate the efforts of the city to over control our cable operation. Well, it didn't. As a matter of fact they reported back to their councils that we were not being cooperative, and recommended that our franchise be revoked. So these staffers in Pleasant Hill, in Martinez and Orinda met together and decided on this course of action. And within a week, each council had before them a resolution to revoke the franchise of Televents, and that passed on first reading. Well, that really got our attention. Harold Farrell had been engaged as our attorney in these things, these early negotiations. And although we carried on the negotiations, Harold was in the wings, ready to come into action. So he was quite ready to step in. We filed injunctive measures against two of the cities. Orinda decided they didn't want any part of this and they rescinded their first reading. I think Harold convinced them that they were on shaky ground. So, in effect, we enjoined Martinez and Pleasant Hill from going forward with a second reading on this resolution to revoke our franchises. That went into the hearing stage with a trial in the future. The legal maneuvering of all that got hot and heavy. To make a long story short, we settled that lawsuit with the cities. They having been threatened with triple damages on this thing, decided they were wrong and we came out with a 25 year franchise on our terms. But we paid 600,000 dollars in costs to get it, and none of it went to the city in terms of taxes. It's just in legal bills and in public relations firms that we hired to sensitize public sentiment about the city's actions. And just an awful lot of executive time.
KELLER: At the same time though, there was an incentive through the National Association to pass the Cable Protection Act, which then finally came about sometime after that. Something was going on at that time just to prohibit this kind of blackmail.
WILLIAMS: The whole country was going nuts about that time. I'm sure that subconsciously the foundation for my exit from the industry was beginning to take form around there. I'm sure I never revealed that, maybe not even to myself. By the time we went through '85 and early '86, I think we were really toying with the notion.
KELLER: Then you finally sold that system and others to TCI, is that correct?
WILLIAMS: Yes, everything, lock, stock and barrel to TCI, and the deal was closed in December of 1986. I sold them the California properties, the Florida properties, the Wyoming properties and the Colorado properties.
KELLER: A couple of these, I want to pick up, because I think there's an interesting story. You built a system on Coronado Island in San Diego, virtually right under the antennas of the television stations that were coming out to the island. Tell me how that came about and how you got involved in that and how it worked out, and your timing of it.
WILLIAMS: I can remember pretty distinctly, I think it was 1970. I was in the state senate from '69, '70, '71 and '72 sessions. I had a call from California off the Senate floor and they said, "You know, we've got an opportunity to make an application in Coronado."
KELLER: This was before there was a satellite put up there to bring in other kinds of programming.
WILLIAMS: Oh, yeah. In my cable experience, satellite was really available in 1978. That's when HBO launched, for me.
KELLER: You were looking at Coronado, which was in a major market, right under the television signals, to build that system without any additional signals; you were prohibited from bringing signals in from outside. You didn't have any satellite signals. Is that basically correct?
WILLIAMS: Well, no, I can't remember the Oedipus of it, Jim, here's what happened. They said "Look we need 50,000 bucks down here" and I'm on the Senate floor, and I'm not carrying around 50,000 bucks. I said "I'll get it to you" and I didn't know what I was going to do. From the lobby of the Senate, there was a telephone booth. I called the bank and said "I want 50,000 dollars sent down to..." and they did. They took the money and deposited it, which was a non-refundable deposit. Of course at that time, California was my oyster. I wanted it.
KELLER: Pete Wilson, as I remember, was the city attorney at that time, wasn't he? California's current governor.
WILLIAMS: In San Diego. Yes, he sure was. It was really battled through, and we beat out the big boys. We beat out Time Life for that franchise. We had a lot of really good help.
KELLER: So what did you do with it?
WILLIAMS: We imported Los Angeles. We brought it in from the mountain out east of San Diego. From there, we made a pick up of some Los Angeles signal and fired it right into our office in San Diego. It wasn't a very good signal, so finally we backed off to the north and made another pick up point on the same mountain that bears the name as the observatory. And got a pick up that much closer to Los Angeles. That improved things. Those were long shots and they were always plagued with atmospheric disturbances. But we packed a lot of service that way.
