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Cynthia Carpenter

Cynthia Carpenter 2019

Interview Date: February 1, 2019
Interview Location: The Cable Center, Denver, CO USA
Interviewer: Stewart Schley
Collection: Cable Center Oral History Program

Schley: Welcome to this iteration of the Cable Center’s Hauser Oral History Series. I'm Stewart Schley on a cold February in 2019. And I'm excited to be with Cynthia Carpenter, who, in a nutshell, whose career sort of tracks and traces a lot of important touchpoints in the modern evolution of the cable industry. So you can kind of take us on a guided tour, I think, of where cable has been. It’s great to be with you, and thanks for showing up.

Carpenter: Thank you for having me.

Schley: So, who are you? And I'll ask that question in this way. Tell me a little bit about where you grew up and your childhood, and touch on what was television for you when you were a kid.

Carpenter: I grew up in Connecticut. For me, my earliest set of memories of television are my brother was in charge of the remote. Or actually changing the channels on top of the TV.

Schley: I was going to say—

Carpenter: Making sure the antenna worked. So we watched what he liked, and I also remember it being an appointment. So growing up I was a figure skater, and figure skating happened after school, before dinner, when the TV was on. I remember feeling anxious to get home to see “Little House on the Prairie,” because it was only on at a specific time. I missed a lot of Saturday morning cartoons because I skated on Saturdays, too.

Schley: Are we talking black and white television…or the full color experience?

Carpenter: We had some black and white; we would see shows, but old reruns of it. And then in middle school, one of my best friend’s father was an attorney for ESPN. We lived pretty close to Bristol. And I remember trying to understand what is that? What does that mean, what does that stand for? But she was really excited about “this cable thing.”

Schley: Because when you were a kid, was it just over-the-air television coming into your home?

Carpenter: In my home, yes. Yes.

Schley: And then, how did cable find you? How did the cable industry find you? Or how did you find it?

Carpenter: I think it’s both. So a good friend of mine in business school started a job right after we both graduated from Boston University, and she worked for AMC networks. And my husband and I—we had just gotten married—I told her, “We’re moving to Denver. Do you have any ideas for me? What should I do?” She said, “Well, you love cable, and Denver is huge for cable.”

Schley: It was.

Carpenter: “So check it out. Go check out cable in Denver.” The first thing I did was I brought out my printed version of my alumni directory from my high school to see do I know anybody in Denver who has anything to do with cable. And one of the people in that alumni directory was Peter Barton. So I picked up the phone, called the number in the alumni directory and I got Peter’s secretary. And she said, “I will give him the message.” A few days go by. Six times I'm calling and calling, trying to get hold of Peter Barton. And I start getting frustrated, like why won’t he answer the phone? I had no idea he was pretty busy running Liberty Media. Finally, he picked up the phone and he said, “I don’t know you, but I know we went to the same high school, so if it’s between you and another candidate at some job, I'll give you a reference.”

Schley: Whoa.

Carpenter: A week later I got a job at Encore, which is a Liberty company. And I got to meet Peter in person a few days after that because we were having a celebration of our 100,000th customer.

Schley: And you’d never met him before.

Carpenter: I’d never met him. I'd only spoken to him on the phone. After that, we became friends. I helped him write a speech.

Schley: I knew Peter when his predecessor job was at TCI, Telecommunications Inc., which was, for a long time, the largest cable company. You mentioned Liberty Media. What was that all about?

Carpenter: So I think at the time Peter was working directly for John Malone. And what’s interesting about it, they were an owner of Encore. When I met him, it was ironic. Because he said, “Well, I'll give you a reference.” But I met him in person and there I was at one of his companies. So that was fun.

Schley: What was Encore? What was the role in theory behind Encore at the time?

Carpenter: So Encore was the bridge between where AMC left off, which was really movies from the Thirties, Forties and Fifties.

Schley: American Movie Classics.

Carpenter: Right. Classics. And bridging into current day movies. So it was Sixties, Seventies and Eighties. Our tagline was, “Hit Movies of the Sixties, Seventies and Eighties.” That was intended to bridge between where AMC was and going into the current day.

Schley: Because they felt there was sort of a gap there.

Carpenter: There was a gap, right. And there was a lot of content, really good content.

Schley: A lot of movies…

Carpenter: Exactly. So my role there was sales analyst. I spent a lot of time re-entering the titles of movies that were printed in the guide, the TV guide, and the movie guide—I can't remember if that was—

Schley: Typing them in?

Carpenter: Typing them into a database. And then de-duping. And seeing who’s playing the same movie over and over. What should we be playing? What should Encore be playing? How do we time—there was no time shifting at the time, but how do we schedule so that we’re competing with the other channels?

Schley: Encore was a premium service. You had to pay an extra fee for it. But was it a lower price premium or how did it work?

Carpenter: It was $1.00. Initially when it launched, it launched to TCI and it was a negative option and not super popular.

Schley: No, it was a controversial—and you were enmeshed in that, you were part of that. Explain negative option…

Carpenter: It wasn’t that I masterminded it.

Schley: How did it work?

Carpenter: So how it worked was for TCI customers, they would automatically have a dollar added to their bill for Encore. And it was sort of like we’re giving them this fabulous hit movies of the Sixties, Seventies and Eighties for only a dollar. Then I think people figured out, wait a second, I don’t even watch that channel and I don’t want to pay the dollar, so the negative option didn’t last all that long.

Schley: But Encore did survive and ultimately thrive and has become part of the Starz Media Group of multiplex pay TV channels. What did you learn? You were a young—starting your career. What did you learn, or what takeaways and impressions do you have about this industry, which is really in flux and sort of interesting at the time, right?

Carpenter: Well, at the time—so as we talked about, it was just Encore. While I was there, we launched Starz and the multiplex services. So it was nonstop, just energy and constant work. And it was very driven by John Sie and his personality and his drive. He’s so, so brilliant, and pushed you really hard to know the right answers and solve the problem and get to the bottom of it. So that was really foundational to what learning about how to be your best and how to continue to try for the answer and to become knowledgeable all the time.

Schley: I remember John Sie, S-I-E, born in China, came to the United States, became this force of nature in the cable industry. But you said “brilliant,” I think. He has this mind for mathematics that was—did you detect that…? I remember he would do these elaborate presentations about what was then a new concept. Tell me if I'm wrong. The notion that people would buy more than one premium channel was part of the business strategy.

Carpenter: Those presentations, that was my job. So I was the analyst that put together those presentations on PowerPoint, way back—the early Nineties version of PowerPoint. And I remember one night—so we didn’t have email then. Think about that. We started at work, we didn’t use email as a tool. So anything you did, you had to be in the office. So I was in the office a lot. But John had a presentation at Continental Cable.

Schley: Big cable company.

Carpenter: Big cable in Boston. So East Coast, we’re here in Denver. I remember it was Friday morning. I completely clearly remember this. It was Friday morning, he calls me at home. He carried around everybody’s phone number on a little tiny business card-size in his pocket. He probably didn’t even need to have it printed because he remembered it. He called very, very early in the morning. He was up early in Boston. And he saw one of the slides—it wasn’t a slide, it was a piece of paper I created. I didn’t carry it out to two decimal points, and he wanted me to fix it, and then FAX him that one page because there was no email. So I had to go into the office to do this.

Schley: To get to the FAX machine.

Carpenter: I always tell this story. I was in the office before Mark Bauman, which, I don’t know if you remember Mark Bauman. He was our CFO, and he was known for getting there before—

Schley: He was a hard-charging, driven guy.

Carpenter: I was there before him. I remember his face. “Somebody is here before me? What are you doing here?”

Schley: But you did it, you finished it, you fixed it. You know, today you would make a quick change on a presentation and just pop it over.

Carpenter: At home, in my pajamas.

Schley: Correct, but not then. I had heard John demanded a lot from his employees, right? So was it a hard job, or what was rewarding about that job?

Carpenter: Usually in any job that’s hard, the rewarding part of it is the people you get to work with. And that’s been constant throughout my career. That is what held me up. We were all working hard and as a team. We were all producing, and all creating, and all driving results, and that’s what made it really fun. And I'm learning. You're an absolute sponge at that time. I remember hearing John talk about broadcast, DBS, Direct Broadcast Satellite. That was my next job. I went to work for Primestar right after that. I remember him describing it, and I couldn’t believe it was possible to do what he was describing.

Schley: To beam television down to individual households from a satellite?

Carpenter: Right. From a big satellite.

Schley: One thing, I think, is interesting about your career as we’ll go through it, is that—you just talked about satellite television now. You have been at the center of all these sort of seminal transformations of the industry. Take us through—explain what Primestar was, if you please.

Carpenter: So Primestar was a joint venture, if you will, between the major cable operators. So TCI at the time, Time Warner, Cox, Comcast, MediaOne was another participant in it. The idea was to create somewhat of a coalition in advance of, and to defend the cable industry from what was on the horizon in the form of DirecTV.

Schley: We knew it was coming.

Carpenter: And then later, DISH. We knew it was coming. We thought, you know, cable can do that. We know how to do that. So the idea was to offer this service outside of in areas where the cable plant touched, but still within the franchise area.

Schley: You wouldn’t be cannibalizing necessarily your own subscriber base. That was the theory.

Carpenter: Right. That was the theory. Exactly. And it was really successful, particularly in areas where there was a lot of rural customers or rural potential customers. I traveled—my job, when I was with Primestar, was field marketing. So that role was, I was based at our headquarters which was in Stamford. But I would travel to our field offices, our regional offices, and help them market the service to their more rural customers.

Schley: OK, so the cable system or the cable company did play a role.

Carpenter: Yes.

Schley: It wasn’t totally direct to consumer from Stamford, Connecticut, to the end, to that new customer.

Carpenter: Each of the participants, each of the MSOs who participated in Primestar had a similar structure.

Schley: I think DirecTV was launched by a company called Hughes Aircraft in 1994, so this predated that. When were you present in the market with Primestar?

Carpenter: I was with Primestar starting in 1995, but it had launched prior. And the fun part of it was, I got to—so there are only five states in the US that I have not yet visited. A lot of it is thanks to my job with Primestar. That’s on my bucket list. But the idea was to go and make sure we were flanking our cable plants, right? And to defend that kind of holding the communities and make sure we were providing however our customers wanted to consume, we had an option for them.

Schley: You had an answer for them.

Carpenter: Exactly.

Schley: Was Primestar sold under the Primestar brand name, or was it sold under the cable company or mix of the two?

Carpenter: It was a mix. So with Time Warner, it was Time Warner Satellite Services. Then we started saying, Primestar By Time Warner Satellite Services. Then in a few years into the process, we all rolled up into one company. So we became Primestar.

Schley: And then what you describe seems really sound from a strategy standpoint. What happened to Primestar?

Carpenter: Well, the government.

Schley: The government happened to Primestar. All right.

Carpenter: The government decided it was too dominant and that we were not allowing competition. So Primestar ended up selling to DirecTV.

Schley: It's interesting because you and I were talking off-camera before about today, 2019, we are seeing this real severe deterioration of what we call DBS, Direct Broadcast Satellite. And for a long time, though, it bedeviled the cable industry. It was a very serious competitive force. And it's interesting you sort of saw both sides of the picture—how the satellite television infrastructure worked with and around the cable industry.

What did you learn about the medium, and the yin and yang of the two?

Carpenter: I think that the way people consume video really drives how we deliver it. Now you look at what’s happening in satellite; that’s not the way people are consuming video now. We were talking about watching on a small screen. My kids, who are now 20 and 22, watch on their phones. That actually is almost their first choice. And if they then decide maybe to watch it on their laptops, they don’t have TVs where they live in their houses.

Schley: I saw some statistics from Nielsen just recently about the growing millions of homes or customers fall into that category.

So what was your evolution following Primestar? Were you there for the demise, when it went away?

Carpenter: Yes.

Schley: So what did you do? Suddenly you're without a company, right?

Carpenter: I had a baby. Right after I left, I had my second child. It was perfect timing. I met Jana Henthorn.

Schley: Jana Henthorn is currently the president of the Cable Center.

Carpenter: I met her 22 years ago now because my daughter, well, 20 years because she is about to turn 20. And I met Ron Rizzuto. So I was in sort of a maternity leave pause between Primestar being purchased by DirecTV and then starting up with High Speed Access. So I worked with Jana and Ron to write a case study for the WICT leadership conference.

Schley: OK, so this brings your worlds together. Ron is sort of a well-known professor at Denver University and has been associated with the Cable Center for a long time. What was Jana doing at the time?

Carpenter: At the time, I think, Jana was with Jones. We’ll double-check, match up the resumes…

Schley: She was in the cable industry.

Carpenter: Yes. In the cable industry. And she became a really wonderful mentor to me. She has two daughters as well who are a little bit older than mine. But she was always such a good voice for me as a working mom, and leader, and somebody who understood sort of that balance—integration of your life and your work.

Schley: That’s been a theme, I think, throughout your professional life. You mentioned it earlier. Relationships, the team aspects of business, and career. But also this industry was early on dominated by men. Pole climbers, pioneers, technical people, engineers. A lot of the people you mentioned earlier as influences—John Sie, Peter Barton—obviously were men. Can you just talk about how you found—was the industry inviting toward women from an early point, and how did you deal with some of the, just sort of the gender issues that are unmistakably present in business?

Carpenter: John also has a daughter, Michele, who is my age. So he recognized—she’s a fantastic leader and super-smart. So there was absolutely in his mind no difference between men and women. He didn’t see us as one or the other. It was, can you do the work for me? Are you smart enough to keep up with me? His wife Anna is very strong and I think he’s been surrounded by tremendous women, too. He was a terrific force for me. He was the first person who said, “Join WICT and go to the management conference.” That was very early on in my career. So I very early connected with such a terrific network of women but powered by men, who said, “Go do this.” Then when I went to Time Warner Satellite Services, Dan O’Brien was the president of that division within Time Warner, and he encouraged me to apply for the Betsy Magness Leadership Program. So I was in Class 2. Jana was in Class 1. And that was another way I connected with these tremendous leaders and realized that I’m not the only one. I'm not the only one doing this. I was lucky enough to meet Ann Carlsen when I was in the Betsy Magness program, and she’s still just a wonderful friend and advisor and guide.

Schley: How do we explain Ann Carlsen to the world? She’s maybe responsible for populating 80% of the executive positions, an executive search specialist, right?

Carpenter: Ann has a company that places terrific people throughout not only cable, but now technology, and her business has evolved too, as has cable.

Schley: So it's hard to crystallize in a soundbite, but what has been the influence and value and purpose for you of WICT over the duration of your career?

Carpenter: WICT has really been the fabric that is underlying everything that I've done. It’s given me confidence and strength by meeting all these people, as I said. I mean, our stories intersect in so many ways. A lot of the women that I've met through WICT have a similar kind of home life to mine where their husbands are the primary caregivers for their children, as was mine, until our kids grew up and left. They are solving the same problems. What are the expectations of me as a woman at home and a caregiver, and at work? I want to be a strong leader and I want to advance. So it helped me recognize that it's not just women doing this by ourselves, but needing men to help us to recognize it, too. So I've been really lucky to be surrounded by open-minded, wise men who get that.

Schley: It sounds like part of it with WICT and perhaps other professional organizations is just that feeling that, oh, I'm not alone in this situation, right?

Carpenter: Absolutely.

Schley: And shared circumstances are important. So Cynthia, you’ve talked about WICT at large and the role that organization has played in your career, in your life. You’ve been president of the Rocky Mountain chapter of WICT and continue to be engaged and vital to that organization. What are you sort of proud of regarding those accomplishments, and what have you tried to do at that organization?

Carpenter: It's been a really gratifying ride with WICT Rocky Mountain. When I first joined the cable industry and joined WICT, we did not have a chapter here, in fact. The chapter kind of construct didn’t start until probably the mid-Nineties, where we, Rocky Mountain, formed a chapter. We’re one of 23 now, I believe. We are about the third largest. So about 1,000 members, which is just fantastic. And 20% of our members are men.

Schley: I saw that.

Carpenter: And what’s important about that is I believe to my core that no change will ever happen for any group of people unless everyone is involved in that change. It's been a really terrific organization that cares very much about advancing leaders through the—really, we activate WICT’s global mission, which is to empower women leaders. So we take that and we make that happen at the local level.

Schley: I like that activate verb. One of the ways you do it, I know there are many, but Tech It Out is a program you’ve alluded to. What is Tech It Out? And what happens there?

Carpenter: So Tech It Out, we started it here in Rocky Mountain Chapter…

Schley: That’s what I thought.

Carpenter: It's sort of the brainchild of Leslie Ellis and a group of incredible women. And Leslie is still really involved, thankfully. So we started this program that became a full day conference. In fact, when we first did it, we did it here at the Cable Center. And we outgrew it pretty quickly because it became this place that everybody needed to be. It's a daylong of keynote speech, speeches, we also have little segments that we call “Tech Talks,” riffing on Ted Talks. We have panels, we have demos of various new technologies and what maybe has been shown at CES, for example. But the important thing about it, it's meant to inspire people to really appreciate how technology drives our industry, and the key role that diverse populations can play in making that change happen. So we’re really committed to this ambassador program we have. We invite 30 to 40 students every year who are focused on STEM to come and spend the day. They don’t have to pay. We fund that, and then we pair them with an ambassador for the day so they can learn and ask questions of that person and get a good understanding of our industry.

Schley: I love that description. You're trying to expose people to how innovation is powered by humans, by people…?

Carpenter: Absolutely.

Schley: So Tech It Out is not for die-hard engineers necessarily…

Carpenter: No, not necessarily.

Schley: Anybody who’s interested. Great, thank you.

Carpenter: You're welcome.

Schley: Before we talk about your career progression, note that with Charter Communications today, one of your roles, perhaps your main role, is something called “employee experience.” Really interesting title. Right when we first started talking, you talked about the influence of co-workers and camaraderie and team. We have to mention you were a competitive hockey player for most of your youth as well. But what is employee experience, and why does it matter in a cable industry context?

Carpenter: Well, having started my career in analytics and marketing and product management, what I've learned most of all is that nothing gets done without a tremendous high-performing team. So the common team that I've been able to build on and recognize throughout my career is that as a leader, my job is to evoke the best and the highest potential out of everyone. Everybody has something to bring. You can't have a one-person team.

Schley: It’s a great way to put it.

Carpenter: So what was a tremendous opportunity for me was after we merged, after Charter merged with Time Warner and Bright House in 2016. I had the opportunity, thanks to my current boss, Rich DiGeronimo, to sort of solve for the problem of how do you empower and create this strong culture that is going to evoke the best talent out of everybody?

Schley: A big charge.

Carpenter: Huge charge.

Schley: How do you do it?

Carpenter: How do you do it? And what I drew on was what I know how to do is build teams. I know how to evoke that strength from each person. And I also know marketing and I know product management. So I think of the employee experience similar to the way I think of the customer experience. So you need to attract the employee to what you're trying to do to your mission, to your value proposition.

Schley: It’s sort of sell, right? I mean, you sell the argument?

Carpenter: Sort of sell. I think of it as marketing. It’s a mutual decision; we’re all deciding we’re going to come here and then, once they're on board, you need to really induct them into your culture. So you can't market or sell them something that isn’t actually true when they walk in the door. So inducting into the culture means making sure your values are aligned, making sure that you're building trust very quickly, because that’s the only way you're going to try and create results. And then, constantly investing in people. So there’s this dynamic circle of training and development and feedback that’s ongoing throughout someone’s career. And integrated with what they're doing and what their job is. So that’s another part of the life cycle. And as importantly, when somebody leaves, you want to make sure that they had a good experience there and maybe they’re leaving for a reason to advance their career or move or do something different. But you want them to think positively of their experience.

Schley: That’s interesting because I think a harsher approach is to say, “OK, lost that one. He/she is out the door. Let’s move on.” But you put more emphasis and intent around that, sounds like.

The mergers and acquisitions have been a constant part of the cable industry’s evolution, and you guys were at the center of one of the big ones of all time. Can you just talk about—I think some people think the cable industry is kind of monolithic. Every company operates in the same way because they're in the same business. Is that true or not, culturally, is that not true?

Carpenter: I think each cable operator has a different culture, and each programmer and device provider has a different culture. And even within the company, there are different cultures. Whether it's departmental or geographic, there are definitely different cultures. But I think what defines Charter, where I am now at least, is this idea of operational excellence in the name of customer delight. So the idea is if your customer is happy with your product because they're having a really frictionless experience, then you're doing a good job. And you're keeping that customer from needing to call you, frankly. And if your products are great, they shouldn’t have a reason to call you. But if they do, you should have different ways for them to reach you.

Schley: I think it's a great way to put it. I mean, I don’t think you want people to take your services for granted. But at the same time, right, you just want them to work and do what they're supposed to do. I love the “delight” word in that mission statement.

Carpenter: Right.

Schley: But it's hard.

Carpenter: It is hard.

Schley: It’s a hard business.

Carpenter: Oh, yes, there's a lot going on in the background to make sure that it's seamless.

Schley: Do you think—I always wondered, you know, there's this world of over-the-top video. And one of the elements of that world, I think—unfair is not the right word—but is it an advantage, is the customer care burden is not really on companies like Netflix or YouTube. So the phrase “over-the-top” really is sort of true. They're using an infrastructure that someone else has provided. Is there like resentment in the cable industry over the fact that you’ve empowered this new beast, or do you see partnerships evolving over time? What’s the culture around competitive Internet video?

Carpenter: I think initially yes. I sat in audiences and listened to panels of executives saying, “Oh, we should never have let Netflix happen.”

Schley: Totally. I heard it, too.

Carpenter: Right. That was several years ago. Now I think there’s an understanding, a realization, that yes, it is over-the-top. It is leveraging our infrastructure, but you're welcome. We have an amazing infrastructure. So now let's partner. Let's make sure we’re all benefiting from the fact that Netflix or Hulu are developing fabulous content. And let's make sure that we are the choice for how customers get that content.

Schley: Make it convenient. Make it affordable. Do a good job. I do think there is still very much a role for an aggregator who does bring delight to that process. To jury-rig your own video infrastructure in your home is challenging.

Carpenter: Yes.

Schley: I'm sure it is for everybody.

Speaking of infrastructure, though, after Primestar, you became involved in what would become maybe the seminal transformation of the cable industry, which was the move into broadband Internet delivery. I would just like you to kind of tell us what your role was, what the company you worked for did, and what you saw happening right in front of your eyes at that time, right?

Carpenter: So I went to work for High Speed Access. Dan O’Brien was the CEO there and as I mentioned earlier, he was the president of the division for Time Warner. He brought me over. That’s another thing that’s so great about this industry is you meet people and they know your work and then they bring you to the next thing. It's so great.

High Speed Access was sort of the outsourced partner to the smaller cable operators to develop, deliver and market their high-speed data product. So at the time there was another similar company called @Home, which was serving the larger cable operators—Comcast, Time Warner, etc.

Schley: Doing something similar.

Carpenter: Something very similar. And I think ultimately Charter bought High Speed Access in 2001. They sort of went to school on us. It was how do we make sure we can operationalize this within our infrastructure—

Schley: This broadband product.

Carpenter: This broadband thing, whatever it is. So I learned so much about what that was that it actually positioned me well for an opportunity with AMC networks. Interestingly, I think, just having a deep understanding of where the industry was going. One thing about when I was at HSA was 9/11 happened when I was there. I think probably everybody you talk to will remember exactly where they were, what they were doing. So I was at work at HSA, and I was lucky and happy enough to be among people who really cared, and were really supportive of each other through that. It was just so traumatic for all of us. I think it was one of those moments that you remember to be part of your career.

Schley: Well, so that puts us kind of in the timeframe. Why did the cable industry, why was there a need for sort of a third party entity like HSA, or like @Home, to help segue the industry into this new world of Internet delivery?

Carpenter: I think it was a way to mitigate risk. We didn’t know how to do it yet. We—kind of by separating it out and parsing it out to people who were going to be very busy figuring out and working through all the challenges—

Schley: All the intricacies.

Carpenter: Exactly. It was a probably a smart strategy to keep the risk contained. And then once it was determined that, oh, OK, this actually isn’t something that we need to be afraid of, it works, customers like it—

Schley: That’s the real reason.

Carpenter: It's proven, it's a proven business strategy.

Schley: Do you remember using what we would call dial-up Internet in your life?

Carpenter: Yes.

Schley: Prior to the broadband evolution? So when you guys started enabling broadband high-speed Internet—I mean, your company literally was named High Speed Access, what did you see unfolding? Did you realize you were on the cusp of something, you know, amazing?

Carpenter: One of the first things that made me feel that way was the notion of being able to send a picture.

Schley: Yes. That’s a great story.

Carpenter: It was shocking and amazing—

Schley: Because heretofore, what did you send? Email messages, text, right?

Carpenter: Email. And I felt like I had just started doing that. We didn’t even use email at work when I first started. And so the ability to send a file or a thing attached to words was fascinating to me.

Schley: Get it to appear on the other end. Then you know the rest is history. Now cable is now the dominant provider in the US and many international markets for broadband Internet. I'm looking at some data points today; I think you will appreciate this, given your history, that probably this year or the next year in the US, we’ll have more broadband Internet connections than traditional pay TV connections. Because one is sort of eroding a little bit and the other is rising. So what you wrought is pretty amazing, right?

You talked about AMC and I was curious about that segue because you're in kind of the trenches of enabling high-speed Internet and now you're going over to the programming work. What happened?

Carpenter: Well, recession, right? After 9/11, there was a recession. And opportunity to be part of a brand that I had admired for a really long time and seen how it works. They also had just launched WE TV. It was called Romance Classics and they rebranded to WE…

Schley: I do not remember that…better name.

Carpenter: Better name. So WE was “Women’s Entertainment” was what WE stood for. And the AMC Networks had also just purchased MuchMusic from Canada. So the opportunity was to be the VP of affiliate marketing again for those three networks, working for just a tremendous woman who I admire very much, Kim Martin, who was the head of that division. And it was a really just a great opportunity to be associated with a brand that I hadn’t really had the opportunity to deal with. And the biggest budget I'd ever had for marketing…

Schley: Cynthia, what was MuchMusic?

Carpenter: MuchMusic was, it was actually one of the first channels that was starting to take advantage of social media. So they had a crawl going across the bottom of the screens usually when they were playing music saying—

Schley: A music video or whatever?

Carpenter: A music video and it would be, “What are your comments about this?” It was really cool to be in kind of that cutting edge. What I brought to AMC Networks was my knowledge and understanding of high-speed data and also an appreciation that, from a cable operator point of view, don’t just tell me to tell my customers to watch your channel. That’s not doing anything for me.

Schley: Right. For you as a cable operator.

Carpenter: Exactly. As a cable operator. I don’t really care how often you watch their channel. What I care about is selling high-speed data so how are we going to do that?

Schley: OK. Using programming to help as a lever?

Carpenter: Exactly.

Schley: How did you do that?

Carpenter: So we created campaigns that were kind of paired with going online and entering a sweepstakes or answering trivia questions, and then, watching the movie. So it was really kind of a way to pair and help our operators sell high-speed Internet with the programming as leverage.

Schley: For those watching who aren’t part and parcel of the cable industry, there was a time when cable companies—exaggerating a little bit—would put on any programming you could deliver because they needed content, right? They needed that 35th channel or that 75th channel to be populated. By this time, that was not necessarily the case, is what you're saying.

Carpenter: By this time must-carry had started. So you had to have a set of channels in your market and then the idea that some of the channels were related to each other, so we’ll give you this channel and we’ll throw in this other channel to go with it. The other thing that started when I was with AMC and WE is we started offering local ad sales. So up until then, those channels had been completely commercial-free.

Schley: That’s right. And then you introduced advertising. Why was it in the selfish interests of the cable operator to have an ad sales possibility?

Carpenter: Well, you can make money off it in ten minutes an hour.

Schley: You give them time per hour to sell?

Carpenter: Yes.

Schley: And that became a big business over time.

Carpenter: Definitely, especially with politics in the way they advertise.

Schley: But what I think is interesting about that is you really have—as a programmer you had to change the argument, right, the economic argument of why—you're an affiliate relations executive, why people should carry your stuff? How did you go about sort of plying the waters, or hearing the voice of your affiliates in terms of what they wanted?

Carpenter: We created an advisory board. And tapped into the brilliant minds of marketing from the operator side to say, how do we partner to make our programming help propel your business forward. So we had quarterly meetings with our advisors who were the heads of marketing from Cox and Comcast and MediaCom.

Schley: The brain trust.

Carpenter: The brain trust. Right. And they really helped us. And so realized that it's not programmers every time you come knock on my door, it's about negotiating your new rate, it's actually about your coming to help me solve a problem.

Schley: Then where are we today with the yin and yang of programmers and cable distributors? What does one want from the other, would you say?

Carpenter: The programmers want the pipes—

Schley: They want carriage, they want distribution.

Carpenter: Yes. And the operators need the content. And they need to keep it interesting and exciting and dynamic. So it is yin/yang. And you constantly see, oh, this station is being dropped or blacked out. It's part of the dance.

Schley: We’ve seen it at a high level recently with some of the satellite negotiations. But programmers today also—because you and your group at Charter deal with product innovation a lot. So the forms in which we consume television have changed so much. You talked about your kids watching on small digital devices. So the world seems a lot more complicated than it used to when we were in a 35-channel—that’s probably an obvious statement. But it is challenging, right, to figure out how to satisfy demand in a really competitive environment?

Carpenter: Yes, and it is becoming more software-driven. So by becoming more software-driven, you need to attract a different type of person.

Schley: I'm glad you mentioned that. Right. And how are you doing it at Charter? Let me ask you, the prelude question is: is the cable industry considered cool if you're a 21-year-old programmer today? I mean, where do you stand on that?

Carpenter: We’re working on that. I think cable is kind of an interesting word, right? Thinking about what is cable—?

Schley: A loaded word.

Carpenter: It's a loaded word, yes. But it is our lifeblood literally. It's what we’re based on. It's how we got here and how we’re going to keep developing and innovating. And maybe it's not literally cable—it's fiber, it's much more advanced than when we first started. But making it cool, I think what we offer is this unique and very attractive blend of being fully funded, having a deep infrastructure, having very smart people and kind of not having some of the baggage that some of the Silicon Valley companies might have around bias and around—

Schley: Culture.

Carpenter: Culture. Exactly. So I think we offer this really nice blend of a safe environment from a funding standpoint, from an opportunity standpoint, from a deep history standpoint, to be more intrapreneurial, to use a word that the Cable Center has been leveraging, within a bigger infrastructure.

Schley: But I think that not all coders or digitally-minded people realize until they're in, what cool stuff, what cool apps are being produced in the cable industry context. So it takes a while to get the message through.

Carpenter: It does, and I think a lot of the operators are doing a very good job of creating internship programs, making those exciting and enticing people to the industry. Women in Cable and Telecomm, particularly in our Rocky Mountain chapter, we have a daylong program called “Tech It Out.” And the intent behind that is to attract STEM students to the industry. So we have an ambassador program where we bring—last year, I think, we had 35 or 40 people, young people from high school, sitting for a day and hearing from people like Leslie Ellis and hearing about what’s cool about technology and talking to others who might be coding or doing—data science is a huge one, understanding the data. So that’s one way. It's definitely a full-court press. All of us are in on that effort.

Schley: What’s the selfish interest from the standpoint of a company like Charter, for instance?

Carpenter: Absolutely. You need to create that pipeline. A pipeline of talent who’s thinking of things you haven’t thought of yet. And I think we've done a fantastic job of that historically. So we need to keep involving, not just innovating from a product perspective, but who is going to power that next generation.

Schley: Was your move from AMC to Charter, or what was that progression

Carpenter: So my move was from AMC to Level 3.

Schley: That’s right.

Carpenter: That’s from back to Denver.

Schley: With AMC, were you on the East Coast?

Carpenter: Yes.

Schley: Level 3—it's a pretty well-known company, but I think of big fat fiber pipes. Is that kind of what Level 3 does?

Carpenter: That’s accurate. And Level 3 is now CenturyLink. CenturyLink just bought them. But exactly, it's underlying big fat fiber pipes that they sell to the cable industry.

Schley: What made you a good fit for Level 3 and vice-versa, at the time?

Carpenter: At the time, they were interested in getting into allying themselves with the cable industry. Recognizing that cable was growing this big thing called high-speed data. They were going to need a way to transport all that information.

Schley: Kind of in the background, the public Internet sort of distribution array?

Carpenter: At the same time, Voice Over IP was starting to become a force. So what I was hired for was my knowledge of the cable industry and my ability to understand how do we intersect what Level 3 offers with what cable operators need.

Schley: What part of the cable industry were you interfacing with? Was it the engineering team, was it the business development team or a combination?

Carpenter: It was a combination, but it was decision makers who are making big strategic decisions about their infrastructure. Nomi Bergman was working with people at Bright House, who was a customer, an early-on customer. That was just a really fun time to grow that segment within Level 3 and become kind of a force that helped power a lot of what happened in the cable industry.

Schley: This is what I always wonder, if people, when you're in it on a daily basis, you're a busy, busy person, do you realize kind of the revolution that’s taking place out there…?

Carpenter: It’s amazing, isn’t it? It's been fun, too, because. I'm looking back and thinking, wow, I guess I was there.

Schley: Are you kidding me? But I think sort of you look back on it and in your career, for instance, a tremendous amount of change has occurred over let's say, a 20-year period. And I think sometimes you only get appreciation for it when you do this. You look back on it.

So Level 3 brought you to the doorstep of Charter, or how did that happen?

Carpenter: With a couple hops in between…but at Level 3, I worked with Rich DiGeronimo. The two of us were tasked with huge business development on the cable segment, and I was the product marketer. And I also knew the industry so we traveled around, introduced him to several of those decision makers, and I think he got the cable bug from that job and went directly to Charter from there. So now he’s an executive vice-president with Charter for product and strategy. So soon after I left Level 3, I did a couple of small startups. I think Level 3, having that experience of a very large company, I was ready to kind of do some more similar nimble startup things.

Schley: Agile work stuff. When you talk about the cable bug, what is the attraction, what is the cable bug? What are the elements that go into creating that “I want to work here”?

Carpenter: Results. I mean you just kind of get so addicted to that notion of constantly driving change and delivering and producing new innovations. So that’s one part of it. And the other part is absolutely the people that I get to work with. It feels like a family, it's people that you know you can turn to and you constantly go to events and you see the same people and their friends.

Schley: I've always wondered, and I've said this before, but I've always been involved in and around as a writer of the cable industry. So I haven’t seen other industries up close and personal. So maybe the exact same dynamic occurs. Do you think it does, or does cable have structurally an interesting arrangement that does lend itself to maybe more personal kinships…?

Carpenter: I was thinking about that, too. What is it that makes cable such a family and such a great kind of an organism to be part of? I think we do a lot of things—we love to celebrate…

Schley: Cable is good at partying.

Carpenter: We are really good at that, right? So part of that is you get to interact with people not only who you’ve been working with and for, and around, but then you get to see them in a different kind of perspective.

Schley: As a human being or an individual? Your friend, Jana, once told me that she thought cable was a place—was, still is perhaps—where you could sort of raise your hand and say, “I kind of want to try that” or “Put me on this team.” Do you still see some fluidity in terms of what employees can do to kind of exert their influence on the organization?

Carpenter: I am a perfect example of that, right? I've gotten to do so many different things within this tremendous bubble that we call cable.

Schley: You have.

Carpenter: And even just within Charter. When I first started, I was overseeing product management for our commercial services and our enterprise services. So from there, after the merger, I think I created a brand around myself as being a problem solver, so after the merger one of the problems was, oh, now we have a home security product. What do we do with that? Well, first let’s look at the team. So Cynthia, can you take care of that…?

Schley: So how do you form a team? How do you know who’s supposed to be on the team and who’s on the sidelines?

Carpenter: Talk to everyone.

Schley: Really?

Carpenter: Learn. Yes. Then talk to people who aren’t necessarily on the team, but who are experts in that thing, to learn a little bit more about home security and then Internet of Things. So again, the network. That’s what’s such a help when you're going through any transition like that. You can turn to the people you’ve met throughout your career, and say, “Hey, I don’t know this.” And it's nice and safe because you can be vulnerable that way and say, “I am new at this thing. And I need to start over and I don’t know.”

Schley: That’s OK.

One of the daunting aspects, I think, of cable, modern cable today, is just the sheer scale. These are big companies. I don’t know what your video subscriber count is at Charter, but it's in many, many, many millions, I know that. So can you talk about what cable companies have to contend with in terms of being really, really sure a product is going to work before you roll it out? It's got to be hard, right?

Carpenter: It is hard and I think each company does it a little bit differently. We talked about that experimenting off to the side with high-speed data, for example. That was one way. And I think some companies have full R&D kind of setups within. The idea of fast failure, I think, is one that is helpful for cable operators or companies to say, OK, what experiment do we want to run? And how are we going to know very quickly that it's not working or it's working? I think within my organization, within Charter, we’re really thoughtful, we’re very data-driven, we’re always thinking about how do we make sure that when we do launch this thing, that it's going to provide a seamless experience? So you make sure that you have that sort of minimum viable product that’s going to get you to as seamless an experience as you can and then make sure it goes. I mean, think about how fast we launched mobile. We just launched our mobile product last year.

Schley: That’s true.

Carpenter: And that was based on a lot of very smart people doing a lot of very hard work to make sure it was seamless when it launched.

Schley: But it has to be rewarding, maybe unnerving, when you finally do begin a rollout. And now, with stuff you’ve been talking about internally for months, it's out there, right? And what does that feel like?

Carpenter: It's so exciting. It's why I keep doing this. It's awesome.

Schley: All along the way, from the days of 30-channel linear video distribution to—I don’t know what we call what we have today, but it's a lot of different ways to consume a lot of different products. What do you think has happened with the consumer’s psyche in terms of expectations for the role of a third-party provider? Do we want to do it all ourselves? Or do we want to hand over the confusion to a company like Charter? How does the consumer evolve? How has the consumer evolved over the years?

Carpenter: I think consumers have become more demanding of their experience. They also, if they're not happy with it, they can tell thousands of people in one fell swoop—

Schley: Through social media.

Carpenter: Through social media, exactly. So there's definitely that. It's good because it raises the bar. It makes us know that we have to deliver quality. So I think that’s the next evolution of the theme, that the experience needs to be high quality. And how do you measure quality? Well, data. Data is going to tell you how long did it take that person after they pushed the button on that remote or said into their remote—

Schley: You can look into it.

Carpenter: Oh, yes. We’ve got all that data. Data going all the way down to when we configure a screen in a certain way, do we get more hits than if we configure it another way?

Schley: That’s fascinating. Almost like an A/B test of what works—

Carpenter: Exactly.

Schley: OK. So data is a big part of it. Instinct? I mean, is there room for sort of a hunch, you know, about how people will respond or react?

Carpenter: Part of it is instinct, but instinct is generally based on your experience, right? So if you’ve had experience up until now and you can rely on your instinct or your intuition to say, let’s go in this direction. If you're surrounded by smart people who know their craft, well, then your instinct is really something that you can feel a little bit more comfortable taking a risk around.

Schley: But it does require a certain amount of experience over time, immersion over time.

There are two areas I wanted to talk to you about before our time is up. One is you talked a bit about employee engagement and I want you to talk particularly about the customer-facing side of your business. So these are technicians who come into my home and hook up my modem and then there are people on the phone or the other end of a chat conversation. I always thought those were some of the hardest jobs in cable. What makes a great customer contact employee for you guys?

Carpenter: So I didn’t tell you this, but my very first job out of college was a customer service rep.

Schley: Beautiful. For who?

Carpenter: For Putnam Investor Services in Boston.

Schley: No kidding.

Carpenter: My very first day on the phones was Black Monday, 1987. I was supposed to be on the phone. They didn’t let us get on the phones because it was that much of a disaster. What I learned from that experience of being on the phone and interfacing with customers is that I think everybody in their career should do something customer-facing. Whether it is waiting tables or driving an Uber or being on the phone and having to interact with a customer and answer their hard questions about your product, it is so important. So I believe—in our organization, Charter absolutely recognizes that that front line person is absolutely critical to that customer relationship. I'm really proud that Charter now pays no less than $15 an hour for any of those front line employees. We were really on the forefront of that; now it's starting to happen.

Schley: I did not know that.

Carpenter: So that’s been something I'm very proud of just to be part of Charter for that.

Schley: Right. And what is the expectation for longevity? Can someone spend a career doing customer-facing work if they choose to, or is it rare that you see that? Is it transient?

Carpenter: I have in my role in HR and employee experience actually interviewed some people who are in the customer care world. So certainly, depending on the individual, they might want to go somewhere else, learn something else.

Schley: It's a jumping-off point for some.

Carpenter: But I do think you have a terrific opportunity to work up through the ranks within a front line to manage a region. Become an operations person.

Schley: What does it take in terms of constitution or human makeup to be good at that job, at one of those jobs?

Carpenter: Empathy and patience, definitely.

Schley: I think empathy is huge, right. But I just always thought, you know, there are going to be some bad days when you're now on call number 8 in a succession of really upset people. That’s not easy.

Carpenter: You have to understand what’s upsetting them. One of the things I've learned since we've launched our accessibility team, our team that’s focused on universal design for people with whatever abilities you might have, is that if you're talking on the phone to somebody, you don’t know whether they are in a wheelchair, you don’t know whether they can see, they might be using adaptive technologies in order to look up your account or you know, help you. So having some empathy for where people are, and where they're coming from, is definitely a key to it.

Schley: The technician side, though, these are people who you actually see, right? So have you spent time and attention thinking about that interface point and how it affects perceptions of Charter?

Carpenter: In my current role, no. We have an amazing operations team and field operations team.

Schley: Those are field ops.

Carpenter: Oh, yes, exactly, led by Tom Adams, who is another cable pioneer. I have though had experience training the field technicians. So when I was on the programmer side, particularly when we launched Starz, I got to go to the garage right before the techs took off to go do their work for the day.

Schley: Why did a programming company need to talk to technicians?

Carpenter: We needed to talk to them because at the time, technicians—and it depends on the cable company—were encouraged to sell or upsell channels, right? So they would actually get commissions for adding services. “Oh, while we’re at it…”

Schley: Because you’ve already got the face time with me as the customer. OK. So that’s interesting.

Carpenter: That was one of the tactics that we used was to inform and educate the field techs to get them really excited about Starz so that they would mention it when they were in a customer’s home.

Schley: Then I want to talk about hockey a little bit. What brought you—I think as a young girl, into the world of skating and hockey?

Carpenter: As a young girl, growing up—my early childhood was in the late Sixties and Seventies—there weren’t a lot of teams or girls’ sports. So girls could do gymnastics, skate, maybe swim. But there weren’t a lot of organized sports for girls.

Schley: This is pre-soccer revolution.

Carpenter: Yes. So the sport I chose was skating. I would just go recreationally and then I started to really fall in love with it. Then my mom bought me a skating dress for Christmas.

Schley: I’ve heard the dress is a big deal.

Carpenter: The dress is a big deal. I mean, a twirly dress that does things when you spin is so cool. So that skating dress really launched me into, oh, I've got to earn this dress. I've got to look good in it. I've got to be able to do really good spins so it does its thing. So I became really involved in figure skating. I started competing. I loved ice dance. It's fairly technical. You have to really have a lot of discipline around your edges. You dance with a partner so I did ice dancing for quite a while until I got to high school. And in high school, I realized there was a girls’ hockey team.

Schley: At the school?

Carpenter: At my high school in Connecticut. So I thought, OK, I can skate, but I really want to be on a team. I'm going to try out. So I tried out and I think the thing the coach was impressed with was that I could go backward really fast. I was a good skater.

Schley: Because you were an ice dancer and a figure skater.

Carpenter: If you look at ice dancers—next time you watch, notice. The women spend more time backward than the men.

Schley: I can sort of see it when I think about it.

Carpenter: There's a lot of really good backward skating and that’s what you have to do as a defense person in hockey; you get backward and you have to got to go fast.

Schley: So your coach had you pegged as a defense person.

Carpenter: Pegged as a defense person. So yes, I played ice hockey for four years in high school. My best friends were my hockey teammates. What I loved about hockey—and I stopped figure skating because they were both messing with each other. When I tried to figure skate as a hockey player, it was a mess.

Schley: Golf and baseball.

Carpenter: So I chose. I chose hockey because to really advance in figure skating you have to invest your entire life. It's kind of lonely. It's not really one where you're on a team. And that was something that was important to me. So I was lucky enough to be on the girls’ hockey team. I was captain my senior year and we traveled around and played. But the best part of it was practice. I loved it. I loved practice. A lot of what you do when you practice hockey is fall down. Literally. You are falling down.

Schley: There is a great analogy to business somewhere here.

Carpenter: Absolutely. So it's fall down and get up. And how fast can you do that? And so that’s something that’s taught me a lot of sort of mental toughness around—well, I know that I have fallen and I know that I have gotten back up again and I've done that over and over so I know that I can do it. I loved it. I loved hockey. In the summers I would go to hockey camps and really invest in that, and then ended up going to Cornell for college and tried out. Walked on, tried out for the team and said, “I play defense. Do you need one?” And so, there I was. Made the women’s varsity Division 1 hockey team at Cornell as a defense person.

Schley: A defense woman, a defense person.

Carpenter: A defense woman.

Schley: You’ve sort of already answered this but how does that relate to your professional life and particularly for you, it seems like team is a really big theme that’s been an undercurrent of your career, right?

Carpenter: Definitely.

Schley: I mean, what are the relationships between the two?

Carpenter: So I would say part of it is the physical part of discipline so mentally you have to be tough. Whether you're doing something physical—anything you do over and over and practice, you have to have a mental toughness and commitment to it. So that was really part of the discipline that I've carried through in my life. Now I'm a yogi and a runner so I still kind of carry that mental discipline and toughness with me. The other part of it was the team part. So you realize yes, I played defense, so I'm not the person that’s always going to be scoring the goals. I've got to link up with the person who can take the puck and drive it into the net.

Schley: Great analogy.

Carpenter: So I can't win a hockey game all by myself. And that part of it was really important to understand. You rely on your teammates and they’re the ones who are going to prop you up, and if you're having a bad game, they're going to come in for you, they're going to push you, and make you be your best.

Schley: I mean, it's almost like sort of, I don’t know, giving something of yourself up to the broader cause, I guess?

Carpenter: Exactly. And then winning. So great to win.

Schley: How do you guys score winning? What’s winning? Take mobile for instance. It seems like that’s a really hot takeoff for a product. That’s my version of winning, I guess.

Carpenter: Absolutely.

Schley: Taking away customers from the other guys is winning, OK. Competitive spirit is part of that.

You mentioned a handful of people that seem to have risen up as influences in your career. Is there anybody else you’d care to cite or kind of comes up as someone who’s been, wow, my life would have been different without meeting this person?

Carpenter: The most recent example of that is Rich DiGeronimo. So having met him in 2004 at Level 3 and worked together and grown the cable segment and then having him have sort of the confidence in me to challenge me with so many different roles within Charter, that’s been huge. So my latest change into the human resources and employee experience discipline would never have happened unless he said, “I trust you to do that because I’ve seen you solve big problems in other places.”

Schley: I was going to ask about that because you had a real product focus earlier in your career. Now I think you have more of an organizational or a human resources focus.

Carpenter: Right.

Schley: But same concepts carry over from each?

Carpenter: They do.

Schley: From one to the other?

Carpenter: It's recognizing what potential people have. Being able to apply that potential to a place where you need to drive results. Organizing the teams so that people are working together to produce those extraordinary results. And nourishing that and feeding that and building the community around that has been a really tremendous challenge.

Schley: This is also the impossible question to encapsulate, but I'm going to throw it out there anyway. What’s been, besides the paycheck, what’s been rewarding, satisfying, what are you glad about that you didn’t go work in footwear or grocery or banking? What sort of has been the center of your love for this industry?

Carpenter: The center of it has been the opportunity to be at the intersection of where people drive innovation. And that’s been so gratifying. My career has enabled me to really take care of my family. My husband, as I mentioned, was full-time at home with our kids, and that wouldn’t have happened unless I had a really full career. He knows all my cable friends. So again, it's that notion of the family that has really been the constant throughout my career.

Schley: I think that it has been fascinating to talk to you both because of what you bring from a personal and from a human standpoint, but also this Zelig-like quality that you have that’s put you at the epicenter of all these interesting—from programming to technology to product and now to organizational. Thank you for taking some time to visit with us. I totally appreciate it.

Carpenter: It's been a pleasure, thank you.

Schley: With Cynthia Carpenter, for the Cable Center’s Hauser Oral History Series, I'm Stewart Schley. Thanks for tuning in.

END OF INTERVIEW

 

 diane christman cynthia carpenter jana henthorn stewart schleycynthia carpenter stewart schley 2019

 

 

 

 

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Jill Campbell

Jill Campbell

Interview Date: February 8, 2017
Interview Location: Atlanta, GA
Interviewer: Seth Arenstein
Collection: Hauser Collection

ARENSTEIN: Hi there. I'm Seth Arenstein. I'm here in Atlanta, Georgia, at Cox Communications. It's February 8, 2017. We are here for the Hauser Oral History Project for The Cable Center and our subject today is the EVP and COO of Cox Communications, Jill Campbell. Jill, welcome.

CAMPBELL: Seth, thank you. Happy to be here.