KELLER: Did you bring in the independents from Los Angeles?
WILLIAMS: Yeah. So we had an enormous amount of carriage responsibilities. I think this might have been the very first dual cable plant built on the West Coast. I remember Kip Fletcher telling me about how they built a dual cable plant back in some Levittown project in New Jersey. And Tom Mitchell said, "We can do that." So we put in two twelve channel systems, side by side. And that gave us a 24-channel capacity which was as good as you could get then. And the system always did pretty well. There were some growing pains to it, but it didn't last long.
KELLER: Did you do origination of any kind?
WILLIAMS: Oh gosh, yeah. We opened up down there, and I do remember this was 1972 and we had an opening there. We had all the city officials in and all the newspaper people and the mayor came into the opening of our closed circuit television studio, local origination studio. We had a reception, and champagne and the whole works. It was really nice. We really got started on a good foot. We went over across the street, after it was all over and started to drink martinis. To make a long story short, my brother Frank had to be called from the hotel to get me out away from the policemen that night.
KELLER: You made it work. At that point of course with the advent of HBO and some of the other signals then, that system just really took.
WILLIAMS: Then it really took off.
KELLER: You had an ideal clientele with a lot of military people and a lot of military retirees who were used to seeing a lot of television.
WILLIAMS: We finally cracked the big Shores Condominiums, four big buildings there with over a hundred units per building. They had run their own systems and finally we cracked them. We did it by actually giving away a converter to each one. And then completely rebuilding their internal systems. We spent a lot of money to get them. Finally got them. I was a good system, and it was really the key to letting Televents jump to a much faster track. I'll say the fast track, but I'm very mindful of my colleagues in this business who really know what fast track means.
KELLER: You were in the big time then, buddy.
WILLIAMS: Yeah, I was swinging in the big time. And I've got to tell you that I admired Trygve Myhren who was then president of ATC and Tom Benning, his CFO for ATC. They had made a decision to cluster, and they decided, as a matter of policy that it would be fair and good corporate policy to allow their neighbors first shot at acquiring the systems they didn't want. And so I was called to see if I would like to buy their part of Lafayette, Orinda, Danville and of course, I said yes. They said if you want to sell it, we would like to have Coronado. Of course ATC was already heavily in San Diego County. And that would really induce the deal. So we dealt on that basis, and I dealt off Coronado in order to almost double the size of the Contra Costa County operation.
End of Tape 2, Side A
Start of Tape 2, Side B
KELLER: You also expanded into the state of Florida. How did that come about?
WILLIAMS: That came about earlier in the career. It was in the late '70s that Gail Oldfather had come out to become the president of Televents from Indianapolis. He had a minority position in a Florida operation along with Jim Ackerman and others.
KELLER: Now both Jim Ackerman and Gail Oldfather were with...
WILLIAMS: Economy Finance.
KELLER: That was a big name in the financing industry. It was for cable at the time.
WILLIAMS: It sure was. They charged enormous interest, but they made loans.
KELLER: When no one else would.
WILLIAMS: When you needed some air, they gave it. They deserved every percentage they got. Along the way, their executives were allowed to make entrepreneurial investments, and this was one. I had kind of an inside track in the thing cause Gail kept telling me about it, that maybe Jim and the rest of them wanted to sell. I said "Let's go buy it." I had a terrible time convincing Gail that we ought to take a look at it and march on it. He said, "Golly, they want too much for it. " We finally bought it for two and a half million dollars, down there. All of Citrus County. Crystal River, north of Tampa; about an hour and fifteen minutes north of Tampa. It was a great, fast growing country. The system was growing pretty fast . I want to tell you that when Gail repeated to me that they wanted to sell the system, at way to much money at way too much to pay for it, I said, "I don't think so. Let's go buy it." And I went back to Indianapolis and struck the deal with Jim Ackerman myself, and we bought the system. That turned out to be, within a few years, quadrupled in growth. We never took any money home from that thing. It's really a capital short system, we just kept shoveling it in. But we had the growth figures to sustain it. We had the franchise for all of Citrus County, and there was no one else down there of any significance, and we ultimately built out nearly all the population areas of Citrus County. Had two management turnovers down there. Both of them had turned out to be stealing us blind. It kind of gave me a bad taste for Florida.
KELLER: Was that partly the situation when you sold everything to TCI?
WILLIAMS: Right. There were always serious competitive worries down there. The power companies were making some of their...rattling their sabers, and I didn't think too much about it, because I didn't think anybody would really let them do that. But everything seemed a little bit queasy. I feel as though I'm glad I didn't have the problem down there that TCI had.
KELLER: One of these days someone is going to do the Florida story, because that was an interesting story in itself, of how the industry developed down there. That has to be done sooner or later. In any event, you got in and got well and got out.
WILLIAMS: That's right. That wasn't my first connection with Florida though. My first connection with Florida was, quite frankly, to go for a New York group and determine whether West End Grand Bahamas could be the pickup point to cable the Bahama Islands. And I went down there to see if the technology were available to shoot from Palm Beach over to West End Grand Bahamas, and I looked at the whole island, I knew it would be great to be here.
KELLER: I can't see how you'd get a signal across.
WILLIAMS: Incidentally, C.A. Sammons owned the Jack Tarr Hotel at West End Grand Bahamas. The next thing, I was called down to John Spotswood's system in Key West, Florida. It was one of the remarkable systems in the early days. John Spotswood was the Sheriff of the county, had the franchise, and he had every advantage going for him. He added some minority stockholders whose equities had to be valued, and I think that's why I was called in, as near as I can recall. I went down and viewed that and he had the biggest damned antenna arrays that ever existed in the industry down there. There was no microwave down in the Florida Keys at the time. He had the huge arrays to pick up Miami signals all the way from Key West.
KELLER: How high did he go?
WILLIAMS: They were probably only 60 or 70 feet high, but it seemed like each (room) was about four billboards wide.
KELLER: Could that have been when the old parabolic antennas hit the hot air.
WILLIAMS: Yeah. It captured everything. John even had a little surreptitious subsidy. He never explained it to me. He had some of these antennas pointed toward Cuba to pick up Castro's ranting and raving, so that Washington could put an ear to what Castro was saying.
John asked me, while I was there if I would go to Naples, Florida and advise him as to whether I thought a cable system could survive in Naples, Florida. He even flew me in his (John wasn't a pilot, but he had his flight crew fly me from Key West up to Naples, drop me off in late, late afternoon. I spent the evening and the next day driving around there looking at everyone's signal, figuring out where the stations were. I reported back to John that I didn't think Naples would make a cable system.
KELLER: We're through the point now where you had divested of Televents and this was in 1986.
WILLIAMS: I sold them.
KELLER: You sold it to TCI. What then, did you get back into the industry any way. Have you made any other investments. Are you involved in it in any way?
WILLIAMS: That's kind of interesting, Jim. Take you back to point of beginning. My very first effort in cable television, Miles City, Montana, I closed the system down. I went into one of these pools after I sold out and I had a pocket full of cash. Played around with some of these young fellows that spun off from Daniels and Associates. One of them was Sea Island, Georgia, another very small system there. Their concept was to pay too much money for it and then raise the rates and make it more valuable, and they had just petered out on that one. So that was a failure...my first one and my last one. But in between was OK.
KELLER: Let's focus this next phase on the people who you recall most vividly as being forces either in your own career or forces in the cable television business over the time you have been in it.
WILLIAMS: Of course, Bill Daniels has got to be at the top of that list, and we don't have time this morning to cover Bill. I told you a lot about our early days and I think I'll let it go right there. Bob Magness, of course, was the most fascinating guy and close friend that I had in the industry. We met when Bob had just sold his very first cable system. He built it from scratch, he and Betsy, as the story goes. He gave Daniels and Associates number a call here in Denver and said he'd like to have an appointment, he'd like to buy a cable system, he'd be coming through on Saturday. Bill assigned me the job of coming down on Saturday and seeing this unknown person and talking to him. I met with him about 10 in the morning, Saturday morning, in 1959. It was in Bill's new building at Third and Milwaukee.