ARENSTEIN: I have to tell you, before we even begin, I heard you give a speech -- we were reminiscing before. I heard you give a speech in Williamsburg, Virginia, must have been 10 or 15 years ago, and I remember Rob Stoddard was at the table. I said, “Rob, wow, that was a fabulous speech. This is a person who really speaks her mind, she’s so direct.” And then when The Cable Center said that you were one of the people who were going to be on the oral history list I said, “I want to interview Jill.” I really wanted to be here and I'm so happy to do this.

CAMPBELL: Wow, I hope I don’t disappoint you, Seth.

ARENSTEIN: No pressure. No pressure at all. Jill, where were you born and where did you go to school?

CAMPBELL: So, I was born in Oakland, California, but my parents moved us when I was two years old to Las Vegas. My dad’s a college professor and my mom was a school teacher and he took a job at UNLV. So, I grew up all the way through in Las Vegas. Went to UNLV because my dad was a college professor there and there's really nowhere else to go, Jill, because it's free and it will be a great education. So, I stayed there, as did all of my friends, because who knew, but in Las Vegas people don’t leave. I was the one who decided to go and everybody else is still there.

ARENSTEIN: What subject did your father teach?

CAMPBELL: He’s a psychologist, so he taught graduate students counseling and guidance. And his area of specialty was alcoholism and drug abuse, so that came in really handy for me. He was constantly leaving me books and, you know, “Look at this” and dragging in alcoholics and it was pretty good on the job training right there.

ARENSTEIN: Especially being in Las Vegas.

CAMPBELL: Yeah, and it really translates well to cable TV, is the thing. But honestly, I was going to be a shrink just like him. Majored in sociology and then I went on to graduate school and took a class from him. He gave me a B.

ARENSTEIN: Really?

CAMPBELL: Imagine. Straight A student that I was. And I quit the program and moved to LA which is how I got in the cable industry, my dad giving me a B.

ARENSTEIN: So, it's his fault.

CAMPBELL: It's completely his fault. But seriously, till the day he died he would say, “Jill, you need to go back and get your doctorate so you can teach at the college level. It's a great career, you'll make good money.” And I would just say, “Yeah, thanks, Dad, I think I'm doing pretty good.”

ARENSTEIN: You're doing pretty well. Now, I know on your official bio it starts in the ‘80s, the early ‘80s, and starts at Cox in Oklahoma City, correct?

CAMPBELL: Well, I didn't officially start in the cable industry at Cox. That's where I started --

ARENSTEIN: So now let’s talk about it.

CAMPBELL: Little known fact. In 1981 when I fled Las Vegas from the sting of the B, my dad knew somebody who knew somebody who got me a job with a company called PhaseCom Corporation. They manufactured head end equipment. Who knew? I didn't have cable growing up. So, they needed somebody at all the conventions, the Texas show, the NCTA show, to be the Vanna White of the amplifier. So, my first job, seriously, right out of the college was, “And this is an amplifier.” And then if they asked me what it was I’d have to spin around and find the guy who knew what an amplifier was and that's how I started in the cable business.

ARENSTEIN: Really?

CAMPBELL: Yeah.

ARENSTEIN: And where did you go from there? What happened after that?

CAMPBELL: I met a boy at one of the shows and I chased him to Oklahoma and he was in the cable business and made the mistake of introducing me to the general manager of the cable system there who worked for Cox and he said, “Little lady, you want a job, we'll find you something, you move to Oklahoma.” And I did. And he gave me a job as the interim HR manager because she was going to run for office. Luckily, she came back and then he had nothing to do with me. And I wrote pretty well so he said, “We don’t have a PR person, why don’t you do that?” And so, I did. And then he got fired and they brought in somebody who really knew what they were doing. He took one look at me and was like, oh my God. But he literally had an ad in the Smithsonian from when he worked at GE and here I am 22, whatever, writing the New Zoo Review -- that's what I called our newsletter. And I owe getting into operations to him.

ARENSTEIN: Now tell me, what was -- let’s set the stage. What was cable like back then and what was that system like? What products did they have, how many stations did they carry, how many channels?

CAMPBELL: We had broadcast stations and HBO, that was it. And then it just started snowballing from that, pretty quickly too. But we were just the people who brought you good reception and a little jazz on the premium side. It was one of, if not our first, it was one of our first franchises that we negotiated. So, it had all the trappings of the good old boy stuff with the city council where you took them to lunch and had martinis in the afternoon and then you’d take another one to dinner and that was kind of the job. And I thought wow, this is awesome. And then he got fired so we didn't do any martini lunches with the next guy.

ARENSTEIN: How many employees were in that --

CAMPBELL: I'm not even sure I remember. Probably less than 100 at the time.

ARENSTEIN: Really, that many?

CAMPBELL: It was really a small system. And then grew pretty dramatically after that. And that's why you could say, “Hey, why don’t you be our PR person?” Because you didn't really need a functional skill set. And that's why I think I was able to grow up in operations because they just said, “Why don’t you take the girls on the phone and you figure it out?” There wasn't the expertise that we have now with these large call centers and supply chain and all that. You just kind of rolled up your sleeves and did it.

ARENSTEIN: Let me ask you this. Let’s try to blend in the college with your career. You must have taken some lessons from psychology into your career. What are they?

CAMPBELL: Well, sure. I mean leading is all about people, right? And having good EQ and knowing what to do when people are in tough situations or reading the tea leaves. So, I have always told people when they're thinking about careers and college majors there is nothing better than a solid liberal arts background. You go back and I got an MBA later and you get the business piece, but if you can't walk and chew gum and relate to people it doesn't really matter how great you are with a spreadsheet, you're not going to be good as a leader. It's fine if you want to be an individual contributor, what have you, but I think it's invaluable to have that background.

ARENSTEIN: So, are you going to go back and get that PhD?

CAMPBELL: Never say never. I'm so young. So, I clearly have time to do that. I actually really would love to have done that and teach. I think that would be really cool because I've got a college kid and the stuff he’s interested in and the discourse and the bright minds thinking in different ways, that's really, really exciting. So, eh, you never know.

ARENSTEIN: So, can you go back? I know we're jumping here a lot, but can you go back to the early ‘80s? You’re in the system. What did you think of -- did you even think of this is going to be my -- this is it, I love this, I'm going to be with this forever and ever and ever?

CAMPBELL: No.

ARENSTEIN: Was cable at that point a viable business? Was it something that you thought oh, yeah, this is going to be around forever?

CAMPBELL: I was 22. It was a job. I was making $19,000 a year and thought I was hot stuff. That was amazing. And I'm a firm believer in timing and luck on lots of things and for me I've been very lucky in my career. One, woman, interested at all in getting into operations, having a boss who said, “You need to do this because there are not very many women, maybe two, in operations. You could do really well in your career.” And so, I think it was just okay, I'll try that, I'll try that, but I had no thought about the future at all. I didn't even put into the 401K. He had to come and explain to me that Cox matches it and I'm like, “Yeah, but shoes.” So no, it wasn't until -- I'm trying to think when I even thought of it as a career. Probably my first general manager job because that was oh my gosh, this is it. It was a heady experience.

ARENSTEIN: Where was that?

CAMPBELL: Bakersfield, California. I was 31 years old and it was the perfect progression. I had managed the call center -- they weren't call centers. I managed the phones and then the field techs, but this was now the whole enchilada. And you quickly discover you don’t really have a collections manager, there's no marketing person. So, 22,000 subscriber system, had to learn everything from scratch. And it's fascinating to me today, as I look back, that they even took that risk or gave me that opportunity because I had no clue. And so, I think they gave me enough support around the edges so that I didn't fall completely off and that's really where I learned every facet of the business. So, I'm thankful I got to move in my career that way.

ARENSTEIN: But you know, you just used the word move and I know that's been a part of your life too.

CAMPBELL: Yeah, we moved six times in 10 years and several were year, year, year. We did Bakersfield for three years, Santa Barbara for a year. That was probably my biggest mistake, not staying there and just surfing and retiring. But oop, out of there. Phoenix for a year. Then we bought the Las Vegas system. So, super cool, back home for three years. And then I've been in Atlanta for 16. So, my oldest moved in first, fifth, sixth, seventh, and tenth. Yeah, lots of therapy going on now.

ARENSTEIN: Let’s talk about that. I mean, again, we're going out of order here, but moving still is a big part of the cable business, especially if you want to move up, and it's not easy. How did you do it?

CAMPBELL: You know, they talk about Hillary Clinton, takes a village, I say it takes like a multifaceted city with a lot of roadways. It's support. You can't do it on your own and you do sacrifice stuff. My favorite question that still gets asked after however many years I've been around is life balance, how do you do that? And you don’t. You do the best that you can at the time that you're doing it. So, you could say did my oldest sacrifice a lot because I moved her so much? Perhaps, but when you look back now and you ask her she’ll say, “It really formed who I am. I'm comfortable in any situation. I learned different cultures.” It's a little bit like being an Army brat, I guess, but it does take its toll in areas of your life and I think you just, along the way have to be practical about what you can and cannot do. So, I don’t regret any of them because I think it led to the next thing. Did I need to make all those moves and still get to where I am today? Probably not, but hindsight is always so great. Each place I went I learned something new about myself and what I wanted from a career or personally. So, I don’t regret doing that.

ARENSTEIN: And the support, you talked about support and I read in the research about the respect and admiration that you have for your husband.

CAMPBELL: That's the ex. I still have respect and admiration for him as an ex. He’s much better in the ex department. But no, he was there. He was an attorney and he moved with me along the way and was there to help support the children which I think was very, very beneficial and helpful because especially when I started to travel that was the case. But you think about did all that travel, did my career versus his cause us to grow apart? Probably. I think that had a lot to do with what occurred there, but through it all we were very much a partner and supportive of each other, and I think that's why it worked.

ARENSTEIN: Is moving still a big part of moving up in the cable industry?

CAMPBELL: It's less than it used to be because we're so centralized and we've consolidated in lots of areas. There's still opportunity, particularly if you want to be in a region. We have regional managers who are inside. Then you would move up from a market leader up to a regional manager. Or if you want to run a bigger call center. But generally, the path isn't a general manager P&L any more on the MSO side. It's very much here. So, people now aspire to go from the field, which I think is amazing training and you should be in the field first, and then come to corporate to run field service or all of care or customer experience, whatever it is. Same with marketing and sales. Everything strategically is done in Atlanta and then it's executed locally. So, it's less important than it was which in some ways is a shame. We're trying to figure out how do we get to make sure that people still have P&L experience because you can get very functional and not be able to look end to end. And so, I think thinking through rotations and getting people to move, even for a couple of years, to experience what is it like on the front line is going to be more critical.

ARENSTEIN: I was just going to say that. There have got to be very few people like you around at this point who have this breadth of experience.

CAMPBELL: I think that's fair. There are fewer and farther between than there used to be. And that used to be the path if you were an operations person. You wanted to run a region, then you wanted to be a division person, and we don’t have those paths anymore. So, it's going to be difficult to get that.

ARENSTEIN: Just curious, do you send people, not back to the field but to the field periodically to get some of that experience?

CAMPBELL: We do. We don’t have a formal you have to go here before you get here and that's I think something that the industry is going to have think more about. Because used to say you couldn't run a system unless you had that field experience and you knew you’d have to move. Now it's not as definitive, you have to have been in the field, but if you're in a role that requires a link back to the systems then you are in the field quite a bit going to visit the folks on the front line and we encourage all of our officers to get out there, do ride-alongs side by side so that they get firsthand experience. I don’t know that that's enough. I really think you have to be there for extended periods of time to feel it in the fray. And they don’t get the calls every day. The really hard part about Cox being in Atlanta, we don’t have a cable system here. That’s a blessing and a curse because when you're in the market you see the advertising, you have your neighbor telling you there's something wrong with their cable or the person in the grocery store, and so you're living it every day and you get that experience. You don’t get that in Atlanta. So, I think we can get much more disconnected than if we had a system here.

ARENSTEIN: All right, so the next question then is how do you stay connected with your customers? And you do it great. A hallmark of Cox is its customer service, has been for a long time. How do you stay in touch?

CAMPBELL: Honestly the hallmark started with Governor Cox, our founder. In his value statements, he speaks about employees and customers. So, it's ingrained. It's not just Cox Communications, it's in automotive, it's in our media group. We start with local communities and I think it's just in the DNA of how we operate. But as we got more centralized that is a concern. So, one of the things I really encourage particularly my ops team to do, besides go to the field which they do, is to listen to calls regularly. In my staff meetings and groups, we do that weekly so that we've got attention and usually we're getting calls and letters and emails anyway. They find you. I mean it's interesting with social media how many people figure out who to contact, but I think staying close to the customer experience is really all about hearing it on more than a monthly basis.

ARENSTEIN: Is that something you learned out in the field?

CAMPBELL: Oh, absolutely, yeah.

ARENSTEIN: I'll bet.

CAMPBELL: You're always on when you're in the field. You are the company. That's why I said you're in the supermarket, you have a Cox logo on, people know and your neighbors know that you work there. Here you can just fade into the woodwork and because it's Comcast here and not Cox people don’t really associate that Cox is a cable company. So, you are a little bit immune to it, definitely.

ARENSTEIN: But there must be some good points about being here far away from the customer too.

CAMPBELL: What?

ARENSTEIN: Well, I mean in the sense that yeah, you can look at another system, i.e., Comcast and say are we doing that or shouldn't they be doing this and are we doing this. I mean there's comparisons and things like that.

CAMPBELL: Yeah, you can do that and I mean we obviously are really good partners with Comcast and we have their platform and we've learned together a lot of things. I think there's more benefit to being in a market than not. I guess the benefit of not being in the market when you're the corporate office is you can then be a little more objective and not so much reactive to what's going on. Because when you're there the customers are telling you in your face. You can maybe make decisions that are more short term than long term. So, in that case I think there's a little more of a buffer in thought, but then the downside is the bias for action. There's a customer in your face, you've got to move now, that sense of urgency doesn't exist. So, I’d take the sense of urgency and having the customer constantly in your face any day over not.

ARENSTEIN: Really? Wow. What about cable then and now, from when you started to today? I mean there's almost no comparison.

CAMPBELL: There is no comparison. I mean it literally was for reception and, like I said, one channel. And then it exploded into hundreds of channels and then we got into the cable business -- I mean into the telephone business which seemed very odd at the time and then we took the majority of the market in almost all of our markets which was fantastic. And then you think about internet on top of that, add that into the mix, and then more programming starts and more programming, and then faster speeds and all the things you can do on the internet. The industry was cable TV, wired, getting it there, and now it's this explosive entertainment information source for customers. And I think we really have underestimated all of the changes that have occurred in our industry. I like to say -- people are like, “You've been with Cox in the cable industry 35 years?” I'm like, “It's not like I've been putting mail in the mailbox every day of my life for 35 years.” This industry is so dynamic it changes every day. And when you're in an operations role -- people say, “What do you do every day?” I'm like, “I start with this whole list of meetings or whatever and then something can change dramatically.” We have an employee issue out in New England we have to deal with, customer calls and we have something there. AT&T makes an announcement, we regroup and have to do something else. So, every day is dynamic and different and that's amazing. You can't say that in most other industries.

ARENSTEIN: No, and I have to agree with you because I remember writing stories and saying cable wants to be your internet provider, you know, that's going to be interesting. And telephone too. And I remember Cox was probably the first --

CAMPBELL: We were the first to get into the telephone, the circuit switch. But I think that's true with Cox on lots of things. Partly because we've been private most of the time. We were public for a period of time. But Jim Kennedy, our owner, he’ll take risks and he’ll put money where he believes the future’s going to go and he bet big on cable and he was certainly right about that. And we have found as management, he has said, “You guys bring me what you think is the right thing to do and execute on it and I will always fund you.” And that's been the case. We saw that with Gigablast in our Phoenix market. Google was announcing all over, they were considering going and Jim said, “Oh, hell no, uh-uh, what do you need?” and we built an amazing network there that really helped inform the future of our company from a network perspective on what we could do, what we should do, where we should go with fiber, where we could do DOCSIS. It was a true gift that we had that opportunity because honestly had we been public I don’t think that would have been possible. So, he did that with telephone, PCS -- we were one of the first to get in that. We made a bet on wireless a couple of times and timing wasn't on our side, but that doesn't mean we wouldn't make other big bets in the future.

ARENSTEIN: All right, we'll talk about the future as well, but let’s sort of get back to your career. I guess you were in -- you mentioned coming back to Las Vegas, coming back home. What was that like?

CAMPBELL: It was very surreal. Because I mentioned at the beginning none of my friends left and they all grew up there and they're all still friends and they're married to very wealthy people who own casinos. And so, they just did not get the concept that I had a job and they would call like the night before, “Hey, we're going to go to New York tomorrow” -- because they all have planes -- “and go shopping. Do you want to go?” And I’d be like, “It's Tuesday. No, I have a job.” And they’d go, “Oh, that's cute, that's great.” So, the adage you can't go home, it was a little different. And I also realized that growing up in Las Vegas isn't exactly your normal Ozzie and Harriet upbringing. I didn't get it growing up, but when I went back and went to the grocery store and there are slot machines, that's kind of weird, isn't it?

ARENSTEIN: Yeah, sure.

CAMPBELL: And your friends have Lear jets. So, it was good to go back and see it, but I realized probably not where I was going to end up with where I wanted to be in my life. It’s good to visit.

ARENSTEIN: And after Las Vegas what happened, where did you go?

CAMPBELL: Here. Yeah, Pat Esser took a chance on me. I was sort of the long shot when people were betting on who was going to get the role because I had only been in Vegas three years. That was our first time that I had been in a larger system so when he was promoted he kind of looked around and GMs were the people who he would choose from. He gave me that shot and so I'm forever grateful for that one and it was he, Claus Kroeger at the time and John Dyer who’s now our president at CEI, the three of them ran the divisions. And then when Pat was escalated it was John, me, and Claus. And so I had, again, that cocoon where I think they took good calculated risks on me but knew there was enough of a safety net that I wasn't going to fall off a cliff.

ARENSTEIN: Okay, and now so somebody comes to you and says, “Jill, I've got this opportunity, I don’t know that much about the job, I don’t know the technology particularly, but I'm a good people person, I'm a good manager, I'm responsible.” Do you tell them to take the job?

CAMPBELL: I do.

ARENSTEIN: Yeah?

CAMPBELL: Yeah. I wouldn't tell them take the job of CFO if they couldn't count without their fingers so that would like, not be me or maybe chief technologist. There are some engineering, very specialized. But when people say, “You've never run the field” I'm like, “Okay, it's people management. You can learn how many points you should put on a job or what have you.” So, I'm less concerned about the functional expertise as I am the leadership skills, definitely.

ARENSTEIN: Talk about leadership. Talk about some of the leaders you've met here at Cox. I know you want to talk about Pat Esser, you want to talk about Jim Robbins.

CAMPBELL: Yeah. So, I mean who doesn't want to talk about Jim Robbins? Honestly, there isn't a day that goes by that I don’t think about him and I think that's true for most people that grew up with him. I have more Jim stories than any other story. He’s just such a salty character and he really did teach me to not take myself too seriously and tell it like it is. That's who he was. My favorite Jim Robbins story though is when I was in Oklahoma City he came to just get with the troops and he had his ratty old vest on, moth-eaten, and he decided he wanted to go door to door with one of the sales reps and we're like, okay. And we get a call into the call center and it's an older woman and she says -- and he’s still here -- “You have somebody who’s impersonating your president. He said he’s the president. There's no way. You should look at him and by God, you need to do something about it.” And so, we said, “Oh, ma’am, that is our president.” And he sat down, had a cup of coffee with her. Her husband had been in the war. I mean they had this long chat and friends for life. But that was Jim. He just connected on a level that nobody else did. And he was very visionary. He had the best business sense of almost anybody I have ever known. He just knew. And he really knew the cable industry. So, it was really an honor to get to be with him as many years as we had him.

ARENSTEIN: And Pat is kind of a different type of guy?

CAMPBELL: Pat’s a totally different leader than Jim is. The thing I love about Pat, you talk about authenticity, Jim was authentic in his way and Pat is as well. And he will connect with anybody. He’s got an open door policy. Employees will say, “Hey, I have an idea” and he’s like, “Come on in” which most CEOs really would never consider doing. But the thing I love the most is that he takes the chances on people. He is a huge champion of diversity. He heads up our diversity council, him personally. And he really thinks about how do we make sure next gen that we've got officers in the future that are going to look like the world and he’s very deliberate about that. I also love that he treats everybody just like he does. He still hangs around -- he’ll love this. I hope he doesn't get to see this video. But he still hangs around with all his buddies from the years gone by. You know, all his success has not changed him and fundamentally who he is. He’s still fine drinking beer, eating a pizza, and sitting at the Mellow Mushroom. That's at the core of who he is. And I think that's why he’s such a great leader, because he connects. Everybody can relate to him. And he didn't lose that.

ARENSTEIN: What do you want people to say about you when they're doing your --

CAMPBELL: That's why I'm never retiring, because I'm not going to deal with that. No, no, no. We’re not going to have these stories. I don’t know, I think it's probably the authenticity and that I was able to take some great raw talent and give them shots and let them move up and explore their full potential and keep my pension safe at Cox for years and years to come. Because really, Seth, at the end of the day nobody really remembers the last P&L or you launched whatever. They remember what you did for them as a leader or what advice you gave them or what stupid thing you did that they learned from. And if that's one or two people then that's really worth it, isn't it?

ARENSTEIN: Sure. I was just thinking, the last conversation I had with Jim Robbins was he had retired and I said, “Jim, your golf game has to be getting better, you have all this time.” He said, “It's getting worse.” I said, “Really? Why is that?” He said, “If I knew I’d be out on the course hustling people, not talking to you on the phone.” So that's what I remember about him.

CAMPBELL: Exactly. That's true.

ARENSTEIN: What about, you talk about when you started at Cox and here we are today 35 years later. What's the future for cable? What do you think it's going to look like in 10 years?

CAMPBELL: Oh, yeah, no, I'm not going for that one. Ten years? I mean seriously, any more in this industry. Look back a year. Who would have thought what's happened would have happened then? So, I'm not going to crystal ball, but I believe cable is the future. I mean we've been talking about the wire to the home forever and that nothing can usurp that. Now, you know, are there alternatives that people will like? Fine. But ultimately everything that passes over that wire and everything we're going to connect to it is what's going to happen in the future. You know the coined phrase, connected home? I absolutely believe that that's where the industry is going. question marks over how does mobility fit in and wireless and where will those converge and play? But all the investments that we've made and are going to make I think are where people want to get their entertainment, where they want to get information, and how they stay connected in the world, we have all of that technology for them. So, I'm not worried about it. The other piece too that I think people forget is how much entertainment this industry has brought not just to the United States but to the world. Think of the channels and the international reach that this industry has and people just take that for granted. It wasn't that long ago that Ted Turner said, “Hey, I wonder if people would like to see news every day?” and now look at it. So, we're just looking at, I think, a group of people that are scrappy and pioneers and things and willing to take risks and can see what's going to happen next. And that is in the DNA of the industry. It's ingrained in everybody and I think the next generations will feel very similar to that.

ARENSTEIN: How do you stay -- you mentioned all these technologies, all the different things that cable is doing, how do you in operations stay on top of all that? Because at the end of the day it's your headaches that you have to deal with. You have to deal with everything.

CAMPBELL: Yeah, you do, but there are functional experts that are there as partnership. You can't know everything so we've got people steeped in technology. We have strategists who look ahead and know what's going on and the product people. So, I'm not going to be able to look in a device, set-top box, and go, “Hey, I think there's a bug in it.” I can hear from a technician, “something’s not right. I've checked the lines, I've done this.” And what we have to do here is listen to them. When they say, “Trust me, I've checked it all out, I think there's something wrong in the box” you've kind of got to take the box and test it until you find it. And sometimes we're not as good at listening to the front line as we could be, but I'll place my bet on them any day of the week. They will know what is wrong or where we're falling down from a customer perspective.

ARENSTEIN: You know, since we're talking about technology I read some of the research about medical devices in the Cleveland Clinic. I guess it was a couple of years ago now I read this quote. What's going on with that? That sounds fascinating.

CAMPBELL: It's huge and that, I think, will be the next area. We're very committed to telemedicine. We have the partnership with Cleveland Clinic. We bought a company called Trapollo which is part of our Cox business suite of products and we continue to look at new businesses by which we can connect in the home telemedicine, what have you. Still not right here in front of us, but you talk about the next three to five years, that area will clearly explode. And the industry is the best suited to partner with health care, insurance providers, hospitals, etc., because we have the infrastructure.

ARENSTEIN: So basically, what are we talking about here?

CAMPBELL: I think the future is going to be you're sitting in your home, you're connected to your doctor, your hospital, your health care provider, and all the diagnostics that Trapollo does now they're able to monitor for you so you don’t have to go in. It’s all kept on a computer and you do virtual care that way.

ARENSTEIN: Wow.

CAMPBELL: I know. It fascinating, but think about the aging public and how important that's going to be. Or you sell it to an apartment complex, that's part of their feature offering and you can also do that with doctor groups and hospital groups. I mean it just is endless in the possibilities of what you can do.

ARENSTEIN: What other things would I go wow at if I knew that cable or Cox is doing? Any other businesses that I would, you know, would really knock me over? I think the medical thing really is great.

CAMPBELL: For us, for our parent company, conservation is really important. Jim Kennedy with sustainability has preached that for years and years and we have Cox Conserves. All of our systems come up with ways to figure out how to save the environment and do things better. Every building is LEED certified, what have you. He’s invested in solar panels and we give discounts to employees to do that. But they are looking at businesses that can change the world from an environmental perspective. Everything from using Cooke bottles from the plastic in order so they don’t break down for other sources. Tires, where you can repurpose shredded old tires for other things. So, I think what we'll see or my hope is from Cox Enterprises that's where some of the big bets are going to go in how do we really impact the environment with these companies that we haven't even thought of yet? And there's a lot of work being done in the arena here in the US so that's one area. And I still do think health care is going to be the other leg of our stool from a broader perspective that you'll see Cox get into and grow. Alex Taylor who is next generation, Jim Kennedy’s cousin, who will be the heir apparent, very committed as well to that. But he has a vision for growth for the company and over the next 10, 20 years I think you'll see us invest a lot more in companies that are either adjacent or maybe a whole new industry.

ARENSTEIN: Let’s talk a little bit about the culture here at Cox because everybody talks about that, and frankly it's a culture that has kept you loyal for 35 years. I mean we do have to talk about somebody who stays at one place for 35 years, I really think we do.

CAMPBELL: We have a lot of people who stay for a very long time here. Call it the secret sauce, I don’t know, I really think it is. But, as I said, it goes back to Governor Cox. It is just their unwavering commitment to employees that is ingrained in everything we do. I have a wonderful story that I heard when we had a family meeting which they do every couple of years and the head of HR for Cox Enterprises told a story on Jim Kennedy where we had to close a couple of the smaller newspapers back in the day, rural, etc. And a lot of these employees had been with us 20 years even though they were 40 because they started really young and so they were not going to be bridged to their retirement. And it was a lot of money, but she went to Jim and she said, “Here’s the situation” and he said, “Marybeth, what is the right thing to do?” And she said, “Bridge them to retirement.” He said, “Absolutely. You don’t need to ask me that. That’s our core value.” We have made our money and our companies on the backs of our employees and we will always treat them right and be loyal to them. And so, it's stories like that that you hear. And Pat’s that way and Jim was that way and Sandy Schwartz runs auto that way. That’s just what we do. And employees recognize that. Even when we had to close down call centers, we made the strategic business decision to consolidate, we had a couple thousand people impacted by that. That was huge for us. We were teeth-gnashing and Pat and I sat up for hours, what should the severance look like, how should we do this? And we gave people relocation if they wanted to move to another Cox location along with the time to be able to do that, generous severance packages. We also told them as far in advance as we could and we decided to do that because we wanted them to have the opportunity to find something else with the outsource firm that we used and/or maybe go to another Cox entity. People told us who stayed they watched how we behaved and they knew that we would take care of them if something were to ever happen and we needed to do something else from a business perspective. So that we treat people right on the way out, they knew we treat them right when they're here, and that generates a lot of loyalty. We don’t nickel and dime people. That’s just not what it's about. Our building, we just built a new building last year, it's phenomenal. We have a cafeteria that's five star. I bring friends here and they're like, “You want me to come to your cafeteria?” I'm like, “Yes, it's fabulous.” We have a gym that makes LA Fitness look like a dump. I mean we just really invest in our people because we know if you have happy employees they're going to treat customers well and that's the core of why we're in business is to keep customers happy. So, they're happy, they're happy, everybody’s happy, we make more money. It's just our philosophy.

ARENSTEIN: But I think you’d agree that that's not the way most companies go about things.

CAMPBELL: No, I think that's true.

ARENSTEIN: So, what are they missing? Why are they not doing that?

CAMPBELL: I don’t know.

ARENSTEIN: You've been here for 35 years.

CAMPBELL: Exactly. I can't speak to that. When I have people who come here from other places they're like, “Oh my God, this is so unusual.” And I couldn't speak to that other than knowing people who work in other companies and they just say, “Wow, we don’t have that at all.” I feel extremely lucky to have grown up in a company that really cares about me as a person. And you know, we've got employee relief funds that our employees invest in. When anything happens, we are all there. When we just had the recent floods in Baton Rouge, unbelievable the amount of support that these folks got. Really heartwarming to see what our employees will do and what our parent company kicks in. Jim wanted to know every person and did they have a place to stay and did they have enough money and were they okay? Names, everything. We were that way in Katrina. It just is a family. We see ourselves as a family and when you're in a family you stay together even if sometimes you're like ugh, Seth, pissing me off. We're just still -- we rally and come together.

ARENSTEIN: That was the theoretical example. I'm not pissing you off?

CAMPBELL: No.

ARENSTEIN: Okay, all right. Jill, a couple of legacy questions. We always like to throw these in the oral histories. We're hoping that people will be looking at this years from now. So, what do you want them to say about you and your career and what about the cable industry itself? Is there a story or is there an impact or an influence that you really want people to know, hey, this industry did all this, whether you know it or not in 2050 or something this is where it kind of started?

CAMPBELL: The cable industry created in home entertainment. That was what it was all about. And so, when you think about everything from news to animals to travel, there's just a subject for everything and this industry did that. You can say broadcasters started it, what have you, but the cable industry is the group that really made that come to life and explode. And the second thing I don’t think we get the credit for is we built the broadband infrastructure in this nation and we didn't get a guaranteed rate of return on it. We did it well ahead of when people even needed some of these speeds. The reliability has been incredible. We did that because it's good business and we knew that that was the future of what the consumer was going to want. And then we look at things -- we got into home security and we didn't make it just about security. We really made it about how do you make your lives easier. Cameras to be able to watch your pets, your children, interconnect. It's back to that connectivity with what's going on in the home. But all of that was done just without fanfare. The industry didn't take out big ads about that. We just did it. And then politically we did not get the credit for having done that. So, for me I think when people look back 50 years to just pause and say it used to be getting the broadcast channels in with a good picture and maybe HBO and then look at it today which who knows what it’ll be in 50 years. But we will have created all of that. It’s a pretty extraordinary story.

ARENSTEIN: Speaking of extraordinary stories, Jill, congratulations on going into the hall of fame. What does that mean to you?

CAMPBELL: It started with I told Michael Willner when he called, I said, “I think you're calling me too early because I'm not old enough to be in the Cable Hall of Fame.” And then he kind of said, 35 years, hmm.

ARENSTEIN: You started when you were 10.

CAMPBELL: And that's what I told him and yet still here I am. But no, it's an extraordinary honor, especially this class. When I looked at the people in it I was very humbled to be part of that because I just still don’t see myself as having done everything that these folks have done. So, it's pretty cool. Kind of wish my parents were around. As my dad used to say, even a blind squirrel finds an acorn. I am a classic example of that. And he’d be really proud of me so that would be awesome.

ARENSTEIN: Jill, thanks so much. This has been a pleasure.

CAMPBELL: Thank you, Seth.

ARENSTEIN: And I'm glad I get to do it with you. This is great.

CAMPBELL: Thanks. I appreciate it.

END OF INTERVIEW

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Lela Cocoros

cocoros lela 2016

Interview Date: August 11, 2015
Interview Location: Denver, CO USA
Interviewer: Jana Henthorn
Collection: Cable Center Oral History Program

Henthorn: It’s August 11, 2015. I'm Jana Henthorn and we’re doing the oral history of Lela Cocoros here at the Cable Center in Denver. This is part of the Gus Hauser Oral and Video History Program.

Lela, you and I have known each other for a long time and I'm really pretty excited to do this interview with you.

Cocoros: Thank you, Jana. I am, too.

Henthorn: You grew up mostly in Connecticut. Where did you go to school?

Cocoros: I went to NYU Film School for my college education and it was a Bachelor of Fine Arts degree so it was all focused on liberal arts and a concentration in film production. So I learned a lot about film history and television but mainly production. I was on crews, I did production management and script writing and even a little acting. It was kind of a well-rounded film experience. I'm a big film buff...

Henthorn: Film to cable television.

Cocoros: Yes.

Henthorn: So did you ever take a business class in college?

Cocoros: No, I did not. And I wasn’t really sure what I wanted to do when I graduated but I knew it wasn’t going to be film production. It was one of those things where you did the whole program and while it was really, really valuable and it actually did come in handy throughout my career, being a film director wasn’t in my future. I knew it almost immediately.

Henthorn: So how did you get into the media space? What was your first job in the media space?

Cocoros: I always loved film and television and media and I wanted to be involved in it in some way. So my first job out of college was actually for the Cabletelevision Advertising Bureau in New York. This was in 1982. The CAB was only about a year old, and it was a time when it was really just getting started because all the networks were just getting started with advertising and trying to compete against the broadcasters. It was really an exciting time because MTV was a year old and CNN was two years old and ESPN was three or four years old. All these big networks that needed to generate revenue through advertising needed an association to kind of lobby on their behalf to agencies. And it also was set up to help the local advertising teams that were just getting formed in the local systems—kind of getting them the tools to help sell local advertising.

Henthorn: And what was your job?

Cocoros: My job initially was the secretary to the CEO, which at the time was Bob Alter, and I was doing that for about two or three months when I got promoted to research and member services. So I started to work on helping build the kits to sell advertising at both the national level and at the local level to agencies. The whole concept of advertising was new to them. Some of the agencies wouldn’t even take a meeting in those days. It was challenging.

Henthorn: So you started out as the secretary to Bob Alter. That’s in a fine tradition. When I think of other people in the cable industry like June Travis, started out as a secretary and ended up as the president of Rifkin. George Bodenheimer started out in the mailroom at ESPN.

Cocoros: There you go. I'm in good company.

Henthorn: Indeed you are.

So then you decided to move from CAB in New York to TCI in Denver—or just to Denver. That’s a big change.

Cocoros: Yes. I was at the CAB for about two years and young person that I was, I thought, well, I've done about as much as I can with this job so I was ready for something else. There wasn’t really anything else at CAB so I promptly quit. And my parents always told me never to quit a job without having another job but of course I thought, well, I'll see what’s around. And I was also kind of getting, not kind of, I was getting tired of living in New York. I was living in Brooklyn before Brooklyn was cool. I wasn’t making very much money. I was living with a roommate. And I thought, gee, there are all these companies that are on our database that are in Denver, all these operating companies. And I fell in love with the cable industry. I really thought it was a fascinating industry. So I thought, well, why not go out and see what’s out there. I went to Denver and I spent about three or four days in Denver, rented a car, stayed with a sister of a friend of mine and just kind of got the lay of the land. Then I came back. It was May, kind of around Memorial Day and I thought, if I don’t have a job by Labor Day, I think I'm going to move. I think I'm just going to go out to Denver and seek my fortune.

Henthorn: So you set a date.

Cocoros: I set a date. I said, by the end of the summer, if I don’t have the job that I want, I'm going to go to Denver. I'll just go and see what happens.

I decided to kind of look around in the cable industry. I sent out resumes and again, back then it was all by mail or by phone. I had a couple of interviews at A&E; they were looking for a salesperson but they decided to hire a person who had actual sales experience. My experience was really more in writing and communications.

When that didn’t happen and I had sent a couple of other letters out, I had received a letter from Bob Pittman, who was running MTV, who had sent me a letter saying, “Here’s the name of the person you need to contact. We’re starting a new network.” Which turned out to be VH1. “Contact this person and send them your information and see if you can set up a meeting.” And it was Labor Day, 1984, and I had gone out to the movies with my friends and I had gone back to Brooklyn. It was about ten o’clock at night and I took the train, which I didn’t usually do that late by myself and I got mugged. And it was Labor Day so I took that as a sign that it was time to leave New York and to go to Denver and within a month, I was here in Denver. I just kind of worked from there. I started to work my network and eventually wound up at TCI.

Henthorn: At TCI. And your first job was at Cable Time at TCI and I think that’s where you and I met.

Cocoros: It was. We were doing a survey project of our customers, our subscribers.

Henthorn: Was that in...?

Cocoros: I think it was like, I want to say, in 1986, ’87, something like that?

Henthorn: That makes sense to me.

Cocoros: And at Cabletime, I did a lot of marketing work and I also did a lot of writing. We had an editorial that Peter Barton, the publisher of Cabletime—at the time it was one of his many jobs working for John Malone. I was kind of his ghostwriter for that and so he hired me on a permanent basis because he liked the way I wrote.

Henthorn: Writing is really turning out to be a fortunate skill at TCI.

Cocoros: It was. There weren’t a lot of business writers that did that. Actually there weren’t any that did that as their main job at TCI. So I actually traveled around to a lot of different departments, helping the executives with whatever communications they needed.

Henthorn: Peter hired you at TCI, is that right? Do you want to tell that story?

Cocoros: Yes. Peter hired me at TCI. As I said, I was working at TCI on a contract basis and I was doing his writing and I wrote one of his—the first one I wrote, one of his editorials—and I didn’t know him at all. I was called into his office one morning. He just kind of introduced himself and he sat down and the first thing he said to me was “So, you think you know cable?” And he started shooting me all these questions. “What’s the third largest MSO? What year did CNN launch?” Just all these kinds of questions. And I answered them—I think I answered most of them right—but I was thinking, “Who is this guy? Why am I here and why is he doing this?’ I had no idea I was being interviewed for an actual permanent position. So I left after he grilled me a little bit and went back to work and then the next day I was offered an opportunity to become permanent there by Warren Zeller, who was my first boss, my first direct boss at TCI. God bless Warren, he asked me what I wanted in terms of a salary and I gave him a number and he said, “That’s too low.” He actually gave me a little more than what I had asked for and I think that was probably the first and only time at TCI—

Henthorn: Probably in the whole industry.

Cocoros: —in the whole industry that that happened, but I was again pretty naïve. But I was learning along the way and I wound up staying there for a total of fifteen years after that.

Henthorn: After that department, where did you go next at TCI?

Cocoros: As I said, I did a lot of wandering around in different departments helping out, because my writing skills were called into duty several times. John Sie, who I had done some work for, kind of matched me up with Bob Thomson, who had just been hired as their head of government affairs. I didn’t know anything about politics or law or government affairs or lobbying but I did have communication skills so John Sie thought it was a good match. And it wound up being a very good match. I worked for Bob for many years and kind of took over or created actually the first public relations function at TCI, the formal public relations function—press releases, media relations and some employee communications and messaging and positioning and things like that that were all done ad hoc beforehand, but it wasn’t really a formal concentration at the company until I started working for Bob.

Henthorn: You talked about law and government relations and I'm sure there was some finance thrown in there. So it sounds to me like you were getting an MBA even though you never took a business class.

Cocoros: That’s right. I really feel that my years at TCI gave me an MBA in the best way, I think. Just a tremendous education.

Henthorn: Right. It was the kind of thing where you could just raise your hand and say, “Let me try that.” There was that opportunity.

Cocoros: That’s right. It was small enough where everybody got in a room together often and just started to brainstorm. Anything was possible. We had very, very limited resources and we had a lot of challenges. I mean, our reputation was always a challenge. As the PR person, it was on me to try to do everything I could to at least try to balance it the best I could or mitigate the negative. So there was a lot of activity going on in that area. But I also was able to say, “Gee, I'm interested in this area in the marketing department and can I help out?” Those types of things. It really expanded my abilities and my experience to hone my skills.

Henthorn: Adding classes to your MBA.

Cocoros: That’s right, that’s right. It's “TCI-U.” And you learned on the job. Everybody worked really, really hard.

Henthorn: The “Malone School of Business.”

Cocoros: That’s correct. The John Malone School of Business at TCI-U.

Henthorn: What was the culture like at TCI back in the late Eighties?

Cocoros: It was very fast-moving, very fast-paced, and it was kind of like the Wild West. That’s been documented. But it really was. It was open territory, an opportunity to try some new things, and everybody contributed. Very smart people with different types of skills and different personalities. Very male at that time. I just found it very stimulating and energizing because it really stretched you in every which way.

Henthorn: Challenges? To the Wild West? What were the challenges?

Cocoros: The challenges obviously were that a lot of what we did, we were the largest cable company so we were the ones out front taking a lot of the arrows, some of which we truly deserved...

Henthorn: Arrows—nice; Wild West, yes.

Cocoros: And other ones we inherited or we were misunderstood. I think there were things that we did that we didn’t get credit for. There were things that we did that we shouldn’t have done, but overall I think it was a really fascinating company and a lot of fun to work there. A lot of people stayed a long time. I think the average tenure was something like nine years for a very long time. And for a company with 30,000 employees and a lot of people in a field where there’s a lot of attrition, that’s quite a feat, I think.

Henthorn: It is.

Cocoros: There was something going on there that was very positive for a lot of people.

Henthorn: In 1991, TCI created Liberty Media and Encore. How were you involved in that?

Cocoros: Again, I was involved in the communications behind the launches or the announcements, dealing with the media. Talking a lot to the employees about these changes and why they happened. I also was editor of our employee magazine at the time called “Communications Magazine,” so a lot of these stories were ones that we wanted to share with our employees. It was just all of the storytelling and the communications around the launch of Encore, which was in a major way to compete with HBO and Showtime and give the studios another place to negotiate, and keep our costs down if we had another competitive service. Liberty obviously was our company that we spun off and spun back in and it had very many iterations, but it was primarily our programming arm and had a lot of our assets and our interests in all the programming networks that we had. And some of the new technologies that were coming out.

Henthorn: So it sounds to me like at this point you're working on your PhD at TCI-U. Then it got even more exciting in 1991—I don’t know if exciting is the right word—but more chaotic when Bell Atlantic tried to buy TCI.

Cocoros: That was actually 1993. For me personally, that was kind of an alarm that went off because I wasn’t tracking at all on TCI being bought by anybody because we were the largest cable company. So again it was a big lesson for me. It was the first time I had even thought about or heard anything about being bought out and the culture changing and everything kind of being different. I wasn’t alone. I saw a lot of grown men with tears in their eyes because it was one of those things where you recognize something was going to come to an end and change.

Henthorn: But the deal fell through.

Cocoros: That’s correct.

Henthorn: What was that like to be on the sales block?

Cocoros: It was jarring for me personally, but we had a job to do and I wanted to do the best I could and Bob Thomson actually was very supportive in trying to get me in front of the leadership at Bell Atlantic. I remember going to a Christmas event, holiday event, in Virginia I think it was, somewhere in the DC area...and Ray Smith, who was president, I was sitting at his table and I went with John Malone and I went with a couple other of our executives and we sat at the head table just to get to know some of the other people and other executives at Bell Atlantic. It was different. It was a kind of recognition that something is going to be different after this and maybe I'll be part of it and maybe I won't.

Henthorn: So let’s move away from TCI and talk a little bit about some of the other things you were involved in. In 1994, you were chosen to be part of the charter class of the Betsy Magness Leadership Institute. And I was in that class with you.

Cocoros: We were the guinea pigs, I think, for the very, very successful WICT program that is now—I don’t know how many classes there are now, but in the way double digits.

Henthorn: It’s class 32 and 33. 800 people have gone through it.

Cocoros: Oh my goodness.

Henthorn: I think WICT was really trying to figure that out back in 1994-1995. But that’s been 20 years.

Cocoros: I was very, very impressed with the class, too. I mean, the people in that class. I knew you. I didn’t know a whole lot of other people in the class. I knew a couple more. But it was a very awesome experience because I wasn’t really quite at the level of leadership that some of the people were, at least title-wise. So I felt like I was trying to step up and try to be in the big leagues. But it was very interesting, the whole program. I'm sure it's changed now and evolved since we've been there but very, very helpful to my career.

Henthorn: So, Lela, in 1996, November, 1996, Bob Magness died and that seems like it was a turning point in the culture at TCI. You want to talk about that?

Cocoros: It was very sad. Bob was always very involved in the company. He wasn’t the person in the spotlight, like John was, but he and John were very, very close. They worked closely together and talked about the business all the time. They had their offices next to one another. So it was really the end of an era when he passed away. It was tough. At the time the company was going through some tough times, some challenges. Our stock was at a very low price and things were just in some disarray. So it came at a tough time, but in 1996, I was also offered—right after Bob passed away—I was offered a job at NBC.

Henthorn: So a turning point for you.

Cocoros: It was a turning point for me as well. I had a sense that...

Henthorn: It’s more like a U-turn. Tell me about that.

Cocoros: Yes, that’s true. At the time—and I really struggled with whether or not I should take the job and go to New York and work for NBC—but I decided to take the opportunity because it was for me an opportunity to have my own team in my own department. And it was a step up for me in that regard. So I went back to New York; very different situation from when I left, from when I was at CAB. It was a great experience at NBC. I was very happy there doing corporate communications and within four weeks I got a call from—

Henthorn: You were working with great people at NBC.

Cocoros: Yes, absolutely. I was working with great people: David Zaslav and Tom Rogers and I worked for Beth Comstock, who is now chief marketing officer of GE and she’s a very, very smart—

Henthorn: What a great team.

Cocoros: She was terrific. Everybody was terrific and she reported to Bob Wright and he was wonderful. I learned a lot. I call it my “semester abroad” because I was there for five months. And the reason I was there for five months was four weeks into my tenure there I came back here to close up my house and pack it up to leave to move everything. When I was packing my phone in the box but right before I unplugged it, because back then you had a plug in the phone...

Henthorn: I haven’t had one of those in awhile.

Cocoros: A lot of people don’t. Anyway I was about to put it in the box and the phone rang and it was Marty Flessner, John Malone’s assistant, who asked me to hold for Leo Hindery. So I held for Leo Hindery. I had known Leo; I had worked briefly with him when the Viacom systems were sold to various companies. And his company, Intermedia, took several of those systems and that was in partnership with TCI. So I was working with him on employee communications when that happened. That was several years before this call came but I got this phone call and he basically made me an offer I couldn’t refuse—to come back to TCI, work with him and the senior team.

Henthorn: That’s such a great story. You're unplugging the phone and Leo called.

Cocoros: That’s right. And I had no clue. I was very happy at NBC. I was not real happy being back in New York again and I had a young son and my husband had to try to figure out his future because he worked for the state of Colorado when I upended him. So going back to TCI and going back to Colorado was very tempting. It took a few months because of various things but I wound up staying almost through Memorial Day. I actually started my new job, my “new-old” job, my new job at TCI on Memorial Day weekend, 1997. I do mean the weekend. Leo had us on a plane with Marvin Jones going around the country and working that weekend.

Henthorn: So that was Leo Hindery and the “Summer of Love.” What was that like?

Cocoros: We were just starting the Summer of Love.

Henthorn: How were you involved in that? The famous Summer of Love.

Cocoros: That’s right. The famous Summer of Love. I was working with Leo on helping to shore up the company from an image standpoint and from a constituent outreach standpoint. We started with the employees because Leo had done a lot for improving the employee benefits and he also wanted to visit several systems and really get to know the employees. He was very insistent on always going—Leo is always going, he’s always on the go—so you run and catch up and keep up, you're trying to keep up. So we went to a lot of different towns and cities that we served. We visited a lot of franchise—government officials. We did a lot of work with the press and with our employees and just helping to bring more, you know, better relationships than we had in the past and more attention focused on that. Because I'm in public relations that was a lot of what I did in those early months when I worked with him. The other thing that he did was obviously that Summer of Love, which was to get all the cable companies together and look at our footprints—where we serve customers. And for efficiencies and for a lot of reasons, to make those footprints more concentrated around the markets that we served. So there was a lot of horse trading going around because there were certain systems that were outliers for our own company, and they were a perfect fit for another company and there was a lot of selling and trading going on. So that was what Leo coined the “Summer of Love,” because it strengthened everybody in the whole industry...

Henthorn: That’s a good way to put it: strengthened everybody.

Cocoros: Yes. So that really gave us the opportunity, I think, it gave Leo the opportunity to start the process of selling TCI.

Henthorn: So for you personally, though, that was a great time, I think, and you also got a huge award. You in 1998 got the Vanguard Award for Young Leadership. That’s a very big deal. Congratulations on that.

Cocoros: Thank you.

Henthorn: Tell me about Walter Cronkite and John Malone. That’s pretty cool.

Cocoros: This was during the AT&T-TCI—we had announced our merger and our intent to merge, if you will, in 1998. That was in June, and then later that year, during the Walter Kaitz week, Leo had joined the Museum of Broadcasting—I guess it was called the Museum of Television and Radio, which is now the Paley Center. We could rent the venue of the theater and he challenged me with, “Find something that we can do in that theater.” I remembered I had heard John talking a lot about the Sixties during the Space Race and during all of the NASA and the building of the Apollo Program and all of that and he was very interested in that and he really admired Walter Cronkite for how he covered all of that.

So it dawned on me that maybe since Walter Cronkite was working with John Hendricks at Discovery, and John Malone are both icons in their own right—they were both involved in television but from totally different perspectives. Wouldn’t it be interesting to put them together on stage? So from there I created kind of a concept called “Cronkite and Malone: On Television.” And I called John Hendricks and he thought it was a great idea. I obviously had to run it by Leo and by John. They liked the idea as well and it all came together. It was quite an evening. It was also telecast on C-SPAN or taped for later telecast. It had to go through the appropriate channels, which Brian Lamb definitely reminded me, saying, “I can't approve this; it has to go through the editorial approval process.” So I submitted it for their consideration and it was taped and it was quite an evening, it was very interesting.

Henthorn: I’ll bet. I hope we have a copy of that here at The Cable Center. [available online at the C-SPAN Video Library: http://www.c-span.org/video/?111881-1/state-television-news]

So tell me about your work with Cable Positive. You were the board chair there.

Cocoros: I was the board chair there later on, but I was always involved in Cable Positive from the time it was created. Jeff Bernstein, one of the co-founders and I started to go out to lunch when he used to work at Request TV during his stint in Denver. We talked a lot about the organization and I was asked to join the board and eventually I was asked to become the board chair. During the time I was board chair, we were undergoing a lot of change. We had created the fundraiser, the dinner, that happened every spring in New York, and those were very successful, but we needed to take it to a new level and we did a job search for a president and that president was Steve Villano, who was such a wonderful advocate for the organization and for the cause. He was just a great person to watch at work. He worked for Mario Cuomo, Governor Cuomo, in New York and had a tremendous command of how to handle the media and how to handle political advocacy and all of those skills that we really needed to put Cable Positive on the map and make it a tremendous success. He created PSA’s with the cable networks that were really wonderful and really raised awareness and money.

Henthorn: I can't even imagine how many millions and millions of dollars were raised to fight AIDS by Cable Positive.

Cocoros: It was also for education and advocacy. It was the whole research, education and advocacy. All of those areas really benefited from Cable Positive and the industry’s generosity.

Henthorn: While that was going on and you were volunteering there, there was also a lot of merger activity. So let's go back and talk about the final, the big sale.

Cocoros: Although people may not remember this, but Comcast took their first big acquisition of Jones Intercable here in Denver. That was announced in 1998 and closed in 1999, but that was far overshadowed by what was going on at TCI and AT&T.

Henthorn: Wow, Lela. What are your memories of that?

Cocoros: That was huge. My memories of that were very little sleep especially as the deal was working. I remember going with Leo to New York and sitting in a lot of various rooms of various lawyers’ offices and legal offices. It was very exciting but it was also again, the end of an era. “Gee, I don’t know what is going to happen next.” I met a lot of people at AT&T and worked with them very closely, and had a good experience working with them. But obviously I knew I wasn’t going to stick around.

Henthorn: MediaOne was involved in there also.

Cocoros: Yes. The announcement for MediaOne came, I believe, shortly after we became AT&T Broadband. So AT&T Broadband announced the acquisition of MediaOne in probably 1999, I think it was.

Henthorn: Financially successful; culture clash? How did that all go?

Cocoros: It was announced as a $48 billion deal, I believe, and wound up being a $55 billion deal when it was closed. It was quite a huge news story, obviously. It was a challenge. The culture, it was like polar opposite cultures so that was challenging, but to everybody’s credit, our employees really did—they knew they had a job to do, they knew they had to keep the cable systems running. In the field it wasn’t as big a deal because “Oh, another owner.” Because they had several owners already over the years.

To the corporate group, we were no longer a corporate entity, we were a subsidiary and it was a different vibe going on. But everybody acted very professionally and I think a lot of people just realized that they feel like they're part of the new organization or it's time to do something else. And I was the latter.

Henthorn: You were in “the time to do something else.”

Cocoros: That’s correct.

Henthorn: So you became the brave entrepreneur and launched your own business, October Strategies.

Cocoros: I did. In 2000, I left AT&T Broadband and I pursued my own business as a 50-50 partnership with my colleague who worked with me at TCI, LaRae Marsik. She was my VP of media relations at AT&T Broadband and TCI before that. The two of us embarked on a new journey. It was quite a ride. We wound up lasting ten years and it was a very happy and productive ten years. We worked internationally.

Henthorn: Very successful.

Cocoros: We worked for a lot of different companies, a lot of different media-related technology-related—

Henthorn: What was your biggest success?

Cocoros: Probably the IPO for Jupiter Telecommunications, which was the largest MSO in Japan, and it had had a couple of rough goings-on on going out for an IPO and this was their third attempt. They brought us in to communicate more effectively with non-Japanese audiences. So we were reaching out to North America and Europe and trying to tell our story because at the time Jupiter Telecommunications was half-owned by Liberty. I believe it was called Liberty International instead of Liberty Global at the time. Then half-owned by Sumitomo. So it was a joint venture. It was a totally different world for me, but we worked on their website, we overhauled their English-language website, we overhauled all their press releases and we worked closely with their financial people and their operations people to tell their story.

Henthorn: Did you go to Japan?

Cocoros: Oh, yes. We went many times and it was really interesting. It was really a lot of fun, too.

Henthorn: October Strategies was a fun company. It was very fun. I still have my October Strategies oven mitt, which was one of your great party favors, but that wasn’t the best party favor. Tell me what was.

Cocoros: We had a party for six of the ten years. We decided to have these big parties in Denver and just invite everybody we knew. They were a lot of fun, and we had hundreds of people attending these parties, and we had a theme every year so; we tried to do something goofy for the invitation and something goofy for the little parting gift. One year we did salt and pepper shakers that emulated myself and LaRae. LaRae is blond. I’m brunette, so I was pepper and she was salt. And we handed them off to our guests and said, “From the seasoned professionals of October Strategies.” It caught a lot of attention. We got a little blurb in Multichannel News.

Henthorn: How did you get that name, October Strategies?

Cocoros: October Strategies reflects—both of us were born in October. We didn’t want to name the company after ourselves. We just wanted to do something that lended itself to a little bit more smart marketing. October is also the time that most companies plan for the year ahead: budgeting and strategy and things like that. We wanted to emphasize strategy. We wanted to be more than a publicity machine. We wanted to really talk through how you communicate and why you communicate and what you communicate based on what your business goals are, and what you want to accomplish. Not just getting attention. So October Strategies was the choice, and we branded ourselves and we also put out a newsletter called “As the Leaf Turns,” which got a lot of attention in the industry.

Henthorn: I remember that.

Cocoros: It was really a lot of fun. We had ten really good years, we were profitable within six months, and we paid ourselves well. We actually hired a couple of people that we paid well. We had an office in New York toward the end. Then we realized that we had to go bigger or go home. And we started looking around for a partner. We found a company here in Denver—a technology PR firm that we were doing due diligence with and they were interested in us and we were interested in them. Then we just decided, “You know what? If we do this we’re going to have two more partners. We’re going to have to go to an actual office, because we worked virtually.” And we just decided it was better to fold up tent and move on. So that’s what we did.

Henthorn: But you also worked for The Cable Center. I recall that. And then we lured you over to The Cable Center to work with us. You had some big successes.

Cocoros: I love the Cable Center. Even before the building was built I was at the groundbreaking of The Cable Center years ago, and I was a volunteer on a committee back in the day where we were trying to acquire more materials for the Barco Library. So it was coming home, and of course The Cable Center was also one of our clients at October Strategies. So it was a very natural fit for me to come in, and I had two great years here. We did a lot of work on the Cable Hall of Fame. It was the first time the Cable Hall of Fame hit a million dollars, and we also created the Customer Care Committee during that time, and got a sponsor for that. It was a really productive and fulfilling couple of years.

Henthorn: We were glad to have you with us. Now you’ve re-invented yourself as a digital media executive—very cool, Lela.

Cocoros: Yes, I'm working for a digital media company and learning a whole lot of new things about digital media and it was a part of my portfolio that I had not really touched...

Henthorn: Is this postdoctoral work or a PhD?

Cocoros: I guess so. It's definitely a totally different world in many ways. But there are of course a lot of overlaps with what is going on in the industry. And I certainly keep up with what's happening in the industry because I can't just let go. A lot of these things obviously affect—digital compression technology in the early Nineties, the 500-channel universe was one of the announcements that we made back in the early Nineties, that John made, I believe, it was at the Western Show, and started everybody thinking about how could we fill 500 channels. So it really started that dialogue.

Henthorn: Tell me about the people that most influenced you in the industry.

Cocoros: There are very many to mention—

Henthorn: We don’t have time for you to mention all of them. How about doing the top six or seven?

Cocoros: Obviously John Malone. Just watching him. I was lucky to be around him for fifteen years and just absorb how he went about strategy in business. Leo Hindery, who not only did strategy but also executed brilliantly on a plan and just never stopped. And was always working and always trying to do things to move us forward. If the goal was there, he was always carrying the ball to move us forward. Bob Thomson, who was a mentor to me, taught me a lot about diplomacy and consensus-building and a lot of leadership skills. And he was really very adept at that, and nobody worked a room better.

Colleen Abdoulah. I was lucky enough to be a colleague of Colleen’s when she was at TCI and her standing up for the customer and standing up for the employees and the fact that she was able to take that and turn that into running her own company and doing things the way she always wanted to do them. At a place like TCI, it was not possible for her to do what she wanted to do there with customers. She just was an inspiration.

Then, in terms of people I didn’t really know, but I've always admired Ted Turner, because he was a risk taker and he was so darn interesting and entertaining and committed to the business and starting CNN. Brian Lamb of C-SPAN for the same reason - a different type of person but for the same reasons; he had a vision and he stuck to it. Then Bill Bresnan, who I was able to work with a little bit, who started The Cable Center and was so wonderful to be around. Also he just was an inspiration because he was very funny and very personable and very supportive.

Henthorn: Great jokes and great Minnesota accent.

So tell me, Lela, in your opinion, what's the big story about the cable industry that needs to be told, that needs to be out there?

Cocoros: When you look back on all of what the industry has accomplished, it's probably just simply that we really changed the way people communicate, the way people are entertained and educated. So all the infrastructure we put in place way back when has evolved into the communications and education and entertainment that we enjoy today and the ways in which we do it. The wireless, the mobile, all of that I think stemmed from our infrastructure. The broadband infrastructure and the satellite technology and how we shepherded it into the home. So I think you can point to all of what we did as an industry and you see it today—just in a different form.

Henthorn: This is probably too big of a question but what do you see as the major impact that the cable industry has had on society? Chop that down; tell me one or two.

Cocoros: What comes immediately to mind is Ted Turner said something and I am going to paraphrase it. I don’t really know exactly the quote but he said something to the effect that—

Henthorn: He said a lot of things.

Cocoros: Yes, he did. When he started CNN he said, “Now nowhere in the world will it be dark.” In other words, just the communication, the ability to inform and enlighten. If you kind of fast forward to the age of Twitter, when Twitter started to create for better or for worse, a lot of change in the world. That whole idea that we've changed the world through our ability to tell stories, to communicate with people and to educate so people who didn’t have a chance necessarily to go to the Library of Congress, right, and actually get some materials and see them there, can see them online. That’s true with museums, it's true with libraries, it's true with schools, that’s very powerful. If it weren’t for cable, that wouldn’t be happening.

Henthorn: Lela, it's been delightful talking with you and I wanted to know if you have any final impressions or thoughts, comments, reminiscing?

Cocoros: Well, thirty years in the business there are a lot of stories.

Henthorn: Some of which you can't tell.

Cocoros: Some of which we can share right here. I guess the parting thoughts are that the people in the industry that I have been lucky enough to have met and have worked with; I don’t think I could have asked for a better career, more better opportunity to meet so many wonderful and smart, talented people from all walks of life. And the pioneers of the industry have always fascinated me because they all have such incredible stories. Bill Bresnan, when he passed away, I was here at The Cable Center and we were working on the tribute video to him. It just really struck me when you hear these heartfelt stories about these people and what they’ve accomplished. And Glenn Jones passing away recently. I went to Bill Daniels’ memorial service, I went to Peter Barton’s memorial service. It just hits you how lucky you are when you're in this business. And to have all of these people mentor you, support you, just work alongside. You can learn from them. You can't ask for anything more out of a career because it's more than just a career, it's your life.

Henthorn: That’s right.

Cocoros: It’s connected in so many ways.

Henthorn: It’s in your bloodstream.

Cocoros: It is. You can never get it out. I never want to. I want to keep it as long as I can. I want to keep the memories because it was a great ride.

Henthorn: Amen to that, Lela.

Cocoros: Thanks.

END OF INTERVIEW

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  BACK TO ORAL HISTORIES

Craig Cuttner

Craig Cuttner

Interview Date: December 3, 2014
Interview Location: New York City, NY USA
Interviewer: Seth Arenstein
Collection: Cable Center Oral History Program

Arenstein: Hi, I'm Seth Arenstein, I’m here for the Cable Center’s Oral History Project. We’re here with Craig Cuttner, who is the SVP of Technology Development and Standards at HBO.

Welcome, Craig. Great to have you here.

Cuttner: Good to be here.

Arenstein: One of the things that people in the business, but I would say a lot of the public doesn’t realize, is that HBO is a technology leader that placed its bets pretty early in a lot of cases, and it's a better business today because of some of the bets that you and Bob Zitter made years ago.

Cuttner: Sometimes, but not always. We were a fast follower when that was necessary. After all we’re a storytelling company and not a technology company. Not many companies who believe they were technology companies first and storytellers second are around to tell the story. So we did innovate several incredible things, notably the migration from terrestrial microwave. But HBO’s history was long before satellite, but that was the inflection point of the first real great thing that was a technical innovation.

Arenstein: Let's talk about HBO’s history before the satellite. You were there, correct, or you were just coming into the business?

Cuttner: We were already in satellite, but I do fashion myself a sponge for knowledge. I love hearing the old stories from the folks who were there before me. In fact, there were some stories about terrestrial microwave when it was mountaintop to mountaintop through New York and Pennsylvania, that were some incredible stories. Part of it was also that HBO didn’t know what it wanted to be. It was a trailblazer in the programming sense as well as the technology sense and some of those old stories were fascinating to me. Then the move to satellite and the move to national distribution was certainly an inflection point for the industry and for HBO.

Arenstein: Let’s go back even there and talk about how did cable start. Why was there cable in the first place?

Cuttner: That history is far before me but generally it was I think, Mahanoy City, Pennsylvania, November 8, 1972 (my birthday is November 9th so I always remember the 8th), and that was basically a mechanism to sell television sets and it was antennas on mountaintops. And HBO came in as the first, what we would call in technology, a baseband signal. It wasn’t an antenna, it wasn’t on a mountaintop, it was delivered by microwave from New York City point to point to point, and that was brought into the headend and put on the channel. So that was that original launch. That’s sort of how cable started in the early days, like Frigidaire was synonymous with refrigerators, HBO was the name ascribed to cable.

Arenstein: People got cable in the early days to get a better picture.

Cuttner: Yes.

Arenstein: I mean, programming was sort of—it was there but not much of it.

Cuttner: Certainly. Again, I’ll just tell you a funny anecdote because one of HBO’s first things in programming was they didn’t know what to do. The first night of programming was a polka festival and a hockey game and a movie, and one of the funny stories was that they started—it had never been done on television before. They started covering swim meets. And they had young high-strung directors from New York come out and, “OK, we’re going to do this swim meet.” And no one had ever done it before so they didn’t know where to put the cameras, they didn’t know where to do anything and the story was told that the director didn’t like the flags over the pool because it blocked the shot of the swimmers as they were swimming. So they took the flags away, started the swim meet, started recording and then the first backstroke occurred and the swimmers swam right into the wall because the flags are used to flag the turn. So there are several stories like that in the HBO history books that are somewhat comical.

Arenstein: Let’s talk about your beginning, Craig. Where did you go to school and what did you study?

Cuttner: I went to Georgia Tech in Atlanta; Atlanta for me was second grade for me through college and it was sort of an amalgam degree. I ended up working my way through school at a television station, which is where I got my start in the industry, pulling camera cables and that sort of stuff. I graduated from Tech and the crusty old chief engineer of the TV station said, “Kid, I'd love to have you work here but you need to go find your fame and fortune.” So literally he told me to send my resume to the network, which was CBS, and I sent my resume to CBS and received a Western Union telegram so I'm dating myself. A plane ticket and I went to New York and had five interviews in X hours, flew back to Atlanta where I was still living with my parents and they said, “How was New York?” And I said, “Well, I'm not quite sure but I'm moving there.” I accepted the job and did some New York, Los Angeles kind of network television stuff and then one of my colleagues from CBS called me up and he said, “ Hey, this cable—“ I didn’t know what cable was; I didn’t even have it at home at time. He said, “This is fun.” And fun definitely got my attention. Two weeks later I left CBS and I was at HBO and that was thirty-two years ago.

Arenstein: So what did you find when you went from CBS, which was—

Cuttner: The Tiffany Network...

Arenstein: The Tiffany. To this thing called “cable,” which had to have been a bit of a gamble for you.

Cuttner: It absolutely was. But I was young and single and that was in its day, the entrepreneurial thing. The history of cable is all about entrepreneurial spirit. I had it at a micro-level. Well, I'll try this out; it could be fun. And it was fun. I look back over a long career and realize that virtually every six months I've done something different. Whether it was a different project or a different facet of business development or trying something out or experimenting—it's been crazy.

Arenstein: So what was HBO like back then when you walked in the door, which was what year? It was 1982?

Cuttner: Yes. Well, the first day almost completely deflated my entrepreneurial spirit because the person that hired me was fired. I walked in the door and they said, “We've got good news and bad news. You still work here but oh, by the way, the guy that interviewed you and hired you is not here anymore.” I said, “OK.”

Arenstein: That wasn’t your friend, was it?

Cuttner: No, it wasn’t.

Arenstein: OK, that’s good.

Cuttner: That was OK because I don’t know if it was a non-compete or whatever but he then became my boss and that was great.

Arenstein: Your friend became your boss.

Cuttner: Yes.

Arenstein: Hey, that’s great.

Cuttner: Well, it wasn’t like we were chummy and friendly. We had a professional relationship of him giving me hard projects and that kind of stuff. So then it just was a migration of the tail end of HBO being on the satellite and getting the cable industry to understand what it was. Because as I had said, cable was used to signals coming from antennas on top of mountains. Satellite dishes, that was all new technology in the early days, the operators would actually get the satellite dishes, which were hugely expensive. HBO would lease them because they didn’t have the capital to build it themselves, then there were other things on the satellite and then it became more of a cost-benefit for them to build their own. But that was the early days. We used to literally go on the road. We had a team of engineers that went out, went to regional shows, went to local headends and literally taught the cable operators what a satellite was, how to use it, how to do the link calculations and point a dish and all that sort of stuff, and it was really a learning experience.

Arenstein: What was HBO—let’s get back a little bit—what was HBO like when you walked in the door? How many people were there for example?

Cuttner: Even the company today is barely over 1,000 people. So it was always a small gang and from an isolation perspective, the main thrust of the building was in the Time-Life building and I was one of first employees that wasn’t there. So we had our little engineering group separate from the programming people and the marketing people who were all in their own little world of Time, Inc., which—back to your “What was it like?” Time, Inc., was known at that point as the “country club.” It was—as seen on “Mad Men”—it was martini lunches, it was a very different culture and HBO was moving away from that, and getting its own building down on 42nd Street was actually telling because it really did allow the entrepreneurial spirit to sort of move away from stodgy old Time, Inc.

Arenstein: OK. Let’s talk about—so you're at HBO in the early days for you and for your
career. At what point did you say, “Oh, yes, this cable thing it’s not a gamble anymore. This is something that’s going to work. I’m going to be able to make a long career here. I’m going to raise a family on what I'm going to make here.” When was that?

Cuttner: One of my first big projects was satellite scrambling because back in the day, no one ever expected a consumer to have a dish and then with cost efficiencies and better chips and smaller lower noise amplifiers, consumers actually had the satellite dishes. So we were forced to scramble our signal. And that was my first project and it was getting out again to the hinterlands and showing cable operators how to install the equipment, what it meant to them, and that was right about the time when the industry hit the stability of—you know, they were past the franchise wars, they were past the capital infusions, they really had running businesses that were profitable. That’s when I said, wow, this is a pretty good business.

Arenstein: What year was that about?

Cuttner: That would have been probably 1986-87. That was the first of many big projects that just were tipping points for the cable industry. Scrambling—I’m sure you said Bob Zitter—that was when actually scrambling allowed the cable industry to really think about the DBS business because it was collecting money from subscribers directly for access to the programming. And HBO was a participant in that. So if you think of things happening in 2015 and beyond, HBO actually had a storefront, collected money, and a call center. So we actually were—I wouldn’t call it over the top—but it was a retail business that subsequently was overtaken by events such as DirecTV and DISH and big dishes just fell out of favor.

Arenstein: We’re a little out of order, but let’s talk about what did HBO announce a few weeks ago that sounds eerily similar to what you're talking about? Tell us the implications of that announcement.

Cuttner: I’m actually not sure because that’s still playing out in the way the announcement was made and how our chairman, Richard Plepler, mentioned it as an evolution of our existing business relationships. I don’t know that it's going to be a watershed. Everyone thinks it is. The press certainly is enjoying making it into something as they have fostered this competition between HBO and Netflix on a global scale, which is really not true. There are subscriber ways to look at that, there are economic ways to look at that but it's just not a valid comparison to say that we’re head-to-head in some markets. We’re not.

Arenstein: Somebody actually sat in this chair a few hours ago and said, “If I had a choice of managing HBO or Netflix, I would certainly choose HBO.” In terms of money and reach and everything else.

Cuttner: Does that mean I’m going to find money in the seat cushion?

Arenstein: No, that’s not how we work here. Let’s talk about the HBO Go program. Or the HBO Go product.

Cuttner: Generically, TV everywhere.

Arenstein: TV everywhere, right, but HBO Go’s product—I'm not saying that’s because you're sitting here—everybody I've spoken with, everything I've read, everybody raves about it. What part did you play in that?

Cuttner: In some ways, it's an evolution of a lot of different technologies. Way back from when Time Warner Cable and HBO were sister companies and we worked together on the Full Service Network, which became video-on-demand and the cost reduction and the scale of the Internet made that become a viable product for a larger scale deployment. So you could argue that HBO Go is a video-on-demand product from the history of digital cable and video-on-demand.

I worked on pieces of it. My expertise—I'm the chair of several committees and some of them are in the cable industry on encoding. So part of the contributions was how we do the video encoding and the rights management because it's all about getting paid. That history of being a satellite scrambling guy and taking that over to digital rights management has sort of been an evolution of my career as well. So a lot of the contributions of the security piece.

But we also worked—and this was across HBO and Turner and Time Warner in general—TV Everywhere was an initiative across Time Warner. So the authentication and how all that works was also something that was a contribution before HBO Go really launched. So I’ve worked on lots of pieces of it.

Arenstein: I guess I'd be remiss if I interviewed somebody from HBO and didn’t at least use the words, “The Sopranos.” Talk about anything that touched your corner of the world with that franchise.

Cuttner: To do a humor story first.

Arenstein: Sure.

Cuttner: The finale, where there was a music bed playing and fade to black. Apparently Mr. Chase, the creative genius behind it, wanted that fade to black to be three minutes long. And better heads prevailed and it was a discussion about “Do you know how many phone calls the cable industry will get when they think their cable is dead at a crucial story right in the most popular show of the day?” And it was shortened significantly. That was one of the little tidbits...

Arenstein: Aha, aha.

Cuttner: But “The Sopranos” was an inflection point across a couple of HBO things such as the fact that HBO had been, I wouldn’t say this too glibly, HBO had been given up for dead several times. Whether it was the VCR—why would anyone want to pay to see a movie they’ve already seen or even cable in general? Why would anyone want to pay for a channel when television is free? And there have been several evolutions of that and one of them was our contributions to original programming, which was to see something on HBO you can't see anywhere else.

Arenstein: OK, so now flip from those arguments back in the 80s—nobody is going to want to pay money for cable when they can get it for free, or when they can get television for free. And here we are in 2014, almost 2015; a lot of people a lot younger than you and I am say the same thing. Why should I pay for cable? I can get it—legally or illegally—for free. Where are we going with this?

Cuttner: I characterize them generally as Millennials. And you look at the monetization efforts that occur and you look at how many YouTube subscription of people who watch cat videos and it gets 50 million hits, which is more than typically a TV network gets in terms of ratings. What does that mean? What does that mean to the industry? Is that really a turning point? Or is it just a fad or is it some watershed that everyone needs to take into account? The HBO model of programming has always differed over time to—it’s not network television trying to please everyone all the time. It’s what does it take to make you happy enough one time during the month to get your checkbook out? Not trying to be everything to everybody. That’s a whole programming model that I'm not certainly qualified to talk about but it is something that HBO has evolved over time. That’s as we said in 2014-2015. That’s probably the biggest thing that’s coming down the pike that everyone’s going to have to figure out.

Arenstein: And then to make matters even more interesting for HBO, you have a network called Cinemax that is known for a number of things but high drama isn’t one of them until you come up with a great drama called “The Knick.”

Cuttner: Cinemax has always been—I don’t even know the term, is it “stalking brand” or some mechanism to counter program. We've done that with Multiplex, where there was one HBO channel and now there's between HBO and Cinemax, we have twenty-six different feeds. Those are all counter programs; they have different demographics and Cinemax fills that role. The fact that Cinemax had some early shows: they had SCTV, they had “Max Headroom,” they had a lot of avant-garde stuff that fit into the demographics that network’s targeted to. So there’s been a lot of things that HBO, in general, morphs into to fill different niches.

Arenstein: With the growth of HBO—and you’ve been there through most of that growth—how has that changed your job, changed your life?

Cuttner: Back to the every six month mantra. It’s been an evolution of being an innovator, taking risks and then also realizing it's a big multi-billion dollar industry. Multi-billion dollar company in a multi-hundred billion dollar industry. That requires attention to detail so you start paying more attention to, well, what if it doesn’t work right? What about a backup? What about a backup to a backup? What happens when it doesn’t work? That sort of mentality has rippled in over time. Not being more conservative, just being more prudent in what the technology deployments are, what the risks are associated with them and how to take a project successfully against a press release launch date.

Arenstein: Talk to me about some of your proudest moments, specifically about certain technologies or certain projects. Some of your proudest moments at HBO over the years.

Cuttner: Proud in general is probably for me being behind the scenes. I'm not the bright bee in front of everybody so successful execution is proud. I think some of the proudest moments would be things that evolved into mainstream cable. Working with some of the early Time Warner folks on the Full Service Network where literally it was the figuring stuff out kind of perspective and that effectively—which was ridiculed at some point during its early deployments—now is the standard by which all digital cable is deployed even to this day. There were only two parts of that project that were changed. One was the change from ATM protocol to Internet Protocol. OK, that was down in the engine room and the other piece was the guide was such a big part of that user experience that, initially, it was a session -- so it consumed network bandwidth so people were just surfing and deciding what they wanted to watch. So the digital cable today now has that as a carousel where it’s sent separately and doesn’t consume bandwidth while people are trying to figure out what they want to watch. That was a proud moment, I think.

We as a network in the 80s, we saw high definition and some of our executives went to Japan and saw it and said, “This is really something.” As a movie service, primarily at that point a movie service, it was obvious that we would have to make a play in HD. And the executives at the time, we went to every ATSC and FCC Advisory Council meeting in Washington. We became founding members of ATSC, which was the broadcasters trying to launch HD. And it was only when HBO launched high-def -- and the broadcasters didn’t -- because they were still screwing around with things, that we pulled out of ATSC and said, “We’re going to launch this without you guys.” And that was a proud moment as well. The digital cable earlier than that was probably a revolution in itself. But HD itself was the one that hit mainstream America and it was good to be working on that in the early days.

Arenstein: Do you consider yourself a revolutionary?

Cuttner: Revolutionary is just a matter of how many arrows you have in your back and if you get the same thing accomplished without the arrows, that’s revolutionary-evolutionary.

Arenstein: That’s OK, too. I know you’re too modest to say this, but you are known for being the behind–the-scenes guy, as you said, and building so much of HBO’s technology.

Cuttner: Along with a big team of folks who are unsung heroes in their own right.

Arenstein: Yes, yes. But I mean in my research for this interview, that’s what I heard over and over and over again, that you are a tireless worker and not only for HBO’s benefit, but for the industry’s benefit, even in cases where HBO is not really a player. For example, the CALM Act [Commercial Audio Loudness Mitigation Act]. Talk about what the CALM Act is and what you did on that effort.

Cuttner: Well, there's a certain level of altruism of HBO has the resources, has the commitment from the people to send out into the industry. I'll take one step back. When we did satellite scrambling in the early 80s, HBO didn’t have any sports. But we knew that a contemporary system that would be widely adopted across the industry needed to have blackouts. That was built into the system before ESPN ever got on board. So the CALM Act was also one of those -- because if you think about HBO’s distribution, it goes from the highest end home theater, where we have spent years making sure when you tune across the dial, and you land on HBO, you recognize what it is. We don’t put [logo] bugs in the lower right hand corner. But we ensure that that channel stands out by its quality. And you’d be surprised—you don’t even think about it—now you're going to go home and try it.

Arenstein: Now I'm going to think about it, yes.

Cuttner: And you're going to tune across the dial and you're going to land on HBO and it's going to be different. And it won't be because it's a different show, it will be because it looks better and sounds better. One of the things that was occurring in the background of the CALM Act was you could be very ham-handed and take the audio levels and squish them down and be very flat and be completely unappealing, but, in that sort of pablum way, consumers wouldn’t be offended by loudness.

We run Arnold Schwarzenegger movies and guess what? They're loud, they want to be loud, the creative intent was for them to be loud. So my involvement with the CALM Act was actually to ensure that loud is OK. It's the improper use of loud in a commercial environment—because that’s what the “C” in CALM is for—was that HBO could continue doing what we do, bringing that entertainment experience to users and not be impacted by some overly broad legislation. It's a challenge we've always had with our audio in particular because it ranges from home theater to a five-inch speaker in a hotel. And HBO has huge distribution in hotels so we have to walk that fine line and the CALM Act, participation in that was to make sure that the cable interests were well-served, you know, all our MVPDs, all of those interests were served so that we didn’t lose the differentiation. And people wouldn’t say, “Oh, I don’t need to do that, I'm just going to get a DVD.” And we’d be right back to the early days of people watching VHS tapes instead of subscribing to cable.

Arenstein: You also are known as a leader in the standards area. Why is that important?

Cuttner: There’s a component of that that’s altruism. Actually, though, it's also an interesting collegial—I'll tell you a sidebar about the cable industry’s collegial group. It’s a mechanism where technical people without the competition of business folks trying to solve problems, and the standards process is actually an interesting one because that’s where people go with their new ideas. Because standardization is about interchange. If HBO went up on the satellite with a proprietary signal and everyone had to buy a dish for different channels, that wouldn’t have worked. If our satellite scrambling system was proprietary and people had to go invent another one for a different channel, that wouldn’t work. So there's a benefit to standardization just for the facilitation of interchange so that we could buy a movie from Warner Brothers and buy a movie from Universal and we wouldn’t have to build a different tape machine. We wouldn’t have to build a different infrastructure. So there's a self-serving part of it.

But let me sidebar on the collegial nature. One of my first experiences in the cable industry was the then-legendary Wendell Bailey, who was the head of technology at NCTA. He put together in the early days of cable this engineering committee that was the MSOs, consumer electronics manufacturers, the programmers, the vendors and even occasional FCC folks would show up, John Wong in particular. And it was a rolled-up-your-sleeves no competition, let’s figure this out for the benefit of the industry. And it was some of that early work that really got me exposed to this concept of “we’re all in this together.” We may be competitors on the subscriber counts or the programming deals or whatever, but the pie will be bigger if everyone works together and it worked. It was really a very—I still keep in touch with the few remaining folks in that group that are alive today, but I'm dating myself.

Arenstein: OK. Let’s look ahead. What technologies—not necessarily those being used at HBO—generally what technologies excite you the most about the future of cable television generally and then maybe HBO specifically?

Cuttner: Well, there's the evolution and revolutionary part of this. I think the taking content to any device anywhere is certainly a big watershed. How that plays out is going to differ over time. Certainly today’s environment, the MSOs are all-in on Wi-Fi. They went and played the game with the FCC on spectrum and paid billions of dollars and then said, “Wait a minute. There’s billions of Wi-Fi devices, the spectrum is free, it's unlicensed, we can build the infrastructure.” So that’s one of those things where it's a facilitating technology to allow content to be everywhere on every device. I think that’s one of the components of the future. I think we get into the storytelling aspect of it, where technology is just a facilitator and as we sit here today in late 2014, the next great things are going to be probably high dynamic range where a television set, even a motion picture in a theater is a dim experience in a darkened room, but that’s not reflecting of the real world. So there are new technologies, whether that’s the wider color gamut or the high dynamic range where the immersive experience will actually be more possible than it has been in the past. I think that’s one that’s got me excited.

Arenstein: We’ve mentioned Bob Zitter. Talk about mentors, your mentors at HBO. In the industry in general. I know you were a ham operator, a ham radio operator, I'm assuming you know Ron Hranac. Talk about some of your mentors and colleagues in the tech side of the business.

Cuttner: I would say in the category of too numerous to mention I think it works that way because—you know, there are the Jim Chiddixes of the world, who in his own way, figured stuff out. If you look at people who have got inventions behind them, or aha moments where he could say, “Well, I could re-purpose this laser,” and that kind of stuff. Wendell Bailey was great because he would tutor all of these people on the engineering committee. He would start the meeting with, “Here’s what’s going on in Washington and why and what does it mean?” The politics of what would be now be characterized as like a “House of Cards” kind of show.

So that’s kind of a mentor in a sense. And there have been other technical mentors that I've had over the years who would do more about just being a calmative effect. OK, this may be risky but here’s how you mitigate that risk and go and bring the project in on time and under budget. Bob Seidel, who was my old boss from CBS, my mantra and I think his is too, we’ve never bought a shrink-wrapped product in our careers. One of the things that I learned when I was at CBS, I was in the system development group. And it was an interesting mechanism because it was a group of people who have as their charter doing things that have never been done before. And he would say, “Oh, they're just crazy people in a lab doing stuff.” It was like, no, those were requests to do a project that have a budget, have a timeframe, and are necessary to accomplish a business purpose. And I took as—that’s something I took with me to HBO, that it was the ability to be out there, take a technical risk, whether that is re-purposing. The satellite scrambling vendor was a military vendor that had never made a consumer product before. And it was military-grade encryption commercialized into a consumer product. That was Linkabit that became MACOM that became GI [General Instrument] that became Motorola that became—so that was the progression of that particular technology. That was applying something that had never been done before. There were mentors in that process, lots of people on that side, like Dr. Woo Paik, who is arguably the father of what we know as HD.

So there were a lot of people I was exposed to and just was a sponge and stuck little pieces from.

Arenstein: What about—in a very, very generic sense for the layperson—what's the layperson have to look forward to watching television in the next few years? What are things that are going to really knock their socks off?

Cuttner: The fact that it might not be a television. To use the Millennial point, because it's not us watching TV, what's the next monetization wave of making money from watching TV? And the traditional picture quality sort of metric is you have a large screen TV and the larger the screen, the more quality you need to have and all that. But in fact, if you have a tablet you're holding in front of your face, that proximity to your retina makes that a much more challenging environment to view the screen. And that’s the device you feed from the crappiest Wi-Fi router in your house. Not a good scenario. So some of that wow-ness is going to be a different viewing experience, sort of in the cable sense is TV Everywhere going to be cable? Is it going to be still wire, is it going to be wireless, how is that going to play out?

Arenstein: It’s early to ask you about a legacy, your personal legacy, because we’re hoping for many, many more years of wonderful things at HBO. If you had to have your legacy written today, what would you like it to be?

Cuttner: Invisible Number Two.

Arenstein: OK.

Cuttner: That’s sort of tongue-in-cheek. But I really never wanted to go riding on a parade on a big white horse and carry a flag. I’ll say it in all seriousness. It’s really been a team effort. I look at some of the people at HBO. Elmer Musser, who runs our broadcast engineering and R&D stuff, and just brilliant folks. You probably have never heard his name.

Arenstein: No, I haven’t.

Cuttner: Yet he has little pockets of claim to fame. He actually is one of the few people that has a personal technical Emmy Award because Emmy Awards—it’s a long story, but Elmer was on duty the night “Captain Midnight,” who was opposed to some HBO scrambling and charging money, jammed HBO’s satellite signal. At that point there was no way to identify the source of the interference. And Elmer, who is also a ham, modified a Morse Code technique to actually identify the transmission. And had that system been in place, they would have known where Captain Midnight was from—aka John MacDougall—and he was in Orlando, Florida, but that’s a side story. And Elmer took that invention, took it to the FCC and proposed it against the odds of all AT&T and other people who were inventing identification systems. Proposed it and in fact, that system, as humble as Morse Code is, has prevented dozens of interference events and he was awarded the Technical Emmy. One, Emmy for the technology and one, because he did it in his garage and came up with the idea. So that’s a pretty good accolade for him and he’s part of the team behind the scenes at HBO that no one knows.

Arenstein: Now I know you're too modest to sit to say that you’ve won a number of awards, too. So when you get these awards, what's your speech like? If you want to be a background number two guy, what do you say?

Cuttner: Thanks.

Arenstein: And you sit down. Fair enough. So you know, you’ve shortened those rubber chicken dinners. OK, well, that’s good. You also have dozens of patents and patent pending. Talk about that.

Cuttner: There’s a lot of—I wouldn’t say there's sort of rules of thumb about why people are inventors. Most of it is labor-saving or laziness. And in some cases, just an idea that you have the resources or time and can push the patent through the process, which takes five to ten years. So in some cases, the patents were related to things—for example, one that just expired was the team effort that actually patented the user interface for what we now know as video-on-demand, which predated the Full Service Network. It was in that era back in the 90s. So some of the patents are like that; some of the patents are just goofy little ideas that HBO decided would go through the process and pay all the lawyer fees and everything else. There’s some that are kind of cool that may or may not ever see the light of day.

Arenstein: Like what, for example?

Cuttner: One of the ones that a colleague had this idea and this was like, oh, yeah. It was one of those aha moments, was this concept that when you watch content on a DVR, all the sports, for example, the stuff at the bottom of the screen is all old. While you're watching the old content, what if those scores were new? And the patent even goes so far as to say, well, what if you don’t want the spoilers to know what games have already been decided? So it was this whole concept of updating time shifted content but not necessarily all of it.

Arenstein: Interesting. About, I don’t know, maybe fifteen years ago, I was reporting at an SCTE show, somebody gave me a camera, what was called a digital camera in those days...

Cuttner: If you're holding your hands like this, it was probably the original Apple.

Arenstein: And they said, go to So-and-So’s booth and take a picture and bring it back and then write a story about it. I remember I brought the camera back and somebody played on their computer a little bit and there was the picture I had just taken. You’ve got to remember, this was years ago. There was the picture I had taken and it was already on the screen. Then I was going to go out and write the story. I remember thinking, “Holy wow, that’s amazing!” What in your career have you looked at and said, “Wow, that really is cool. I can't believe it!”

Cuttner: That’s an interesting one because most—again, not the aha moments—but most things that would come to fruition were trials and tests and that sort of thing. The fact that it worked shouldn’t have been a surprise. When I was in Atlanta growing up, I took a photography class and the teacher was the owner of the photography shop, probably self-serving, buy some stuff, and take the class. But he said, “You'll be kicked out of this class if you ever pull film out of a tank and are surprised by any image that you see. Because in the composition, in the methodical process of taking that photograph, there should be nothing surprising about it. You should have visualized that image before you laid it down on film.” A lot of my projects have been like that. It's wasn’t like I magically mixed two wrong chemicals together and came up with a bomb. It was a process of “well, we can do this.” Applying a technology that already works to something else: piece of cake. You have to work through how that happens and how it evolves and how it becomes commercialized and cost-effective and all that. But I haven’t had one of those big aha moments.

Arenstein: What energizes you today? You’ve been in this business for a long time, you’ve seen a lot; you’ve seen a great deal of change. What helps you walk into work in the morning with a smile on your face? Why are you charged to go in everyday?

Cuttner: It is that change. It is the knowing that the constancy is the change. You don’t know—many people in television can tell these sort of stories where one day I was sitting at my desk and my phone rang and it was Jerry Levin, chairman of Time Warner: “What kind of TV should I buy?”

Arenstein: What did you say?

Cuttner: Actually at the time, when you say, “What kind of laptop should I get or what kind of TV should I buy?” If someone really knows their stuff and I'm not saying—it's more of a question than you think. It's more about what’s your lifestyle. What do you like to do? What are you going to do with this thing? And it turns out there was one particular, at that time it was called “improved definition television.” It was long before there was high-def or even a glimmer of high-def. But it turns out that the technology was moot because his wife had an architect and the TV had to fit in this space. So that was the end of the discussion. OK, get the TV that fits in the space.

Arenstein: I think we’re about finished, correct? We have a little bit more time. Five minutes. Let’s see; what were we going to talk about then, for five minutes.

What are some of the best, or most rewarding industry-wide work that you have done? You’ve been on so many committees, you’ve presented at NAMIC, you’ve done all kinds of things. What two or three stand out for you? I know you’ve worked with SCTE for a lot of years.

Arenstein: Probably the “it just works” piece, which if you didn’t think about it, you just plugged it in, that sort of works. I think digital compression. In the early days of digital compression, when the MPEG was still getting figured out, MPEG-1 moving to MPEG-2, you could buy an encoding system from Motorola and it wouldn’t work with S-A [Scientific-Atlanta] set-tops. And you could buy an encoder from S-A and it wouldn’t work for Motorola set-tops. There was a lot of effort, and the cable industry even now still has that bifurcation of Arris versus Cisco. The fact that the video plays across everything—forget the conditional access and the guides and all that. The part that HBO cared about was we would put up one signal and we would let that one signal go everywhere because it was dis-economic to do anything else. That was the similar thing on video-on-demand; where Time Warner Cable did the video-on-demand spec and I got involved with CableLabs to write the encoding spec because it had to play across all the vendors. If it didn’t, the economic model of giving consumers free access to on-demand content would have failed miserably. So it's that kind of “it just works.” It’s the fruition of a standard effort. You get the people in the room, everyone goes through their due process and consensus building and all that, but at the end of the day, you want one result that’s for the betterment of cable-kind, mankind, whatever you want to call it.

Arenstein: I guess that’s again impinging on the question or the issue of standards. Preparing for this interview, I was talking with—“Why are standards important?” And I realized that, well, you know I have a BlackBerry and I’d like to get something from my BlackBerry to my iPhone and I can’t do it. And that’s kind of what you're saying. If the phone people had that kind of attitude, I'd be able to do that, is that right?

Cuttner: And there’s economic reasons why they don’t want to do it. And this is one of those things you're going to go back and check this: there are very few ubiquitous standards that actually work globally. Two that come to mind: AA batteries and Group 3 FAX. You can send a FAX from any machine to anywhere in the world and it works. Now you may not get grayscale and all that, but you’ll get a picture out the other side. AA batteries are the same. You go anywhere in the world—other sizes not so much, but those are the two, when you think about standardization, the microcosm of S-A set-tops and Motorola set-tops. But if you think globally, the standards effort is not as complete as it probably could be.

Arenstein: Exactly. I guess the last question: what kinds of hurdles are there still for the cable industry now from a tech standpoint?

Cuttner: Technologically I think part of it is the evolution in the economic environment. There’s so many great ideas that the cable industry, or MVPDs in general, but the cable industry in particular, could go do but they’re being done not as a rebuild, but an evolution. If Wall Street weren’t breathing down everyone’s neck, you could say, “Oh. Well, I’ll get my little forklift and we’ll change out all this stuff and we’ll go do something new.” And if you look at what cable’s accomplished without changing the fundamental architecture, whether that’s adding two-way for VOD, adding cable modems, adding VOIP to those cable modems, adding over-the-top streaming services, all that, the fundamental architecture hasn’t changed. And I think that’s the piece that’s going to be the challenge for the industry is to keep that pace of revolution and evolution along with the economic environment that it has to live in. That’s a big challenge.

Arenstein: Great. Craig Cuttner, thank you so much. This was a lot of fun. I enjoyed this.

END OF INTERVIEW

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  BACK TO ORAL HISTORIES

Terry Cordova

Terry Cordova

Interview Date: September 23, 2014
Interview Location: Denver, Colorado USA
Interviewer: Mike Schwartz
Collection: Cable Center Oral History Program
Note: Update: 2016. Terry Cordova is SVP and CTO of Altice USA. See video; https://youtu.be/SdArd3XxyjA

 

Schwartz: Hi, my name is Mike Schwartz. I’m here in Denver, Colorado, at The Cable Center, with Terry Cordova, CTO of Suddenlink Communications. It’s September 23, 2014, and this interview is part of the Cable Center’s Oral History Program.

Hi, Terry.

Cordova: Hello.

Schwartz: How are you?

Cordova: I am doing well, thank you.

Schwartz: I want to start our discussion by going back a bit into your formative years prior to your entering into the cable industry in the mid-seventies. Do you remember anything from those days that would have indicated to you that you were going to be coming into a then-nascent cable industry as a person who would be setting up cable systems and then moving to a position four decades later of being a CTO of a major cable company?

Cordova: Early on, I would say probably nothing specific. If you remember back in those early days technology wasn’t near what it is today but I was actually born at Fitzsimmons Hospital here in Denver and my father was an officer in the military. And we traveled throughout the world. We lived in Paris, France, in Munich, Germany, and as I reflect back on your question a little bit, one thing that comes to mind is that I was a pretty mechanical kid. I used to build bikes as a matter of fact, and I’d get bike parts from people that might put a bike out on the street, throwing it away, what have you, and I would collect a bunch of bike parts and make a bike. So it’d be a few days in the basement and out would come a new bike that I would take advantage of for a couple of weeks before I would do it again. Maybe some of the mechanical mind that I had back then may have led me down the engineering path perhaps.

Schwartz: Tell us how you started in cable then some thirty-five years ago.

Cordova: Thirty-five years, that’s a long, long time. But I can remember just before I was graduating high school and was living in Junction City and I needed a summer job. So I went down the street and actually put in an application at the local phone company—I believe it was Southwestern Bell at the time—and of course, no one came out and I just handed in my application and walked out and right across the street was the local cable company, Communications Services, Inc. I finished my application process and sure enough, luck would have it, the manager, local system manager, Jeff Lowe, he walked out from his office and brought me back into his office and chatted with me a little bit about the summer job he was looking to fill. I guess I must have convinced him I had enough of a work ethic that he hired me. It worked out great. I spent the next three or four summers working for CSI, both in Junction City and Manhattan, Kansas, doing various jobs. But that’s really my start.

Schwartz: So what was the connection then beyond just the summer internships at Communications Services? Was this something that was close to your home, was it a great opportunity for you as a young professional start-up there?

Cordova: You know, when you think about it, and you're just walking from a phone company to the cable company, there was some technology interest there even as a young person, but I had no connection to CSI. Fort Riley, Kansas—as I indicated my father was an officer in the military—was right next to Junction City and I went to a small Catholic high school in Junction City. So that was probably the connection to CSI. But when I think I think about CSI, the Communications Services, Inc., it was a wonderful opportunity to do summer jobs there. I was doing installs and service calls and, depending on who was on vacation, I might be on the construction team or the maintenance team, so it just created a really great learning opportunity for me and really started setting the foundation for my interest in the cable industry.

Schwartz: So then your next step was Kansas State graduation. Following that was Galaxy. Is that correct? What was that like working for a pretty good size cable operator at the time and you were a pretty young guy entering the business?

Cordova: I was. And there again, I'm going probably to repeat myself a number of times to some of your questions, but I think it was very fortunate that I came across Galaxy fresh out of college, after getting my degree in engineering from Kansas State. The Gleason family hired me into their company; we were a mid-size cable operator. We had about 350,000 customers but it was a unique time in the cable industry in that we were getting franchises, we were building out cable systems, we were strand-mapping. I was running construction crews and really providing new cable services to a lot of areas that had never had cable before. So I can just reflect back on that and remember some of the great experiences of there again building headends and microwave systems and so forth. But it was a great foundational opportunity for me working with the Gleason family and everything they stood for relative to taking care of the customer and really providing quality services, even when you think though back then, it was just about video.

Schwartz: That’s true, isn’t it? And that was fifteen years now you were with Galaxy? What were some of your successes at that company?

Cordova: Let me think here. So early on successes—when you think about a mid-size cable operator, we operated a lot of disparate cable systems and I would say one of the early on successes was the fact that we were tying a lot of those cable markets together. Back then, mid-eighties, it was microwave. We were building microwave sites and standing up towers, putting up dishes and tying cable markets back to one master facility. Over time that transition to fiber optics. When you think about fiber and the advent of fiber, some of the costs really were prohibitive for more midsize operators to deploy the amount of fiber we needed to tie cable systems together. An early on success for me was just the whole notion of taking disparate cable systems and tying them back to a master facility and certainly that whole concept of interconnecting cable markets today is alive and well.