Betsy was with him, and Kim and Gary were small children in the back seat. It was a tan colored Oldsmobile 88. The kids were in the back seat, kind of like a cage for a couple of puppies. Betsy was such a sweet person, she waited in the car while Bob and I went in the building and talked. He explained what he wanted to do. Frankly, we only had one really available listing in the west. That was Bozeman, Montana. I suggested to Bob that he take a look at it. I said, "Frankly, I haven't been there. I don't think it's a very good system." It was owned by a Larry Pae, whose name came up early in this. And Larry Pae had been killed, and his widow was stuck with cable systems, not knowing very much about management of cable systems, in Salida, and Alamosa and Monte Vista. Larry had just bought Bozeman, Montana and it was going to be a problem and a trouble from the beginning. But now he's dead, and it was a desperate thing for the widow to deal with this dangling property up here. So Bob went up and took a look at it. Larry Pae's estate had very low basis and relatively low capital commitment anyway. So they were willing to sell it, just to get out. And Bob bought it. Bob was bottom fishing, but it was really some scrambled eggs.
Bob and I stayed in contact through the years from that point on. Later on, Bob had sort of an oral commitment to buy Salida, Alamosa and Monte Vista. After he got to Montana, he fell into a den of snakes up there with broadcasters and really got diverted. So when Shirley Pae had to really bail out of those properties, Bill and I bought them into Televents. I always felt a little bad about that, that Bob had a kind of a gentleman's first refusal on this. But, in this same timeframe, subsequent to the time I shut down Miles City, Bob said, "What are you going to do with Miles City?" And I said, "It's yours if you want it and when you want it. He said, "OK, hold onto it." It was two years after that, with nothing written, Bob said, "If you still want to let me have Miles City, I'll take it." And I just executed assignments of the franchise and the pole contracts, and sent them right out to him. Hell, we were doing this on the phone; it wasn't even handshakes. By then, Bob began to see the light of the enormous competitive predicament he found himself in, in Montana. There was a real effort by the broadcasters to throttle, and finally check the growth of cable television in Montana.
Ed Craney, out of Butte, and a broadcaster in Great Falls and Billings, all collaborated to program identically, so that cable systems could only get signals that were identical. They were really being stretched.
KELLER: Craney was a formidable advocate of the industry.
WILLIAMS: Very much. An associate of Ed Craney was George Hatch from the NBC station in Salt Lake City. George Hatch was always a visionary kind of guy and a good entrepreneur and speculator, and had already invested in some cable operations over in Nevada. They were not large systems, but they were up and going and proved themselves to be a good business operation. I do not know how Bob Magness ever identified George Hatch in that bunch of scoundrels and got him aside and made a close business association with him.
KELLER: Up to the day he died.
WILLIAMS: No doubt about it. This allowed Bob the entrée, gave him support to go back down into Idaho Falls and further to pick up the Salt Lake City stations, and carry them all up through Idaho and maybe hit Great Falls first. The capital investment required to haul that television all the way from Salt Lake City back in and then distribute it throughout Montana really took the steam out of that combine up there. It at least thwarted their efforts to do in the cable operation. Meanwhile Bob just all of a sudden got on a roll up there, acquiring other systems and making partnerships, and really put the Montana Cable Association on the map. Made important retainer of Washington counsel and went on the counter attack. But it was desperate, dark days for Bob up there. He was still very new in the industry and in strange territory up there. I worried about him, even more than the days when he got overextended and the stock went to under a dollar.