Another I guess would be a distance learning network. In the state of Nebraska, there again probably mid to late-eighties, through this headend consolidation effort we were doing with Galaxy, we ran about 500-600 miles of fiber to probably about twenty-five communities. And there again, trying to tie these small markets into a larger master headend and then as part of that, we actually reached out to the local school districts. There were about six different school districts, probably about 115 schools, many of which were in these smaller markets. We really created a distance learning network and it was all about full-motion video conferencing, wide area networking, four digit dialing and so what it created was a huge opportunity for these small schools to now have access to calculus teachers, foreign language teachers, what have you, that were sitting in the bigger markets. You know, when I would see that in action and the students really excited about having that opportunity in their small town, it really made a difference. But certainly early on those were some of the accomplishments.

Schwartz: Pretty early indication of cable’s support of the education of our youth.

Cordova: Exactly.

Schwartz: Well done. On the flip side, what didn’t work as well as you planned in those days?

Cordova: Business-wise, I’d say you know I've been very fortunate. My life has been—and I would characterize it as luck and you have to position yourself for luck. Business-wise, there’s probably nothing that I can say jumps out at me that didn’t go well. Personally, maybe; I got married in life much later than I would have thought. In my late twenties when I had friends around me that were getting married and having kids and I was jumping into a Suburban and you know, traveling to five neighboring states building out cable companies. Very limited opportunity to really have a long-term relationship. As cable luck would have it, I got reacquainted with my eighth grade girlfriend. So she, Kathy—her father was stationed at Fort Riley, Kansas, the same time I was—you do whatever you do when you're in the eighth grade and boyfriend and girlfriend. You go to dances and what have you. She moved away and some twenty years later, I was sitting on the back porch of my fraternity brothers’ house and sure enough, talked to this guy. It turned out to be her brother. Her older brother, back in the eighth grade, five years is a lot of time. But he told me to give her a call and I gave her a call and we met a couple of weeks later and six months later, we got married. I’ve been very fortunate in that regard. We’re going on twenty-plus years now and have two wonderful teenage boys. It’s definitely worked out very well.

Schwartz: Good for you. Congratulations on that.

Cordova: Thank you.

Schwartz: So the next step is Charter. Charter Communications from 1999 to 2003 you were again coming into a major company as a vice-president helping to build a new company. Tell us about that.

Cordova: The move to Charter was a big decision for me. I was with Galaxy for about fifteen years. There again, I thought very strongly of the Gleason family. They gave me an opportunity early on. I felt like a lot of my foundational knowledge came from Galaxy. So I really had to think about it long and hard. Eventually my wife and I, we made a decision, we took our two young boys, Parker and Tyler, and packed them up and moved to Greenville, South Carolina, to join Charter’s eastern division at a very unique time in the industry. The industry was going through a bunch of consolidation, if you remember. A guy named Paul Allen, he came into the picture. He bought a company called Marcus Cable and then bought Jerry Kent’s company, Charter Communications. When Jerry and Paul teamed up, they went off and we went off and really created Charter Communications back then, some six million subscriber company. We acquired ten different companies and grew probably 10,000-12,000 employees as a company. I had the responsibility of the eastern division. The eastern division was roughly half the company. Back then it was largely an opportunity to take a bunch of different companies and integrate them into one large company. So we spent billions of dollars upgrading about 100,000 miles of plant and tying these markets together. We had a master upgrade plan that we were executing too, launching digital video services and probably most importantly, we were turning up Internet access and most of all those homes that never had Internet access before.

Once again, luck would have it. I had a great opportunity to learn a lot, which I did, not only through the technology integration we were going through but also the people integration. When you think about the ten different companies and all the different cultures that existed in those companies to get them wrapped around a common culture was a large task. We put in place an effort called “Operational Excellence.” It really involved a lot of the care center folks, a lot of the front line folks and I think it really helped position us to organize ourselves well and do as well as we did.

Schwartz: It was also nice to have someone like Paul Allen coming in to the cable industry as an investor as well. I guess he was a pretty hands-on operator, wasn’t he for awhile?

Cordova: He was, yes.

Schwartz: So what next? What happened after your work at Charter?

Cordova: After Charter—you make the point about a “hands-on” person and Paul Allen. So Jerry Kent, who was our CEO at Charter, he left Charter, I guess, in probably 2001. I think that he probably left because of that hands-on approach of Paul. Jerry is masterful in his knowledge about cable television and really had asked me probably three years prior to come to work for him. I believe I missed an opportunity at that point. I made a decision to stay with Galaxy and I'm sure that the Gleason family were pushing me hard to stay. So when he came and asked me a second time, “Do you want to come and join our company here in St. Louis?” It was called Cequel III and Cequel—a lot of people may not know it, but Cequel III was Crown Communications, then Charter Communications, then Cequel III Communications. So the sequel to the story (although it’s spelled with a “C”). When he asked me to join him, I went home and talked to Kathy. It took about an hour and we made a decision: we’re packing it up and we’re going to move to St. Louis.

You have to kind of think about where I was at that point in my career. I'm part of a great organization at Charter, we had a great team, we just spent billions of dollars upgrading networks and launching new products and roughly six million subscribers. Now I’m leaving that scenario to join Jerry in what was about a 300,000 subscriber company and what felt like probably an equal number of headends. But we left because of Jerry, frankly. I mean, Jerry is a quality guy that I've always had a lot of confidence in and so he asked me to come to St. Louis and be his senior vice-president of engineering. So we packed it up, we moved to St Louis and it turned out to be a great move for Kathy and I. It was at the same time that we were looking to do acquisitions and so I was tasked with the acquisition modeling and the upgrade modeling and really a lot of the integration of several acquisitions, including about 17% of Cox Communications and then some assets from Charter Communications, News-Press Gazette and others. As you think about it, now you’ve got much like a Charter and an opportunity to begin the deployment of new products and tie markets together and so very similar in nature to some of the other efforts that I've been part of.

We went through, early on, “Project Imagine,” which is all about launching advance services. We put about 100 HDs over the national backbone. I think we’re one of the few companies that were delivering that many HD services over a national infrastructure, which we were doing. We launched VOD, or extended our VOD footprint as well. We launched 107 megabit data service. At the time that was the fastest Internet service in the U.S. In a funny story really quickly on that, Mediacom was at 105 and I told Jerry that and he said, “Why don’t we do 107?”

But it was a great time and here we are once again. We just announced a project. It’s called “Operation Gigaspeed” and it’s a focus on our data product. We’ll go out and take our flagship product, which is where the majority of our customers sit and we’ll take them to about 200 megabits over the next fifteen months. So if you think about that, in the early days when we were launching sub-1 megabit speeds and now we’re talking about 200 megabits as the standard product offering. Many of our markets in fifteen months will have a 1-gigabit offering. Certainly it’s great to see the data product do so well but I'm happy to be part of Suddenlink organization. We’ve got a great team there and I'm excited about the next few chapters.

Schwartz: I think you should be. It sounds like a great, great place to be launching into.

So looking back now, what do you call over the course of your career in cable as one of the biggest challenges the industry has had and faced and how has it overcome that challenge?

Cordova: That’s a really good question. I’d say one of the largest challenges has been the perception of our quality customer experience. And we’ve evolved ourselves so many times as a cable industry in going from video only to data and phone and what have you. It has been a challenge to make sure that we’re constantly focused on the customer experience. A guy like Jerry Kent: absolutely focused on the customer experience. Customers have long memories. So in the early days, I won’t say that we were terrible, but we weren’t as good as we are today. I know that the leaders of the cable companies that I interact with were keenly focused on tools at the care center level, at the technician level, to really improve upon the customer experience. So I know it’s a focus and net promoter scores and JD Power scores and us being open to taking customer input and what have you has made us a much better company and certainly much better industry.

Schwartz: When you're here in Denver this week for the annual convention of the Society of Cable and Telecommunications Engineers, you were just recently re-elected as their chairman. Congratulations on that.

Tell me about where do you see the organization headed and how have you felt your relationship with SCTE has blossomed over the years?

Cordova: The SCTE for me—I think about it. From this perspective it’s all about the technicians in my opinion. The technicians are in many cases the only face that the customer sees. It’s like the CSRs that are answering the phone call. It’s the same thing. So the SCTE, it’s a great society that really focuses on the technician from a training and certification perspective. We have some seventy chapters throughout the U.S. and Canada and those are locations where technicians are coming every day to be part of something and collaborate. The SCTE has got great training and certification efforts that go miles in terms of building the confidence for those technicians to be able to go inside of a customer’s home and resolve their issue and do so proudly and having feel like they mastered that particular install or service call. So the SCTE is an organization that is focused on that. For me it’s been a part of our organization at Suddenlink. I really pushed for SCTE certification. In our organization, every technician has at least one level of certification and in many cases, they have two or three. We’ve seen our employee churn go down and so lots of benefits from training and certification. Certainly lots of benefits from just being associated with the SCTE. But I'm very proud of the experiences and the opportunity I've had at the SCTE.

Schwartz: You’ve mentioned several times in our conversation the name Jerry Kent. Was he the biggest influence in your professional career?

Cordova: I would say absolutely. Jerry, he’s a wonderful person, he’s certainly a very well-respected person on Wall Street. He is a very capable operator. He’s taught me many, many things—being financially disciplined, the importance of taking care of the customer, the importance of personal and business relationships, the importance of generally just taking good care of your family—like you would take care of your customers. He is a guy that creates culture and the culture you can see and feel. So people around him, certainly inside of Suddenlink, they gravitate towards that. You know it’s not just words, you know it’s just not a card you carry around in your wallet or your purse. It’s something that the company lives by. If anything, Jerry is a guy that really is keenly focused on building a culture as much as he is building a business of driving revenue and cash flow.

Schwartz: And who else would you put up into the category of great influences on your outstanding growth in cable?

Cordova: Another good question. You know our industry is a very collegial industry. If you think about that, many industries aren’t that way. But the likes of guys like Tony Werner at Comcast and Mike LaJoie at Time Warner, Nomi Bergman at Brighthouse...over my career, they’ve always been very forthcoming with information or resources. If I had questions maybe about a certain technology or certain idea that I was trying to flesh out inside of our own organization, they would absolutely make their teams available or offer their own input. So when you think about that, it really allowed me to have a lot more resources available to me, gave me the confidence in some of the decision-making that we were doing as well. Certainly those folks absolutely impacted my career and I thank them for that.

Schwartz: In your opinion what is the most important big story in cable that should be told?

Cordova: You know what, the cable industry is one that has constantly evolved themselves. And we think about it in the early days, when we were a video-only network in disparate stand-alone towns, we began interconnecting like I was mentioning earlier those markets into larger networks of towns serviced from one master facility. We then evolved ourselves to activate the return plant to where we now had data services and phone services. We started introducing commercial and carrier services and what have you. So time and time and time again, we continually evolve ourselves from a network perspective. Our people as well continue to evolve themselves. That for me is probably one of the most unique characteristics of the cable industry. Any one of those businesses, whether they be video or data or phone, could stand on their own and be a very successful business. But we have the unique opportunity in the cable industry that we get all that ability, both residential and commercial over a common infrastructure and really the same technicians and same CSRs largely supporting that network.

Schwartz: So with that kind of a culture for the industry as a backdrop, what do you see as the most significant accomplishment that you made as a contributing high-level executive in the industry, or that you were a part of in the broadband cable industry?

Cordova: I’d have to say, given the importance of the Internet and really for me, having been part of many companies or at least three different companies that we were launching Internet access in many communities for the first time, that would probably have to be the largest. And there again, you think back to the days of Galaxy and Charter and Suddenlink, I think in total probably approaching some ten million homes that I've had some role in launching Internet access. For me, that’s very gratifying. Knowing what the Internet has become, knowing how important it is to all of us, how many devices inside your home. We have connected VOIP. So certainly that clearly is right at the top. We’re still at the infancy from many respects. We have DOCSIS 3.1 coming our way and continually evolve the ability of access to high-speed data outside the home via Wi-Fi hotspots and so on. But that one is certainly right at the top of the list.

Schwartz: It’s a good one. What do you hope your legacy will be?

Cordova: I would say that I hope people remember me as not somebody that really sought out the limelight. And really it was important for me to recognize the team because it is all about the team, the people you assemble, you create a vision of the direction that you're going. I’d also hope that people remember me as someone that was keenly supportive of the SCTE and the mission that we stood for, which is all about training and certification of that frontline employee technicians. We’re actually working on a program to have certification for CSRs, which I think are just as important. Then I guess lastly, I hope people remember me being very, very supportive of ethnic and gender diversity and someone that spoke about that regularly and really felt like that was a very, very important effort.

Schwartz: On the same level, what do you think cable’s legacy will be on our society?

Cordova: I think it has to be the remaking of itself, the constant evolving of itself. And there again, when you think about the changes that we’ve gone through as an industry—we’re not fully replacing our network every time these changes come up—we’re actually augmenting it. We don’t run out and get a bunch of new people to replace the people we have. We train the people that we have to do different skills and support different products and services. But I think our legacy as an industry will be an industry that constantly evolved themselves. Very innovative with our products and services and getting better and better at that everyday. When you think about what I was mentioning earlier, just the sheer notion of having Wi-Fi hotspots allowing people to go to a ballpark and open their tablet and gain access to a local cable company’s Wi-Fi hotspot and do that for free, as an extension of their data service, and now we’re tying those Wi-Fi hotspots together so you can travel from one town to the next—the neighboring cable company will participate in a very similar manner. They access the content outside your home on the tablet through some authentication processes. All those are unique changes, I think, that will be a legacy of ours in our customers’ minds. I remember sitting in a meeting once with Steve Jobs and it was a cable meeting and he made the comment, “The cable guys are just a bunch of deal-doers, and you should really just leave the innovation to me.” And he made that statement and it was profound. We all knew—and this was probably five or six years ago—that we needed to step up the pace of innovation. I think we did in the industry. So I believe our legacy will be largely about our ability to adapt, constantly evolving and innovation is one of our key priorities.

Schwartz: So what’s next for Terry Cordova and what’s next for the cable industry?

Cordova: I can tell you that I've been speaking about this year many times being at another inflection point. It’s another one of those points within the cable industry that we’re going to go through a massive change and it’s all for the good. It’s one more time we’re going to be remaking ourselves. When you think about the dependency on our networks, on the customer experience and so forth, it really requires us to take the next set of products that we have with DOCSIS 3.1, where we’ll be offering some ten gigabits to the home and you really think about that. Boy, that’s a lot of speed. And all the things we’re going to do with television everywhere and community Wi-Fi and what have you. There’s still a tremendous amount of opportunity that we as engineers, we as the cable industry, have ahead of us.

What am I going to do? I think I'm going to continue doing what I love, which is this cable business, and it’s been a passion of mine so yes, I'm going to spend the next several years helping Suddenlink write another good chapter of success or two.

Schwartz: So you’ll be in the thick of it.

Cordova: I hope to be.

Schwartz: Thank you very much. That concludes our interview with Terry Cordova as part of the Cable Center Program on oral histories.

END OF INTERVIEW

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CTAM Panel - Why CTAM?

Interview Date: July 2006
Interviewer: Steve Nelson
Collection: CTAM Collection

NELSON: The roots of CTAM before there was a CTAM. Just tell me briefly what each of you were doing at that time, starting with you – Paul Maxwell.

MAXWELL: CTAM didn't exist but the NCTA had run a couple of marketing seminars, one in Atlanta, one in Denver and it was really odd – I'd been in the trade publishing business back then and we were just about to start Cablevision Magazine in 1975 and a meeting happened at the O'Hare Hilton in early September of that year, and for some reason I accidentally got to come along and almost every MSO was there. What we talked about was this word "marketing" which wasn't part of the lexicon. It just simply wasn't a part of the business back then. Everybody was worried about stringing the coaxial cable and what we're putting on the 12 channels or the 20 channels that we could program in those days. Right after the death of distant signals there was an FCC problem and a freeze and just at that period the idea of pay television was beginning to take hold. So there was this meeting and everybody talked about this concept of marketing, and nobody really could define it. That coalesced out of those meetings, out of the couple the NCTA had had, it seemed like somebody ought to do something about this. So these guys here with me this morning did something about it.

NELSON: Now, Gail Sermersheim, you were among the few people in the business who actually had a title and responsibility that... marketing was actually your job but that was a rarity at that point.

SERMERSHEIM: Yes, I was Marketing Director for a company called Telesis and it was a really big job because we had 55 systems in the Midwest with, I think, a grand total of about 20,000 subscribers back then, so it was a job traveling a lot. We were also one of the companies that launched pay TV very early on so I was involved a little before this meeting that Paul was talking about because I actually also went to the meetings in Atlanta and Denver that the NCTA had sponsored and got a phone call one day from Mr. Liptak about the fact that this pay TV product was going to have to be marketed, and as Paul said we didn't really know much about marketing then. To us...

MAXWELL: We could hardly spell it.

NELSON: So did you get that title by default or did you actually have some credentials?

SERMERSHEIM: My boss had several television stations so they must have had a marketing director somewhere so it seemed appropriate. Actually, marketing then was much more door-to-door sales. I started my career in cable actually as a receptionist at the cable system in Bloomington, Indiana before I got out of college and when I graduated just kind of hung on to run the door-to-door sales crews and then a year later became marketing director of Telesis which was the MSO that had the system. But really, marketing was very primitive as Paul was saying and consisted of either door-to-door or newspaper ads with pictures of antennas and ugly birds sitting on them and maybe a turkey at Christmas if you referred a friend.

MAXWELL: And Able Cable.

SERMERSHEIM: Able Cable, we can't forget. But the marketing really started in the cable business I think the day that Greg called and said we've got to start talking to each other.

NELSON: Okay, Greg Liptak – you called Gail. Why did you call her, what did you say to her, and who were you?

LIPTAK: All right. Here's what happened. I was Vice-President of Marketing for a mid-size cable television operator called Communications Properties, Inc. based in Austin, Texas and we had cable systems principally in the Northeast and we wanted to launch this product called Home Box Office or another pay television product. There were several at that point in time. And the way you had to do that at that point was you had to build a terrestrial microwave system to get the signal from one location to the next location and you had to build these towers every 25 to 30 miles. Very expensive, very time-consuming, and if you didn't build these towers to bring HBO in then you had to get videotape equipment and run these tapes and all sorts of hassle. So in June of 1975 there was an announcement that forever changed the cable television industry. At that NCTA convention in New Orleans, and the pumps failed, we all had trouble getting out of town, water all over the city – not nearly as bad as Katrina, but it was a bad situation. Two gentlemen, Jerry Levin from Home Box Office and Bob Rosencrans, a cable TV operator, announced that HBO on September 30, 1975 would go to a domestic communications satellite. So this was amazing! For the very first time, cable TV would no longer be this small mom-and-pop operation putting up big antennas to snatch signals out of the air or building microwave. Suddenly there'd be this wonderful bird in the sky that would bring signals to anyplace that the footprint of the satellite covered. And so it seemed to me that, wow! What an opportunity this would be for us in cable and as Gail and Paul said, we didn't know how to market the thing, we had several cable operators in the Northeast that were putting the HBO signal on their cable system and then billing people for it. Now that's something called the negative option and attorneys general in four states were very upset at that. So we knew that was a strategy we would not want to employ. So that's how things began and I got this idea to call the people that I could find that were involved and interested in doing pay television properly. Gail was one of them, and we invited Paul and we invited 53 other people, all identified as cable experts or want to be cable experts in pay television...

LAUGHTER

MAXWELL: A wannabe!

LIPTAK: That's right. ...to come to Chicago to exchange ideas. We wanted to know what worked, but perhaps more importantly, we wanted to find out what didn't work because we really didn't know how to do this.

NELSON: So this was the universe of cable marketing people – 53 – and they weren't even all marketing people.

LIPTAK: No, they weren't.

MAXWELL: They were mostly operations guys, and in a number of cases the CEOs...

NELSON: And journalists.

MAXWELL: Well, Paul Kagan and I were there and we were covering it. Paul was just getting out with the idea of IBITA instead of cash flow. Cash flow was the mantra instead of real profit. I was sitting around going, well, how does all this stuff work, and gee, it'd be nice to see some of these movies. The Thrilla from Manila was the launch with Ali and Frasier from Manila. It started in Jackson, Mississippi and Vero Beach, Florida, were the first two systems. We were sitting in this hotel conference room in Chicago at the O'Hare Hilton so nobody had to take a cab very far, I guess, and it was convenient. We talked about all of this and then just a couple weeks later I'm out in Vero Beach helping put the big dish in with Jackson Communications and then all the guys from – what was Rosencrans's company then?

LIPTAK: UA Columbia Cable.

MAXWELL: UA Columbia Cable, and all of those guys there, and it was just an amazing thing.

NELSON: Scientific Atlanta was on the dish sector.

MAXWELL: Yeah, it was SA that built the dish and Jackson put it in. You couldn't believe it – the concrete base was the size of this room, the dish was 10-meters and it was just amazing! It cost, what? $130,000-135,000 back then, and you think about the dishes all over houses now and how we missed that bit. But how were we going to talk about this stuff? And out of that one meeting everybody kind of walked away going, you know, we ought to keep talking, and then they took that seriously.

SERMERSHEIM: I think the really important thing to me about that Chicago meeting was that it was the most frank and open...

MAXWELL: It really was.

SERMERSHEIM: ...honest discussion I've ever heard in a business meeting before or since. Everybody was frankly in a slight panic at this point in time because we had a new product that had never been introduced to the world before and we were people who had no real backgrounds in marketing or product introduction, and likewise there were technical issues and we were all thinking, Oh my Lord, we've got to get this out in two weeks. What are we going to do?

NELSON: So you're confronted with this.

SERMERSHEIM: Yeah. So everybody talked about what they were doing that had worked...

MAXWELL: There were a few pay TV things by microwave and as Greg mentioned they called it bicycling, and believe it or not, all these videotapes would be put in a truck, taken to the next system, and then the new ones would come in and it was just a mess.

NELSON: And this was the HBO programming? It would arrive in a box?

MAXWELL: Well, not HBO. They never did that. They were microwaved out of...

NELSON: But there were, you were saying, competing pay services.

MAXWELL: There was Channel 100, there was Best Vision – I can't remember some of these guys because they came and went at an astonishing rate. We tried pay TV before in Etobicoke, Canada outside of Toronto, and in...

LIPTAK: Bartlesville, Oklahoma.

MAXWELL: Bartlesville, Oklahoma, with Famous Players. It was a movie company way back in the '60s. This was tried in what? '68, '69, I think it was, and failed. You put coins into meters in order to get it clear, and I've still got one of the meters from Etobicoke. There were guys with... Dore Schary, who was a really famous producer in that era, and I don't remember the name of his company, but you put a wax thing into a box and it melted and then that made it work. It was most frankly the damndest thing you've ever seen. So we were trying all these different things.

NELSON: It didn't sound like you'd replay it though.

MAXWELL: Well, you had to re-melt it. You had to go buy a new one and put it in the Wafer Vision. But we were trying all this stuff and nobody was really having a lot of success but the distribution changed so the economics changed and you could see this ability to make cable a bigger thing and that's why they wound up making it a bigger thing.

NELSON: Just for the record, the date of the Chicago O'Hare meeting?

MAXWELL: It was early September 1975.

LIPTAK: That Chicago meeting as the predecessor to CTAM was very valuable for one particular reason. Two of the people that I invited were executives from the Times Mirror Company of Los Angeles – major newspaper publishers getting into cable – and the rest of us had kind of grown up from other disciplines and quite frankly fairly unsophisticated, but they brought a corporate attorney...

MAXWELL: They brought two of them, remember?

LIPTAK: Well, David Lewine and an attorney. So a cable guy and an attorney. So, we're sitting there and discussions are going on and all at once we look around and they're gone!

MAXWELL: I remember it so vividly. I was right across the table from David. He stood up and said, "I'm sorry. We have to leave."

LIPTAK: I went out in the hall and I said to David, I said, "Phil, what's the problem?" And I wrote down this quote because I remember that – he said, "I've instructed my client to leave. There's a potential violation of anti-trust laws. Treble damages could be assessed and you could be held personally liable for organizing this meeting." Well, that was quite a shocker. I was very poor. My wife and I were very poor at that point and the concept of treble damages was not pleasant, but that was important because we then had to find a way in which all of these people could continue the discussion, and that way was to organize a not-for-profit trade association.

NELSON: So you couldn't hold some secretive cable cabal in a hotel room.

LIPTAK: Absolutely!

MAXWELL: And we learned right then, you never mention price. And that gave the seed to the idea to make it more formal, I imagine.

LIPTAK: It did. At the end of the meeting when there was a general assessment that people wanted this dialog to continue, and Paul was very vocal about it and talked about how valuable it was, I said to Gail, "Gail, if you will chair the steering committee to put this organization together I will agree to serve as its first president." And so we left Chicago and began work, and I went back to Austin, Texas and got our corporate attorney and convinced him to do all of these documents at no cost. We had $30 in the treasury of the organization at that point. That was the result...

MAXWELL: I think that was the tip that you stole off the table!

LAUGHTER

LIPTAK: So he started working, we got appropriate information from the State of Texas and the Internal Revenue Service about how to do this, and then Gail and I accumulated bylaws of the various trade associations – the RAB in particular was very valuable, the Radio Advertising Bureau, because it was similar. And so we started working.

SERMERSHEIM: That steering committee really met during the Chicago meeting, I think, at the end and sort of answered the big questions: one, do we want to keep this going, which again was universal. The second one was what should the structure be because there was still this thought that maybe the NCTA could have a subcommittee for marketing and that this would be the legal form under which we'd operate, and we thought about that a bit. But most of us really felt that what we needed was not an organization driven by companies and corporate agendas. What we really needed was something along the lines of a professional society with individual members who would come together to learn from each other and to want to develop their skills – nothing to do with sort of the corporate agenda. So that was the first big decision, and then the second was that we all... back then we had a lot of trade shows. We had state trade shows and regional and the Eastern and the Western, and with hospitality suites and exhibits and all this, and we never got a chance to sit down much and talk. The suppliers were always trying to sell us something, you're having dinners and all this. We knew we were entering an era where we'd have to sit down with each other, that we couldn't sell pay TV without having serious marketing discussions and business discussions with the operators in a non-contractual kind of environment. So we decided that the best thing would be to have everybody equal. There would be no associate membership, and there'd be no commercial activity. So we wouldn't have any exhibits, we wouldn't have tabletops and all that. We wouldn't sell sponsorships. We just wanted to get together and talk.

NELSON: So it was a professional society.

SERMERSHEIM: Yes, very definitely.

MAXWELL: Very much that idea at the beginning. It wasn't so much that they didn't want to market something and sell something, it was wait a minute, we need to learn together and not have... and the agenda needed to be how do we grow everything, it wasn't how do we just grow this or that. It was wait a minute, this is a rising boat chance and we need to take advantage of that. I can't remember how many subscribers there were around the country in 1975. What, about 20 million maybe?

LIPTAK: Or less, actually.

SERMERSHEIM: In '81 it was a 25% saturation so 12?

MAXWELL: It was 12 million, I think, if I can remember parts of that era, but it seemed to me, because when I first got into the business in late '69, early '70, there was like what? 8 million, 8 ½? Because we had the freeze then, and then it was just starting to loosen up and this was the chance to really offer something to a consumer that could change the whole reason why you built a cable system from just pulling the local signals into shadow areas and stuff, and I really believe we all could see how big we could be as a business and an industry.

SERMERSHEIM: Yes.

NELSON: Was that sort of the first time you had that vision because just the growth of the industry, as you said, it was really a signal service until then.

MAXWELL: Yeah. We tried to do it with importing distant signals to have a better... that was the first effort at that, actually. It was okay, we built this, what are we going to put on this bandwidth? And the history of the business has been as bandwidth has increased, the programming and the services have exploded. We're in another era of it right now that is almost, if not more, exciting than what we did back then. But this was a chance to say it's not just what you can get over the air, it's special for you, and it was movies. It was uncut, uncensored, no commercial movies. How do you explain that to people?

NELSON: And that was function of the organization to figure that out.

MAXWELL: Right, right.

LIPTAK: We had a situation in the cable industry where the leaders of the industry were largely entrepreneurs, and I don't want to say they were cheap but the concept of spending money for marketing? This was foreign because the way cable was marketed in the so-called golden days when communities were separated by distance or terrain from TV transmitters was the cable operator would build the town, hire the local armory, get a sports or entertainment celebrity, all the TV dealers and people would come in. They'd leave that weekend with often 50% of the people signed up. Ballgame over!

LAUGHTER

NELSON: Who needs marketing?

LIPTAK: Suddenly we're starting to build cable systems where – holy cow! ABC, CBS, NBC, PBS are all available off-the-air and good quality on rabbit ears, so we've got to have product and then we also have to talk to people about the benefits they'll get from cable, and that's marketing. That was a tough road. As Gail mentioned, there were all of these drains on the money at the cable system level for all these conventions and so forth, so we had the perception in the early days that we might have a good deal of opposition from the leadership of the industry to create another organization with the perception that all these upstart marketing people are going to go have drinks. So what we did was the Chair for this meeting in Chicago was the retiring Chairman of the NCTA the previous year, a fellow by the name of John Gwin, who'd done a wonderful job on behalf of the cable industry. So by getting John and by getting some other people like Chuck Dolan and Bill Bresnan – people very familiar today – we tried to get some of those people to come in and we had a NCTA board member, George Sissin, who agreed to be the first Treasurer of this organization. So we tread very lightly and we asked those people who believed in this marketing idea and believed in the value of this organization to spread the word with their fellows, their colleagues and to let this organization exist and hopefully grow.

NELSON: So from the very beginning there was an issue of what is this organization, why does it exist and why does it exist apart from other organizations, right from the beginning.

LIPTAK: Absolutely.

NELSON: I want to go back to something you said about being able to get the off-air networks by rabbit ears and therefore you had to do something. So is this in a sense the first time the awareness of competition sprung up? Were you even thinking about competition at that point?

MAXWELL: I don't know if that's the right word.

SERMERSHEIM: We didn't think of television as competition.

NELSON: You were in a different universe in a way.

MAXWELL: Very much a different universe.

SERMERSHEIM: We were a delivery mechanism for it, so we didn't view it as the competition.

NELSON: But now you're starting to talk about original programming, uncut movies...

SERMERSHEIM: But we didn't have enough to sell. We could deliver what was there but that was it and they already got that, so we had to add new things or we had to encourage people to do that for us.

MAXWELL: And they had to beyond a little camera that would focus on a thermometer and then the wind gauge and then the clock.

NELSON: The goldfish bowl.

MAXWELL: That was in Kansas, actually. There really was a goldfish bowl, and it really...

SERMERSHEIM: It got more publicity than any channel that then existed.

MAXWELL: It had a little deep sea diver that came up and down.

SERMERSHEIM: That was the real sophisticated version.

LIPTAK: There's a famous story in Iowa – the cable operator to fill up some of his channel capacity got a couple of hamsters and they had a contest, the kids named the hamsters, and lo and behold one day the hamsters died and it was a major community crisis.

NELSON: They died on TV. Who knows who was watching at that moment, but... Let's go back now again to, okay, you're ready to go, you have a steering committee, you're going to form this organization – whatever it is, professional society – you get your lawyers down in Texas to draw up all the paperwork. Now somewhere in that paperwork you've got to insert a name and say the organization is ... So where did the name come from at that point?

LIPTAK: Well, I was originally going to name the society the Cable Television Marketing Society, CTM, very short. But then, one of the people in our group in the early days, Marc Nathanson who then went on to great fame in cable, built a terrific company, Marc said, "No. Again, we have to involve the leadership of the cable industry in this society. It can't be just marketing. Let's add the word 'administration'." So that's CTAM – Cable Television Administration and Marketing Society. That way we can attract people in the operations side of the business to be involved with us, and so that's the genesis of the name. It has since changed.

NELSON: In your meetings at the time, did these administrative operational issues come up or were you just still marketing guys?

MAXWELL: Well, there weren't really marketing guys yet.

NELSON: You didn't think of yourselves that way, right, because you didn't have the experience.

MAXWELL: Well, and there were operational people in the... there weren't vice-presidents of programming at the MSOs. There weren't people that...

NELSON: So the infrastructure that we know today wasn't even there.

MAXWELL: This is pre-Fred Dressler, think of it that way.

LAUGHTER

NELSON: Okay, okay.

LIPTAK: In the early '70s there were four of us that could be identified in the whole cable television industry in America that were specializing totally in marketing. Four!

NELSON: That was the full-time job for those people.

LIPTAK: As a full-time job, yeah. So Paul's actually right.

NELSON: And others that dabbled in that on the side.

LIPTAK: It was a side job.

MAXWELL: It wasn't that so much because you really didn't need it before. This was really in response to a real need, and I don't know how many of them really perceived it back then, but I know some of the guys running companies, like Chuck Dolan, Tom Johnson at Daniels and Associates which was a cable operator at the time, they looked around and went, oh my God, we've got to do something! Chuck was a big fan and a big backer in the beginning. He was a quick joiner, he got his people together, and it wasn't long before he had somebody running marketing because he thinks marketing. But if you think back to how he grew up in Sterling Manhattan and the difficulty of doing business in a marketplace like that, you can see why.

NELSON: So now you're at least organized on paper, you have another meeting? Is that the next thing that's happened?

SERMERSHEIM: Yes, I remember it well. That was the 99 guys and me meeting, which was depending on your point of view an improvement or not an improvement over the 49 guys and me at the first one.

MAXWELL: Right. She was the only lady that could spell it.

NELSON: So the first meeting was, you said, about 53 people?

MAXWELL: It was about that, right.

NELSON: A deck of cards and you. And now you've attracted another 40 or 50 guys for the next meeting. Word got out about Gail!

LIPTAK: She was getting very famous!

LAUGHTER

SERMERSHEIM: Those were the days.

NELSON: So how had things changed between the first meeting which was really very exploratory and "we're all here, we need to be doing something"? The second meeting now is much more purposeful in that "this is our next meeting".

SERMERSHEIM: That was in Atlanta and was called pay TV today, status today and it really was sort of a follow-up. We'd had another nine months or so of experience at actually launching HBO, so we had some real things to talk about. So that was the primary reason for that meeting but then we also developed some new issues and looking back they were things like how do we explain encores...

MAXWELL: Right, repeats. Because there was an odd complaint – "you're showing that movie again?"

SERMERSHEIM: And again?

LIPTAK: And again!

SERMERSHEIM: And there were 7-10 movies a month. That was all HBO was.

MAXWELL: Right, that was it.

NELSON: You got to see those pretty quick and then what do you do with the next 20 days?

MAXWELL: The Polka Festival didn't have any legs, did it?

SERMERSHEIM: No, not at all. Bad producer.

LIPTAK: And they didn't start on the hour. Mention that, that's interesting.

SERMERSHEIM: Didn't start on the hour.

NELSON: The movies didn't start on the hour?

SERMERSHEIM: No.

NELSON: So was it when a movie ended at one hour and 40 minutes, the next one would start or it would start again?

SERMERSHEIM: A new one started.

LIPTAK: And then it would start again. And customers were saying, "Why is your movie beginning at 17 minutes before the hour?"

SERMERSHEIM: So, yeah, and HBO wasn't on in the daytime, so it was sort of that kind of issue.

MAXWELL: Right, it was just evening really.

SERMERSHEIM: And this concept of R-rated movies in the home!

MAXWELL: Boy, that was a big deal.

SERMERSHEIM: Really exploded on us.

MAXWELL: Nobody anticipated it.

NELSON: Did you overtly talk about that to the customer in any way, or did people just figure this out?

MAXWELL: Well, people were complaining.

SERMERSHEIM: They figured it out.

MAXWELL: Some were looking for it, some were complaining.

NELSON: Nothing has changed.

LIPTAK: Nothing has changed!

MAXWELL: It was an odd thing because we, of course, didn't really know what we were doing, anybody. Nobody had done this before – and neither did HBO by the way – look at how it compared... nobody thought competition yet. This was added in. They didn't think ratings yet. They didn't think any of these things. It was a fascinating time, and oddly enough you'd start marketing... HBO would come to these smaller towns because HBO financed all the dishes in the beginning, which was a very smart move, by the way, but this big dish would show up on a plain in Kansas and that would be a very big thing. So people would subscribe.

NELSON: In any town – just, what is this?

MAXWELL: Right, yes. It's space-age, right? And it wasn't a common thing at all, and people would come out and stare – remember when they were building the dishes out in the plains and in the mountains and other places? And then the new programming would start and people wouldn't understand it, and that fed more into what they were trying to help everybody do.

NELSON: So where did you go to next?

SERMERSHEIM: I just want to expand upon that because out of that first meeting was the first dialog with the pay TV supplier in this one-on-one kind of equal dialog.

MAXWELL: That's right. "What are you doing??"

SERMERSHEIM: CTAM really helped in the long-term to facilitate that relationship between programmers and operators to develop the product. I don't think it would have happened nearly as quickly had we not been in a form where we could talk to each other constantly about what the customers were saying, so this was a very valuable thing.

NELSON: Because until then, cable was a totally passive medium. You were just passing stuff through, so you have no say so in what anybody's putting on the air, or any ability to feedback to them.

SERMERSHEIM: Yes.

LIPTAK: That's right. So a subcommittee was organized – it was called NAMAC, National Affiliates Marketing Advisory Committee – to HBO. Quite a number of people involved in the foundation of CTAM also then agreed to serve on this committee and to try and deal with these issues and make recommendations and have discussions with HBO about starting the movies at odd times and how to deal with Rs – they should be played late at night – and all these kinds of issues.

NELSON: And were they open to having this committee?

MAXWELL: Very much so, actually.

LIPTAK: Yes.

SERMERSHEIM: Yes.

MAXWELL: It wasn't a "you can't tell us what to do" at all.

NELSON: They were feeling their way around as well.

MAXWELL: Exactly. Out of that grew better interstitial programming, grew better information to the consumer, better information to the cable operator too, because they sometimes didn't get the guides out. It was a tough time. Everybody was learning.

SERMERSHEIM: HBO's problem was that it wanted to have an advisory group but it couldn't politically pick the members without getting into hot water, so the fact that we could do that for their organization then really facilitated that happening.

NELSON: I'm just curious about one thing – when you started did you call it CTAM or C.T.A.M. initially?

LIPTAK: CTAM.

MAXWELL: CTAM. That looks right.

NELSON: Just for the record.

MAXWELL: You always try to turn an acronym into a word.

NELSON: Right. We don't always succeed.

LIPTAK: Steve, one of the really interesting parts of the early days at CTAM was a committee called the Idea Exchange. This was a kick. We had the concept that in order to be a member of this organization you had to share an idea with all the other members.

MAXWELL: Preferably one that worked.

LIPTAK: Or one that abjectly fails.

SERMERSHEIM: So you really learn something.

LIPTAK: And you had to send however many copies were required – say there were 100 members you had to send 100 copies of that – to Gail. So if you can picture, in Gail's basement she's go these stacks and everybody in CTAM looked forward to them. We'd get them once a year, a whole packet of wow, look at that, and wow, isn't that terrible". So Gail, for what – several years actually...

SERMERSHEIM: Three years, I think we did that.

LIPTAK: ...sorted through this.

MAXWELL: It was pretty funny stuff, too.

NELSON: And of course as the membership grew...

SERMERSHEIM: It became unwieldy.

NELSON: ... more copies to distribute...

MAXWELL: It got way out of hand.

NELSON: ...or would-be members sending in their ideas. Can anybody remember what one of these was?

MAXWELL: I just remember all the bad clipart. I vividly remember all the bad clipart.

SERMERSHEIM: Yes, because either we had to draw our own or we had to cut it out of something and paste it in and use it.

LIPTAK: In 1976 in a little newsletter, somebody said, "What's the purpose of this organization? Write down the purpose." So we wrote – and it really applied then and applies today – "The society will endeavor by various activities to promote the means whereby members can exchange ideas and information." How simple. And the Idea Exchange was really the heart of that initiative in the early days.

SERMERSHEIM: It started the culture of sharing that has been CTAM's hallmark to this day.

NELSON: Absolutely. That's really interesting. Right from the beginning.

LIPTAK: Right. And then, at that early period in '76, in addition to the Idea Exchange committee that Gail organized, we had three other committees. We had a Pay Cable Committee to focus in on pay cable issues; we had a Basic Cable Marketing Committee to work on stuff other than pay cable; and a Cable Operations Committee. So very early on after the Society was formed, we started to develop some specialties within this marketing arena.

SERMERSHEIM: And we also started, I think around that same time, doing some regional level workshops because we had the once a year marketing conference. We actually had an annual management conference, too, and then we realized there weren't that many people who could travel – what were travel budgets back then, right? – so you couldn't come to San Francisco or Boston or something like that, so we had our members – again, this is a volunteer organization, and I want to re-emphasize this...

MAXWELL: This was all volunteer then.

NELSON: It still has the $30 in the treasury.

LAUGHTER

SERMESHEIM: That's right!

MAXWELL: What was the membership? $25, was it?

SERMERSHEIM: $20 to start.

MAXWELL: $20 to start, that's right.

SERMERSHEIM: I think it got up to $50 by '81 or '82 or something like that. But we had a lot of our volunteers like Don Mathison and Rick Barone and Ron Wren and others I remember in various locations who wanted to do something and so we'd have a conference in Hartford on door-to-door sales, perhaps, and one in Tampa on direct mail and things around the country that got more people involved and helped those that were starting off.

NELSON: But when you had these conferences, say on direct mail, were you drawing on – I hate to use this word – expertise within the cable industry at that point, or did you bring in people? Where did the knowledge about direct mail come from that was being delivered to everybody?

MAXWELL: Trial and error.

NELSON: Trial and error, okay. Mail them out and see how many of them bounce back?

LIPTAK: See if it works.

MAXWELL: And then tell somebody, hey! Try this!

SERMERSHEIM: That's very true.

MAXWELL: It was true.

SERMERSHEIM: I think the very first time we reached to others to learn from was the CTAM Goes Hollywood in 1977, and it was sort of really the statement to the industry that hey, we've got to grow up here faster than we're doing and there are people out there who know an awful lot more about marketing, in this case movies for example, than we do, and why not go talk to them.

NELSON: So you decided to hold a meeting in Hollywood, this '77 meeting?

LIPTAK: Right, and we had quite a representation from the motion picture community, and in fact at one point a Hollywood person joined the board of CTAM, was on the board for a couple years because they recognized that in those early days it wasn't a given that there'd be only HBO and Showtime. Hollywood was mounting its own product and so forth.

NELSON: But they really saw the value of cable as a deliverer of movies. This was a whole outlet that existed, and people have to remember... where were we with VCRs then?

SERMERSHEIM: Just barely.

LIPTAK: Just barely starting.

NELSON: But not penetrated.

MAXWELL: No, they began penetrating in the early '80s.

NELSON: Right. So to the viewer the only way to watch movies was either at the movie theater or broadcast when it got into that window with commercials, or all of the sudden this whole other way of looking at a movie on TV.

SERMERSHEIM: But there still was a very real concern back at that meeting about overexposure.

NELSON: From Hollywood?

MAXWELL: Exactly, from Hollywood.

SERMERSHEIM: Because we had several broadcast windows and now we're adding a pay TV window – this might be too much. People don't want to see movies that often.

MAXWELL: It was interesting conversation, but the studios then – as if that hasn't changed, actually – were very jealous of their product, I think is a fair way to put it, and of course they sued the VCR guys when they came along in the early '80s. That decision saved them, for one thing, but it also showed that the more the better, kind of, and ever since then we grabbed on to more choice – that became really cable's mantra – and as the bandwidth kept growing, we kept growing things. It's harder to market different things. How do you market to a niche? I remember early discussions in CTAM – things like "Sports? Nobody wants a sports channel." "News? News all the time? Leave me alone." It changed the whole nature then and we kept looking at new ways to do that and CTAM was always right at the forefront of trying to figure out, okay, how do we do this? How do we penetrate these markets? What are they like? And out of that grew an understanding of better research, out of that grew an understanding of customer service. Because when HBO came along actually with the satellite and the other stuff, there were truck chasers. Like the early days of building a system and it was wonderful, that's another golden era. So what we've been, I think, throughout the whole history of this group is okay, how do we do the next golden era?

LIPTAK: And we stumbled on one – and I do mean stumbled – we stumbled on a marketing technique that really helped the development of the cable industry and you can describe it as follows: you launch a cable system, you sell the services to people, you get 40 or 50% penetration, and then you come back and launch pay TV and you get about 20% of the homes passed by in pay TV. But if you start from day one and you package together basic cable service and pay service and present it as one offering to the consumer for a certain price, the numbers are just substantially different. It's called the new build phenomenon.

NELSON: The birth of bundling.

LIPTAK: Early bundling, absolutely.

MAXWELL: It was early bundling, it was the precursor.

LIPTAK: That propelled and gave operators the reason to go after these big town franchises because suddenly we had a product that, my gosh, maybe you could make some money with this thing.

NELSON: Now Gail, you referred to at the Hollywood meeting about Hollywood being afraid of overexposure. There was another kind of overexposure that perhaps they weren't anticipating.

MAXWELL: We were all young.

LAUGHTER

SERMERSHEIM: Yes, you must realize that this was a very young group.

NELSON: There was some kind of swimming pool party, I gather?

MAXWELL: We had a lot of fun in those days.

SERMERSHEIM: Yes, we did.

NELSON: All right, well, we'll just leave it unsaid at that. Those who know will know, and those that don't can imagine.

MAXWELL: Interestingly enough though, what Greg was talking about is really critical to why the business grew so fast after that. In the late '70s and the early '80s, the franchising boom, another wave of that, because the first franchising was all shadow markets, distant signal, other things like that, but boy, there's HBO and then Showtime came along and stuck, and the Channel 100s and some of the others disappeared and the better ones won. But then ESPN got started, and then Ted Turner looked at the satellite and went, wow! That's pretty cool. He put WTCG, Channel 17, on the satellite. He had microwaved all over the South and he said, "I can do this for the whole country now." And boom, he did it. And then CNN started. Those things, honest to God, changed the world in ways I don't think we completely understand yet. It made news available anytime, it made sports available, and you had channels on a system that served a purpose, and cable then began programming its channel lineup as opposed to programming a half hour at a time. It really changed the dynamics of television and how people experienced television, and that then gave CTAM a whole hell of a lot more to do.

NELSON: So then during this time period, was CTAM experiencing a lot of growth as an organization? From the 99 guys and Gail?

LIPTAK: You know, it was fairly slow in the first few years until this big city franchising started to occur and operators started to build and then by the early and certainly the mid-80s, oh, it was huge. Just huge.

MAXWELL: Yeah, the mid-80s, it was a big thing.

SERMERSHEIM: Again, it tracks with the hiring of marketing people in the business basically. It still, even in the '70s, was a pretty slow process of companies ramping up their marketing staff, and again, the number of people who could sort of maybe...

MAXWELL: Spell it.

SERMERSHEIM: ... be out and about nationally.

NELSON: So was it when the operators started adding these systems in more urban and populated suburban areas that they started realizing, okay, we've got to be able to sell things to our customers out there?

MAXWELL: Absolutely that.

SERMERSHEIM: Yes.

NELSON: Because you're beyond the truck chasing thing at this point.

LIPTAK: Right.

NELSON: So how did that start to change the organization, the flavor of the organization's nature? Because this was such a small personal group of buddies that got together...

MAXWELL: It was when it started.

NELSON: ... knew each other, and were there really from the beginning and had that camaraderie that comes from being in on something very early. Did that effect the organization as you now started to experience that growth?

SERMERSHEIM: I think it was still the same. I was on the board up through '84 or so and around after that, and I think the spirit, the excitement of getting together and communing...

MAXWELL: It was still there, yeah.

SERMERSHEIM: There's still so much going on and so much everybody had to learn that I didn't sense a change. I don't know about the last ten years, for example, but for the first 15 or so it was always...

MAXWELL: Well, it began to grow up, though and get more professional at the management level.

SERMERSHEIM: Oh, yes.

LIPTAK: Yes, yes.

MAXWELL: It naturally did that because more was demanded of it, and that was in response to the demands. But you know, it was collegial; they let me hang around a lot on these things. But it stayed that way for a long, long, long time. It was a comfortable place, you really looked forward to the meetings. I was on the trade publishing side always trying to figure out how to put the publication I'd just started into some room or do this and that, and I think they were the only people I never really argued with because from the beginning we all sort of bought into that this is collegial, this is to help each other, this is to help the industry.

NELSON: We're in this together.

MAXWELL: Yeah, we're in this together, you know. It was that way... it just was that way.

NELSON: But I have to say I think you laid a base there. That's what I was trying to get at, that even though the organization has grown enormously – you've got 3,000 people now instead of the 99 guys and you – there's always been that atmosphere at the annual CTAM, what we now call the summit of it is still collegial. Obviously you don't know everybody anymore.

MAXWELL: Not anymore.

NELSON: By a long shot. But I think you set a tone there. That's what I wanted to bring out. Just talk about that. There's always been, in addition to all the meetings and the important discussions, a kind of social component to it too, which does feed into business. Maybe you didn't have golf tournaments in the early days...

SERMERSHEIM: No, never did.

MAXWELL: No, we didn't.

NELSON: ...or big rock and roll parties, but...

SERMERSHEIM: We just danced and drank, I think.

MAXWELL: We did do a lot of that.

NELSON: But you had some fun at the same time. Were you having some fun at these meetings?

LIPTAK: They were great. It was fun, and it was fun because you learned, and you learned what to do and you learned what not to do. More importantly you learned what not to do. As CTAM started to grow, the leadership of the industry recognized the value that this kind of networking provided because you could translate it right into subscriber growth.

MAXWELL: You really could at that stage. The buy-in both from the vendor side and the operator side was substantial. It really was. The people that came, a lot were still the senior guys in the business and they really recognized that hey, this helps.

NELSON: So really you got beyond this point in the early days where "we better involve some people because we're afraid that people don't want this organization to exist" to people really now across the industry understanding its value, and that was a huge transition during this early period from this rump meeting in an airport to a really established organization that is valued by the industry.

SERMERSHEIM: I like to think about it sometimes, you know, the people who started the cable business were entrepreneurs and they did it by sharing and they talk about loaning each other money and equipment and all that, and I think CTAM just sort of picked up that torch and took it to a new level of sharing and working together and being collaborative and continues to do so.

LIPTAK: And we've always perceived ourselves as the underdog in this communications world, certainly back then and I think, perhaps, even more so today. I want to read you a two little sentence poem that my former boss and mentor and close friend, Glenn Jones, wrote in 1985 in a little poem called Shark Talk. He said:

They'll get you in the stomach

or they'll get you in the back

in the marketplace where it's

attack, attack, attack

Don't despair

Just beware

There ain't no mercy there

NELSON: Well, we know what a great philosopher Glenn is. I didn't realize he was a great poet at the same time.

MAXWELL: He has many books of poetry, by the way, all on my shelf.

NELSON: So anything else that comes to mind to sort of wrap up the early period of CTAM, which is what we've been talking about here.

MAXWELL: We survived.

NELSON: That's certainly an important one. You survived and you grew.

LIPTAK: Absolutely.

MAXWELL: And the business did more than survive. It really got to be a major dynamic player on the world stage.

SERMERSHEIM: And I think CTAM contributed a great deal to that. It would have happened but not nearly as quickly as it did.

NELSON: Well, one thing I can say here, just having shared this with you, is the fondness and the warmth you all feel for not only that experience, but the continued relationship with the organization today.

SERMERSHEIM: 30 years later.

NELSON: Have we pretty much wrapped up our early years of CTAM?

LIPTAK: I think we have.

MAXWELL: Part one.

NELSON: Part one and more to come. Thank you very much, Paul, Gail, Greg.

MAXWELL: Thank you.

LIPTAK: Thank you, Steve.

SERMERSHEIM: Thanks.

NELSON: Very enjoyable, very interesting.

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  BACK TO ORAL HISTORIES

CTAM Panel - Second Decade

Interview Date: July 2006
Interviewer: Steve Nelson
Collection: CTAM Collection

NELSON: Charlie, let's start talking about when you first got involved with CTAM. What were you doing at the time?

TOWNSEND: Well, it is ironic that I'm sitting here with David Van Valkenburg because I was happily employed at the Pepsi-Cola Company in charge of new product marketing, and I got this invitation to come out and interview with United Cable with David, and I was intrigued by the cable television business and by what United was doing.

NELSON: Did you follow the business at all at that point?

TOWNSEND: A little bit. I knew Matt Blank. He and I had spent a lot of time together. He was, at that point, head of marketing for HBO. So I came out, I interviewed with David and also with Gene Schneider who was out of another world from my standpoint. I have since grown to really, really like him, but at the time... It was like 8:00 in the morning, he had a shoestring tie on, smoking a big stogie cigar, and he had on cowboy boots.

NELSON: And so people know, you're a graduate of Harvard Business School, kind of an eastern kind of a guy, right?

TOWNSEND: Yes. So here David and I are both alumni and we had on our three-piece suits, and Gene had on his stuff. So I decided it was an intriguing opportunity and joined the company in the fall of 1981.

NELSON: But you had a pretty good marketing background. Pepsi is a very marketing driven company, unlike cable TV in 1981.

TOWNSEND: I think that was part of the reason David hired me, although you'll have to ask him, but I had actually worked for H.J. Heinz before that and Phillip Morris, so I had a pretty good consumer packaged goods background and had actually talked to Bert Stanier, who was the first guy that I knew who had come into the industry as a true packaged goods marketer. He was, I think, product manager for Colgate-Palmolive. So I got in and I sat there and said to myself, I could see it was just beginning to turn into a true consumer product because we'd been selling reception up 'til then and then suddenly you had some of the basic channels. I think MTV launch...

VAN VALKENBURG: In '81.

TOWNSEND: The day that I was interviewing. I went...

VAN VALKENBURG: Went to the party.

TOWNSEND: I went to the party, and I'm like, this could be fun.

NELSON: That got you interested, I'm sure.

TOWNSEND: It got me interested.

NELSON: I can imagine the MTV launch party.

TOWNSEND: It was pretty exciting. And then I could see things were potentially going to change, and I really think that CTAM to a large extent reflected those changes as they occurred over the next five or six years. That it went from an industry that had focused on really selling reception improvement to true consumer package goods companies where they had originally pay, then multi-pay, then packaging, all of which were the driving forces in the early '80s. Then, I think what was kind of a transforming event was in 1983 there was a planning session which Gary Weik hosted down in Florida, I think at Sanibel Island, and his concern was that a lot of the old people who had originally started CTAM were going off the board the next year. So all the heritage, the knowledge, the perspective was gone, and you had a lot of new board members like myself, Gary, Ed Bennett – I'm trying to remember some of the other ones – that were on there that certainly had good marketing experience but didn't have the right perspective. So he had a strategic planning session in Sanibel Island that really formed the basis of many of the changes in CTAM over the next five years. I think the significant one was that up 'til then, CTAM had had a very central focus, which was the annual show and I think the feeling was that it needed to have more of a national focus and it needed to be more mainstream in the industry. So the result of that session was that they decided to take it from Atlanta which was where it was headquartered at that point, bring it to Washington and also focus more on year-round programs and also a more local orientation. Up 'til then, the only people who came to CTAM events were people that could afford to travel to the annual show which was in San Francisco, Boston or Chicago, which meant you had to be at a fairly senior level in your organization. The thought was we really need to bring this knowledge down to the local level. So, I much greater focus was on local marketing, which developed the local chapters several years later; it was a direct outgrowth of that. It also, I think, as Gary told me, shifted from tactical sales and marketing to more strategic marketing, which the shift there would have been from the bundling and multi-pay in 1981-82. He also said that the franchising wars were an important part of the focus then, so it was more franchising than marketing. And the pay packaging really started in '83-'84 which was one of the key products in selling into the new metropolitan areas that up 'til then had not embraced cable. So pay television was really the product that brought cable TV to the major metropolitan areas.

NELSON: And it was actually, as we saw in an earlier panel, the product that actually brought CTAM into being as the first meeting was on pay TV. But I want to ask you, David...

VAN VALKENBURG: Go ahead, because I wanted to comment right here because pay TV... this was the time where the industry was getting into urban markets. You had the basic programming services that were off the satellite, like TBS, was all purchased programming. You had the start of MTV, but it was all purchased programming... WGN, another off-air that we imported elsewhere. But when it came to cable exclusive product, the only thing we had at that point in time, as Charlie said, were HBO and Showtime. That was real, incremental, first time that people could see that product in the home, and that's why you had the single pay and then multi-pay, and bundling those together, even though in some cases they were duplicate movies, but you could get the variety of when you saw it and they had some differentiation. This was before the days they got into more exclusivity and original product. But Charlie's right, that was the driving product that got us into the large urban markets like here in Boston.

NELSON: Now turning back to CTAM and your involvement in it coming out of this meeting in Florida – where did you go from there?

TOWNSEND: Well, Gary Weik actually went from there. He was later to become president of CTAM.

NELSON: He was your immediate predecessor?

TOWNSEND: Yes.

NELSON: I'm just try to keep this chronology.

TOWNSEND: So, I followed in Gary's footsteps. His focus was really quite good. The other things that came out of the strategic planning were much more focus on quantitative measures – acquisition costs per sub, the subscriber lives, also there was the CTAM database, which was really interesting because we had several people who had come out of consumer packaged goods, the idea of having a Nielsen rating for the cable television business in terms of share of markets, the different products, because up 'til then there'd been no way of measuring really how Showtime was doing against The Movie Channel against HBO. You knew the total number of units but you didn't know who was taking what. So the database actually would then provide us with information with churn, with acquisition numbers, and most importantly with what pay packages were doing well.

VAN VALKENBURG: Charlie just used a word that just rolled off his tongue, but one that – I don't know whether you created it, Charlie – but it was not a word that was in existence in the mid-80s and that's churn. Churn became a factor as we get towards the end of Charlie's time on the CTAM board and mine coming in, and that was the churn of pay services and the slump that went into premium services, and that's where the word churn really became a household word for those of us within CTAM. The research that Charlie did, and the research committee at that time – this would be '85, '86 – was what's the cause of the churn? What has to change in the product within premium services to reduce that churn?

NELSON: Can you just define how bad that churn was? Give us a sense of what was going on. Was this really dropping off the cliff?

VAN VALKENBURG: Well, it was. I mean it was a factor at least that cost me my job, so I know it well.

NELSON: Oh, you churned!

VAN VALKENBURG: Yeah. Because we came to the end of the roll-out of multi-pay and what was underlying that was the churn that was going on of customers coming on and then going off, but we were rolling out multi-pay to more and more markets so we were growing. But we got well into '85 and the bottom didn't fall out, just growth stopped and we had declines, and the first quarter of '85, as you may recall, the industry declined – many of the companies did – in pay units. So we were having churn, correct me if I'm wrong, we were like 10, 12, 14% per month. This was very high turnover of pay units and so what was going on, why? And back to the research committee and some of the things that came out of that, and obviously one of the things as we go later into the '80s is exclusivity, which especially, well, both Showtime and HBO went towards, and original programming. So when you get that now into the late '80s, this increasing amount of original programming, you start to stabilize the HBO and the Showtime base and have a chance to grow it again. When you take a look at a Showtime today and how many quarters that Matt has grown it today here in 2006, looking back 20 years ago that's very hard to believe except he's got exclusive programming, he's got cutting edge programming, and very original kind of programming that he can acquire and retain customers, which we didn't have in the era that Charlie's talking about.

NELSON: Now this research, was this really one of the first big research projects that CTAM got involved in because obviously there was a real economic incentive to do that. Had there been much research going on before that?

TOWNSEND: There were really two key research studies that done in close proximity to each other, and the CTAM database was not a single shot study. It was an ongoing study, so we actually had results every month in terms of pay units, one, two, three, four pay households, churn, acquisition...

NELSON: And the data? Where did the data come from?

TOWNSEND: Well, the pay suppliers gave it to like Price Waterhouse, who carefully guarded the data and then gave it back to everybody later. The second study which was a real beauty was done by Char Beales when she was at the NCTA, and this was a segmentation study which was identifying who was buying cable, who might buy cable in the future, and who was unlikely to buy for a long time. That study came out and had several key acronyms that came from it. One was the "truck chasers", who were the people – as David remembers and other people may have indicated – who used to knock on the doors of our service vehicles to get them service ahead of everybody else, and what that started to identify was how does the industry go from 35% basic penetration in 1985 in the new builds, go above that? Because you've already got all your fixed investment in your plant, so every one of those new customers is like 80-90% profit margin. So the segmentation identified many of those people, and it turned out that after the first 35%, the next level of subscribers were not interested in pay TV or else they would have bought cable. What they were interested in were the basic services. So what that change did in the mid '80s was it started focusing on basic programming, and the pay suppliers actually came to us, I think in about 1984, and that was at a point where we either got free carriage or they paid us at United Cable. I remember this – two guys came to me – Roger Werner from ESPN said, Charlie, if you don't pay us we're going to go bankrupt", and I said, "Okay, Roger, how much do you want?" And he goes, "We need 25 cents a customer."

NELSON: You fell on the floor?

TOWNSEND: Well, I went back and I talked to David and to Gene Schneider, and then the next... and I'm not going to tell you what we did quite yet... but the next call I got was from Doug Holliday at The Weather Channel. He came in and he said, "If you don't pay us, we're going to go bankrupt. As a matter of fact, here are our books." He has this financial presentation, he shows us, we showed it to David who understood all these things, and we both agreed, they were going to go out of business in the next six months. So we came back, I'm not sure we gave Roger 25 cents, probably 15, and I think we gave The Weather Channel a nickel.

VAN VALKENBURG: Exactly right.

TOWNSEND: And we were the first company to agree to pay the basic suppliers and it was because of the segmentation studies. We knew we had to have better basic programming if we were going to attract the next level of basic subscribers.

NELSON: So this wasn't merely an expense, it was really an investment in your growth.

TOWNSEND: The quid quo pro here was we'd say, okay, we're going to give you this money, what are you going to do with it? It can't go into Roger Werner's salary. So they agreed to buy certain types of programming which ultimately ended up two or three years later with the NFL, which I think was a real turning point in terms of the viewing of how serious cable had really gotten when we could knock off some of the big network programming.

NELSON: '87, as I recall, was a real watershed year, and the NFL deal and also reaching the 50% mark.

TOWNSEND: That's right.

NELSON: So that was a big leap forward from where... you said you were what? At 35% only five years before, something like that. So obviously the strategy of pushing basic at that point, the shift away from pay, paid.

TOWNSEND: It did, it did. The other piece that came out of the research that the CTAM database showed is what it really showed was, which was the underlying cause of churn, was that you had certain households that were going to buy pay television, and then the question was how many pay TV services were they going to buy? Not knowing any better, the industry basically crammed five services down their throats as the new belts came through. So they'd give people these packages of five pay services and a special offer to keep them for a month or so, and then lo and behold, three of them went poof after a couple of months and everyone was scratching their heads – I wonder why that happened? Well, what the research showed was that people didn't want it. So the answer was that you had to one, segment your customer, so certain customers wanted Disney Channel, certain customers wanted Showtime and HBO, and then there were the true tonnage users and those people wanted everything. That was about 5-10% of homes passed were your true tonnage users and you could sell them anything, but the rest of the people were relatively discriminating.

NELSON: So this whole experience must have really reinforced CTAM's role in the industry because this research really led to a huge surge forward that you might not have achieved without understanding what the customer was really thinking, what the customer really wanted.

TOWNSEND: I think one of the concerns about CTAM that I noticed in the early days was that it wasn't focused on making money. That the operators were all very financially oriented and that the marketing people were more interested in esoteric things. I think starting right after the strategic planning session we were focused on how do you maximize profitability. Fortunately it tended to coincide with good marketing practices and so one of the other conclusions was we had to change the location of the headquarters from Atlanta where Dean Wait and Judith Williams had done a very diligent job coming out of their experience there, into Washington D.C. with Vic Parra. At that point it went from a fairly small budget to a fairly large budget in terms of how much money the industry spent on CTAM activities.

NELSON: During your period there, CTAM went through big change. It had been in Atlanta, it moved to Washington; it went from sort of part-time management to full-time. Can you just give us a little bit of that chronology of the changes that occurred then?

TOWNSEND: Sure. Well, originally Lucille Larkin was doing this on a part-time basis, helping to put the Association shows together on an annual basis. Then Lucille handed the administration piece over to Dean Wait and Judith Williams in Atlanta, I would say in the early '80s, and they did a great job of keeping things running then. But after the strategic planning session in 1982 or '83, it was concluded that we needed a full-time professional staff in Washington because that's where a lot more of the central activity was occurring of the industry. So the Association's headquarters were moved from Atlanta to Washington D.C. and Vic Parra was hired as the head of the Association.

NELSON: And what was his background?

TOWNSEND: He had been running an association. I can't remember if it was the American Manufacturer's Association or the supermarkets' group, but it was on some packaged group's level. What he had a great deal of knowledge about was how do you get many disparate groups to work together for a common cause in an association format.

NELSON: So he was an association professional as opposed to cable guys filling in to keep this organization going.

TOWNSEND: Exactly.

NELSON: Now of course with the move, with bringing on a full-time guy to run it, increasing the staff – I'm smelling the need for more money to keep this thing going. Where'd that come from?

TOWNSEND: Well, fortunately it came from greater attendance at the annual show, and the interest in marketing was just booming at that point, and it was booming from several areas. Number one, the programmers were very interested in learning as much about what the operators needed and also trying to influence in terms of what they needed, and the operators were becoming more interested in bringing more of the operational people to the CTAM show. So one of the other things that came out of the strategic planning session in '83 was a more operational-focused CTAM. Instead of just being pure marketing I think what we realized we had to do was to incorporate the general managers and the operating personnel of the major MSOs into CTAM, which was the reason that David eventually became involved, as did a number of other operating people. Rod Thole was one that came in then. So we specifically reached out to operating general managers – Wayne Knighton was another one – who had a marketing focus and were operationally oriented because what they could do was they could take a lot of the CTAM ideas and incorporate them into their business plans so that they really worked.

NELSON: Do you recall something that maybe you did that you in fact incorporated?

VAN VALKENBURG: That's a good question. I'll have to think about that one. But let me though do respond to the change in direction in terms of bringing operating executives on the board. That it became a lot more than just focused on marketing. This was at a time when we now start to get into human resources, we got into – in fact in some of those days right in there is where we got involved in advertising, but later we spun out that advertising committee that formed CAB. Later the development of reaching out to human resource people and that got spun off eventually to CTHRA. And so you had all of those various other disciplines as well as operating executives brought on so you can really permeate the entire organization. The other thing we did, and this maybe was in your era, that we started to have CEO mini-conference, confidential conference, bringing the CEOs to CTAM and having very specific closed-door sessions in talking about topics that are more broad-based topics but are critical for an entire company and that would be of interest to the CEOs. I think you had one that had 50-some executives there in '85 or '86 timeframe.

TOWNSEND: Yes. I am so glad you brought that up. One of the problems that the members of the board and other people who were involved in the leadership of CTAM found was is that when they came in for their annual budgets the CEOs of the companies were scratching their heads frequently on why they needed to spend more marketing dollars and it was difficult to frequently justify those programs. Part of it wasn't that they didn't get it, it's just they really didn't understand the benefits of the marketing itself. So what we realized is we had a mission that we needed to perform, which was to expose the CEOs to why they need to spend marketing dollars and to focus on marketing and we thought who better than other CEOs to help bring this out. So we had these CEO conferences and then we would use the CEOs who were more marketing oriented to make presentations, to talk, to answer questions so that the CEOs would then embrace the marketing budgets, the marketing orientation of the people in CTAM when they came up for their annual reviews.

VAN VALKENBURG: And then '86 was Charlie's, and that is one of the major topics was the slump in premium television, was in use of the research study, presenting that to the chief executives. Another one was preparing for rate de-regulation that happened now in '87 and that was another topic. Another was restructuring of the channel lineups, which became called tier meltdowns, but that was another topic. And what's interesting was – and this is back to Charlie and his background in Pepsi – and that was where's our competition today for the viewer, for the entertainment dollar, and specifically talked about the home video business that was occurring at that time. So those were the four major topics that Charlie presented to the CEOs there in '86, which were very, very relevant for the CEOs to think about what are the big issues that are happening with the consumer in marketing at the time.

NELSON: So I imagine this not only would change attitudes toward the marketing budgets but towards CTAM itself because of the kind of value that they derived from these sessions.

TOWNSEND: I'm not sure they necessarily said CTAM is doing this. I think they said I had a good experience at CTAM, I learned a lot of good things, it's helping me do my job; therefore if my people want to participate in CTAM it's a positive thing.

NELSON: Well, that was a good accomplishment, I would say.

VAN VALKENBURG: You asked a question earlier about what I took away – and the one that Charlie was involved in – and that was the Family Viewing Study, and who watches what TV, where do they watch it, who's the buyer, who's the influential buyer, and so forth, and that in-home segmentation in terms of focusing on a particular program and aiming it at different people even within the home. That was a very valuable research study that came towards the end of Charlie's time of being active in the CTAM board.

NELSON: And at that time, were people still thinking of TV viewing as the home as a family gathers around the set?

VAN VALKENBURG: Exactly. Yes, it was mass marketing, mass media, everybody collected around the one TV set. Well, by the mid '80s, TV sets were in a lot of kids' rooms and elsewhere in the home. I think that was one of the very first, if not the first, study about the family and its viewing habits.

TOWNSEND: And coming out of that were several key findings. One was, you want to get additional outlets into the home.

VAN VALKENBURG: Absolutely!

TOWNSEND: It was like glue in that the more people watched it, the more they liked it. So putting those additional outlets in didn't really cost us very much and it significantly increased the viewing of our product. The second thing that came out of that study was in terms of the decision-making process to bring cable TV into the home and then the decision-making process to rip it out. How did that happen? Well, it turned out that the guys brought it in and the gals got it out.

VAN VALKENBURG: In terms of final decision.

TOWNSEND: And here's how it would work. The man would sit there and watch the sports and movies and they would say, "Gotta have it." So they'd get it into the home, the wife would sit there and watch, now her husband is watching more television than ever, her kids are watching shows that she doesn't want them to watch, she can't spend as much time as her husband and her children as she wants, and she says, "Why are we spending $20 a month to do this?" So she gets on her husband's case, out it goes. So one of the conclusions were women's programming was really important. So Lifetime, which at that point was kind of floundering around, we were like, yes! And we also needed to highlight more women's programming in terms of our promotion of different shows. The other thing that came out of that was of the homes that don't buy cable TV, why don't they buy it? And the answer was an interesting one. There was a fear, frequently, that they would watch too much television. It was almost viewed like narcotics, that you bring it into your house and it's going to destroy your home. So we had to highlight what shows could come into the home that would not be harmful to the home setting. So we pushed CNN, Arts & Entertainment, all of the more information programming and less of the entertainment. The focus there was you don't have to watch a lot of television to buy cable TV, and it slowly started working away at that perception that you don't have to be a TV junkie to buy cable. Today if you were to ask people, that's all gone!

NELSON: That's for sure.

TOWNSEND: It's hard to believe that 20 years ago people didn't want cable in their house because they were afraid they were going to watch too much.

NELSON: But that is an odd thing to sell your product by convincing people they're not going to use too much of it.

VAN VALKENBURG: Well, it got it in the home, and with the family viewing now you can have quality programming – Nickelodeon, I forget when that was launched...

TOWNSEND: Right in there.

VAN VALKENBURG: Right in that same timeframe, quality programming for kids. You got the wife, you've got various kinds of programming so you don't have to watch a lot yourself to have value for the entire family.

NELSON: That sounds like the Family Viewing Study and then Lifetime, Nickelodeon were really at the real turning point here in terms of really starting to have more and more segmented programming, more and more focused programming and all the special kinds of networks that followed from that.

VAN VALKENBURG: Let me cover something else on research that I think is important on why CTAM was able to do and achieve this at that point in time. This was at a time when at that point in time it would be less than 25% of the customers of our cable industry would be in, say, the top five. You had a proliferation of operators within the industry; none could on their own afford the kind of research that Charlie is talking about, but together could get enough of a broad sample to get relevant information for an individual market. And so that was a real value for CTAM that CTAM brought to each company and to each chief executive as well as each marketing person. Charlie had a research person but it was narrowly focused kind of research, and so with CTAM you could get some industry value that was company applicable and market applicable.

TOWNSEND: And actually, United Cable developed an advertising campaign that came right out of us. It was called The Less You Watch Television, The More You Need Cable.

LAUGHTER

NELSON: We won't take that to its logical conclusion.

TOWNSEND: You would think that would be counterintuitive. We researched the hell out of this thing and we found that it played with the non-subscribers. They knew exactly what we were talking about. It also helped that we had a little known actor at that point, Jason Alexander, who was in our commercial. This was one of the first commercials he ever shot; I've still got a copy of it. He went on to become legendary in Seinfeld as George, but he was very good because it included humor and also all of the more informational programming.

NELSON: Now where did this commercial come from?

TOWNSEND: We had an advertising agency in New York develop it for us.

NELSON: Now is that the first time that CTAM went out with a video campaign?

TOWNSEND: This was actually United Cable.

NELSON: Oh, United did that. Okay.

VAN VALKENBURG: But the question is appropriate because it has to be about the first time that, because of Charlie, we had a New York ad agency at United in Denver.

TOWNSEND: Right.

VAN VALKENBURG: And that's a major, major step forward for that company as well as others in the industry at the time. A New York ad agency would not be something that maybe any others had at that point in time.

NELSON: But CTAM wasn't yet doing any of these kinds of campaigns that they subsequently did?

TOWNSEND: No, this started with individual companies. I think CTAM embraced a lot of the advertising as individual companies started to bring it along and would share it with other companies. I'm thinking here...

VAN VALKENBURG: Let's key off that because this is at the very early beginnings of what are now the Mark Awards and I don't know whether those started under your...

TOWNSEND: I think they were right after me.

VAN VALKENBURG: Right after you. But that's what started it. By the time that it got to my time in the late '80s as president or chairman of CTAM, they started to have real awards but the genesis of that was Charlie hiring an ad agency, producing a professional spot and producing those kinds of commercials for us that led to the Mark Awards, which is today a very, very professional event for us and the ads are very professional today. This has got to be one of the very first TV spots.

TOWNSEND: I think that David's point is very well taken there. That wasn't just kind of haphazard. People realized we needed to showcase the best marketing campaigns. How do we do it? So first you've all got to decide, which are the best campaigns, hence the kind of award making process, and then how do you publicize those? The beauty of the cable industry is since they don't compete with each other you can do a lot of sharing and everybody can benefit. One of the other things – I remember it now – that about the television campaign that was important, and it was a major breakthrough, is that we were advertising on broadcast television and we didn't know if the broadcasters were going to let us on because we were basically going right after their customers, but fortunately those greedy little guys didn't care, or at least they didn't think we could do anything. So we were putting these commercials right on the broadcaster's stations, aimed right at our customers – well, the beauty of it was their customers, the off-air viewers, were exactly who we wanted!

NELSON: You couldn't target better than that, right?

TOWNSEND: It was so good.

NELSON: That's fantastic. Well, you were talking about the broadcasters – what else was going on during that time period outside of cable that you were competing with in terms of you had the broadcasters, this was a period where the VCR really took off, but that really turned out to be a real plus for cable.

TOWNSEND: David was right. The fear there was that the VCRs were going to basically undermine pay TV because the window for VCRs was before pay television so people would watch it on their VCR and they'd dump HBO.

NELSON: And was that fear realized?

VAN VALKENBURG: Well, that certainly was a significant factor and I think that's where the push to get more original programming and exclusive programming on HBO and Showtime, that's where that drove it. Obviously the other thing that drove it would be sporting events, especially HBO with boxing, that was a major exclusive with HBO, but it was the additional exclusive programming, original programming that then was the competitive response to the advent of the VCR in the home of being able to watch the movie way before they could watch it on HBO or Showtime or Movie Channel or Cinemax.

NELSON: Charlie, talk a little bit about during your time period, the event itself – because here we are at the summit taping this – how did the annual meeting or whatever it was called at the time, how did that evolve over the period when you were active in CTAM?

TOWNSEND: Well, when I got into the industry in '81 it was evolving. I think I had missed the Gail Sermersheim days when it was like 30 people in the Holiday Inn, but it had increased to, oh, I don't know – the first one, I think was in Boston here where Ted Turner announced that he was going to come out with CNN 2 to respond to... somebody else was launching another news network, SNK or something like that. So that probably, I'd say, was in the 400-500 category in terms of attendance, '81, although we have the exact number, and it really skyrocketed in the next couple of years to 1,400-1,500. So there was a lot of interest and a lot of money coming into the Association. I think what we felt we needed to do, which again was part of this strategic planning, was we had to make this worthwhile where people weren't going to come and they weren't going to spend – I think it was $300 or $400 to come in those days – so we really had to make sure that our product was good, and we had to give them good information. They had to go away having two or three ideas that they thought they could bring home and use immediately in their cable systems.

NELSON: And were there things in the way the conference was structured that started changing, because if you go from 100 people to 500 people, you've got to deal with them in a different way. You can't just keep putting them in one big room.

TOWNSEND: I think we can thank Jerry Maglio for that. They started to have tracks where you'd have a central session followed by all sorts of different smaller sessions that you could pick from so that individual interests... we're almost segmenting our own customers so that everybody could go after what they wanted. We'd have lot so things – we'd have an operational focus, an advertising focus, a direct sales focus, and you could basically reach out to many pieces of the marketing community that way.

NELSON: The advertising folks you just mentioned, because it just brings me back to something you talked about before which I guess not having been there I'm curious about, and that is the fact that CTAM started becoming so many things to so many people – the administrative, the operations, the advertising, the HR. How was the decision made – I can see why you'd do it – but how was the decision made to move into those areas which were getting pretty far afield from marketing per se?

TOWNSEND: Well, one of the things we did is we ran a survey of our own membership in 1982 and we said who's attending the conference? Of course everyone thought telemarketing people. We had about 40% were marketing, 20% were programmers, 20% were administration, 20% were operations and 20% were other things. So we already had a base of customers who were coming to the shows – and HR is another one – who were this broader base. So we said, hey! We've already got 'em, we might as well target 'em better. So we expanded the base of our own clientele.

NELSON: Did you finally discover why those people, of all people, were going to a marketing conference?

TOWNSEND: Well, CTAM as you probably remember had "Administration" wedged in there at one point, and fortunately...

NELSON: So was that the hook that got them?

TOWNSEND: Well, a lot of them really were administration in the early days, when it really started, and then it kind of shifted over to marketing in the early '80s and then I think it shifted back to administration in the mid '80s.

NELSON: And then those things were spun out – CTHRA and CAB.

VAN VALKENBURG: But see, they didn't exist. The people that were involved in ad sales within the cable systems, they had no place else to go so this was a way for them to learn more about the industry. Charlie developed sessions for those that were involved in the creative, the ad sales, and so this was sort of the germination... and you've got people like Jerry Maglio that comes out of Literary Guild, or Trygve Myhren from Psychology Today or Charlie from Pepsi that were used to the ad sales side as well, and so it was very natural for them to have a segment on advertising and ad sales. Now it obviously grew to the size that it really needed its own organization but this was the place where those that were comfortable with it, it was the only place that they could go, was to CTAM.

NELSON: So CTAM really was an incubator for a number of other organizations that came later, which probably a lot of people don't realize that that's where they came from.

VAN VALKENBURG: Right, right.

NELSON: You know, in the early days the industry was very much of a technology driven and, as a friend of mine used to say, the operators would come into a room and they'd have to take the pliers out of their back pockets to sit down. How did you start to see that shift taking place where... I mean you talked about the CEOs starting to accept the marketing budgets, but I think it's more... and I think you're nodding because it's really more than just that. It's really that just the buy-in to marketing and the importance of marketing and really the centrality of marketing in people's operations and to their bottom line, particularly.

TOWNSEND: Well, it certainly is an area that I thought a great deal about 20 years ago, and Gene Schneider, bless his heart, is the perfect epitome of this because he had the pliers. He was an engineer, a very good engineer I might add, and he had the pocket protector.

NELSON: He had it all!

TOWNSEND: He had it all. And I figured if I could get Gene Schneider to buy-in on this stuff, he was the epitome of the typical old cable operator who was usually technically based, very good technically because they were mostly engineers. The key to success in the cable business in the '70s was engineering, it was not marketing. So you have these companies that are built by people who are operationally engineering focused who are running the companies. Suddenly you get this shift taking place in the late '70s, early '80s where you start to get this marketing focus and it's a lot of this razzle-dazzle stuff that the engineers did not understand, and I'm not sure wanted to understand, but the one thing they did understand was if it could make them more money, they were willing to listen. The profitability of a lot of these multi-pay, pay services and even basic marketing programs were clearly profitable, so I think we brought them along slowly, but we had to prove that we could earn our way to do it.

VAN VALKENBURG: But you take a look at the markets that Charlie was now involved in versus the markets that Gene and Richard Schneider, his brother, had built. There's a big, big difference between Casper, Wyoming and Hacienda Heights, California. Huge, huge, huge difference. In Hacienda Heights, part of Los Angeles, it's got a dozen, fifteen or more off-air. They don't need cable for entertainment. It's got a significant minority population. It is a very, very different market, and totally foreign to someone that came from Casper, Wyoming. So you had to market, and you had to figure out the various segments of a Hacienda Heights or an East Valley there in LA and so forth, and later a Baltimore. Very, very, very different and different communities within each, and that's where someone with Charlie's background and Ajit Dalvi and others that came into the industry from the consumer products industry really added real value to the industry in terms of you had to really market. You didn't just put it out there and they come.

NELSON: Would you say that transition – kind of looking back on your term at CTAM – that that was your biggest accomplishment? Or what was your biggest accomplishment? When all is said and done and you step down from the president's chair, what did you think you had gotten done?

TOWNSEND: I think the thing that I really felt was critical was to bring CTAM base back to the mainstream of operations. I thought to be profitable in this industry you really have to integrate marketing right there into the heart and soul of the companies, and so we brought the operating people in, we really focused on how do you make money and how do you make this thing work. I think that was very effective. We had some just sharp people who were on the board who did that. I used to learn a lot myself from them. I was very good in marketing, but I wasn't that knowledgeable about operations. So I could tell them, here's the idea, and they'd say, okay, Charlie, here's how to make it work.

VAN VALKENBURG: But let's just take that, and that is in terms of permeating operations, and that is making the installer a salesperson, making the CSR a salesperson, and that again comes from integrating marketing, product knowledge, and sales skills to everyone in the organization and only a person that comes from that product marketing background and understands the consumer can really bring that into the entire organization. So I would agree with Charlie. That's a major contribution to the industry and we had a number of those kinds of sessions during the CTAM years that Charlie was on the board where we talked about the incentives for the installer or a CSR, and training them and so forth. That's also why we got HR people in, because they're part of marketing.

TOWNSEND: And then if you look at who succeeded me as presidents of CTAM, many, many of them – David, Barry Lemeiux – they were all a COO, CEO of their company so these were operationally oriented people who I think forced that marketing to stay on target.

VAN VALKENBURG: The transition from Charlie's time to mine... you were '8...?

TOWNSEND: '86.

VAN VALKENBURG: '86. I was '89, so basically a five-year period, but the major difference of thrust between Charlie's time and mine was the full implementation, or the over implementation of Gary's strategic plan. By the time it got to my time it had grown in so many different ways it was almost unmanageable and why the next transition was one of bringing more focus because it just was trying to do too much. But we were the ones in the late '80s implementing some of the ideas that came out of Gary's and Charlie's strategic plan that said marketing needs to permeate the entire organization. We did it, but it went too far as we learned from previous discussions.

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  BACK TO ORAL HISTORIES

CTAM Panel - CTAM Grows

Interview Date: July 2006
Interviewer: Steve Nelson
Collection: CTAM Collection

NELSON: ...CTAM oral history are another group of old-time TAMers.

VAN VALKENBURG: Old, yes.

NELSON: I think we'll start with you because we sort of have you seated in chronological order from your chairmanship. So why don't you give us a sense of – you are 1989, correct?

VAN VALKENBURG: Chairman in '89, yes.

NELSON: Okay, give us a sense of what you were doing at the time. I want to get a little feeling for who everybody is before we plunge into CTAM. What were you doing at the time?

VAN VALKENBURG: At that point in time, during that year, I was President at Cablevision Industries in Liberty, NY. I'd just made the transition from a joint venture between Time, Inc., ATC and Houston Industries called Paragon and at the end of that time transitioned to run Multivision for Merrill Lynch and GE Capital down in Greenwich.

NELSON: And how long had you been around the business at this point?

VAN VALKENBURG: Since 1969.

NELSON: Okay, so a lot of experience brought to bear. And just to set the stage, Ruth, you were...?

OTTE: 1991.

NELSON: '91.

OTTE: And I was in the middle of my nine year tenure at Discovery as President of Discovery Channel.

NELSON: Okay, so you were right in the heart of all that.

OTTE: I had been before that eight years at MTV in affiliate sales and then VP of Marketing.

NELSON: And Chuck?

ELLIS: In 1992 is when I joined the board; I was chairman in 1996. At that time, '92 was about two years after the Time Warner merger so I was in the process of moving from Warner Cable to the new world of the combined Time Warner Cable in '92 when I actually joined the board. I got in the industry in 1982 with a company called Group W Cable, which David knows well from the succeeding company that picked up a piece of it in, I think, '86 from Westinghouse. So that's how I got started in the business. As you probably know, Group W was the succeeding company to TelePrompTer. Westinghouse bought them in 1981. So that's how I got my start in the industry.

NELSON: Okay, so now that we have a sense of who you are, or were, and came from, let's pick up the state of CTAM in the year 1989.

VAN VALKENBURG: In '89 we were really in a transition from a time of an executive director and industry executive lead to a chief executive, president and a different strategy for CTAM and trying to do many new things, really a proliferation of activities, of functions, of many conferences, a major conference, a time of major growth in the industry and in CTAM. So it was a time of very rapid and in some cases almost uncontrolled growth.

NELSON: So what were some of the major changes that were implemented at that time when you talk about this transition?

VAN VALKENBURG: Probably one of the major changes would be the establishment of chapters. The first chapters were established – there were two in 1987, there were five by 1988 and there were 11 by 1989. So it was a very rapid growth of the local chapters, and that would be probably the biggest change happening is pushing a lot of the marketing ideas and peer exchange down to the local level.

NELSON: And how about in terms of just how the chapters interacted with the overall organization?

VAN VALKENBURG: Now you're talking of one of the real controversial issues because we established actually as we looked at how do you organize this in the relationship, both the organizational relationship as well as the financial, and actually set up regional boards which I think at Chuck or maybe even before got eliminated. But the objective was to maintain a common thrust, a common image, a common philosophy throughout all of the chapters with the national organization. So there was a board driven centralization of a philosophy at the time, and financial relationship.

NELSON: And was that smooth in terms of decentralizing to some degree while trying to retain a centralized mission and purpose?

VAN VALKENBURG: That was very controversial at the time and one that a lot of to and fro, back and forth between centralization... those out in the Rocky Mountain area wanted to do a lot of their own programs, raise their own money, yet having the control back in Washington in the CTAM office. So there was that constant tension and it was going on in the entire industry of centralization versus decentralization. So it was not just within CTAM. This was really a question of what was going on in the entire industry of centralization versus decentralization.

NELSON: Authority in the field versus the headquarters.

VAN VALKENBURG: Exactly. Yes, yes.

OTTE: And also just the notion of if we do these activities locally and we pay some remittance to CTAM headquarters, then what services are they going to give us in exchange for those, which is also a classic field/headquarters kind of thing. I think we also had a concern for wanting to give them autonomy, right? To let there be imagination and creativity, yet having some kind of quality bar for what... maybe we weren't thinking of the CTAM brand, but we were certainly thinking of a standard of expectation.

VAN VALKENBURG: Of excellence. Yes, exactly.

OTTE: Right. Of the good thinking in marketing and in cable and customer and all that.

NELSON: Can you think of an instance where this started to in fact work where you had a sense... because obviously there was this tension and at some point it settled down. Was there some instance of something that happened out in the field that kind of worked along with national and people said, yeah... Did you get to a point where you felt like maybe this idea will work?

VAN VALKENBURG: I think that really has to go to Ruth and later.

OTTE: Later.

NELSON: Did it even go as late as your tenure in '96?

ELLIS: Well, I think the notion of, as David said, centralization/decentralization and some of the tension and a little bit of the paranoia that that creates, which is we're from headquarters and we should maintain some control over the brand and the experience and what it is that's going on in the local chapter. There also was some concern, I think, about the financial arrangement between the local chapters and the liability that might have for the parent organization which I think we worked through. But by the time I got involved at CTAM, frankly, the local chapters had, I think, established a lot of credibility in terms of the people that were involved in them, in terms of the programs they were running, the vitality that they created in each one of the markets, the focus on marketing that this organization created by having it decentralized that you really couldn't do from a national scope, had really gotten to the point where people believed that it worked and therefore, I think, a lot of the natural tension sort of dissipated at that point.

NELSON: But you're also seeing that on an operational level in the business itself?

ELLIS: Absolutely.

VAN VALKENBURG: That's what I was going to add because through that same period of time you had the same tension happening within several companies. Cox had decentralized under my time in the very early and mid-80s, but Time Warner, or Time and Time Warner was more like into the late '80s, early '90s for decentralization, and so at least those two were going through the same kinds of things. Same with TCI, with Comcast, so those were corporate tensions as well, and so I think that as you get to the time that Chuck was on the board, you had a lot of the corporate issues resolved as well, and a lot more comfort with the skills, the integrity, the ability of those out in the field, in the regions, in the individual systems that we didn't have when I was on the board and chairing it and starting the chapters in the '87, '88, '89 era.

NELSON: Now the other thing that was going on when the chapters were started was the whole change in the way CTAM was itself centrally operated and run. Talk about that for a minute.

VAN VALKENBURG: Well, it was because you have the more administrative era of Lucille Larkin and Vic Parra and it was really industry executive led.

NELSON: That's where they came out of.

VAN VALKENBURG: Where they came out. So they were executive directors and sort of following the lead of the various executives, corporate executives, marketing executives typically of the cable industry, and now in late '87 into '88, we bring in Margaret Durborow.

NELSON: And what was her background?

VAN VALKENBURG: Her background came from industry, but with a new strategy of being much more centrally led where you had a president/chief executive with a staff that could move a lot of programs and guide a lot of programs, whether it was HR or pay-per-view or addressability, the chapters where you had a knot of activity going on, research was another one, and so you needed that central staff, or at least that was the feeling, to control everything and to get that expertise out throughout the industry. So it went from a very decentralized kind of organization to a very centralized one as we get into the late '80s.

NELSON: And that's the point in time which the staff not only grew, became more professional, I'm hearing a lot of new activities – where did the money come from to make all that happen?

VAN VALKENBURG: Well, that's a very good point. Through that period of time it was strictly single membership oriented, number one. Number two was contrary to what we see today, it was all non-commercial so there weren't the revenue streams from the annual conference that are later available for support of a lot of the activities. It was strictly single membership, not corporate memberships, in terms of the due structure.

NELSON: So this is still carrying on the original vision of this as a professional society with individual members.

VAN VALKENBURG: Exactly correct.

NELSON: But now this structure is growing out of that.

VAN VALKENBURG: Right, and now we run into the financial problems that bridge between my time and Ruth's where we run against some huge barriers in terms of available funding for all of the activities that are being demanded but there are not the funds for it all.

OTTE: You could see the mix right here. You have individual memberships, we were in this constant conversation of showing our value to the industry, to the MSOs, to the people paying for these memberships, and expanding industries, so you want to offer more programs that your customers perceive as valuable, right? And you move to do that in some ways that were actually very successful.

NELSON: But then you have to pay for doing those.

OTTE: But then this non-sponsorship... That was a very deeply held principle. I'm not sure exactly why, but I remember it was something people felt at the time like we shouldn't change, right?

VAN VALKENBURG: My example is in 1989, as Chairman of CTAM and we're in Chicago, and WGN Tribune owning the Cubs wanted to have an event at Wrigley Field and I prevented them from doing so. Warner Brothers had just issued the movie Batman and wanted to have a big party, sponsored and sent out invitations. Again, I prevented that because...

OTTE: You had to.

VAN VALKENBURG: ...of the non-commercial policy that we had that this is an industry conference. This is not a convention.

NELSON: Or a trade show or... yeah.

VAN VALKENBURG: Trade show. This is sharing among peers.

OTTE: Learning together, best practices, explorations.

VAN VALKENBURG: So it was, in a lot of ways, a professional society. It was the objective not to be a... you're right, a trade show.

NELSON: But now you've got these companies that are coming forth and want to take people to the ballgame, throw a party, the kinds of things we don't even think about today. Was that still true during your reign?

OTTE: Oh, yeah, yeah. I had actually forgotten about that whole piece, but speaking with David...

NELSON: Did you have to intervene and shut some parties down?

OTTE: I don't remember shutting any down, but I remember a lot of discussion about the pressure between having that policy and yet wanting to fund more things and not having the funds to do it simply from the individual subscriber dues, basically. I don't exactly know how the transition happened but walking here today you can see it's a much bigger event and there's many very multiple strands of learning and fun events and all that, and somehow they've figured out the sponsorship piece in an appropriate way.

VAN VALKENBURG: Yeah, tonight's the MTV party. Disney has a big party. You look at the floor here – I mean, it's close to being a trade show.

NELSON: Yeah, there are exhibits. Now you're not going to go to the party tonight and try to shut it down?

LAUGHTER

VAN VALKENBURG: No, I don't have that authority, no.

NELSON: And Chuck, by your time, this commercialization policy really had begun to change, I believe, by then.

ELLIS: Well, it was evolving. I think there was still a real legitimate, heartfelt concern about the commercialization policy and there's a lot to the story of how CTAM went from an organization in the late '80s to early '90s with a very broad agenda that drove a lot of costs that were new to the organization with a fairly flat revenue stream to cover it that made the idea of additional revenue streams through things like commercial opportunities like we're enjoying today a pretty inviting concept. Two things happened, and I don't want to steal any thunder from the next discussion about the '91, '92 evolution from not only the leadership of CTAM, but also sort of the agenda and the scope and the mission of CTAM really getting tighter in that period of time, but we really did continue to debate and evolve in the commercial policy area and we started to do things like sponsored parties, we started to offer minimum sponsorships of different parts of the convention, we had limitations on how it could be promoted, we limitations on what kinds of signs you could use for it, etc. but the notion of the opportunity is there as long as we didn't flaunt it and as long as it didn't get out of control, the revenue streams and opportunities to work more effectively with programmers and other vendors and operators seemed to make more sense. So we sort of dripped dripped our way over time to what you see today which is a mini-trade show.

NELSON: As that evolved you didn't really find there was a huge resistance to these changes? Were people saying why are we having this party and how did Discovery – sorry about that – put their sign up there? Because today there are signs everywhere.

ELLIS: No, I don't think there was big resistance. I think, frankly, the leadership of CTAM trying to honor the principles of CTAM were trying to guard the notion of let's not let this get out of control because if it gets out of control the opportunities – because with marketing we're in the sights of every programming service and vendors and lots of other people – the opportunities to make this a flow-through marketing machine from outside sources was very tempting. So there was a lot of demand from those that wanted to participate from a commercial standpoint. There were a lot of the members who wanted that to happen. I think, frankly, it was the CTAM leadership trying to keep a lid on it to a certain extent and yet be reasonable and practical that kept it in balance for awhile.

OTTE: I think like any event like this there's a sense that what's the content, what am I going to learn, are these people really on top of our industry, our issues, what we're facing today? That whole theme has been a huge part of what CTAM has cared about and still has to and does care about, right? So it seems like that continued, this always listening and trying to anticipate the real needs of what are we facing – customer focus, competition, all those themes – and then this thing was like the frog in the water. The water got hotter and it became a non-issue it seems.

ELLIS: I think the organization has always been one that wanted to provide balanced information and not necessarily be an advocate for any brand, for any company. We certainly had initiatives that the organization believed in because the constituency believed in it and needed us to stand up for certain initiatives, but products and the services and endorsement of those at the expense of other things, even through the initial decisions about how we control the commercial policy, I think was the guiding principle on why we should go slow with that because we wanted to keep the playing field level and not provide advocacy for any particular brand or product.

VAN VALKENBURG: I'd like to add one other word to what Chuck said and that is one of the beauties of this industry, and I don't know that there are any others like it, and that is it's always been a collaborative industry. Even in the days of heavy franchising when you're saying bad things about each other as you were standing before a city council, you were on the other hand, in other markets, were cooperating, and at places like CTAM, CTAM was the epitome of that collaboration and even when there were bitter negotiations between a programmer and an operator, still there was that collaboration that was there that permeates and permeated and still permeates CTAM, and that's one of the beauties of CTAM and of this industry is that ability to collaborate and to look for best practices, to share experiences, share research and to learn from each other. That was underlying the non-commercialization policy. This organization can't afford to lose... even with some of the parties that go on and some of the trade show aspects of it, but still you look at the sessions and it's still very collaborative.

OTTE: We even felt that way on the programmer side because we were fighting ferociously really against each other to get distribution from you all, night and day, and also essentially for viewership as well, but I was neck-and-neck at that time with A&E and Whitney Goit was on our board. That is a really fabulous thing about... I don't know if it's the sense that we always felt in this business that we were making history and doing something new together, figuring things out together, whether that was part of it, or if it was just the fact of the way the franchises were that you didn't directly overbuild... I mean, you did some, but I don't know. Something contributed to that that is very unusual.

VAN VALKENBURG: You had something else at the time and we'll see whether it continues, and that is by today's standards this was a very fragmented industry because when you look at the top five companies in 1986 when I came on the board, 28% of the customers were in those five companies. TCI was the biggest with only 11%. Today you've got over 2/3 in five companies, two of which are direct to home, and so you've got a huge, huge shift in the concentration of the industry. In those days when we had... in the late '80s and earlier, with many companies you did have a lot of that discussion and collaboration of learning from each other because there were many. So there's a real difference in terms of the industry today versus at that point in time, and you had some very bright people coming into this industry from outside. In fact, I think probably all three of us can say that we came from outside the industry.

NELSON: Well, everyone came from somewhere, right?