Here's what's important about it. Bill Daniels and I decided to divide our interests and go separate ways. It was Glenn Jones, acting as attorney, represented both of us and drafted an agreement by which Bill and I sorted out the interests we had in common and divided them. But that left me with the Colorado properties, and quite frankly, the California properties that were heavily in debt. Colorado was hopelessly in debt. It had been a good cash flow deal, but Bill insisted we suck that cash flow out and stick it in that crazy KFML radio station and buy all this fancy furniture from this fancy interior designer. Her name was Portia Moyers. That's another story, but that's the one that financially broke him, that and the Sammons thing. We divided and I took off. I needed some individual credibility of my own at that point. I was out there alone. It was Bob Magness that made an appointment for me to meet with Jim Ackerman, at the cable convention in Philadelphia, and we discussed what I needed to get this financial scramble recast. Bob Magness, in his funny way didn't say he was going to guarantee anything, but he gave a tacit understanding to Jim Ackerman that he was behind what I was trying to do and he'd like to see it done. So I always said that Bob helped me finance my divorce from Bill Daniels.
KELLER: So you had the Colorado properties which were heavily in debt, you had the Martinez system which was a piece of junk early on. So that's what you ended up with.
WILLIAMS: Yes. I of course had my equities in all those cable operations. They got consolidated, which was helpful. Systems Management Company really went out of existence, as managing for others. Alfred Stern wanted to take the operation back to New York City and play executive. Narragansett Capital always had a stronger loyalty to Bill than they did to me, so when they wanted to take their stuff over, I didn't resist it. I still had my equities in those operations. When Jack Kent Cooke made his first acquisition of the Narragansett Capital systems, this was Kane, Barstow, and Laguna...when that deal was all over, they had to send me a check. I don't think Monte wanted to do that, but he did. Then later one that Bill made for about 10,000 dollars in closing costs. I told him to go take a hike. That was that. It took the 200,000 and Jim Ackerman made me take the whole damn thing and paid it out in Economy Financing. Then of course, along the way, I was still on the board of Television Communications Corporation. I was the executive vice president, Alfred took the presidency and the chairmanship. And I'd go back to the board meetings four times a year with Winston until I realized that I'm doing this, there's a lot of glamour to it but I'm not getting a thing out of it, so I retired from the board back there.
Within a year, Alfred arranged to merge that into Kenny Corporation. Burt Harris' operations merged in at the same time. We had Kenny stock. Steve Ross was the chairman. Amazingly, Steve Ross arranged a merger of Warner Brothers and Kenny parking garages. Kenny was in the parking garage business, janitorial services in New York City. It was an amazing thing, and then changed over to Warner Communications. So I was holding Warner Communications stock. And about every year, for quite a while, I'd trim that thing for a half a million bucks. It just kept growing and growing.
KELLER: Did you have it when they finally merged with TCI.
WILLIAMS: No, I don't think so. Yes I did. Went in with Kahn. I didn't have any by the time Turner merged in.
KELLER: You can say that if you're not the father, you're partially the grandfather of Warner Brothers, now a major part of Time Warner Cable and some of the other companies that you put in the business.
WILLIAMS: I enjoyed it so much. Leonard Reinsch had brought Cox Broadcasting and all the people that he brought along, they were such gentlemen. Sophisticated. You couldn't help be around those people but learn something. You would emulate their way of doing business. You would learn something important. Leonard Reinsch had done a tour under the U.S. Information Agency. I remember traveling from New York to Dayton, Ohio where the headquarters for Cox was. I met Jim Cox, who's the scion of the family at that time. It was his father that ran for president. Franklin Roosevelt was his vice presidential candidate. You really knew that these people had been in business a long time, they're very, very stable. They're very erudite. They could take a broad view of everything and everyone.