VAN VALKENBURG: Somewhere else! And so we had many, many very bright, very capable people coming in, sharing their backgrounds, as well as their experiences in the industry. So all of that underlies the non-commercialization policy and maintaining that was very important to us in terms of the collaboration and the peer exchange and learning from outside the industry as well as inside.

OTTE: There's another thing too when you think about it. You had this pretty good-size board that covered all aspects of the industry, and then you had the chair or the committee putting together the conference. So there was a huge attempt to get feedback all the time through having this wide well-balanced group putting the conference on, and the board, and then trying to listen in every other way to what was going on.

NELSON: You talked about a lot of people from the outside coming in. That seemed to be a period, because of the growth, that you'd have to bring in a lot of people. Did that really enhance the role of CTAM because the whole learning experience, the whole collaboration, the kind of relationships that people seemed to develop around the organization?

VAN VALKENBURG: This is where somebody new to the industry would come. This was the place if you were anywhere in marketing or management, administration early days, or very early days if you were in ad sales – that's another topic in terms of spin-off of CAB – or human resources, the spin-off to CATHRA. So anybody in those various disciplines that was new to the industry, this was the place to be to learn what's going on, what the critical issues are, and without the large corporate staffs at the time, this was the place.

NELSON: And how about CTAM's relationship with NCTA at that time because now you're painting a picture of an organization that is the place to be. How did NCTA feel about that?

VAN VALKENBURG: Some of the others may want to speak... I can speak for my time and my time was there was a very close relationship with NCTA at that time. We had each year CEO mini-conferences that were just for CEOs. We had 50-75 executives from the entire industry, both programming and operators, dealing with issues that were at the executive level and those were all part of the NCTA and working with NCTA, and in some of those cases we had NCTA presentations like when we came into regulation, re-regulation, syndex – those were issues that were discussed here as well. The relationship altered some, I think, as we get into later years, into the '90s.

OTTE: I think. I recall that we had certain areas where we coordinated, but we had a concern about CTAM's identity with the leaders at NCTA, really with the key cable operators. Had we... as we felt our way in this expansion of services and as the industry was expanding and this whole mode of optimism that characterized the times all the way through – our brands were getting stronger, our service was getting better, at least in the time that I was there – so we actually had, Chuck reminded me, we went out and talked and did research and one-on-one and kind of closed the door and what's going on kind of conversations with several leaders in the industry just to calibrate where we were. These really hard questions any organization in a rapid time of growth asks – Are we expanding too fast? Are we really providing value? What do you need more of, what do you need less of [???] kind of thing. But I distinctly remember that our identity with them, their support of their memberships inside their organizations among the big MSOs was essential to our survival and was something we were concerned about.

NELSON: And by your term?

ELLIS: Well, even before my term because I joined the board in '92 and the leadership of the organization, Ruth and Matt Blank and several others, were really taking a very candid pragmatic look at what the mission of CTAM had evolved to and everything that Ruth just mentioned in terms of the breadth and scope of the agenda and the initiatives and the cost structure I think led to a question in the minds of a lot of CEOs and operators, what does CTAM stand for? What is it they deliver to this industry, what is the value, what do we get for the money the individuals, and therefore we, pay to CTAM? So I think despite the fact that a lot of the new initiatives that CTAM went forward with were driven by operator and program requests to be gentle about it, the reality was it got to be sort of a mile-wide and an inch-deep in a lot of people's minds. As a result of that, I think the relationship maybe at NCTA suffered a little bit during this time period. I think frankly it recovered nicely in the next several years and my term on the board really overlapped Decker Anstrom. Decker clearly got the notion that if the organizations work more effectively together and we took advantage of the skills and the knowledge and the capabilities that exist at CTAM, i.e. marketplace, consumer, marketing-oriented focus and capabilities, that the NCTA in its public and legislative arena could benefit, and that those two things working together would allow NCTA to be more successful in the regulatory and legislative arena, and a number of initiatives came out of that. The on-time guarantee of David's era, which were the service standards which were certainly intended to in a more consistent manner to provide a better customer experience by having all the operators buy into it and execute and having a tracking mechanism to support that. In the evolution of the late '80s to the early '90s when competition really became something beyond an intellectual experience to the point at which it was a reality with DBS and the de-regulation in the early '90s led to, I think, a renewed awareness that we needed to focus more on the customer and therefore CTAM was a very valuable ally for the NCTA as a result of that.

NELSON: Well, as we know, the industry has gone through these cycles of regulation, re-regulation, de-regulation. Where were you in that cycle and how did CTAM help further the industry during that?

VAN VALKENBURG: Well, I spanned... we were de-regulated, if I recall, in '87 if I recall correctly, and we were re-regulated in '92, I believe, and so my time almost spanned that era.

NELSON: The de-regulated era.

VAN VALKENBURG: The de-regulated era, preparing for de-regulation. But in my time the major focus as we entered into the late '80s was, first of all, as Chuck said, was customer service. CTAM was at the forefront of that and that led to the NCTA putting together the committee for the customer service standards, but that really came from initiatives within CTAM. The other was original programming. That's where Ruth comes in with original programming, with program promotion, and that time when there's de-regulation, as rates were increased, needing to provide perceived value for the customer. So a lot of discussion about original programming, promotion of original programming and supporting the rates. That was all during that period of time.

OTTE: It was so coincidental, too, because on the network side at that time we had learned a lot more about our audiences. We knew what resonated, what didn't, and yet we were able to dramatically increase our CPMs by having original television, and charge more for it and have a good story about it, and so there was this amazing dovetailing of both of our revenue streams requiring this, and obviously the opportunity then to differentiate your brand and build more loyalty and viewership and all that. So we created this very significant global fund for worldwide production of original television starting in '90 at Discovery. We just upped it so dramatically and it was an amazing coincidence.

VAN VALKENBURG: And who really drove that for you?

OTTE: Our whole board supported it but John Malone was really the declarer of how important this was to own the rights and exploit them more. Of course that was the basis for our international expansion too, but what's fascinating to me is that we didn't end up having to come around and tell you all how much higher your rates – well, that did happen too – but in something you didn't care about. You had the same desire, at least theoretically, not to pay more but to have better programming for this whole regulation thing, while we had to do it to... we were just beginning to get credible vis-à-vis the three broadcast networks in terms of ad sales because it took all of us time to build those relationships, tell our story, deliver the ratings and get higher amounts every year from agencies and advertisers. It's an interesting confluence.

VAN VALKENBURG: When you look at the ratings and you'd know this better than I, but looking at some of the cable ratings in the mid and late '80s, you're still in the single digits. Bob Wright spoke in 1986, I believe it was, or '87, and said, "All of cable has less audience than just NBC." And you see the change in that that's occurred since, but that goes back to those efforts by the operators asking programmers for original programming, obviously meaning higher rates for us, but that need to drive viewership and to drive more value for our customers.

OTTE: And then coupled with a need on our side to dramatically change our organizations. I think at Discovery and TLC we could buy documentaries in a very vibrant worldwide market and co-produce and all those, but we changed from being what was a very, very good acquisition organization to a very significant production organization and now it's just amazing what they produce.

VAN VALKENBURG: The other thing that was happening there, and I think it's an interesting term, and that is when you look at, especially the time of the three of us, but the cable industry went from being a cable operator on the MSO side to a media business. It really made a dramatic change, and again, this was a central role that CTAM played in that transition of bringing to light the programming and the service to the customer, but it really was a change from running a cable physically to really being in the media.

NELSON: Well, it sounds like there's also a lot more awareness of the customer. You talk about understanding the customer better. Where did the role of research, which CTAM obviously has really become a mainstay, how did that evolve over this time period? What was going on?

VAN VALKENBURG: There were several research studies. I remember one that was critical was Family Viewing. I think that would have been right in your era, right?

OTTE: Um-hmm.

VAN VALKENBURG: Right before you came on, late in my time, of creating the Family Viewing Study. Who makes the decision and who views what, and within the home there are very different viewing patterns.

OTTE: Don't you remember that whole thing about the remote and the guys and the girls, and the whole fight about the remote?

VAN VALKENBURG: Yes, exactly. Number one. Number two was as we moved into urban markets being very, very different from one neighborhood to another, so you've got that research as well, a lot of demographic research going on in terms of identifying... the easy one is the time I had northern Manhattan. Well, Harlem across town to the Upper East Side, those are very, very different markets, but when you look at a Durham, North Carolina from south to north, a very clear dividing line, again, very, very, very different markets. And again, CTAM was doing the research as an organization under the research committee of identifying those kinds of issues within the markets and that was the transition where we were also going from the classic reseller to original programming, unique programming, exclusive programming of the new satellite delivered services like Ruth had with Discovery.

NELSON: So when you were chairman in 1989, was there already a major research effort underway or was this really just beginning at that point?

VAN VALKENBURG: Just beginning. This was beginning with people like Ajit Dalvi, Pete Gatseos, others at that time who had a research bent were no becoming more senior in the industry and able to put forward research ideas that would be valuable for the industry and supported by the industry.

NELSON: But you must have brought that kind of mentality to CTAM as well.

OTTE: It was very prevalent, and the board that we had, this topic of the consumer was all we talked about. As a matter of fact, privately even in some despair about would we ever get certain MSOs to take it as seriously as they should be because a little bit behind closed doors on the programming side we'd say, "We get our report card the next day. We know did we serve our viewers or not. Did they come or not." And this was the whole time when the industry was really working to better its service. I feel like, yes, it was very deep in the DNA of CTAM.

ELLIS: And I think in the era in the early '90s, at least from '90 to '96 when the notion of competition went to the reality of competition in CTAM, we began to reexamine our mission and the scope and deliverables and how we're going to maintain relevance within the industry and really provide value. The area of research was one that really rose up on the screen as being critically important for our members. It was one that really could be done in a very balanced way, so there were industry trends, there were consumer trends, it was not individual company research that you might be willing to share with somebody who you didn't want to know the information, or in a public forum. I think it was Grace Ascolese – I'm sorry if I'm mispronouncing the name – who we hired as head of research and really took the whole research function inside the organization to a different level, and it wasn't accidental because the board was driving it, the competitive forces in the world were driving it, and CTAM's reevaluation of itself in the strategic plan we did in the 1993-94 period really pointed towards this being one of the deliverables for CTAM that would provide immense value to our users and consumers in the industry.

OTTE: Well, plus you all were in all these conversations that would strike terror in our hearts about how you ought to package services and offer these different tiers and the gold and the you know...

ELLIS: The NPTs and the MPTs of re-regulation, yes.

OTTE: Yeah, so I think there was a need to on so many levels... like remember at some of the early conferences in CTAM in our eras, somebody would have a big piece of research, like Ajit had once or maybe Jerry, I can't remember who, Jerry Maglio, would share that, as you said, just to more deeply understand how to market and sell pay, basic, expanded basic, all that stuff. So, it was definitely the theme of the times.

NELSON: You talked about this as strategic planning around '93. Did that come about – you mentioned competition, but also you had the re-regulation, so the marketplace out there changed drastically. Is that what led to that?

ELLIS: Absolutely. I think it was a recognition coming out of the '80s and in the early '90s that the world around us was changing, and it was changing in the form of real, on the ground, well-financed competition had moved beyond the intellectual experience to reality. DBS had launched, I think, by '95, '94, somewhere in that time period they were a million, million and a half, moving to two million within probably another 18 months after that. The telephone companies were not only talking about what they were going to do because of the re-regulation/de-regulation of the industry, depending on how you want to look at it, and so there were a lot of real marketplace forces at work. And I would say also Char's tenure had begun in 1992, a very smart woman, very in tune with all the constituencies of the organization and the industry, and was able to help. And I would really give credit to Barry Elson's strategic plan that was done, I think, in '93, '94 that really helped us to understand how the world was changing, how the people who sat around this table are forming alliances with what would be viewed as head-to-head competitors probably unwilling to share information they previously would be willing to share, and unwilling to sit in public forums large or small and share research data about how their NPT or MPTs were performing because they didn't want competition to see it, did not want to talk specifically about how their pay-per-view business was responding to certain marketing and offer tactics because they didn't want to share it with potential competition. So CTAM really said, okay, in the midst of all that, what do we do, what do we become and how can we provide the most relevance to the industry, and what it has evolved to is really research being an absolute core value of the organization. The notion of providing outside information and expertise to the industry through conferences really took on a lot of top spin in the early '90s, and I was looking at some of the conference speakers in the early '90s and the mid '90s and in 1992 in San Francisco, which was sort of the beginning of the notion of reality of competition, the first three sessions were devoted to quality of service. Darryl Hartley-Leonard, who was president of the Hyatt Corporation, talked about... it was sort of the early days of CRM, Customer Relationship Management, and what kind of databases they used and what kind of company culture they created. Len Berry who had written a very interesting book on marketing and service strategies was the second speaker that morning. And Bill McKnight of Alaska Air, who had always been viewed up until one of their engines fell off when they went in the ground for the first time after that, as being a company that had separated themselves from a competitive landscape because of a high quality customer experience. They were the first three speakers. Now, if you went back, I suspect, eight or nine years into CTAM's history that just wouldn't have happened, and it wouldn't have happened because the reality of competition wasn't there. We deliberately structured conferences, we deliberately structured the deliverables to the organization. The committees on CTAM changed as a result of that, and we really evolved to what we felt were marketing skills development and education as sort of being the core mantra and mission of CTAM, and from that came things like the CTAM Advanced Education Seminar which is now, I think, close to ten years old, and research projects that again added value to the brand and added value to the members. The CTAM Probe was initiated during this period, which really helped the industry share information about new product trends, new revenue opportunities in the industry. So there was, I think, a conscious decision by the organization to evolve its mission from small rooms and large rooms filled with people sharing very precious information and data about how their business was performing to one that could help them industry by example from outside companies and outside industries and best practices to be better marketers and be better strategic marketers, better tactical marketers, and that's what I think we experienced in rapid form during the '90 through '96 period that I was most actively involved.

NELSON: During your tenure did CTAM have the same kind of strategic focus? You're shaking your head no, so...

VAN VALKENBURG: No, no, no, it was not, not at all. It was much more inward focused. There were warnings of potential competition coming, and we saw competition for the viewer in terms of the videocassette, the broadcaster, those were the competitors up through the end of the '80s. There was, as I say, the potential of telephone companies coming, of DBS, of MMDS – it was MMDS in a few markets – but it was one of preparing for competition, but there was not the urgency of it that especially in Chuck's time experienced because it was real. And so it was much more, as I say, almost inward focused in my time of customer service. Customer service was more one of growing the business because a satisfied customer would stay, and gaining the reputation, and also maintaining quality service in order to gain and then maintain deregulation, de-regulated rates. So those were the driving forces for the conferences at that time. Then we got into program promotion with increasing, again, customers and increasing ratings during that time.

NELSON: Now, Ruth, when you came in, obviously de-regulation had occurred; we hadn't gotten to the re-regulation. I'm trying to keep all these straight. But of course you came from, and you mentioned this earlier, a place where competition was just part of your life. You're competing for these channel slots, and hey, we want to have another channel we're going to launch, we've got to get a slot that maybe somebody else doesn't get. Do you think that the programmers, and you weren't the first, I guess John Reardon was the first...

OTTE: The first programmer, yeah.

NELSON: Do you think that you brought a different dimension to CTAM because of that kind of a background of you're scrambling in the marketplace?

OTTE: I don't know, it's possible. I think we felt very intent upon insuring that the operators understood what our programming was, what made it different, what was special, what was in the pipeline. So I distinctly remember that, and certainly when the Nielsen ratings got quicker so that literally the next day you saw what you did and the demographics you delivered were more rapid so you could really get your report card in terms of what you were selling to an advertiser – I don't know, it just always felt like an extremely competitive business to me in that sense. We had to earn our place on their dial, increase our sense of their perceived value of what we were offering vis-à-vis the rates we were asking, and there's just no joking around about the Nielsen sample. You either got your rating or you didn't, and you had promised that to an advertiser and you had to either do make goods or... right? So, I don't know. Now I can only imagine how it feels in terms of that, but with all this new media...

NELSON: You were competing for the eyeballs so that was always there as a programmer.

OTTE: Right. We were having our own internal stories about who were we, what was our core promise, how much could we go off of that to get a rating, right? You could put on lots of shows but that wouldn't be a Discovery promise, right? I don't think that was unique to us. It's the notion of your brand, how to be true to that and still have a sizeable enough audience that you delivered and built the business.

NELSON: I think another innovation that came up during your time period, if I'm not mistaken, was the Mark Awards had kind of existed at that point but it became much more solidified, the name was established.

OTTE: You know, to me the Mark Awards would probably be the most interesting thing to watch in terms of the evolution of the sophistication and professionalization and innovation of this industry. Just think about what we thought was a great campaign in 1986, right? And now look at what the MSOs invest. It's so remarkable the caliber of work that's come out from here. I guess I feel like the huge gift that I had was just growing up at MTV because even in 1981 the song was super serve a niche audience – know them deeply, super serve them, right? And that's still the basis of their business.

NELSON: But it was a radical notion at the time because of super-serving, both the super and the niche.

OTTE: Right, because the three broadcast networks were the antithesis of that and they were disdainful of us and thought we were crazy.

NELSON: And they didn't really super-serve anybody. They just threw it out there for everyone.

OTTE: Right.

NELSON: I just want to follow up more about the Mark Awards. Where were they at...?

VAN VALKENBURG: They were just barely beginning. It was almost tabletop newspaper ads. It was really simple during most of my time. Very little, in fact, I don't know we had much cross-channel promotion. That was an issue that we started to talk about during my time was on-air promotion of individual programs, but that evolved between my time and Ruth's.

OTTE: That evolved quite a bit in my era because we started to produce these amazing expensive kits every month to show you all we were doing, and these much better videos that you could cross-promote, try to enroll you in that, and our own consumer marketing budgets were going up dramatically at this time.

VAN VALKENBURG: Well, setting the standard of asking for 20% of your available spots, being for cross-channel promotion that happened during my time. Now that was radical!

NELSON: Was there a lot of resistance, I assume?

VAN VALKENBURG: Absolutely! Much resistance.

NELSON: You want what??

ELLIS: Still to some degree there is some tension involved in that today.

VAN VALKENBURG: But with what Ruth was saying in terms of the kind of product that the promotional spots we were able to get and putting those on, those had real value and they had the quality consistency as well, which we hadn't had as a, back to my previous statement, cable operator. That was a transition, again, getting us into the media era.

ELLIS: As real media players.

OTTE: I think you all started to hire agencies... Wasn't that about this time, in the early '90s when you...?

VAN VALKENBURG: Sure.

ELLIS: Again, I don't want to overdue this notion of the explosion of competition, but frankly I think what it did was to unify the CTAM board with the notion of this is real for everybody that sits around this table. Every programmer that sits around this table has new threats every day coming online, the introduction of new programming services and new niches were coming.

OTTE: There were so many new channels, right.

ELLIS: They were coming off the end of the line almost monthly, and therefore the programmers were faced with it. We were faced with telcos, we were faced with DBS, we were faced with alliances and partnerships that were being discussed and we thought were going to be real. So the notion of setting the table and the agenda around what can we do to help this industry be better marketers, be better strategic marketers, to know their customers better, to vest themselves in the customer experience and apply their resources to that, and what role CTAM can play in that was, in my experience with CTAM, one of the ah-ha moments for the organization in terms of unifying the board and setting the agenda for what the organization was going to do. The 1995 conference that Josh and I shared was "Wake up and smell the competition", which was the coffee cup notion in San Francisco. We had huge branding companies – Brandon Tartikoff and Jamie Kellner, who was just building the brands, which worked for programmers and worked for us, the notion of if you're going to survive in the marketplace you've got to create a unique, memorable leave-behind from the standpoint of how a customer responds to your brand, and we need to get that and we need to understand how to develop it and execute it and tactically stay against it day in and day out. That was consistent for programmers and operators during that period of time.

NELSON: But it was new to operators, the idea of ...

ELLIS: It was new to operators and I think there were folks that came from outside the industry in the late '80s that understood it because they came from kind of classic marketing branding companies. Charlie, I think, was one of those, Charlie Townsend. And I came from the fast food business. I'd been in the fast food business for 11 years – dog eat dog. Somebody opens up down the street and they take 60% of your revenue tomorrow morning. So my engines are running in this competitive era and I'm trying to see if everybody else is as excited about it as I am, and fortunately the reality of competition moves people down that path. The notion for many folks of really understanding what branding was, that it wasn't just an advertising campaign.

OTTE: Right. A slogan.

ELLIS: It's how you do business and what the customer sees and experiences consistently day in and day out with you – this was new to the operators, and frankly I think the industry is still learning what that really is all about and how to execute it and how to discipline yourself to stay against it. Brands don't get built in six months and 12 months and 24 months. They get built with continuity over an extended period of time. So I think it's still a learning process but I think this was a period in CTAM's development and the industry's development that was really vital to understanding real competitive marketing strategies and tactics and the notion of branding and differentiation.

VAN VALKENBURG: I think there was a quote from Jeff Greenfield in 1989 that I thought sort of captured what happened in terms of the maturation of this industry. It went from being really in human experience a child to suddenly an adult and learning how to live in that world, and that was in five years, up through '89, cable going from a David to a Goliath and that growth that happened, but what wasn't the case is we hadn't matured. We hadn't learned all the lessons of what it is to be a big boy in the media world and that's what you see when you look at the years between my time and Chuck's, and even to today, is that maturation that was happening because in my time it was very clumsy and that's what led to the re-regulation in '92.

OTTE: And one of the things really to Margaret's credit, she was just ferocious on that point about the customer.

VAN VALKENBURG: Exactly. Margaret was, absolutely.

OTTE: She was really very concerned about the implications if we didn't as an industry, and I think a really good spokesperson for that.

NELSON: About trying to avoid that result.

OTTE: Just being serious about... what she felt, I think, and I think the organization felt was a certain responsibility to promulgate this and make this real in the industry, to do everything that we could, anticipating whatever future competitively from a regulatory or political standpoint. And because it was just the right thing to do to build a good business.

NELSON: I did mention the Mark Awards a little bit before – when did that get elevated in prominence to it became at one point a great big spectacle, in fact, and it still is obviously a very important part of the event.

OTTE: There was always a debate about when to schedule it so that people would come, so that the people who had worked so hard to do all these campaigns got their recognition. So marketing within these companies, we would try to make MSOs come. Do you remember that? Attend, so they would see the good work that their marketing people had done.

VAN VALKENBURG: I attended part of last night's. Talk about professional. This is really professional. It is a real media presentation and the quality in what I see coming from Comcast is as well. But it is a different world from when ... at least in my time it was tabletop, as I said, to I don't remember yours. I don't remember yours, how it evolved once it got to you, Chuck.

OTTE: Well, we started to get outside talent, remember? Certain networks would offer up a well-known host or something. That was one transition in our time.

ELLIS: More professional production to support the presentation, a little more discipline in how it was done.

OTTE: And how it was judged.

ELLIS: And how it was judged, also. But I recall in that period, even before I was chairman, that it moved fairly rapidly in terms of how well it was done and the exposure that it got. We always did wrestle with where in the conference agenda do you put it because you want a lot of people to see it and the people who did a great job to have a lot of people clapping for them. They may have solved that today, I don't know, but it was always a struggle as I recall.

NELSON: But part of it then was obviously to recognize the work that people had done, but it also was a bit of marketing on behalf of CTAM itself by letting the world see that, hey, this marketing stuff is real and we need to be doing it.

OTTE: Yeah. There was some period of time, I hope this isn't too ungenerous, but it seemed like a lot of the top, top leaders of MSOs had come up not through marketing, they had come up through other disciplines in engineering and other things, and so just like we all are a product of our experience to get them to truly, authentically see the importance of this and value it was a bit of a missionary zeal that we had in the early... in the time I was here.

VAN VALKENBURG: Just as a commercial for The Cable Center, I believe that at least all of the winners of the Mark Awards are in the archives there at The Cable Center, so just to put a plug in for The Center as well.

NELSON: And for the winners.

VAN VALKENBURG: And for the winners, exactly.

NELSON: Who have now been immortalized and aren't merely highlighted for the day, but immortalized.

VAN VALKENBURG: I don't know whether it was all the entries but certainly the winners are all there at The Cable Center.

NELSON: You know what I'd like to do at this point because we've been talking for a long time, is maybe just kind of characterize what went on with CTAM as kind of a wrap-up from... this is rather a great transition really. We're only talking about from your tenure to yours is only seven years but when you look at ...

OTTE: It's so dramatic.

NELSON: It's huge.

VAN VALKENBURG: Huge. It is huge.

NELSON: So just take a crack at kind of wrapping that up. What went on with CTAM in that time period?

VAN VALKENBURG: I would characterize it – my time – of trying to discover its identity. What is CTAM? And we went in a lot of different directions. It was a proliferation of activities, of conferences, of training programs, master courses, sales manager training, pay-per-view, human resources, research – it was just a proliferation and so it was one of trying to determine what is our identity and what is CTAM and marketing and administrative activities, what is the role within the industry? So it was a struggle for identity in terms of my time.

OTTE: I would say somewhat of that same struggle...

NELSON: Still going on a couple of years later?

OTTE: Yeah, but in this context of wanting to really, really serve this industry and also empower the industry to not just give lip service to customer care, but be it and do it and realize it and budget it and do all the things you have to do to make something real in an organization. I think our identity crisis, and then there was a transition of leadership out of that enquiry of have we gotten too big, what should we really be focused on, and then from there you all went into that strategic planning process, right?

ELLIS: I think the two big catalysts for us were Char Beales and the competitive marketplace in terms of what shaped the '92, '96 and I think beyond, and it allowed the organization to really sharpen its focus. I think it allowed the board to be more cohesive in terms of what we should be doing and why we should be doing it, more consensus around the deliverables, i.e. education and research and skills building and so forth. And Char's leadership and her ability to build consensus through lots of different points of view held very strongly by individuals on the board, and she was great at networking and still is, beyond just the board at CEO levels and other senior levels within the industry. There was a real gelling and a feeling of solidness about what CTAM was all about and what it could do and that it could make this transition from trying to define itself to a little bit of a malaise to the point at which it was really delivering consistent value to its members and to the industry and had a lot of respect in other organizations like CTAM because of that. I think all of those things together are one of the reasons why the organization went from 2,800 to almost 5,000 from '92 to I think 1996. It almost doubled in that relatively short period of time. I think the organization sort of got its legs and got its confidence and felt good about what it was doing and set the tracks down strategically. I think one of the other important things that was done was there is a strategic discipline inside CTAM that was started I think then that remains today that just does a very pragmatic look at where the world is, where the industry is, where CTAM is and therefore what should we be doing for the next two to three years to support that. Mixed in with all of that, fortunately, and I've sort of been close to the organization even up to the most recent years, I think there remains a level of openness and mutual respect and ability to work things through within this CTAM organization despite the fact that competition has become white hot that is pretty unique and pretty special. May that always continue, and I think you really have to give credit to people like Gail and Greg who created those values to begin with, which was open sharing and mutual respect and if we work together and do it honestly with the right motivations, we can work through just about any situation.

NELSON: So it really went from seeking its identity to really finding it and acting on it, and yet at the same time, through all that, preserving the underlying values that led to its creation.

ELLIS: Yes.

VAN VALKENBURG: Very much so.

ELLIS: Different in terms of output, different in terms of deliverables, but the core values of the organization have maintained themselves, I think, from what I can see up to the 30th anniversary year this year, which is pretty special. Not many organization or companies or brands, actually, can say that.

OTTE: That's so true.

NELSON: Well, I think for anybody watching this, I think you can see the reaction of everybody to that statement that it's a very heartfelt one.

OTTE: Yes.

VAN VALKENBURG: Very much so.

ELLIS: Absolutely.

NELSON: ...CTAM oral history are another group of old-time TAMers.

VAN VALKENBURG: Old, yes.

NELSON: I think we'll start with you because we sort of have you seated in chronological order from your chairmanship. So why don't you give us a sense of – you are 1989, correct?

VAN VALKENBURG: Chairman in '89, yes.

NELSON: Okay, give us a sense of what you were doing at the time. I want to get a little feeling for who everybody is before we plunge into CTAM. What were you doing at the time?

VAN VALKENBURG: At that point in time, during that year, I was President at Cablevision Industries in Liberty, NY. I'd just made the transition from a joint venture between Time, Inc., ATC and Houston Industries called Paragon and at the end of that time transitioned to run Multivision for Merrill Lynch and GE Capital down in Greenwich.

NELSON: And how long had you been around the business at this point?

VAN VALKENBURG: Since 1969.

NELSON: Okay, so a lot of experience brought to bear. And just to set the stage, Ruth, you were...?

OTTE: 1991.

NELSON: '91.

OTTE: And I was in the middle of my nine year tenure at Discovery as President of Discovery Channel.

NELSON: Okay, so you were right in the heart of all that.

OTTE: I had been before that eight years at MTV in affiliate sales and then VP of Marketing.

NELSON: And Chuck?

ELLIS: In 1992 is when I joined the board; I was chairman in 1996. At that time, '92 was about two years after the Time Warner merger so I was in the process of moving from Warner Cable to the new world of the combined Time Warner Cable in '92 when I actually joined the board. I got in the industry in 1982 with a company called Group W Cable, which David knows well from the succeeding company that picked up a piece of it in, I think, '86 from Westinghouse. So that's how I got started in the business. As you probably know, Group W was the succeeding company to TelePrompTer. Westinghouse bought them in 1981. So that's how I got my start in the industry.

NELSON: Okay, so now that we have a sense of who you are, or were, and came from, let's pick up the state of CTAM in the year 1989.

VAN VALKENBURG: In '89 we were really in a transition from a time of an executive director and industry executive lead to a chief executive, president and a different strategy for CTAM and trying to do many new things, really a proliferation of activities, of functions, of many conferences, a major conference, a time of major growth in the industry and in CTAM. So it was a time of very rapid and in some cases almost uncontrolled growth.

NELSON: So what were some of the major changes that were implemented at that time when you talk about this transition?

VAN VALKENBURG: Probably one of the major changes would be the establishment of chapters. The first chapters were established – there were two in 1987, there were five by 1988 and there were 11 by 1989. So it was a very rapid growth of the local chapters, and that would be probably the biggest change happening is pushing a lot of the marketing ideas and peer exchange down to the local level.

NELSON: And how about in terms of just how the chapters interacted with the overall organization?

VAN VALKENBURG: Now you're talking of one of the real controversial issues because we established actually as we looked at how do you organize this in the relationship, both the organizational relationship as well as the financial, and actually set up regional boards which I think at Chuck or maybe even before got eliminated. But the objective was to maintain a common thrust, a common image, a common philosophy throughout all of the chapters with the national organization. So there was a board driven centralization of a philosophy at the time, and financial relationship.

NELSON: And was that smooth in terms of decentralizing to some degree while trying to retain a centralized mission and purpose?

VAN VALKENBURG: That was very controversial at the time and one that a lot of to and fro, back and forth between centralization... those out in the Rocky Mountain area wanted to do a lot of their own programs, raise their own money, yet having the control back in Washington in the CTAM office. So there was that constant tension and it was going on in the entire industry of centralization versus decentralization. So it was not just within CTAM. This was really a question of what was going on in the entire industry of centralization versus decentralization.

NELSON: Authority in the field versus the headquarters.

VAN VALKENBURG: Exactly. Yes, yes.

OTTE: And also just the notion of if we do these activities locally and we pay some remittance to CTAM headquarters, then what services are they going to give us in exchange for those, which is also a classic field/headquarters kind of thing. I think we also had a concern for wanting to give them autonomy, right? To let there be imagination and creativity, yet having some kind of quality bar for what... maybe we weren't thinking of the CTAM brand, but we were certainly thinking of a standard of expectation.

VAN VALKENBURG: Of excellence. Yes, exactly.

OTTE: Right. Of the good thinking in marketing and in cable and customer and all that.

NELSON: Can you think of an instance where this started to in fact work where you had a sense... because obviously there was this tension and at some point it settled down. Was there some instance of something that happened out in the field that kind of worked along with national and people said, yeah... Did you get to a point where you felt like maybe this idea will work?

VAN VALKENBURG: I think that really has to go to Ruth and later.

OTTE: Later.

NELSON: Did it even go as late as your tenure in '96?

ELLIS: Well, I think the notion of, as David said, centralization/decentralization and some of the tension and a little bit of the paranoia that that creates, which is we're from headquarters and we should maintain some control over the brand and the experience and what it is that's going on in the local chapter. There also was some concern, I think, about the financial arrangement between the local chapters and the liability that might have for the parent organization which I think we worked through. But by the time I got involved at CTAM, frankly, the local chapters had, I think, established a lot of credibility in terms of the people that were involved in them, in terms of the programs they were running, the vitality that they created in each one of the markets, the focus on marketing that this organization created by having it decentralized that you really couldn't do from a national scope, had really gotten to the point where people believed that it worked and therefore, I think, a lot of the natural tension sort of dissipated at that point.

NELSON: But you're also seeing that on an operational level in the business itself?

ELLIS: Absolutely.

VAN VALKENBURG: That's what I was going to add because through that same period of time you had the same tension happening within several companies. Cox had decentralized under my time in the very early and mid-80s, but Time Warner, or Time and Time Warner was more like into the late '80s, early '90s for decentralization, and so at least those two were going through the same kinds of things. Same with TCI, with Comcast, so those were corporate tensions as well, and so I think that as you get to the time that Chuck was on the board, you had a lot of the corporate issues resolved as well, and a lot more comfort with the skills, the integrity, the ability of those out in the field, in the regions, in the individual systems that we didn't have when I was on the board and chairing it and starting the chapters in the '87, '88, '89 era.

NELSON: Now the other thing that was going on when the chapters were started was the whole change in the way CTAM was itself centrally operated and run. Talk about that for a minute.

VAN VALKENBURG: Well, it was because you have the more administrative era of Lucille Larkin and Vic Parra and it was really industry executive led.

NELSON: That's where they came out of.

VAN VALKENBURG: Where they came out. So they were executive directors and sort of following the lead of the various executives, corporate executives, marketing executives typically of the cable industry, and now in late '87 into '88, we bring in Margaret Durborow.

NELSON: And what was her background?

VAN VALKENBURG: Her background came from industry, but with a new strategy of being much more centrally led where you had a president/chief executive with a staff that could move a lot of programs and guide a lot of programs, whether it was HR or pay-per-view or addressability, the chapters where you had a knot of activity going on, research was another one, and so you needed that central staff, or at least that was the feeling, to control everything and to get that expertise out throughout the industry. So it went from a very decentralized kind of organization to a very centralized one as we get into the late '80s.

NELSON: And that's the point in time which the staff not only grew, became more professional, I'm hearing a lot of new activities – where did the money come from to make all that happen?

VAN VALKENBURG: Well, that's a very good point. Through that period of time it was strictly single membership oriented, number one. Number two was contrary to what we see today, it was all non-commercial so there weren't the revenue streams from the annual conference that are later available for support of a lot of the activities. It was strictly single membership, not corporate memberships, in terms of the due structure.

NELSON: So this is still carrying on the original vision of this as a professional society with individual members.

VAN VALKENBURG: Exactly correct.

NELSON: But now this structure is growing out of that.

VAN VALKENBURG: Right, and now we run into the financial problems that bridge between my time and Ruth's where we run against some huge barriers in terms of available funding for all of the activities that are being demanded but there are not the funds for it all.

OTTE: You could see the mix right here. You have individual memberships, we were in this constant conversation of showing our value to the industry, to the MSOs, to the people paying for these memberships, and expanding industries, so you want to offer more programs that your customers perceive as valuable, right? And you move to do that in some ways that were actually very successful.

NELSON: But then you have to pay for doing those.

OTTE: But then this non-sponsorship... That was a very deeply held principle. I'm not sure exactly why, but I remember it was something people felt at the time like we shouldn't change, right?

VAN VALKENBURG: My example is in 1989, as Chairman of CTAM and we're in Chicago, and WGN Tribune owning the Cubs wanted to have an event at Wrigley Field and I prevented them from doing so. Warner Brothers had just issued the movie Batman and wanted to have a big party, sponsored and sent out invitations. Again, I prevented that because...

OTTE: You had to.

VAN VALKENBURG: ...of the non-commercial policy that we had that this is an industry conference. This is not a convention.

NELSON: Or a trade show or... yeah.

VAN VALKENBURG: Trade show. This is sharing among peers.

OTTE: Learning together, best practices, explorations.

VAN VALKENBURG: So it was, in a lot of ways, a professional society. It was the objective not to be a... you're right, a trade show.

NELSON: But now you've got these companies that are coming forth and want to take people to the ballgame, throw a party, the kinds of things we don't even think about today. Was that still true during your reign?

OTTE: Oh, yeah, yeah. I had actually forgotten about that whole piece, but speaking with David...

NELSON: Did you have to intervene and shut some parties down?

OTTE: I don't remember shutting any down, but I remember a lot of discussion about the pressure between having that policy and yet wanting to fund more things and not having the funds to do it simply from the individual subscriber dues, basically. I don't exactly know how the transition happened but walking here today you can see it's a much bigger event and there's many very multiple strands of learning and fun events and all that, and somehow they've figured out the sponsorship piece in an appropriate way.

VAN VALKENBURG: Yeah, tonight's the MTV party. Disney has a big party. You look at the floor here – I mean, it's close to being a trade show.

NELSON: Yeah, there are exhibits. Now you're not going to go to the party tonight and try to shut it down?

LAUGHTER

VAN VALKENBURG: No, I don't have that authority, no.

NELSON: And Chuck, by your time, this commercialization policy really had begun to change, I believe, by then.

ELLIS: Well, it was evolving. I think there was still a real legitimate, heartfelt concern about the commercialization policy and there's a lot to the story of how CTAM went from an organization in the late '80s to early '90s with a very broad agenda that drove a lot of costs that were new to the organization with a fairly flat revenue stream to cover it that made the idea of additional revenue streams through things like commercial opportunities like we're enjoying today a pretty inviting concept. Two things happened, and I don't want to steal any thunder from the next discussion about the '91, '92 evolution from not only the leadership of CTAM, but also sort of the agenda and the scope and the mission of CTAM really getting tighter in that period of time, but we really did continue to debate and evolve in the commercial policy area and we started to do things like sponsored parties, we started to offer minimum sponsorships of different parts of the convention, we had limitations on how it could be promoted, we limitations on what kinds of signs you could use for it, etc. but the notion of the opportunity is there as long as we didn't flaunt it and as long as it didn't get out of control, the revenue streams and opportunities to work more effectively with programmers and other vendors and operators seemed to make more sense. So we sort of dripped dripped our way over time to what you see today which is a mini-trade show.

NELSON: As that evolved you didn't really find there was a huge resistance to these changes? Were people saying why are we having this party and how did Discovery – sorry about that – put their sign up there? Because today there are signs everywhere.

ELLIS: No, I don't think there was big resistance. I think, frankly, the leadership of CTAM trying to honor the principles of CTAM were trying to guard the notion of let's not let this get out of control because if it gets out of control the opportunities – because with marketing we're in the sights of every programming service and vendors and lots of other people – the opportunities to make this a flow-through marketing machine from outside sources was very tempting. So there was a lot of demand from those that wanted to participate from a commercial standpoint. There were a lot of the members who wanted that to happen. I think, frankly, it was the CTAM leadership trying to keep a lid on it to a certain extent and yet be reasonable and practical that kept it in balance for awhile.

OTTE: I think like any event like this there's a sense that what's the content, what am I going to learn, are these people really on top of our industry, our issues, what we're facing today? That whole theme has been a huge part of what CTAM has cared about and still has to and does care about, right? So it seems like that continued, this always listening and trying to anticipate the real needs of what are we facing – customer focus, competition, all those themes – and then this thing was like the frog in the water. The water got hotter and it became a non-issue it seems.

ELLIS: I think the organization has always been one that wanted to provide balanced information and not necessarily be an advocate for any brand, for any company. We certainly had initiatives that the organization believed in because the constituency believed in it and needed us to stand up for certain initiatives, but products and the services and endorsement of those at the expense of other things, even through the initial decisions about how we control the commercial policy, I think was the guiding principle on why we should go slow with that because we wanted to keep the playing field level and not provide advocacy for any particular brand or product.

VAN VALKENBURG: I'd like to add one other word to what Chuck said and that is one of the beauties of this industry, and I don't know that there are any others like it, and that is it's always been a collaborative industry. Even in the days of heavy franchising when you're saying bad things about each other as you were standing before a city council, you were on the other hand, in other markets, were cooperating, and at places like CTAM, CTAM was the epitome of that collaboration and even when there were bitter negotiations between a programmer and an operator, still there was that collaboration that was there that permeates and permeated and still permeates CTAM, and that's one of the beauties of CTAM and of this industry is that ability to collaborate and to look for best practices, to share experiences, share research and to learn from each other. That was underlying the non-commercialization policy. This organization can't afford to lose... even with some of the parties that go on and some of the trade show aspects of it, but still you look at the sessions and it's still very collaborative.

OTTE: We even felt that way on the programmer side because we were fighting ferociously really against each other to get distribution from you all, night and day, and also essentially for viewership as well, but I was neck-and-neck at that time with A&E and Whitney Goit was on our board. That is a really fabulous thing about... I don't know if it's the sense that we always felt in this business that we were making history and doing something new together, figuring things out together, whether that was part of it, or if it was just the fact of the way the franchises were that you didn't directly overbuild... I mean, you did some, but I don't know. Something contributed to that that is very unusual.

VAN VALKENBURG: You had something else at the time and we'll see whether it continues, and that is by today's standards this was a very fragmented industry because when you look at the top five companies in 1986 when I came on the board, 28% of the customers were in those five companies. TCI was the biggest with only 11%. Today you've got over 2/3 in five companies, two of which are direct to home, and so you've got a huge, huge shift in the concentration of the industry. In those days when we had... in the late '80s and earlier, with many companies you did have a lot of that discussion and collaboration of learning from each other because there were many. So there's a real difference in terms of the industry today versus at that point in time, and you had some very bright people coming into this industry from outside. In fact, I think probably all three of us can say that we came from outside the industry.

NELSON: Well, everyone came from somewhere, right?

VAN VALKENBURG: Somewhere else! And so we had many, many very bright, very capable people coming in, sharing their backgrounds, as well as their experiences in the industry. So all of that underlies the non-commercialization policy and maintaining that was very important to us in terms of the collaboration and the peer exchange and learning from outside the industry as well as inside.

OTTE: There's another thing too when you think about it. You had this pretty good-size board that covered all aspects of the industry, and then you had the chair or the committee putting together the conference. So there was a huge attempt to get feedback all the time through having this wide well-balanced group putting the conference on, and the board, and then trying to listen in every other way to what was going on.

NELSON: You talked about a lot of people from the outside coming in. That seemed to be a period, because of the growth, that you'd have to bring in a lot of people. Did that really enhance the role of CTAM because the whole learning experience, the whole collaboration, the kind of relationships that people seemed to develop around the organization?

VAN VALKENBURG: This is where somebody new to the industry would come. This was the place if you were anywhere in marketing or management, administration early days, or very early days if you were in ad sales – that's another topic in terms of spin-off of CAB – or human resources, the spin-off to CATHRA. So anybody in those various disciplines that was new to the industry, this was the place to be to learn what's going on, what the critical issues are, and without the large corporate staffs at the time, this was the place.

NELSON: And how about CTAM's relationship with NCTA at that time because now you're painting a picture of an organization that is the place to be. How did NCTA feel about that?

VAN VALKENBURG: Some of the others may want to speak... I can speak for my time and my time was there was a very close relationship with NCTA at that time. We had each year CEO mini-conferences that were just for CEOs. We had 50-75 executives from the entire industry, both programming and operators, dealing with issues that were at the executive level and those were all part of the NCTA and working with NCTA, and in some of those cases we had NCTA presentations like when we came into regulation, re-regulation, syndex – those were issues that were discussed here as well. The relationship altered some, I think, as we get into later years, into the '90s.

OTTE: I think. I recall that we had certain areas where we coordinated, but we had a concern about CTAM's identity with the leaders at NCTA, really with the key cable operators. Had we... as we felt our way in this expansion of services and as the industry was expanding and this whole mode of optimism that characterized the times all the way through – our brands were getting stronger, our service was getting better, at least in the time that I was there – so we actually had, Chuck reminded me, we went out and talked and did research and one-on-one and kind of closed the door and what's going on kind of conversations with several leaders in the industry just to calibrate where we were. These really hard questions any organization in a rapid time of growth asks – Are we expanding too fast? Are we really providing value? What do you need more of, what do you need less of [???] kind of thing. But I distinctly remember that our identity with them, their support of their memberships inside their organizations among the big MSOs was essential to our survival and was something we were concerned about.

NELSON: And by your term?

ELLIS: Well, even before my term because I joined the board in '92 and the leadership of the organization, Ruth and Matt Blank and several others, were really taking a very candid pragmatic look at what the mission of CTAM had evolved to and everything that Ruth just mentioned in terms of the breadth and scope of the agenda and the initiatives and the cost structure I think led to a question in the minds of a lot of CEOs and operators, what does CTAM stand for? What is it they deliver to this industry, what is the value, what do we get for the money the individuals, and therefore we, pay to CTAM? So I think despite the fact that a lot of the new initiatives that CTAM went forward with were driven by operator and program requests to be gentle about it, the reality was it got to be sort of a mile-wide and an inch-deep in a lot of people's minds. As a result of that, I think the relationship maybe at NCTA suffered a little bit during this time period. I think frankly it recovered nicely in the next several years and my term on the board really overlapped Decker Anstrom. Decker clearly got the notion that if the organizations work more effectively together and we took advantage of the skills and the knowledge and the capabilities that exist at CTAM, i.e. marketplace, consumer, marketing-oriented focus and capabilities, that the NCTA in its public and legislative arena could benefit, and that those two things working together would allow NCTA to be more successful in the regulatory and legislative arena, and a number of initiatives came out of that. The on-time guarantee of David's era, which were the service standards which were certainly intended to in a more consistent manner to provide a better customer experience by having all the operators buy into it and execute and having a tracking mechanism to support that. In the evolution of the late '80s to the early '90s when competition really became something beyond an intellectual experience to the point at which it was a reality with DBS and the de-regulation in the early '90s led to, I think, a renewed awareness that we needed to focus more on the customer and therefore CTAM was a very valuable ally for the NCTA as a result of that.

NELSON: Well, as we know, the industry has gone through these cycles of regulation, re-regulation, de-regulation. Where were you in that cycle and how did CTAM help further the industry during that?

VAN VALKENBURG: Well, I spanned... we were de-regulated, if I recall, in '87 if I recall correctly, and we were re-regulated in '92, I believe, and so my time almost spanned that era.

NELSON: The de-regulated era.

VAN VALKENBURG: The de-regulated era, preparing for de-regulation. But in my time the major focus as we entered into the late '80s was, first of all, as Chuck said, was customer service. CTAM was at the forefront of that and that led to the NCTA putting together the committee for the customer service standards, but that really came from initiatives within CTAM. The other was original programming. That's where Ruth comes in with original programming, with program promotion, and that time when there's de-regulation, as rates were increased, needing to provide perceived value for the customer. So a lot of discussion about original programming, promotion of original programming and supporting the rates. That was all during that period of time.

OTTE: It was so coincidental, too, because on the network side at that time we had learned a lot more about our audiences. We knew what resonated, what didn't, and yet we were able to dramatically increase our CPMs by having original television, and charge more for it and have a good story about it, and so there was this amazing dovetailing of both of our revenue streams requiring this, and obviously the opportunity then to differentiate your brand and build more loyalty and viewership and all that. So we created this very significant global fund for worldwide production of original television starting in '90 at Discovery. We just upped it so dramatically and it was an amazing coincidence.

VAN VALKENBURG: And who really drove that for you?

OTTE: Our whole board supported it but John Malone was really the declarer of how important this was to own the rights and exploit them more. Of course that was the basis for our international expansion too, but what's fascinating to me is that we didn't end up having to come around and tell you all how much higher your rates – well, that did happen too – but in something you didn't care about. You had the same desire, at least theoretically, not to pay more but to have better programming for this whole regulation thing, while we had to do it to... we were just beginning to get credible vis-à-vis the three broadcast networks in terms of ad sales because it took all of us time to build those relationships, tell our story, deliver the ratings and get higher amounts every year from agencies and advertisers. It's an interesting confluence.

VAN VALKENBURG: When you look at the ratings and you'd know this better than I, but looking at some of the cable ratings in the mid and late '80s, you're still in the single digits. Bob Wright spoke in 1986, I believe it was, or '87, and said, "All of cable has less audience than just NBC." And you see the change in that that's occurred since, but that goes back to those efforts by the operators asking programmers for original programming, obviously meaning higher rates for us, but that need to drive viewership and to drive more value for our customers.

OTTE: And then coupled with a need on our side to dramatically change our organizations. I think at Discovery and TLC we could buy documentaries in a very vibrant worldwide market and co-produce and all those, but we changed from being what was a very, very good acquisition organization to a very significant production organization and now it's just amazing what they produce.

VAN VALKENBURG: The other thing that was happening there, and I think it's an interesting term, and that is when you look at, especially the time of the three of us, but the cable industry went from being a cable operator on the MSO side to a media business. It really made a dramatic change, and again, this was a central role that CTAM played in that transition of bringing to light the programming and the service to the customer, but it really was a change from running a cable physically to really being in the media.

NELSON: Well, it sounds like there's also a lot more awareness of the customer. You talk about understanding the customer better. Where did the role of research, which CTAM obviously has really become a mainstay, how did that evolve over this time period? What was going on?

VAN VALKENBURG: There were several research studies. I remember one that was critical was Family Viewing. I think that would have been right in your era, right?

OTTE: Um-hmm.

VAN VALKENBURG: Right before you came on, late in my time, of creating the Family Viewing Study. Who makes the decision and who views what, and within the home there are very different viewing patterns.

OTTE: Don't you remember that whole thing about the remote and the guys and the girls, and the whole fight about the remote?

VAN VALKENBURG: Yes, exactly. Number one. Number two was as we moved into urban markets being very, very different from one neighborhood to another, so you've got that research as well, a lot of demographic research going on in terms of identifying... the easy one is the time I had northern Manhattan. Well, Harlem across town to the Upper East Side, those are very, very different markets, but when you look at a Durham, North Carolina from south to north, a very clear dividing line, again, very, very, very different markets. And again, CTAM was doing the research as an organization under the research committee of identifying those kinds of issues within the markets and that was the transition where we were also going from the classic reseller to original programming, unique programming, exclusive programming of the new satellite delivered services like Ruth had with Discovery.

NELSON: So when you were chairman in 1989, was there already a major research effort underway or was this really just beginning at that point?

VAN VALKENBURG: Just beginning. This was beginning with people like Ajit Dalvi, Pete Gatseos, others at that time who had a research bent were no becoming more senior in the industry and able to put forward research ideas that would be valuable for the industry and supported by the industry.

NELSON: But you must have brought that kind of mentality to CTAM as well.

OTTE: It was very prevalent, and the board that we had, this topic of the consumer was all we talked about. As a matter of fact, privately even in some despair about would we ever get certain MSOs to take it as seriously as they should be because a little bit behind closed doors on the programming side we'd say, "We get our report card the next day. We know did we serve our viewers or not. Did they come or not." And this was the whole time when the industry was really working to better its service. I feel like, yes, it was very deep in the DNA of CTAM.

ELLIS: And I think in the era in the early '90s, at least from '90 to '96 when the notion of competition went to the reality of competition in CTAM, we began to reexamine our mission and the scope and deliverables and how we're going to maintain relevance within the industry and really provide value. The area of research was one that really rose up on the screen as being critically important for our members. It was one that really could be done in a very balanced way, so there were industry trends, there were consumer trends, it was not individual company research that you might be willing to share with somebody who you didn't want to know the information, or in a public forum. I think it was Grace Ascolese – I'm sorry if I'm mispronouncing the name – who we hired as head of research and really took the whole research function inside the organization to a different level, and it wasn't accidental because the board was driving it, the competitive forces in the world were driving it, and CTAM's reevaluation of itself in the strategic plan we did in the 1993-94 period really pointed towards this being one of the deliverables for CTAM that would provide immense value to our users and consumers in the industry.

OTTE: Well, plus you all were in all these conversations that would strike terror in our hearts about how you ought to package services and offer these different tiers and the gold and the you know...

ELLIS: The NPTs and the MPTs of re-regulation, yes.

OTTE: Yeah, so I think there was a need to on so many levels... like remember at some of the early conferences in CTAM in our eras, somebody would have a big piece of research, like Ajit had once or maybe Jerry, I can't remember who, Jerry Maglio, would share that, as you said, just to more deeply understand how to market and sell pay, basic, expanded basic, all that stuff. So, it was definitely the theme of the times.

NELSON: You talked about this as strategic planning around '93. Did that come about – you mentioned competition, but also you had the re-regulation, so the marketplace out there changed drastically. Is that what led to that?

ELLIS: Absolutely. I think it was a recognition coming out of the '80s and in the early '90s that the world around us was changing, and it was changing in the form of real, on the ground, well-financed competition had moved beyond the intellectual experience to reality. DBS had launched, I think, by '95, '94, somewhere in that time period they were a million, million and a half, moving to two million within probably another 18 months after that. The telephone companies were not only talking about what they were going to do because of the re-regulation/de-regulation of the industry, depending on how you want to look at it, and so there were a lot of real marketplace forces at work. And I would say also Char's tenure had begun in 1992, a very smart woman, very in tune with all the constituencies of the organization and the industry, and was able to help. And I would really give credit to Barry Elson's strategic plan that was done, I think, in '93, '94 that really helped us to understand how the world was changing, how the people who sat around this table are forming alliances with what would be viewed as head-to-head competitors probably unwilling to share information they previously would be willing to share, and unwilling to sit in public forums large or small and share research data about how their NPT or MPTs were performing because they didn't want competition to see it, did not want to talk specifically about how their pay-per-view business was responding to certain marketing and offer tactics because they didn't want to share it with potential competition. So CTAM really said, okay, in the midst of all that, what do we do, what do we become and how can we provide the most relevance to the industry, and what it has evolved to is really research being an absolute core value of the organization. The notion of providing outside information and expertise to the industry through conferences really took on a lot of top spin in the early '90s, and I was looking at some of the conference speakers in the early '90s and the mid '90s and in 1992 in San Francisco, which was sort of the beginning of the notion of reality of competition, the first three sessions were devoted to quality of service. Darryl Hartley-Leonard, who was president of the Hyatt Corporation, talked about... it was sort of the early days of CRM, Customer Relationship Management, and what kind of databases they used and what kind of company culture they created. Len Berry who had written a very interesting book on marketing and service strategies was the second speaker that morning. And Bill McKnight of Alaska Air, who had always been viewed up until one of their engines fell off when they went in the ground for the first time after that, as being a company that had separated themselves from a competitive landscape because of a high quality customer experience. They were the first three speakers. Now, if you went back, I suspect, eight or nine years into CTAM's history that just wouldn't have happened, and it wouldn't have happened because the reality of competition wasn't there. We deliberately structured conferences, we deliberately structured the deliverables to the organization. The committees on CTAM changed as a result of that, and we really evolved to what we felt were marketing skills development and education as sort of being the core mantra and mission of CTAM, and from that came things like the CTAM Advanced Education Seminar which is now, I think, close to ten years old, and research projects that again added value to the brand and added value to the members. The CTAM Probe was initiated during this period, which really helped the industry share information about new product trends, new revenue opportunities in the industry. So there was, I think, a conscious decision by the organization to evolve its mission from small rooms and large rooms filled with people sharing very precious information and data about how their business was performing to one that could help them industry by example from outside companies and outside industries and best practices to be better marketers and be better strategic marketers, better tactical marketers, and that's what I think we experienced in rapid form during the '90 through '96 period that I was most actively involved.

NELSON: During your tenure did CTAM have the same kind of strategic focus? You're shaking your head no, so...

VAN VALKENBURG: No, no, no, it was not, not at all. It was much more inward focused. There were warnings of potential competition coming, and we saw competition for the viewer in terms of the videocassette, the broadcaster, those were the competitors up through the end of the '80s. There was, as I say, the potential of telephone companies coming, of DBS, of MMDS – it was MMDS in a few markets – but it was one of preparing for competition, but there was not the urgency of it that especially in Chuck's time experienced because it was real. And so it was much more, as I say, almost inward focused in my time of customer service. Customer service was more one of growing the business because a satisfied customer would stay, and gaining the reputation, and also maintaining quality service in order to gain and then maintain deregulation, de-regulated rates. So those were the driving forces for the conferences at that time. Then we got into program promotion with increasing, again, customers and increasing ratings during that time.

NELSON: Now, Ruth, when you came in, obviously de-regulation had occurred; we hadn't gotten to the re-regulation. I'm trying to keep all these straight. But of course you came from, and you mentioned this earlier, a place where competition was just part of your life. You're competing for these channel slots, and hey, we want to have another channel we're going to launch, we've got to get a slot that maybe somebody else doesn't get. Do you think that the programmers, and you weren't the first, I guess John Reardon was the first...

OTTE: The first programmer, yeah.

NELSON: Do you think that you brought a different dimension to CTAM because of that kind of a background of you're scrambling in the marketplace?

OTTE: I don't know, it's possible. I think we felt very intent upon insuring that the operators understood what our programming was, what made it different, what was special, what was in the pipeline. So I distinctly remember that, and certainly when the Nielsen ratings got quicker so that literally the next day you saw what you did and the demographics you delivered were more rapid so you could really get your report card in terms of what you were selling to an advertiser – I don't know, it just always felt like an extremely competitive business to me in that sense. We had to earn our place on their dial, increase our sense of their perceived value of what we were offering vis-à-vis the rates we were asking, and there's just no joking around about the Nielsen sample. You either got your rating or you didn't, and you had promised that to an advertiser and you had to either do make goods or... right? So, I don't know. Now I can only imagine how it feels in terms of that, but with all this new media...

NELSON: You were competing for the eyeballs so that was always there as a programmer.

OTTE: Right. We were having our own internal stories about who were we, what was our core promise, how much could we go off of that to get a rating, right? You could put on lots of shows but that wouldn't be a Discovery promise, right? I don't think that was unique to us. It's the notion of your brand, how to be true to that and still have a sizeable enough audience that you delivered and built the business.

NELSON: I think another innovation that came up during your time period, if I'm not mistaken, was the Mark Awards had kind of existed at that point but it became much more solidified, the name was established.

OTTE: You know, to me the Mark Awards would probably be the most interesting thing to watch in terms of the evolution of the sophistication and professionalization and innovation of this industry. Just think about what we thought was a great campaign in 1986, right? And now look at what the MSOs invest. It's so remarkable the caliber of work that's come out from here. I guess I feel like the huge gift that I had was just growing up at MTV because even in 1981 the song was super serve a niche audience – know them deeply, super serve them, right? And that's still the basis of their business.

NELSON: But it was a radical notion at the time because of super-serving, both the super and the niche.

OTTE: Right, because the three broadcast networks were the antithesis of that and they were disdainful of us and thought we were crazy.

NELSON: And they didn't really super-serve anybody. They just threw it out there for everyone.

OTTE: Right.

NELSON: I just want to follow up more about the Mark Awards. Where were they at...?

VAN VALKENBURG: They were just barely beginning. It was almost tabletop newspaper ads. It was really simple during most of my time. Very little, in fact, I don't know we had much cross-channel promotion. That was an issue that we started to talk about during my time was on-air promotion of individual programs, but that evolved between my time and Ruth's.

OTTE: That evolved quite a bit in my era because we started to produce these amazing expensive kits every month to show you all we were doing, and these much better videos that you could cross-promote, try to enroll you in that, and our own consumer marketing budgets were going up dramatically at this time.

VAN VALKENBURG: Well, setting the standard of asking for 20% of your available spots, being for cross-channel promotion that happened during my time. Now that was radical!

NELSON: Was there a lot of resistance, I assume?

VAN VALKENBURG: Absolutely! Much resistance.

NELSON: You want what??

ELLIS: Still to some degree there is some tension involved in that today.

VAN VALKENBURG: But with what Ruth was saying in terms of the kind of product that the promotional spots we were able to get and putting those on, those had real value and they had the quality consistency as well, which we hadn't had as a, back to my previous statement, cable operator. That was a transition, again, getting us into the media era.

ELLIS: As real media players.

OTTE: I think you all started to hire agencies... Wasn't that about this time, in the early '90s when you...?

VAN VALKENBURG: Sure.

ELLIS: Again, I don't want to overdue this notion of the explosion of competition, but frankly I think what it did was to unify the CTAM board with the notion of this is real for everybody that sits around this table. Every programmer that sits around this table has new threats every day coming online, the introduction of new programming services and new niches were coming.

OTTE: There were so many new channels, right.

ELLIS: They were coming off the end of the line almost monthly, and therefore the programmers were faced with it. We were faced with telcos, we were faced with DBS, we were faced with alliances and partnerships that were being discussed and we thought were going to be real. So the notion of setting the table and the agenda around what can we do to help this industry be better marketers, be better strategic marketers, to know their customers better, to vest themselves in the customer experience and apply their resources to that, and what role CTAM can play in that was, in my experience with CTAM, one of the ah-ha moments for the organization in terms of unifying the board and setting the agenda for what the organization was going to do. The 1995 conference that Josh and I shared was "Wake up and smell the competition", which was the coffee cup notion in San Francisco. We had huge branding companies – Brandon Tartikoff and Jamie Kellner, who was just building the brands, which worked for programmers and worked for us, the notion of if you're going to survive in the marketplace you've got to create a unique, memorable leave-behind from the standpoint of how a customer responds to your brand, and we need to get that and we need to understand how to develop it and execute it and tactically stay against it day in and day out. That was consistent for programmers and operators during that period of time.

NELSON: But it was new to operators, the idea of ...

ELLIS: It was new to operators and I think there were folks that came from outside the industry in the late '80s that understood it because they came from kind of classic marketing branding companies. Charlie, I think, was one of those, Charlie Townsend. And I came from the fast food business. I'd been in the fast food business for 11 years – dog eat dog. Somebody opens up down the street and they take 60% of your revenue tomorrow morning. So my engines are running in this competitive era and I'm trying to see if everybody else is as excited about it as I am, and fortunately the reality of competition moves people down that path. The notion for many folks of really understanding what branding was, that it wasn't just an advertising campaign.

OTTE: Right. A slogan.

ELLIS: It's how you do business and what the customer sees and experiences consistently day in and day out with you – this was new to the operators, and frankly I think the industry is still learning what that really is all about and how to execute it and how to discipline yourself to stay against it. Brands don't get built in six months and 12 months and 24 months. They get built with continuity over an extended period of time. So I think it's still a learning process but I think this was a period in CTAM's development and the industry's development that was really vital to understanding real competitive marketing strategies and tactics and the notion of branding and differentiation.

VAN VALKENBURG: I think there was a quote from Jeff Greenfield in 1989 that I thought sort of captured what happened in terms of the maturation of this industry. It went from being really in human experience a child to suddenly an adult and learning how to live in that world, and that was in five years, up through '89, cable going from a David to a Goliath and that growth that happened, but what wasn't the case is we hadn't matured. We hadn't learned all the lessons of what it is to be a big boy in the media world and that's what you see when you look at the years between my time and Chuck's, and even to today, is that maturation that was happening because in my time it was very clumsy and that's what led to the re-regulation in '92.

OTTE: And one of the things really to Margaret's credit, she was just ferocious on that point about the customer.

VAN VALKENBURG: Exactly. Margaret was, absolutely.

OTTE: She was really very concerned about the implications if we didn't as an industry, and I think a really good spokesperson for that.

NELSON: About trying to avoid that result.

OTTE: Just being serious about... what she felt, I think, and I think the organization felt was a certain responsibility to promulgate this and make this real in the industry, to do everything that we could, anticipating whatever future competitively from a regulatory or political standpoint. And because it was just the right thing to do to build a good business.

NELSON: I did mention the Mark Awards a little bit before – when did that get elevated in prominence to it became at one point a great big spectacle, in fact, and it still is obviously a very important part of the event.

OTTE: There was always a debate about when to schedule it so that people would come, so that the people who had worked so hard to do all these campaigns got their recognition. So marketing within these companies, we would try to make MSOs come. Do you remember that? Attend, so they would see the good work that their marketing people had done.

VAN VALKENBURG: I attended part of last night's. Talk about professional. This is really professional. It is a real media presentation and the quality in what I see coming from Comcast is as well. But it is a different world from when ... at least in my time it was tabletop, as I said, to I don't remember yours. I don't remember yours, how it evolved once it got to you, Chuck.

OTTE: Well, we started to get outside talent, remember? Certain networks would offer up a well-known host or something. That was one transition in our time.

ELLIS: More professional production to support the presentation, a little more discipline in how it was done.

OTTE: And how it was judged.

ELLIS: And how it was judged, also. But I recall in that period, even before I was chairman, that it moved fairly rapidly in terms of how well it was done and the exposure that it got. We always did wrestle with where in the conference agenda do you put it because you want a lot of people to see it and the people who did a great job to have a lot of people clapping for them. They may have solved that today, I don't know, but it was always a struggle as I recall.

NELSON: But part of it then was obviously to recognize the work that people had done, but it also was a bit of marketing on behalf of CTAM itself by letting the world see that, hey, this marketing stuff is real and we need to be doing it.

OTTE: Yeah. There was some period of time, I hope this isn't too ungenerous, but it seemed like a lot of the top, top leaders of MSOs had come up not through marketing, they had come up through other disciplines in engineering and other things, and so just like we all are a product of our experience to get them to truly, authentically see the importance of this and value it was a bit of a missionary zeal that we had in the early... in the time I was here.

VAN VALKENBURG: Just as a commercial for The Cable Center, I believe that at least all of the winners of the Mark Awards are in the archives there at The Cable Center, so just to put a plug in for The Center as well.

NELSON: And for the winners.

VAN VALKENBURG: And for the winners, exactly.

NELSON: Who have now been immortalized and aren't merely highlighted for the day, but immortalized.

VAN VALKENBURG: I don't know whether it was all the entries but certainly the winners are all there at The Cable Center.

NELSON: You know what I'd like to do at this point because we've been talking for a long time, is maybe just kind of characterize what went on with CTAM as kind of a wrap-up from... this is rather a great transition really. We're only talking about from your tenure to yours is only seven years but when you look at ...

OTTE: It's so dramatic.

NELSON: It's huge.

VAN VALKENBURG: Huge. It is huge.

NELSON: So just take a crack at kind of wrapping that up. What went on with CTAM in that time period?

VAN VALKENBURG: I would characterize it – my time – of trying to discover its identity. What is CTAM? And we went in a lot of different directions. It was a proliferation of activities, of conferences, of training programs, master courses, sales manager training, pay-per-view, human resources, research – it was just a proliferation and so it was one of trying to determine what is our identity and what is CTAM and marketing and administrative activities, what is the role within the industry? So it was a struggle for identity in terms of my time.

OTTE: I would say somewhat of that same struggle...

NELSON: Still going on a couple of years later?

OTTE: Yeah, but in this context of wanting to really, really serve this industry and also empower the industry to not just give lip service to customer care, but be it and do it and realize it and budget it and do all the things you have to do to make something real in an organization. I think our identity crisis, and then there was a transition of leadership out of that enquiry of have we gotten too big, what should we really be focused on, and then from there you all went into that strategic planning process, right?

ELLIS: I think the two big catalysts for us were Char Beales and the competitive marketplace in terms of what shaped the '92, '96 and I think beyond, and it allowed the organization to really sharpen its focus. I think it allowed the board to be more cohesive in terms of what we should be doing and why we should be doing it, more consensus around the deliverables, i.e. education and research and skills building and so forth. And Char's leadership and her ability to build consensus through lots of different points of view held very strongly by individuals on the board, and she was great at networking and still is, beyond just the board at CEO levels and other senior levels within the industry. There was a real gelling and a feeling of solidness about what CTAM was all about and what it could do and that it could make this transition from trying to define itself to a little bit of a malaise to the point at which it was really delivering consistent value to its members and to the industry and had a lot of respect in other organizations like CTAM because of that. I think all of those things together are one of the reasons why the organization went from 2,800 to almost 5,000 from '92 to I think 1996. It almost doubled in that relatively short period of time. I think the organization sort of got its legs and got its confidence and felt good about what it was doing and set the tracks down strategically. I think one of the other important things that was done was there is a strategic discipline inside CTAM that was started I think then that remains today that just does a very pragmatic look at where the world is, where the industry is, where CTAM is and therefore what should we be doing for the next two to three years to support that. Mixed in with all of that, fortunately, and I've sort of been close to the organization even up to the most recent years, I think there remains a level of openness and mutual respect and ability to work things through within this CTAM organization despite the fact that competition has become white hot that is pretty unique and pretty special. May that always continue, and I think you really have to give credit to people like Gail and Greg who created those values to begin with, which was open sharing and mutual respect and if we work together and do it honestly with the right motivations, we can work through just about any situation.

NELSON: So it really went from seeking its identity to really finding it and acting on it, and yet at the same time, through all that, preserving the underlying values that led to its creation.

ELLIS: Yes.

VAN VALKENBURG: Very much so.

ELLIS: Different in terms of output, different in terms of deliverables, but the core values of the organization have maintained themselves, I think, from what I can see up to the 30th anniversary year this year, which is pretty special. Not many organization or companies or brands, actually, can say that.

OTTE: That's so true.

NELSON: Well, I think for anybody watching this, I think you can see the reaction of everybody to that statement that it's a very heartfelt one.

OTTE: Yes.

VAN VALKENBURG: Very much so.

ELLIS: Absolutely.

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CTAM Panel - Building the Mission

Interview Date: Tuesday July 18, 2006
Interviewer: Steve Nelson
Collection: CTAM Collection

NELSON: Let's just start and we'll talk a little bit about what your backgrounds were coming into the cable business. Trygve, where did you come from? Even before cable?

MYHREN: Before cable... well, actually I had a marketing background. I went to Dartmouth and Amos Tuck School where I majored in marketing at Amos Tuck and got my MBA and then went into the Navy as an officer for a period of time and eventually was at Proctor & Gamble, and got a heck of a marketing background there. Then I went off with a company that two other people and I started which did a lot of marketing consulting, and we did work for people like General Motors and Coke, Time, Inc. which came into my life later in the cable business, but also was involved just before coming into the cable business with a company called CRM on the west coast, and we were a publisher of magazines, we were an educational publisher of books, and we made educational films. So that was the background coming into the industry. That marketing background was very important both in terms of my involvement with CTAM and in terms of what the industry needed at the time.

NELSON: And how about your first cable job? What was your entry point?

MYHREN: Well, I came in as Vice-President of Marketing at American Television and Communications in 1975, in May, and eventually took on programming and went through the rungs of Senior VP and Executive VP and President, and then eventually in late 1980 I became Chairman and CEO of American Television.

NELSON: Worked your way up through the ranks from a marketing position.

MYHREN: From a marketing position.

NELSON: Unusual in those days.

MYHREN: Yeah, and my involvement in CTAM I think was very helpful, frankly, in getting me there, and there are others in the industry who made progress because they understood the power of marketing and moved ahead even though there were not many people when I started in '75 who understood the importance of marketing to the industry.

NELSON: And Lucille – we'll come back to CTAM, obviously, that's a separate conversation – but just give us a little bit about your background.

LARKIN: I came to Washington and was a reporter with Time Life Broadcast, so it covered the White House when I was just a kid, and then I worked for Time Magazine for quite awhile before going into public relations, and out of Hill and Knowlton I was hired as the Vice-President for Public Affairs for the National Cable Television Association, so marketing is not my background. Public relations really was what my forte was, but it was a magic time to go into the cable television business. I think I came in in 1978.

NELSON: Okay, so he preceded you.

LARKIN: He did.

NELSON: So when you came in, what was your involvement with CTAM when you first became involved with the industry?

MYHREN: I came in May of '75, about one month after HBO had gone up on satellite and that was... well, actually, no, it was before HBO went up on satellite, which was in September. But the announcement had been made the month before that this was going to happen and it was an interesting time because people began to say, well, gee, what do we do with this new product and how do we market it? Are people even going to like it? Is it going to give this industry some strength, some momentum? A lot of questions. Is the satellite even going to work? Those kinds of questions.

NELSON: Start with that one, right?

MYHREN: This was real pioneering stuff, and people like Gail Sermersheim and Greg Liptak who had been in the industry for a period of time were saying, we've got to start sharing some ideas. The industry was interesting in the sense that it was not competitive in the traditional sense. Different people had different franchises in different markets. You might compete to get a franchise, but you weren't competing on a day-to-day business basis.

LARKIN: That's right.

MYHREN: So there was an opportunity for cooperation, which a lot of people didn't quite understand, but people like Greg and Gail understood it and they decided that it would be a good idea to pull people together and start talking about the questions that surrounded this pay television entry. Having looked at my background, because you know these things are announced when one comes into the industry as an officer, at least in those days that was a pretty big deal in the industry, and they said, gee, "There's a guy with a marketing background. Let's get him to the meeting too."

NELSON: And there weren't too many of you.

MYHREN: There were very few people of marketing backgrounds, but there were people with marketing sensitivities. In that first meeting that they pulled together there were a number of people in the industry – the Tom Johnsons and the Ernie Olsens and the Bill Bresnans and the Chuck Dolans and so on – who may not have had really long pedigrees in marketing, but they knew what they wanted to do and they had marketing sensitivity.

NELSON: This was the famous...

MYHREN: The famous Chicago meeting.

NELSON: The airport meeting.

MYHREN: So, in any event, to your question they asked me would I come to the meeting?

NELSON: And you did.

MYHREN: Yeah, and it was a hell of a meeting. It was a lot of fun. I saw that there were a lot of smart people in the industry, and people who were excited and wanted to work hard. It was an eye-opener for me.

NELSON: Being so new to the industry.

MYHREN: Being absolutely new to the industry, but it was also obvious to me that people didn't understand a lot about traditional marketing and some of the techniques that might be used.

NELSON: Okay. So how did we move from this meeting in the airport to CTAM starting to become something?

MYHREN: Well, through I think a number of things – a lot of hard work on the part of a lot of people; pretty good organizational skills that people like Gail and Greg brought to this thing; a need!

LARKIN: I was just going to say, I think the need is what spurred it all. They were scared, practically. The satellite started raining programming down; nobody had a clue! We had ABC, NBC, CBS and now we have 12 channels. In fact, I have to tell the story, we asked at one point... of course, Ted Turner was what? The third on the satellite or something like that? And he was trying to force people to put his television station on and we were having an interview like this one day, and I said, "How can you be pushing your colleagues so hard when they've got 12 channels and they're all filled up?" And in typical Ted fashion he said, "Well, if I had 12 wives and Bo Derek came along..."

LAUGHTER

MYHREN: I do remember that.

NELSON: Well, that was certainly Ted. So he saw this satellite as a "10". A Bo Derek.

MYHREN: And it was a 10 because it created efficiencies in distribution of programming, economic efficiencies which were outstanding, and it allowed you all of the sudden to get your programming to a lot of places assuming the cable operator would buy the receptive equipment.

NELSON: But were you sensing at that time that it would be such a profound impact? Okay, we're going to get this pay television channel that's going to come down by satellite but...

MYHREN: The honest answer is we didn't know for sure.

LARKIN: That's what I was thinking today.

NELSON: We can be honest here. That's okay.

MYHREN: A lot of what we did in those days we weren't sure of, and that's why I'm frankly proud of the group of people that did this because we didn't know what the answers were and we didn't know at all that we were going to be right, and we didn't know at all that we weren't going to screw things up real badly and put companies out of business and so on.

LARKIN: That's right.

MYHREN: I mean, we didn't know. But we had a sense that we had a shot at doing something really big.

LARKIN: I found CTAM itself an intensely personal organization filled with people of vision and of enormous generosity. As you mentioned, they weren't competitive in the marketplace so it was okay to share, but you had to get over that business thing where it was okay to share, and I think Greg and Gail and you and some other people were really... I think particularly of Greg, who seemed to be a person who knew that if he got three or four or ten heads together certainly they were going to come up with a better idea on what to do with this rain of programming. Should you build more channels? Should you try to find a way to buy that programming? Could you sell that programming? Could people in their homes care enough to buy, and if so, how do you package it? Do you tier it? Nobody really knew what to do, and I'm just amazed at what you did. Just amazed at what you did because you were the architects of the cable television industry, not as it is today but as it was in the '80s because CTAM kept reinventing cable television about every ten years, I think, since then.

MYHREN: And CTAM would reinvent itself, too, as it went along.

LARKIN: That's right.

MYHREN: It would reinvent the way it worked and what it was really trying to do.

NELSON: How did it do that? Was this just circumstance, or...?

MYHREN: I can remember in '79... I think I came in as president of CTAM following Gail, as the third president probably in '78 and then finished up in '79, and one of the things I did was set up a blue ribbon committee of people who – and I'm trying to remember who it was... it was Tom Johnson, Tony Cox, there was one other person on there and myself – a blue ribbon committee to look at the structure of the organization, and obviously kept in touch with both Gail and Greg about what we were thinking. That was not untypical. That was done over and over through the years. The idea of bringing Lucille on as a part-time executive director was we can afford so much; we've got to afford so much because the task is becoming overwhelming. You had 49 people at the Chicago do. By the time we ran the thing in '79, we had 240 people; that was the annual seminar.

LARKIN: It was done all with volunteer...

MYHREN: All volunteer work. And there were 600 the next year in '80. So it was growing like top seed, people were beginning to understand that this was critically important if the industry was going to grow and if it ever had to compete, and all of those things. You had an awful lot of people working awfully hard, but we needed help.

NELSON: So at the time of your presidency, I mean you had a full-time job, this was just a volunteer occasional kind of meeting and whatever?

MYHREN: That's right. I did not give up my day job.

LAUGHTER

NELSON: Yes, yes.

MYHREN: But there were those who said maybe I was giving it up!

LAUGHTER

NELSON: So you had this nascent organization, you have your big annual meeting and you've got a hundred people there, and then you have 200 people there. So now you start to see that growth and say, hey, somebody's got to spend some time working on this. We all have jobs, Greg, I'm not going to do it. Now how did you discover Lucille?

MYHREN: I'm trying to remember how we found you.

LARKIN: Well, Gail and I were friends, and I had started Larkin and Company and a division of Larkin and Company ran Women in Cable so we had already an organizational management operation going...

NELSON: But you weren't in cable, you were just in Women and Cable – is that right?

LARKIN: I was never in cable as an industry. I was in the association part of cable all the way along – trade association and then the professional associations. Women in Cable is actually a professional association, so it suited. We had all the processes in order to do the membership, to do the newsletters, to do the conferences. We never did the programming because – this is what I think is the magic still of CTAM – the people who are the members of CTAM are the people who make CTAM work. They were the ones that did the programming, they were the ones that sat on the panels, they were the ones that planned it, we did the logistics for them and we had a lot of fun doing it because as hard as they worked, that's as hard as they played.

MYHREN: That is the truth. When Lucille says programming she's not talking about programming like C-SPAN or CNN.

NELSON: No, no, at the events.

LARKIN: Conference programming.

MYHREN: Yes, what are the topics going to be and so on.

NELSON: Right, exactly. What are the sessions?

MYHREN: Yeah, yeah.

NELSON: But that takes a particular professional skill to know how and have the tools to run an organization, an association, as opposed to being a marketer or being a cable television engineer or something like that. It's just a different...

LARKIN: And I felt quite good being involved with these people because I enjoy making people welcome, and I will say that CTAM then and now makes people feel very welcome when they come and so they are readily able to participate, they're able to give generously as the very first CTAMers did.

NELSON: Just harking back for a moment to Women in Cable, how many people were in that organization at the time? How many women could there have been in cable?

LARKIN: They were coming in to the industry in exponential numbers, both women and men, exponential numbers. I think Bill Daniels said at one point we were hiring 2,000 people a month in the industry.

NELSON: And this was '78?

LARKIN: '79, '80, '81, would you say?

NELSON: So this is a really rapid growth period.

MYHREN: Yeah, you have to understand that up until that point, up until '75 when there was the September launch of Home Box Office, which went to Florida with UA Columbia, and to Jackson, Mississippi with our ATC system, there was no reason to hire a lot of people because we couldn't get out of the small towns, the rural areas. We didn't have a product to offer that would appeal to someone in an urban area.

NELSON: You were just the reception service.

MYHREN: Now all of the sudden you had Home Box Office, but then things followed along after that. WTCG, Atlanta, became the Super Station, Ted Turner. There were a series... and then there was Madison Square Garden Network; C-SPAN was set up with cable operator money in Washington; you had CBN, which was Christian Broadcasting Network; you had News Time, which I think – I'm trying to remember now – was Westinghouse, actually came out of TelePrompTer/Westinghouse but then died off; and you had CNN, eventually.

LARKIN: I remember the first one – "Give me 27 minutes, we'll give you the world".

MYHREN: Exactly. There was a proliferation, as Lucille said earlier. Programming started raining down.

LARKIN: It just showered.

MYHREN: So now you're in a position where you can offer people something that might make them sign up in an urban area. Maybe not the biggest of cities at the beginning because they had so much programming available over-the-air, and so many other entertainment options, but it came along. It came along pretty quickly and you needed to hire people, and you needed people with some marketing skills and some programming skills, and people who knew how to sell programming and the industry really didn't have that so we had to start doing something about that, and that was one of CTAM's jobs was to get that going. Train people, not only to recommend people to hire, but to take people who were good, smart people who had a sensitivity to those things and train them.

NELSON: Take them to a higher level.

MYHREN: Take them to a higher level. And CTAM tried to do that through its sessions, not just at the annual seminar but there were training conferences that CTAM began to run around the country training on how to think about programming, how to market it to consumers...

NELSON: There was a lot to consider.

MYHREN: There's a lot to consider.

NELSON: But looking at CTAM in this time period when you got there, what were challenges that you felt that you faced in being able to be the executive director?

LARKIN: To pull the organization together.

NELSON: Was it just very amorphous?

LARKIN: It needed very rudimentary things such as membership lists; it needed some regular communication to go out; it needed to have board of directors meetings organized for them. At the time it was pretty interesting both for Women and Cable and for CTAM, some of the CEOs needed to be convinced that they needed to allocate travel money for travel purposes for CTAM people, and that was a bit of a hurdle to go over. I often say that we did have enough fun at those meetings that the CEOs started to come to our meetings and then we became the CEOs.

MYHREN: As they say at some of the meetings, they bare it all!

LARKIN: That's right.

LAUGHTER

NELSON: Well, we won't touch that.

MYHREN: There were headlines to that effect as a matter of fact.

NELSON: Yes, yes, we've skirted around this issue and we'll continue to do so.

MYHREN: I think Lucille has touched on something here which was critical. It was very difficult to get money to send people to conferences for marketing and so on. It was very difficult to do a lot of things in the industry that really were customer sensitive, marketing sensitive, promotion sensitive, public relations sensitive. The industry just wasn't that. The industry, people who really pulled the strings in the industry were financial people, engineering people, and financial people who were nuts and bolts financial people but also real financiers, and they just didn't see this stuff. They didn't see the importance.

LARKIN: They didn't.

MYHREN: They didn't understand that... I can remember having an argument with a key person in my company – not the CEO, interestingly enough, but another person who was a very strong operations person – and his saying you could spend 2 million dollars a month in that market in advertising and promotion and you won't get one more customer. The customers come on as the customers want to come on. That was the argument, and a lot of people believed that or close to that. So it was very difficult to get money, and one of the key tasks of CTAM was to interest the operational people in starting to think about these things because all the members of CTAM, the key people who had started it, were all convinced that unless we got over that hurdle we'd never get anywhere, and when we faced competition we'd be a disaster, and on and on.

NELSON: Well, that's certainly an interesting attitude about the 2 million bucks and no new customers. What other industry could they cite where marketing was completely useless?

MYHREN: Well, that was partly my answer. As you can imagine, I did have some answers.

NELSON: I would think so. I would think so.

MYHREN: But the point is that answers don't necessarily convince somebody and it took a heap of convincing in all of the companies around the industry to spend money on marketing, on training of people, and interestingly enough, one of the things that happened during the period that I was president was that we set up a conference on back office systems because we had very rudimentary systems for accounting with customers. The whole back office of a customer operation today on the internet, you understand that that's the guts of what you've got, but people didn't understand that then. But we knew that computers were getting better. As we talk about this today in 2006, you can't imagine how rudimentary these things were back then.

NELSON: That's why we're trying to get that feeling.

MYHREN: Right. But it was, it was really, looked at from today, just dark ages.

LARKIN: Well, we weren't very far past the pole climbers, the mom-and-pop shops which was the genesis of cable when it was a cable television antenna service.

MYHREN: That's right. And those are smart people, too.

LARKIN: They were very good people and some of them became heads of big companies.

MYHREN: They were gutsy and they became heads of big companies. They were smart people, good people, and they had made things happen, but they just didn't have this experience in their life.

LARKIN: But I'm interested in what you just said a little while ago that I find true, and maybe you remember this story better than I do, but you were saying that the industry was basically run by engineers and money people. So you have the folks that do things and own the systems, and you have the folks that build things or the pole climbers. They had no clue how to relate to a marketing person. Remember, they used to say that the engineer would come in with his short sleeves and his slide rule in his Volkswagen Bug and then you guys would come sliding in your Beamers with tight jeans and a hat.

NELSON: Sounds like a clash of cultures.

LARKIN: It was!

MYHREN: That's why I never had a Beamer. It wasn't the right way to convince them. But the fact is, you're right, and that was the environment that you had and part of CTAM's task was to break through that. So we invited operating people. When we say financial people and engineering people, we're also talking about people who styled themselves as operating people, and they'd had experience in the business operating. That is managing a system. They might not have been particularly good engineers, they had an engineer, and they might have had somebody who kept the numbers. So they were just sort of administrative types and some of them were very, very good at that. But once again, they didn't have the marketing experience so we had to get them in and involved. As Lucille said earlier, there was a need there so it began to get through. But also, we, at conferences, would invite a lot of people and at this particular conference in San Francisco in '79... well, actually we started off in the summer of '79 with a seminar where we talked about advertising and we talked about back office systems a bit as it tied to customer service and how important that was. Then we took sort of a new direction for CTAM, which was a management conference. Now to a management conference you can invite managers, right? They don't have to be marketing managers. So we invited a lot of managers, and we invited financial people and engineering people and general managers and got them out to San Francisco and set up most of a hotel with rooms which displayed the various back office systems and then had general sessions to talk about them. So people could go in, spend time viewing that system, talking about how it worked or didn't work, what its shortfalls were as well as its advantages, and then go into a general session and talk about it. We got a lot of general management people to that and the point was that if you understood all the information on the consumer when the consumer called you, or you called the consumer, you'd have a much more fruitful call and you could solve their problem, or you could sell them or you could do whatever.

LARKIN: So you see what I mean when I say that CTAM and the CTAMers really were the architects of how this industry looked.

NELSON: Talk more about the management people because this was a struggle to get across to other people about marketing.

MYHREN: It was a struggle and I think you could talk to anyone in the CTAM organization and they were just fighting like crazy in their own companies to try to get operating people to pay attention.

NELSON: Could you give me an anecdote or some moment you recall when you thought, well, maybe I'm really breaking through here.

MYHREN: Well, yeah, I'll give you one. When we introduced Home Box Office, which was shortly after I came into the industry, and I had to get up to speed quickly because I came in in May, this was September of '75...

NELSON: You had the summer.

MYHREN: We introduced it at... what did we charge for it? We charged $6.95 in Jackson, Mississippi and we achieved about 15% penetration with it, and it was very interesting. We did a lot of public relations around the opening of it and so on. I remember TelePrompTer then came out and was going to introduce a system not too long after that, and they decided to go at $9.95, and I convinced the people in our company we were going to go at $4.95 in Rochester, NY. I said we will more than double what they do in terms of customer penetration, and then we can raise the price later, right? Typical marketing.

NELSON: Get 'em on board.

MYHREN: Let's get 'em on board, let's get them to understand the value of the product, sort of like product sampling and let's see what happens, and we did that. In fact, I think we might have tripled the penetration that TelePrompTer got.

NELSON: I hate to ask this question – did you test this price in some way or other as one might - $4.95, $6.95, $9.95?

MYHREN: Well, we were creating a test because what we had was we had TelePrompTer at $9.95 over there, we'd already been at $6.95, and we just about doubled in Rochester what we had done in Jackson at the $6.95 price. So $7 versus $5 or slightly under $5, and then you had TelePrompTer basically at $10. So we were using other people to help us test as well. There's always the thought that well, maybe they don't market the same way we do and so there are a lot of variables that we didn't have nailed down. In rough numbers it was pretty obvious what was going on here. That kind of thing in our company, people looked at that – because a lot of people had argued with me about it and I prevailed – and that really caused a lot of people to say maybe he does know something. Maybe marketing people aren't all stupid, and maybe the guy who'd made the 2 million bucks argument I think went home and said, hmm.

LARKIN: But you took a risk.

MYHREN: Well, sure. Everybody was taking risks all the time in the business at that point.

NELSON: That's all there was, right?

MYHREN: Yeah, it as all risk, right.

NELSON: Do you remember a time, particularly, at CTAM – because now you're in the midst of this whole issue of trying to get across the virtues of marketing – do you remember a time where you felt that maybe the message was getting through?

LARKIN: I can't pinpoint a specific time going back that far because the CEOs would fall one at a time, wouldn't you agree? One would get convinced that it was going to work and then they would kind of... they were a good old' boys club, too. So if Trygve convinced Monty Rifkin and Monty Rifkin could convince somebody else and somebody else would talk to somebody else, and then Bill Daniels would come in and say it was all my idea and I knew these guys were all right in the beginning.

NELSON: Well, it put the seal of approval on it.

MYHREN: Although one thing about Bill Daniels, interestingly enough, is that he did have a great marketing and promotion and public relations sensitivity.

LARKIN: Yes he did. Very big sense of that.

MYHREN: Well beyond the average cable operator.

LARKIN: And I was teasing when I said that anyway. I have a lot of respect for him, and he loved CTAM.

MYHREN: He did love CTAM. But you're right, I think you're absolutely right that it was sort of a daisy chain type of thing and you could get one person convinced and they would help you convince the next person.

NELSON: This is what we now call viral marketing, right?

MYHREN: Yeah, yeah.

NELSON: We didn't know it at the time.

MYHREN: It was our own little version.

LARKIN: Well, one of the other ways that it happened is that Trygve and Gail and Greg, when they were putting these programs together, they featured some of these CEOs. If you rub shoulders with somebody, it's a lot easier to understand what they're talking about. So they were no longer sitting up here waiting to be convinced; they were kind of listening to these people talk to each other and understanding that they had had successes and failures – there's no doubt about that too – but they were so honest with what they were doing and they had such vision with what they doing, I think that your asking them to participate was a real step in the right direction for getting them to start believe that they needed to listen up to marketing. That marketing people really were visionaries to some degree and they were willing to put their neck in the noose and see if it was going to work.

MYHREN: By the time that '79 conference I mentioned in San Francisco – which was a management conference, not the annual seminar – came along, I think I went back and looked at this recently, Monty Rifkin... who was my boss, was the founder and chairman of American Television and also happens to be my daughter's father-in-law at this point... but in any event, Monty who was not a guy who was big on going out and rounding up people and doing lots of cooperative ventures, and was not a great believer in marketing – but he had hired me – he was willing to run the first major panel at that particular meeting, and that meant something to other people in the industry, as Lucille said.

LARKIN: It did.

MYHREN: And so we got a couple of other people to come in and run panels like this.

LARKIN: He was a hard-sell on things like that.

MYHREN: He was, but he came and ran the panel and others showed up, and they ran panels. Now they're involved.

NELSON: They're now spreading the word.

MYHREN: They have to sit there on the panel, moderating the panel, listening to these people say all these convincing things about marketing and about back office systems and so on.

NELSON: I want to just come back for a moment to your $4.95 HBO offer. Did you find later – because I know there was a period later where there were issues over pay retention. Did you run into that, or how soon did you run into that because you talked about you were going to raise the price later?

MYHREN: Well, the thought was that when we raised the price that we would have terrific roll-off, they called it, I think was the original word. But we didn't.

NELSON: You didn't.

MYHREN: We had some, but where there was some there was some people dropping off no matter what you priced it at, but if you came in at $9.95 presumably you should hold more of those people, right?

NELSON: Right.

MYHREN: But some of them dropped off, too. Not at as great a rate, but the key when you do that kind of a measurement is if I got 100 people at $4.95 and you get 30 people at $10.95 and I lose 20% of them and you lose 5% of yours, I think I'm pretty far ahead. And I'm saying once I raise my price if I lose 20% of them.

NELSON: Yes, right, right.

MYHREN: So there was a lot of that and with a consumer product you always have to look at what different price points do to you and you should do a lot of testing. We had an opportunity to watch... and one of the great things about CTAM was we'd come into these meetings as the years went by – okay, I ran Rochester at $4.95, I ran Jackson at $6.95 and I ran Honolulu at whatever it was and so on, and somebody else would say I ran these, here are the marketing tactics we used going into those markets, here's the kind of retention devices we tried to put in place, and how did it all work? And then you go back and you look at the demographics in that market, and you also knew what the actual cable penetration was, so you were looking at not only the percentage of cable subscribers who took pay but the percentage of households in the market who took pay. How many people do you think you got to sign up for cable by using pay as the device? Well, if you have a lower price for pay that's a good idea, right? You're going to get more people to sign up for cable. So we went through all of these kinds of calculations and comparisons and CTAM was an organization that could do that.

NELSON: Right, because that was the remarkable thing that you could get together and compare all this information, so in a sense the whole industry became a whole series of market trials that everybody else could look at, learn from and move forward more quickly.

MYHREN: Right, exactly.

LARKIN: And at a point, you gave prizes for the best reports on some of the adventures that people were willing to try and put down on paper to see how it worked out. There were – I don't know how many prizes exactly – but there were papers submitted so that you could actually put these down in addition to panel discussions. There were actually studies done that they would share with one another, and there was a lot of good industry press coverage. CTAM made headlines constantly. Constantly.

NELSON: In the trades.

LARKIN: Um-hmm. That's where the action was.

NELSON: It always seemed that that was the leading edge in terms of growth.

MYHREN: We were doing the fun stuff.

LARKIN: That's right!

MYHREN: I should mention that back there in the Denver conference in the summer where we did do some talk about back office systems and we talked about pay tiering and about pay selling and so on, we also got into the advertising business. We invited the ten top advertising agencies in the country to come meet with us, and some people said that's foolhardy. If one of them shows up you're going to be really lucky because we were zilch on the national landscape.

NELSON: And you're asking them to come to Denver?

MYHREN: Yeah, come to Denver, come to Denver in the heat of the summer...

NELSON: Primarily from New York.

MYHREN: Yeah, exactly, from New York, right, primarily. And come to the Marriot Hotel Southeast which was at 1-25 and whatever it was... Hampden. A pretty grungy hotel. And show up and we're going to have this conference, and the conference was overall pretty interesting but the advertising portions were fascinating because we got the ten top agencies to show up. They sent somebody, and some of them sent some pretty heavy people. We had Pat Weaver there as a speaker, you know, the famous Pat Weaver, who's daughter is Sigourney, by the way. And Pat came and I had a special connection, which was the Dartmouth connection, with him, and he came and talked and was just terrific. He was a bit of a futurist and that helped because he could talk the talk. He didn't come in, as many network people did, with a defensive "Well, you guys can maybe accomplish this, and maybe you can get that done but..."

NELSON: That's it.

MYHREN: Nothing else, right.

NELSON: Mind your place.

MYHREN: Yes, exactly. And he was really expansive and it was great. Then that led to a later conference which we had in... was it in San Francisco? It was at the Western Show which was actually in southern California. We had a seminar which a fellow named Bill Ryan, who was Palmer Communications and was very knowledgeable in advertising and later head of the Cable Advertising Bureau – I mean the president of the Cable Advertising Bureau – and I actually put that conference together, that seminar later in the year at the Western Show, and the ad agencies by that time were really into it. Of course over a period of time this really worked. Primarily, however, the driver, I think, as we went through the years and formed the Cable Advertising Bureau, which came out of all that with Bob Alter and a number of other people who had major roles there from the industry, I think a driver was not just us trying to put advertising on our systems for our locally generated car channel or real estate channel. It was all of these basic cable services coming down which had availabilities and were pretty targeted. One of the disadvantages of cable during all those years was that we had these prescribed municipal boundaries. We were not clustered, which is another issue we should talk about, but an advantage of that was that you could at least make the argument versus the local broadcast station and the newspaper that yeah, we can't cover the whole market you want but we can go into certain high bucks communities and give you that and you don't have to buy the rest of it. So we would do that type of thing, and the advertising people, the vanguard of the advertising industry understood that. Most of them said forget these guys, they're too much trouble to figure out what the advertising is worth...

NELSON: It's too complex a buy.

MYHREN: By the time they went and presented it to their client – they went to General Motors or Coke or somebody – it was like, come on. So we didn't make a lot of headway early, but the vanguard of that industry understood there was something here and we built on that over the years. Now, of course, we are... I think most people would much rather be in cable advertising than in network broadcast advertising.

NELSON: Now before we forget, because you had touched on this a moment ago, clustering.

MYHREN: Clustering!

NELSON: We talk about this patchwork, which you made it work to your advantage, but overall that was not an advantage.

MYHREN: Overall it was not a good idea, but it was the way it was because you had to win these franchises at the municipal level. I would say that CTAM drove clustering, which is of course what the industry is all about today. As it turned out, I happened personally to articulate what clustering was and why it was advantageous and a lot of people picked up on that. I got a lot of my impetus...

NELSON: What year was this?

MYHREN: '79.

NELSON: Just so people know because that's very early advocating clustering.

MYHREN: Yes, well, it was very early. Nobody was really talking about it, although I would have to say that companies like Cox and Continental both were relatively well clustered.

NELSON: From the get-go. That's the way they got franchises.

MYHREN: From the get-go. Nobody had articulated why and so on. It was more an accident of the way they were able to get franchises and so on, although the people who ran those companies were very, very bright people. The industry had to understand what clustering was all about and it frankly drove the growth of ATC. We went out and tried to cluster. We tried to get everything near where we had a franchise. Clustering became very important to our company and eventually became very important to the industry. The idea was this: the broadcast station in a major market covers the whole market; the newspaper covers the whole market; the radio stations typically cover the whole market. If you're going to compete with them for advertising, it's very difficult to go in to someone and say, well, I can give you this town over here and this town over here. This happens to be a wealthy town over here, and that's a very poor town over there...