Leonard Wrench had convinced them that cable was the thing to do. He had been really released to go forward and acquire cable systems on a broad scale. Of course, he came to Daniels and Associates. This was before he really made any acquisitions at all. We introduced him to Aberdeen, Washington and negotiated a deal and they bought it. That was the big system in Washington. They had no way in Atlanta to handle the management of the cable systems. So we took them over. From the beginning, we knew they were going to create their own management. They have big ideas. I'm being somewhat repetitious here. We closed, and Cox put on a reception for Aberdeen, not just the council but the business community. They somehow got the right connections and put out the right kind of invitations and they had a group of about 60 people in to introduce the community to Cox. They came in at a very high level, to explain their newspaper background and their television background. Then Leonard gave a slide show about the USIA in foreign countries and a tour he had just come back, an extensive foreign tour. It was so interesting. He had such presence and soft-spoken sincerity about him, such a command of the subject that he just sucked that whole audience in. Cox never had any trouble there. That's the way they did business. When it came time to put money into something, they just put it up. They went first class all the way and never hesitated to just go ahead and do it.
KELLER: They brought some good people in to manage it.
WILLIAMS: Very good people. About the most unblemished company in the industry. I saw him repeat that when we took over Tyrone, Pennsylvania and some of those others. I almost knew the format. They used the Washington law firm of Dow, Lomis and Albertson; Jack Matthews, just a young attorney. It was a whole new atmosphere for me, from this rough and tumble, half hysterical way that the cable pioneers were doing it. Here these people came in, they were already substantial. This is the way to do business, I thought.
KELLER: Sophistication in the industry.
WILLIAMS: Yes. And I can remember a meeting at a convention of the board. Leonard was brought on the board. Bob Leroux was kind of sputtering on the last vestiges of Strat Smith's stridentness about the broadcasting industry. Here's Leonard Wrench sitting there, a broadcaster, with a totally large view of this. Sincerely wanted to have things pointing in the right direction. Leonard said "Mr. Leroux, just what is your objective?" And with such a surgical kind of small, modulated questions, he completely surrounded Bob Leroux and showed Bob what he was doing. He was picking a fight he didn't need. He was enraging this audience, and it didn't have to be done. It was Leonard Reinsch who really began to give a level polished approach to industry problems, in my view.
KELLER: I'm going to ask you about someone else who I think you'll recall, whether fondly or not, George Morrell.
WILLIAMS: I didn't know George well, Bill knew him. If you recall, I told you about Bill going up to Rapid City, South Dakota. He met George Morrell up there. It was at that meeting that he met C.A. Sammons and took off on that whole adventure. But George Morrell worked for Midwest Video. He was an executive. We used to make fun of George Morrell. He sat very near the president of a large power utility. Down South, in those kind of positions those fellows played politics the way water falls off a rock. If you understand gravity, that's the way politics is done, pretty straightforward. George was on the board. Frankly, I never thought he had a whole lot of influence. He was more of a caricature. I think that he did some important things in his region. This Rapid City, South Dakota was an anomaly for his kind of a thing. And I don't think it was particularly successful for the company.
KELLER: How about Dean Devoe and Lou Lemieux of Southern California.
WILLIAMS: Two wonderful gentlemen. I knew Dean better than Lou. Lou developed Laguna and frankly, had a better sense of the responsibility for construction than anyone I had known at the time. Lou, somehow worked it out with the city and whoever else involved, that the cable plant in Laguna Beach, way ahead of its time, was going underground. It went in in first class facilities. In went in in conduit, and Lou would mother over every detail of how that system was good. From what I'd seen before, at first I thought Lou was overdoing it a little bit. I came to realize that when you're building underground, you better build quality or you're just building yourself a rebuild. Lou wasn't a particularly powerful guy, he was a great gentleman and a good friend and a really first class cable operator.
KELLER: What was his business before he got into the cable business?
WILLIAMS: I don't know. Dean of course...you put those two together and they were running mates, no doubt about it, they were two different kinds of guys. I flew in to Barstow to see Dean about something and he said "Let's go on down to Las Vegas for the night. You can catch a plane from there. " We got out of his airport about dusk, and he's checking the oil and he lights the goddamn lighter and looks down in the engine! I couldn't believe it! Well, it didn't blow up. So we'll take the next step. We got lost about three times between Barstow and Las Vegas. We're coming around looking for a runway and he said, "Which one do you think it is Carl?" I said, "I think it's that one, Dean." We got on the ground. Oh God, I'll never forget that ride.
End of Interview