NELSON: But we've got 'em.

MYHREN: Yeah, and we've got 15% of the market. It's too much trouble for everybody as a starter, and it also puts you in a position where if you ever get competed with – and we used to actually talk about this in the early '80s when we were talking clustering, was if you got competed with by anybody, like satellites, they've got the whole market again. They can advertise efficiently, you can't advertise efficiently – you're going to get killed. So you had to understand this. Clustering also had a lot of other operating advantages. For example, if you had, let's say... a not untypical situation would be to have four or five systems in individual municipalities within a big urban area, they're all separated, and every one has to have a manager, and an advertising manager, and a top engineer, and da-da, da-da, da-da. Now you've got the whole market, you'll still only need one manager, but you can pay a lot more for that manager and that person's going to be a lot better, and that goes right through all your people. You can hire a really top engineer, you can get real whiz as a marketing person. Now you've got a powerful machine, okay? Before it was just scattered dogs. So the interesting thing I found with clustering, because I was really into it, was that the place I could talk about it was with my friends at CTAM. Couldn't get a lot of currency elsewhere, but people in CTAM understood because it's a marketing concept. They understood it, and so CTAM was really very responsible, I think, for the concept of clustering, which now of course is the industry way.

NELSON: Absolutely. Lucille, let me ask you. Over your tenure at CTAM, which was what? Three years or so?

LARKIN: Two, three years, yeah.

NELSON: But it was a fast moving period.

LARKIN: Oh, it was a very fast moving period.

NELSON: What were the changes you saw, let's say, within CTAM during that time?

LARKIN: Numbers. It just got bigger and bigger and bigger. And interest – everybody wanted to know what CTAM was doing; everybody wanted to go to the meetings whether they were in marketing or not. If they were in sales, they were CTAM; they were in marketing, they were CTAM; if they were in management, there were in CTAM. They wanted to be there because they were dealing with the issues of the day more than anybody else. NCTA was valid as a trade association, but their interest was in federal regulation for the most part. Once you finished that slot of the industry, everything else happened at CTAM. I would say that that was the biggest thing that was going on. Every single meeting there was a theme or two themes that truly hadn't existed the meeting before.

MYHREN: Yeah, it's true.

LARKIN: They would say, "What is the topic we need to discuss?" and it would be something like, "I've just run into this, I haven't a clue what to do about it." "Well, I have too. Why don't we talk about that?" So every single time there was a new meeting, there was a new subject. Churn seemed to last forever; that went on and on.

MYHREN: It's still there, I think.

LARKIN: It's still there, I think. But that was the biggest thing – it just got to be the most important place in town, and I think that was at least for a decade.

NELSON: Do you remember any of these particular meetings? I think that literally 25 years ago, CTAM was in Boston. '81...

LARKIN: It was in Boston and I would have to defer to Trygve about what we discussed as far as industry things were concerned, but we had one hell of a party. I can tell you that!

MYHREN: By '81 we were farther along the line with the advertising issue; with customer service and the equipment and back office tie, but the real importance of customer service; with packaging of programming; with pay television, tiering, and... I'm trying to remember what we called that at the time because we had tiering and the idea of offering more than one pay service.

NELSON: The multi-pay that came into play at that point?

MYHREN: Absolutely, multi-pay, exactly. Those were major topics at that time.

NELSON: And all that had really seemed to come into play in just the handful of years that you had been around at that point. You can in '75, we were just talking '81 all of this stuff kept coming up.

LARKIN: Well, the programming wasn't there so the issue wasn't there. So as the programming came, the issues came and you're talking about them today, Trygve, as though of course everybody knows there's tiering, of course everybody knows there's multi-pay, but if you remember no one knew what to do with them at the time.

MYHREN: That's absolutely right, absolutely right. Every one of those issues...

NELSON: They'd say, when they had an HBO and a Showtime, what do we do with these two things? Are they competing?

LARKIN: Where is your loyalty? If you have HBO, do you dare put on Showtime?

NELSON: How did that get broken down?

MYHREN: Part of it was the idea... I mean, part of the argument against it of course was if you put on Showtime then nobody's going to buy HBO, or they're going to stick with HBO, they'll never buy Showtime. The idea that they'd buy both – whoa, okay. But as a matter of fact, a certain number of people did. So you start off... certainly when I came into the industry in '75 you had one system with maybe twelve channels, all right? Now you've got the possibility to offer not just Home Box Office, but Showtime plus Cinemax, which was a Home Box Office and Time, Inc. thing, and keep offering more of those. Now as you know today, Home Box Office comes in various varieties and time slots and so on, but the idea of putting these things together, having the consumer who could afford it and wanted it pay more money. It meant that you ended up in this very tiered situation where somebody's paying you $7 for twelve channels and somebody else is paying you $50 for a whole bunch of things. When you run the numbers out, that's a lot better.

LARKIN: Trygve, you know there's another issue that comes up with regard to CTAM, and that is the programmers were as involved in CTAM as the operators were involved in CTAM, and yet they were each other's customers, or the buyers and the sellers, and they were actually sitting and discussing and sometimes fighting about what they could offer and what they would offer and you would sell.

MYHREN: I think you said the key word, which is they were discussing it.

LARKIN: Yes.

MYHREN: Instead of having what could have been true, and to some degree is always true in every industry, having the buyer say to the seller, this is the way it's going to be and either do that or else, or the seller say to the buyer, well, I've got some leverage here so bam!

NELSON: Take it or leave it.

MYHREN: There was a lot of discussion about what's the right way to do it? How can we maximize the benefits for both the buyer and the seller in this? The only way we could do it is do things that the consumer wants and at prices that the consumer wants. People were there with their own individual agendas but at least they were sitting in the same room and talking, and had it not been for CTAM, I think there would have been a lot less of that and we would have grown more slowly.

LARKIN: You learned each other's businesses. They learned operations and why you couldn't do certain things. You learned why they must do certain things.

MYHREN: When Tony Cox or Gail Sermersheim said, "You know, you really ought to think about this," because they were coming from the programmers' standpoint, then you thought about it. And then we'd say, "Well, you ought to think about this," but the fact is there was a discussion, and as we're learning in the world today discussion is probably a better way to go about things.

LARKIN: The meetings themselves and the panel discussions were intensely serious, but the social part of it was not unserious because a lot of this learning each other's businesses went on at those social things, so nobody ever was absent from those either. You scheduled in dinner and you scheduled in the dance or the concert, whatever was going on afterwards. That was just as important. There was a little see and be seen business going on there. You wanted everybody to know who you were because... I wouldn't say people were stealing each other's employees, but certainly upward mobility was possible in this time.

NELSON: With all that change and action, sure!

MYHREN: There was some movement in the industry.

NELSON: Was that one of the great heritages of CTAM, this collegiality, this willingness to get together and talk and to share?

MYHREN: Yeah, I can't say that today it's exactly the same as it was then. I can remember during that '78, '79, '80, '81 period that we a number of times had discussions about let's have a small meeting over here the way it used to be where we can all get together and really talk about this stuff, rather than at a larger meeting where there might be more posturing and people would be wanting to hold their secrets a little closer to the vest. I don't know that today it's exactly like it was then but I think versus most organizations my sense is today it's still a hell of a lot more sharing and collegial than most organizations are.

NELSON: Well, and that's what I was really getting at because obviously cable companies have become very huge companies and you can't expect that kind of informality and that kind of exchange, but having been coming to this event for almost 20 years now, there is always that feeling that it's a place of people talk, they share, they party but they're still talking.

LARKIN: That's right.

MYHREN: Yes.

NELSON: I think that the roots that were set down in the very early days and then continue into this period just seem to have really found a deep hold.

LARKIN: In as much as it's possible for the larger numbers because Char knew all these people way back when and so when she came on she was not ignorant of the style and the culture of CTAM, and in whatever way she could protect that I'm sure she has, numbers notwithstanding. You can't do the same thing with the big numbers.

MYHREN: But I think you're right and I think it was a good bridge. I think that Gail and Greg at the outset, just their personalities are open personalities and they're not trying to hide anything and you know that even when you meet them today, right?

NELSON: It's true.

MYHREN: And so that rubbed off on everybody else I think, and it worked.

LARKIN: And they never walked away. They always kept a toe in.

MYHREN: They're still involved, doing histories and stuff.

NELSON: Here we are! Which this wouldn't be happening, we might add, without their involvement in making it happen.

LARKIN: Totally true.

MYHREN: Absolutely.

NELSON: So just to wrap up, give us your take on what went on and why it mattered.

MYHREN: Well, what went on was the introduction of the customer – if you look at it in the broadest sense – the introduction of the customer into the business through the marketing promotion/public relations discipline, through the organization taking a real hand in customer service. I mentioned the back office things, but also the whole panoply of customer service techniques and understanding that importance. And the organization taking a very strong hand in programming – trying to talk to the programmers about how things might be different, trying to encourage the start up of new programming, all of those kinds of things, and because of that... there's something that should be mentioned here. During the years that we're talking about, this industry was dramatically regulated. It just couldn't do much and because of that it couldn't get the banks to lend enough money. In the beginning they wouldn't lend anything, but eventually they were lending a little bit but they couldn't lend too much because the industry was so regulated it could be crushed by the broadcasters and the telephone industry and on and on. Something had to be done about that, and CTAM played a role there too because I know that in my particular case, when I became CEO of ATC, and as I say, largely because of sort of the push that CTAM helped to give me, I immediately jumped on the regulatory issue because we had talked it over and over at CTAM about what we could do if we could cause something to happen that would create more programming, get more money for the industry and so on, we could grow like topsy, but Washington was holding us back. So one of the things that I did over four successive years, right 'til the end of the year in '84, the last day of the Congressional session in '84 – and you know they're two year Congressional sessions so it was through two successive Congressional sessions – I probably spent 35-40% of my time in Washington, and a lot of other people in this industry spent a lot of time in Washington. It was the CTAM thinking that was behind all of that, and what happened was we became de-regulated to a degree. In other words, we were able to raise our prices with some shielding from a municipality just saying you can't do that. We could come up with rationale and that ability to raise the prices and also to not to have to do everything a municipality asked us to do, no matter how ridiculous and how costly, put us in a position to go to the banks and say, "Hey, we're real now and we can make some real money here, and you should be lending." We didn't have to go to the programming community; the minute they saw that they said "Whoa!" and they started creating new programming, and so the whole thing then mushroomed and went up. That was just critical to the industry, and the type of thinking that caused all that to happen was the CTAM type of thinking.

LARKIN: I think that CTAM needs to congratulate itself for giving you a platform for being able to use your sheer talent to build this industry. They turn to you so often, and you should feel really good about it. Your fingers are all over this industry.

MYHREN: Thank you. There are a lot of people who have fingers all over this industry.

LARKIN: Yeah, there are. There was plenty of work to do.

MYHREN: Some of the people that I haven't mentioned – I think I mentioned to you that the person who succeeded me was Tom Johnson, and then we had Ernie Olson, we had a fellow named Graham Moore from TCI who was very important during this period, and Gordon Herring, Rod Werner, Andy Goldman from TelePrompTer, and I don't know whether Andy's been mentioned in any of these things, but he was a major, major figure at that period.

LARKIN: Yes, he was.

MYHREN: And Del Henry, and Rod Thole was a person of major importance. A fellow named David Lewine from the Times Mirror Company. Shelly Satin, who was a consultant to all of us on customer service and issues of that type, management training. Don Mathison. I think I mentioned Bill Ryan who had a huge role on the advertising side of this. Even Tom Wheeler from the NCTA was a major player. There were just a lot of people who did a lot on the CTAM side, and then of course we've mentioned the Bill Bresnans and others who were running major cable systems and had a big role.

NELSON: But of course, fortunately, there were some people running systems who, as you said, had a sense or a sensitivity to this even if they weren't professional marketers.

MYHREN: Absolutely right, and I think CTAM helped to train a lot of them on the marketing techniques. Those people just sopped it up and used it well.

NELSON: Any last words, Lucille, from you?

LARKIN: I was thinking today specifically of Tony Cox who was such a major presence in the first years of CTAM...

MYHREN: Yes, he was.

LARKIN: Who died an untimely death. Not to be morose about it, but rather to remember with joy what he brought to the party. He was very beloved. He was a good and keen mind; he was extraordinary in making sure that women were 50% represented at HBO and he was part of the beginning of that operation, but he gave Gail a lot of license to do a lot of the work that she did so nobly in the industry that nobody else, frankly, could have pulled off. But I just can't resist saying a special something about Tony because he was so present and so beloved.

MYHREN: I'll second that one.

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CTAM Chapters - The Later Years

Interview Date: Thursday October 06, 2011
Interview Location: New York, NY
Interviewer: Brad Samuels
Collection: CTAM Collection

 

CTAM Chapters - The Later Years (2004-current)
Brad Samuels, Moderator
Greg Graff, Insight Communications
Duane Dick, Sand Cherry
David Gray
Bob Watson
Mike Lee

BRAD SAMUELS: Hi, I'm Brad Samuels and welcome to today's discussion about the CTAM chapters and their recent history from 2004 until today. CTAM, the Cable and Telecommunications Association for Marketing has been a force in the cable industry for the last 30 years. An organization dedicated to advancing excellence in marketing across the industry. In the mid 1980s, shortly after CTAM was formed throughout the country in different markets, chapters began to be formed and founded in order to take the mission of CTAM down to a more regional and local market to allow executives in those markets to meet and exchange ideas just like CTAM has been doing so successfully at the bigger, corporate and national level as an organization. At the end of 2011 based on changes in the industry both on the content and operator side, the CTAM chapters will cease to operate. It's been a tremendous history for the chapters in terms of their contribution to the industry. Also, I think in a lot of ways how they've helped many executives like the gentlemen that are with me today, to develop their careers and contribute to the industry. We're going to spend a few minutes talking about the period from 2004 until today. What's been happening in the cable business but more specifically the CTAM chapters that they were involved in, how they got involved and some of the things that happened during their period there to really help advance the industry in a lot of different ways. So just before we get started, I'm going to do some quick introductions and then we'll talk just a little bit about what's been going on in the business more generally over the last 5-6 years to kind of set the stage for this discussion.

We have five panelists. Thanks so much for everyone being here today. Let me start with Greg Graff. Greg is with Insight Communications as the senior vice president of field operations. Hopefully, I have that right. Working out of Columbus, Ohio. Greg's been involved in a lot of different ways with the chapters both out in the Ohio chapter and the Great Lakes as well as a corporate board member coordinating with the chapters to make sure that the national and chapter organizations were effectively communicating and working together. So Greg has been with Insight for – how many years now?

GREG GRAFF: 13.

SAMUELS: 13, that's awesome. Before that spent time with Coaxial Cable, Paragon and Continental. A veteran of several different MSOs and has a great perspective on the business, especially the chapters of the Midwest. Next we have Duane Dick. Duane is senior partner and co-founder of Sand Cherry and has been a huge part of what's been happening in the Rocky Mountain Chapter for many years now and has held many different senior leadership positions and has done a lot to really innovate with that chapter. Prior to starting Sand Cherry, Duane was with ATT Broadband, MediaOne and US West. So, a great background across a lot of major media companies. Thanks for being here.

Next is David Gray. David is a Time Warner executive – spent a lot of time in different regions of the country moving up through the organization including Boston, Albany, Wisconsin and now in New York for the last few years running marketing for the system here in New York and now at a regional level as a marketing strategy for Time Warner. Dave has been involved as he moved around in several different chapters in the Midwest as well as New York, recently partnering with Duane to serve as the liaisons – again co-chairs of the Chapter Council.

DUANE DICK: You can have my job. Can I say that?

SAMUELS: I was going to say that but since you've done that already... Thanks for being here, David.

Bob Watson, also with Time Warner for many years. He recently just left to start his own [company] Watson Media, a consulting company. Congratulations on that. Bob is the guy that everyone came to in New York to bow down and try to get carriage of their cable network and he was very graceful about it but he held a position of unique influence in the industry. You're not a cable network until you get launched in New York and Bob did a great job managing the channel lineup and product development and so forth for Time Warner for many years and played a big role at the chapter level here in New York in a leadership position. So we'll get to that in a few minutes – some of the things that happened during your time there.

And Mike Lee is VP of Venture Investments at Rogers Ventures in Toronto. Yes and one of the really exciting things that happened in the last few years with CTAM was beyond the US there became – well I guess you would call it chapters, almost their own national CTAM – both in Europe and in Canada. And I can say having been on the board during that time that it added a real element to and new kind of influence going back and forth to CTAM US and Canada and also Europe. Canada became a really thriving part of CTAM and a chapter in its own right. So we appreciate that that happened and Mike was very involved in making that happen. So let's go ahead and get started.

It hasn't been long since 2004. It's gone quickly. We don't need to dial back the time travel too much but you know the industry has gone through a lot of changes, a lot of growth during those years. A lot of consolidation and just a lot of competitive happening with the telcos coming in. It's just gotten more exciting, more challenging and also a little bit more complex. I think the chapters' role has been just as important during that period to help people learn. A lot of what CTAM does is make sure that marketing and technology work together. There's always been a big role for that to happen at the chapter level. So let's take just a minute to talk about how each of you guys got drawn into and drawn towards CTAM leadership chapter roles. Greg, you're first time kind of jumping in – if you can say what attracted you to be coming part of a board of a chapter.

GRAFF: Yes, this goes back past the 2004 timeframe...

SAMUELS: You can do a little time travel....

GRAFF: It was one of those things where I didn't know that much about CTAM really. I had gone to some national CTAM events but hadn't been involved in the local level. I can't remember who it was but someone approached me and said "We've got this Ohio CTAM and we'd like you to be part of it."

SAMUELS: You were with Coaxial in Columbus?

GRAFF: Yes, I was with Coaxial in Columbus. Had been doing some work with the Ohio Cable Television Association and on their board. The two kind of ended up working together quite a bit. That's one of the things we did right off the bat was to say hey, we've got these two associations – one's more of that governmental, statewide association and the other is a marketing association and let's figure out how we can get those two to work together. That's really where I got my start and first exposure to it. It was one of those things where you hang around long enough; you eventually become president of the chapter.

SAMUELS: That's exactly what happened. Thanks. Duane, talk about how you first got involved.

DUANE DICK: Well, I represented the Rocky Mountain Chapter. In Denver, at the time I came into cable in 1986 was sort of the epicenter of cable industry. Five different cable companies that were headquartered there. I could see them from my office when I first got there. Now it's down to the Comcast West division and then a little bit of Time Warner and Charter's video group is still there. But at the time in 1986, I came in as you mentioned in the intro with US West and we weren't a cable company. My first job there was – "hey, we want to buy this company Continental Cable and we think we should be a cable company", so we got in, did the deal and acquired Continental and first thing everyone overnight is now a cable person. So the first thing I did was look around and what should we be in now to be more cable centric. CTAM was a natural fit so I joined in probably 97. I didn't get involved in our local chapter although it had been around for a while until about 2005 and have been a member there ever since. I've gone through vice president and president of that chapter.

SAMUELS: Thanks. David when did you first jump into the pool?

DAVID GRAY: It was '95 – 96 I think. I was in Boston at the time. I think one thing it's worth repeating here because it's not really intuitive to someone who joined in the industry now, at the time a major metropolitan area like Boston was served by three operators right – Time Warner Cable, Continental at the time and Cablevision. There was literally a patchwork quilt of operators across the region so it really became at that time a great way to learn about people who were innovating and doing things in their market that you could apply to your own operation, your own system. So it was a great way for me to number one to network but also to kind of figure out – I was relatively young in my career at this point – it was just a great way to learn from people who had had success. I always really looked forward to a lot of the frank and open discussions that we had. We'll talk about it later but this of course evolves over time as there's so much consolidation in the industry.

SAMUELS: Right. Bob.

BOB WATSON: I came into the industry in 1995 and coming over from AT&T in their pre-cable days. I don't know if I have you to thank or to blame for my involvement on the board because it was when you and Cheryl were sharing the lead role here in New York and it was – oh come on, you should be on the board here – and that lead to being the vice president with Steve Lichter from HBO. Then because there were no term limits, I had two terms as president here in New York.

SAMUELS: You're the Bloomberg of CTAM chapters. With all that talent we couldn't find anyone to upend you and get you out of that seat.

WATSON: I guess I just didn't feel I had enough to do back in the office.

SAMUELS: Not enough people to come in to talk to you – perfect. So Mike, CTAM Canada a little different animal. Huge geography, lot of markets. So you're looking down to the US and I know we usually innovate based on what you're doing but in this case, you thought there was something interesting with CTAM I guess.

MIKE LEE: That's right. I joined the industry in '98 and I was responsible for product development at the time. So I had a lot of involvement with CableLabs and so actually my route to CTAM at the chapter level was CableLabs and then participating at the national level with conferences for CTAM and there sort of looked into the backyard and said we should recreate this dynamic because Canada is unique. It's a national chapter but its run as a local chapter. So I decided to get involved and tried to take some of the best practices coming out at the national level and from the local chapters and then bring them back into Canada. So that's how I got involved.

SAMUELS: Were you there at the very beginning when CTAM Canada was formed?

LEE: No, CTAM Canada preceded my involvement but it was designed more as a pure networking group before and didn't have some of the programs that you see at the chapters and at the national level. So we wanted to bring more formality to it.

SAMUELS: Right, okay. So we've had a couple of other discussions about different periods of CTAM chapters that are also available, what comes up kind of what you are referring to, David, a lot is the ability to kind of spend time in a different atmosphere in a different dynamic than if you're in pitching a product or trying to do a deal and allows the relationships to kind to take on a different dimension. Did you guys find that? I mean in the last few years, everybody is busier and it is a little more competitive so forth, but I still think there's something about being able to get together in a different setting and try to figure out how solve other problems that really helps you to get to know each other on a different basis. Did you find that when you were working on a board?

GRAFF: Yes, I think what I saw especially being involved with all of the chapters in the role that you and I had was just kind of the way you would have these folks from all different companies that a lot of times weren't even – the things that they would do on a day to day basis weren't' really aligned. Right? You might have someone who's really involved in direct sales or marketing and somebody else is a programmer that's not really spending that much time talking to the sales guy but when you bring them together on the board you get a lot of interesting perspectives. Folks start working together to say hey let's plan this event or let's figure out how we're going to grow our membership and those kind of things. So you end up developing certain working relationships with folks that you would never have outside of that. It would be much more – in a lot of cases would be this typical client/vendor type relationship.

SAMUELS: Yes, and you typically work in a very set group of channels against the people you really need to speak to. I hadn't thought about that, it hadn't come up before – you end up in conversations with other parts of the business because people are all involved in different things and I think that boards always worked hard to get diversity in a lot of different ways, levels, experience, different disciplines in the industry and multicultural as well. So that was a great thing that came out the chance to get in some material you didn't normally work on in your day job. How about you Duane?

DICK: It is a unique dynamic. You don't really get to sit across from the table with 2 or 3 different operators and have the Starz and the ESPN person there all sitting around trying to solve the same problem Usually it's – you know I've got something I believe you need. So even if it at the local level, it's refreshing sort of to concentrate on what's happening here and in our case the Denver market. We've got Dish Networks is headquartered is in Denver. Also, Qwest is headquartered. So there's a lot of competitive dynamics even back at the phase that we're talking about. It was refreshing and unique to have other folks sort of cornering in on said specific topic and call and say "Hey, I've got a different angle that you might want to talk about." So yes, you don't get that at the national level. Of course where a lot of the programs where you get to have that interface but not where you get to look at a local corporation.

SAMUELS: Now you guys are fairly far along at this point that we're discussing and when you're were involved to some degree but did you feel like allowed to develop some different skills in terms of trying to solve problems in more of a kind of a volunteer environment, a very different dynamic than being in the office where you have clear lines of responsibility and so forth. Did you find it helpful in just terms of building your own skills?

GRAY: It was a different type of leadership wasn't it? When you're in the office you can say hey I need you to do this or that and yes you can influence others in the organization but in this instance you've got in some cases people who are volunteers, who are vendors but you have others who are peers in other respects they may have a higher rank than you in the industry. It really was about cultivating this vision and trying to foster support for this thing and then enlist people's involvement in it. I think that was one thing that was – you know you had your core group of people that were involved in something and you hated to go to those people too much. So it became a balancing act and an act of trying to influence the process which is something I think quite honestly – I found that these were things that I needed in my day job but it was a slightly different take on it and many ways made me a more effective manager back in the office.

SAMUELS: How was Canada in terms of participation? Was it hard – you're in different markets- did you find that it was pretty easy to get a good robust group together and keep that moving ahead or were there times when you had to challenge and try to keep enough people dedicated to it?

LEE: So the biggest challenge was – the one interesting thing was from a budgetary perspective and a seniority perspective was you got national people and corporate people involved so the tone of the conversation was slightly different. But the challenge is Canada is like 7 time zones and so Toronto is a little bit like New York. Lots of concentration of programmers, lots of concentration of operators but then to try to involve someone in Calgary in an event – they just can't fly in for a one day session and fly back out or Montreal. It was challenging to try to A. get board composition so you got regional participation and then get enough events into the regions so that members out there felt they were getting value being a local chapter member.

SAMUELS: Did that require some technology – satellite, online streaming stuff to keep the people connected?

LEE: We definitely levered the national satellite program so that we would do multiple venues across the country. We also tried to get engaged and actually co-opt board members and senior management from other cable companies from outside the Toronto area so that they would then sort of start to influence their team members and staff to participate and get involved at the national level as well as at the local level.

SAMUELS: You have bilingual board meetings – another challenge. So, each chapter typically had several events during the year and I think a great process, another part of how you think through things to set up annual planning meetings and really how the market and the industry had changed and how the agenda for the year may need to evolve so I think that was another kind of skill that translation well for people in terms of some of the discussions we've had. Typically each chapter would one kind of major lynchpin event t in the year. I think that Blue Ribbon Breakfast for New York became the big highlight. Talk about being involved in that when you were up there hosting that a few times. Coordinated at the same time as other events in New York. Big audiences. So it was a big one.

WATSON: Blue Ribbon was something that took a lot of planning. It was done very seriously. There was always a, b and sometimes a c version because you're going after some very senior people in the business, very knowledgeable and all and just trying to make sure that you can coordinate calendars and come to an agreement on what the topic is going to be and all. Always knowing that this thing could go upside down pretty quickly so what's your next plan. One in particular that I remember and I think this was 2004. It was what I would call the battle of the titans, Mark Cuban, Hugh Pinero, and Brian Bedall and Ron Insana as the referee in the ring. When you get these three guys – none of them wanted to stop talking about how good they were at what they did. Having a talent like Ron Insana in there, who just knows how to manage those kinds of personalities, was great, but Blue Ribbon Breakfast was the kind of thing it would always sell out. People would be calling the week before saying "You've got to get me in. No we've already got in the all the extras we could fit in the room. I'm really sorry." So that was a big event. Certainly our big marquee in New York.

SAMUELS: Probably none of us really had it as part of our job to organize events and those kinds of logistics, so it was tricky. So it was a new skill I know for me and I tried to stay away from it day to day because I knew that I really didn't have that magic touch around crowds, bringing crowds in so I helped give some ideas and let people who really knew how to look out for the details think two or three steps ahead and make sure that we were ready when the inevitable happened so somebody had travel problems or audio problems or something. There was always a lot of....

WATSON: Well, the big advantage was it happened like during this week. So everybody was in town. It wasn't really that difficult to sell it out.

SAMUELS: Well, CTAM New York had like 5,000 members because 4,000 would just come in and join for the year for the one event. It worked. We took advantage of the...

WATSON: It was always great to run that event and to see everybody and all but it was definitely the one we took most seriously and we typically be running anywhere from 7 to 9 events in a year. So, there wasn't any slack time on the calendar.

GRAFF: And their dirty little secret was they got you to thank that you were pulling one over on them right? As, they took your money and you showed up for the event.

SAMUELS: Yeah, it worked didn't it? So any – talk about in Rocky Mountain, in the last few years you started the program with the competition from Cable Apprentice. Very creative.

DICK: We had two signature events. One a voluntary type event talked about in earlier panels - SkiTAM. 15th year of SkiTAM. But the Cable Apprentice, our board talked about it in 2006. Then in 2007 we ran the inaugural Cable Apprentice. It's based on NBC's Apprentice Program. We wanted to bring in some fresh blood into the industry. We tapped into some of the local business schools and we basically put a case competition together but with a little bit of an apprentice flair to it. We had both a practical exercise as well as a case competition and we're fortunate in Denver because we have Comcast's Media Center there. We've got the Cable Center there. A lot operators and programmers. So we actually videotaped and later professionally edited the practical exercise. The first year, it was teams of business school students who were competing in the Cable Apprentice were trying to sell Comcast high speed internet product in the mall. So they were at a mall kiosk and they were given a product demonstration and were give a sales training – about a 40 minute sales training. Then they had to approach customers that came through the mall and sell them on Comcast high speed internet service. What they didn't know was a little before the television type thing, that the customer's that we sent their way were actually board members. Each of the board members had different roles. There was the disgruntled DSL user. There was the person who was only satisfied with dialup and they had to convince them on the benefits of high speed internet service. So, that was the first go at it and out of that we've run it four times and the winning team gets a cash prize, which they are very appreciative of since they are struggling business school students. But more importantly, the first place team also gets offers of internships with local cable companies – Comcast, Time Warner, Charter, Sand Cherry, Starz – all had internships. So they competed and we became one of the premiere competitions of the local business schools. Through the Cable Apprentice program the industry has been able to hire 12 brand new school students, now who are working at companies throughout the industry.

SAMUELS: Good for them as tough as it is to break in. That's a great way to get exposure and get a chance to start out.

GRAFF: It really shows too at that level of sophistication that came to the chapters over time. A lot of time we all been to the events where it's a group of us sitting in 4 chairs or 5 chairs and it's a panel discussion or PowerPoint. Folks get together and have cocktails and stuff afterwards. There's nothing wrong with that but I think what we saw especially in the later years was certain events that really went way beyond that. That apprentice program obviously is just a huge effort.

DICK: Over the top to pull something like that.

SAMUELS: It's a lot of work but I think it works out really well.

GRAY: I think it was kind of an aha for a lot of us. It inspired if not direct copycats, I mean it was sort of like that's a unique approach. I mean one of our challenges in Midwest where we really were sort of amalgamated after the Chicago chapter closed down, the Detroit chapter closed down, Ohio and suddenly we became the Midwest chapter and we basically had nine states of territory. So it wasn't the entire nation but was almost 20% of the nation. So what we developed was kind of this formula program where we would assemble a panel and we got Stewart Schley, who's a technologist blogger type of a guy, who would moderate a panel we brought in rather than having a bunch of suits talking to one another. Bring in people from; bring in students from business schools or from undergrad. Really to talk about their media consumption habits and how they utilize technology. It was very eye opening and it really lead to some interesting discussions and implications and Stewart did a great job steering those conversations. We could direct questions of cable operators and programmers from the audience to the students. It became a very innovative way of addressing some trends that were going on in real time without having cable people talk to cable people. Which was different from what a lot of us had experienced.

LEE: Definitely is one of the big differences for this period in time is we went from linear to digital, VOD, HD, internet and the chapter level sort of means for us provided this venue to have sort of a pan industry discussion about what are our thoughts on VOD rights without being in a direct negotiation with your suppliers or with your partners. So it really did create this interesting environment and it really diversified the type of conversations that you were having at the chapter level.

SAMUELS: You really needed a dialogue and yet another place to come to just keep going at these new issues that were really challenging. Some of the discussion and some of the panels have been about creative ways of working other industries and organizations. To piggyback on their conferences and so forth and that would be more important where in a region where it's hard to pull people from 100s of miles apart. In Canada, did you have other – is there a CCTA or something where you found that you could accomplish several things at once at the same venue?

LEE: The CCTA no longer exists but there still is a small operators association, so they still hold an annual conference. Two days plus golf. So we would always piggyback on to that. Actually take one of the speaking sessions. Have that speaker talk about marketing for the small operators and at the same time spend time with the marketers and programmers just talking about how we could address the requirements of small operators versus some of the larger nationals. In Canada probably are a little more skewed towards large national operators as opposed to small operators in the marketplace. We definitely tried to work with – 30 million people you have to work with them. You can't pull the train by yourself. So we definitely did spend time with other organizations.

SAMUELS: Any other challenges that come to mind where you really hit a wall and had to figure something out in terms putting together an event or trends in a market where you need to a ---

GRAY: I think one thing that became interesting and I think all of us I'm sure as people who've been experienced with the chapters are with the evolution of technology and there were times in the 90s where you could have fairly candid conversations in front of a group of people before there was an internet. Before things could be – there wouldn't necessarily be reporters in the room and this is something that changes a lot overtime where something gets said on a panel somewhere and all of a sudden investor relations is concerned about this. That's something that all of us who are part of large companies now have – there are reasons there are guidelines in place now and very frankly there weren't the same restrictions that were in place a dozen years ago. That's an interesting challenge that we as content producers and leaders that are challenged to present something that is compelling enough to expect a couple of hundred people to show up and pay good money for and give up a morning or afternoon. That was something that never really got easier. It was something that we needed to get more creative. We had college students say these things.

GRAFF: Is this session being recorded?

WATSON: To the point that Mike made about technology coming in, there was a program that national was running for a while- How Cable Goes to Market – that Craig Leddy was running the program, teaching it and all. National decided that they didn't want to conduct the program anymore and in New York we said boy this is a really great opportunity to help the people that are coming into the business to really get some really good base level knowledge about a little bit about the history but where things were going, where technology was going. And that was a program, I don't know how many episodes we ran of that but Lew Sharpsburg was sort of like Mr. Cable in the Classroom, program director for that. Ran a number of those and had people coming in from all over the country for this program. Just highly successful, great results at the backend there when you talk to people about their experience was. It really served to educate these junior level members in the industry and also give us an opportunity on the board to see, who some of maybe the talents might be in a few years, we might recruit on to a board.

DICK: I think an interesting take on this which is how in the later years for the chapters, technology really did have a big impact on how we operated where maybe in the earlier years there wasn't the same level. I mentioned the Cable Apprentice and the pace of technology has been so dynamic. The last Cable Apprentice that we had we did the voting where it was 50% from judges, 50% of the voting came in from folks who were watching the live webcast and they were texting in their votes for the Cable Apprentice. And we would never have thought of anything like that.

SAMUELS: Just industry people?

DICK: It was industry people watching the webcast if they were a chapter member and they couldn't attend but they could sit at their desk and watch it and then text in their vote. The point about how chapters have developed and technology impact by – I'm pretty active in the CTAM Europe chapter and I just got back from Malta where the last conference was. It was all work, trust me. I had just finished doing a panel with an operator who's talking about a new product that they were getting ready to roll out and I walked out of the room and someone emailed and said I just received this tweet that they talked about this in your panel and I said is that right I'm here in Malta, someone tweeted and then someone back in the United States said hey did you guys just talk about this, I'm interested in that. We would never have even considered something like that in a chapter event.

SAMUELS: Chapters are amazing.

WATSON: Your points about the Cable Apprentice program, so did you pay licensing like to Simon Cowell – were there anybody?

DICK: That was the hard part. We actually tried to. I think one thing about the apprentice that makes it work is that they've got the Donald as the guy who is the arbiter, the judge and so we've really tried hard to get each year that industry Donald Trump person and so we've had Steve Richard one year came in and did it. One year Char actually flew out to be our Donald in the board. We actually had the apprentice presentation set up like the board room on stage. It is a dynamic that is tough to replicate but it is important.

GRAFF: I'm going to put Rich Cronin on that –

DICK: Rich Cronin was our moderator a few years ago.

SAMUELS: Well, no one has that hair. I love when he talks about his hair, he just combs it and it comes out like that. Well, I think that's about it. Any other final thoughts before we wrap up?

I appreciate everyone being here and some great stuff, great impression of what was going on with the chapters and really what was happening in the business in general. So we're going to wrap up. Thanks for watching. I hope you've enjoyed learning a little bit about how CTAM and CTAM chapters made major contributions to cable industry. That's it for today.

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CTAM Chapters - The Middle Years

Interview Date: Thursday October 06, 2011
Interview Location: New York, NY
Interviewer: Brad Samuels
Collection: CTAM Collection

CTAM Chapters - The Middle Years (1995-2003)

Brad Samuels, Moderator

Carla Lewis-Long, NuvoTV

Brian Kelly, BK Enterprises

Pam Halling, Insight Communications

Jan Liddicoat, Scripps Networks

BRAD SAMUELS: Hi, I'm Brad Samuels and I'm pleased to welcome you to today's discussion which is focused on the history of CTAM's chapters, specifically the years 1995-2003. CTAM is the Cable and Telecommunications Association for Marketing. It's an organization that has been in the cable industry for over 30 years with a mission for advancing excellence in cable TV marketing. CTAM's chapters began rising in the mid 1980s as an effort to bring the same mission down to local markets and regions around the country. The CTAM chapters along with the national organization have decided to end the operations of the chapters at the end of 2011 due to many of the changes that have occurred in the ownership and the decision process in the cable industry. So we thought it would be fitting to spend some time talking about the history of CTAM chapters and some of the contributions that the chapters made to the growth of the industry and to the careers of many of the biggest executives and most successful of those in the industry. So today I'm pleased to be joined by several panelists who can really speak to CTAM and CTAM's chapters. Who've played critical roles in the development and growth of many of the most successful chapters in CTAM's history. I'm going to make a brief introduction and then we are going to come back and hear some comments and thoughts from them in just a couple of minutes.

First, next to me is Carla Lewis- Long. Carla has played a role in many of the chapters over the years. She's moved around to be involved in different parts of the country in the industry and pivotal in the growth of many of the chapters particularly on the East Coast. You're VP of distribution of NuvoTV but you've also worked for other cable networks such as American Life, Oxygen, and USA Networks which I believe is where you were at the time in the late 90s that we're focused on here in today's discussion. At that point you were mostly involved with the New England and to some degree the New York chapter?

CARLA LEWIS-LONG: Correct.

SAMUELS: Next to Carla is Brian Kelly. Brian is well known in the industry for being one of the top marketers on the MSO side spending over 20 years at Time Warner Cable and having many senior leadership roles including most recently CMO of the eastern region. In the last few months, he segued into running his own company, BK Enterprises, which is doing consulting in both the cable and other parts of the media business. Brian was also very involved also with the New England Chapter. At that time, I believe you were with both Continental and Time Warner.

KELLY: That's right.

SAMUELS: Brian moved around with Time Warner to Boston, Tampa, Charlotte, where you now live and ...?

KELLY: Stamford, Connecticut

SAMUELS: Stamford, at corporate as well. Thanks for being with us today. Next to Brian is Pam Halling. Pam works for Insight Communications. She's Senior VP of branch Strategy and Research and has been with Insight for many years and played a very big role in leading the New York Chapter of CTAM during the years of the late 90s and early 2000s. Pam also worked at Rainbow for a period of time as well as Cox Communications and Continental. Two other cable companies during your career. So thanks for being with us today. We'll be chatting in just a moment. At the end of our group here is Jan Liddicoat. Jan is in Detroit, Michigan. She's a vice president for Scripps Network and has been very involved in the chapters in both Michigan and throughout the Great Lakes that have been such a strong chapter presence throughout the history of CTAM. Also, she spent time with Disney and IN Demand prior to Scripps. Is that correct?

JAN LIDDICOAT : Yes.

SAMUELS: Ok, good. So you know a little bit about the folks who are going to be joining us in our discussion today. Let's do a little bit of a time travel back to the years that we're focused on today – 1995-2003. In the country, we had President Clinton as our president in 1995 when we started this period and then 2003, of course, George W. Bush had take the reins. So a little bit of a transition on the political side. It would have been a very good time – I hope you all had been investing in the stock market during those years - if any of us had any extra money that we weren't throwing at houses and kids and other things at the time. The stock market, Dow Jones Industrial Index was at 3850 in 1995 and by 2003 it was up to 7890. So it was a good time – very bullish period for Wall Street. The Oscar winning movie in 1995 was Braveheart and in 2003 it was Lord of the Rings. So you get a feel for what was kind of hot in the movie theaters in those years. And the top song of 1995 on the charts as number one for the longest period was the Mariah Carey song which was "One Sweet Day". Brian can you hum a few bars?

KELLY: I could.

SAMUELS: We'll call on you again. In 2003, Outkast was singing "Hey Ya", which you can probably do a better job on that. That'll give you a feel for what was being played on the radio. Our FCC chairman at the beginning of this period was William Kennard. As we wrap up this period of time Michael Powell, who's now head of the NCTA, was running the FCC in 2003. The FCC, of course, played a big role sometimes we would say too big of a role in the plight of the cable industry in terms of regulating pricing and so forth. We always want to pay attention to what's going on there. So just a little bit more background before we jump in.

1995 to 2003 was a really exciting time in the cable business. The foundation was laid, the plan had been expanded and now the industry was ready to roll out new products which was really the theme of this period. So the business became more complicated, more exciting, more consolidated in terms of companies trying to buy each other. A little less entrepreneurial, not as a many family run businesses. Those were starting to sell out to the bigger companies like Time Warner. The AOL/Time Warner merger occurred during this period. Paul Allen, who was of course one of the founders of Microsoft, decided to jump into the cable business and bought into Charter as an MSO. AT&T bought MediaOne and towards the end of this period, Comcast bought AT&T and we had our first super MSO at nearly 20 million homes. The business was starting to be dominated by fewer employers on the cable operator side and certainly the same thing was happening on the cable programmer side of the business. Viacom, Disney and ESPN and some of the others were launching new channels to fill the digital capacity that was now becoming available as cable expanded their bandwidth. They were also buying other smaller independent programmers and building much bigger companies. So fewer players on both sides of the table and a lot of new products started to be introduced out to the consumer. So it was really an important time for marketing in the industry in terms of helping consumers understand what was coming to them in the way of 2-way cable and ITV, Video on Demand. High Def was starting to come in towards the end of this period. Of course, phone and internet service were starting to be really important products that the cable companies were offering on top of the traditional video service that had been there over the years. Just to finish setting the stage, as CTAM was working both on a national level with the bigger organizations and at the chapter level, the hot buttons were competition. Now we had the DVS players in the business in a significant way, changing the way that marketing was happening out there in the consumer level. New products. Branding was becoming the hot button. How do we convey a certain kind of personality to the company, whether it be a programmer or an operator to really solidify the relationship with the viewer and the customer. Cable modems, broadband, ITV, digital cable, high speed internet – these were all new terms being introduced in both the business and out in the consumer marketplace. So it became a really important time for all the players in the industry to compare best practices and really coordinate their efforts and work together to bring out all lot of new products to both compete with satellite and telco and also to just broaden out the offering. The bundle was becoming a very common term and a critical aspect of how cable operators were bringing the products out to the consumers. So hopefully that gives us a little bit of an idea of what was going on during this period.

I'll start with you Carla – so you're working for USA Networks in the earlyish part of your career and you start to become familiar with CTAM chapters. What was it that kind of drew you to get involved and become so big a part of what was happening. Let's say in New England at that time?

LEWIS-LONG: I was an anomaly because I got in the business so young at 14, but anyway besides that, my boss, Doug Holloway, who was president of USA at the time was really big on CTAM and saw the importance on being part of an organization and the relationships that were formed besides what we were doing individually as MSOs, what being a part of CTAM and doing marketing in a group could do for yourself. I was one year in actually, when I joined CTAM New England. I had only been in the industry a year and met this guy next to me (Brian Kelly].

SAMUELS: And you stayed in the industry?

KELLY: I was 16.

LEWIS-LONG: So, I realized with being new to the industry and attending a CTAM event how important it was and in what they were doing in bringing operators together with programmers and I realized early on that it was on organization that you could form true friendships in. Great for business dealing with people on that basis in an intimate and really trying to target and work for something in the New England area that could benefit all the MSOs there. You found out information that you wouldn't necessarily get on a day to day basis that ultimately you'd take back to your business that could help. So that was very key in justifying the dues and the traveling and that sort of thing. It's really beneficial for me growing in the cable industry because I was able to form great relationships with Time Warner and MediaOne and get proprietary information that would help me and help them and would help us work better together. But not only that, we'd really focus on how we could help New England. It was during a time of competition, so we would put together these great panels. It was either do or die and we didn't know if the people on the panels were going to speak and tell what they were doing because everyone was so afraid. So it was either going to be a bomb or it was going to be a great hit. We were always faced with that. Usually it turned out that they told enough that it was interesting to everyone and we got the ? support because we got the operators to come and talk and of course, the programmers would come. So that's how we survived.

SAMUELS: It sounds like your learning curve was advanced because of the organization.

LEWIS-LONG: Absolutely.

SAMUELS: So Brian, were you in New England around that same time? You had just started up with Time Warner sometime around this period.

KELLY: That's right. I started with Time Warner in '88 and by 1995, the market in the Boston area had consolidated pretty significantly. We had three major operators up there in the Boston metro area – Cablevision, Time Warner, and Continental which had eventually become MediaOne. It was a very dynamic time. We had Greater Media in Worcester was an active participant and then Colony down in the Rhode Island marketplace. So it was dynamic but you could feel it starting to consolidate. I think one of the bigger initiatives I remember being part of – as part of the CTAM chapter - we actually formed the Boston Cable Co-op as kind of an adjunct out of that group of folks. It just became pretty clear that we could become more active as a chapter and as a marketing organization up there to have a greater impact on consumers. We could do collective research through the CTAM group that was of common interest to us. But you could feel, as Carla said, the change in the market in respect to the growing competition.

SAMUELS: That's interesting. I didn't realize that the Co-op was kind of an outgrowth of getting together as a chapter and starting to see that you could work in an even more specific kind of way. So the line between your day job and your CTAM chapter role – back and forth there were a lot of good ideas that ended up being very useful even in what you were doing focusing on your day job.

KELLY: That's right and one of the things, if memory serves me right, right before we started to form this kind of coalition, we had just come out of the Ontime Guarantee, which was a huge success. Fundamentally drive by the thinking of the leaders of CTAM. I remember Chuck Ellis had a role in that as the head of the CTAM organization from a president's national standpoint. That program grew organically at the local level as it was presented as a great solution for us to deal with some of the customer issues we were facing. One of the things that I will always remember is the metrics and the measurements after we implemented the Ontime Guarantee. It was really the first initiative I've ever seen that drove the customer satisfaction in the Time Warner plant that I was in, the division that I was in. We improved our customer satisfaction scores by 5 points and one of the major drivers was this Ontime Guarantee messaging. Which was again driven by the marketing initiative from the CTAM group. It became very integral in the day to day, as you put it. CTAM is such a wonderful organization and the networking opportunities and just the openness to new ideas. It was a treat to be a part of it and it really was a value add to the career. It was something I always looked forward to.

SAMUELS: Pam – so you were with Insight back in the days?

HALLING: I'm exhausted just hearing all that.

SAMUELS: Late 90s, you were in New York now with Insight at the time?

HALLING: Well, late 80s, actually 1988 is when I joined Insight in New York from Disney and I got involved – and actually the New York chapter was formed in 1988. I was involved in the chapter starting in 1994, I think. '95 was when I became the programming chairperson. Then in '96 is when I became the 6th chapter president. It's very rewarding to be part of the CTAM chapter and to be part of the New York chapter was pretty exceptional in terms of the caliber of industry leaders that were able to attract for our programs. The signature program for New York was the Blue Ribbon Breakfast. At that time in '95, we were doing it twice a year, which is quite an undertaking for once a year. But I was always just amazed at the fact that industry leaders and visionaries actually wanted to be part of the program. So for our chapter it was a great experience because they were exposed to the thoughts and ideas and the predictions of these people. People like back in the early days – Tom Rogers, Kay Koplovitz, Gerry Laybourne and John Hendricks. Then eventually we evolved as competition came in and we started broadening our scope of the involvement of the industry. We were bringing in people like Eddie Hartstein, who was the CEO of DIRECTV and Ray Smith...

SAMUELS: Did he know where he was going?

HALLING: I'm not sure. As I recall, we were all taking notes at the things he was saying. Ray Smith, CEO of Bell Atlantic. So just great names and great people. Moderators were Lou Dobbs. We had Roger Ailes. It really was a broad range of leaders.

SAMUELS: Again, chapter members get a chance to hear from and get exposure to some very big names in the media business...

HALLING: Things that they would not be exposed to otherwise because many people were not able to go to CTAM National Summit or to NCTA. I think that was something that was fairly unique to the New York chapter. Not that Michigan couldn't attract those people.

LIDDICOAT: And we did eventually. It took awhile. Very similar to Brian and Pam's experience with - it started with a Michigan chapter and ended up involving the Midwest. At the time we had a marketing cooperative – SEMCA – Southeast Michigan Cable Association. Which we had 11 operators around the Detroit market. So we kind of were an offshoot of that. Reverse of what you did Brian and created the chapter there. So it really was a way for people in the market to have access as Pam mentioned to industry people. Much like the experience of New York. A lot of the people that we attracted to our events weren't necessarily those who would be able to attend the marketing conference – CTAM National Conference. We strived to bring educational programs to initially the Michigan market and ultimately the Midwest. We were eventually able to attract bigger people like Pam Halling and Brad Samuels. We attempted to do that and the great thing about that, Carla alluded to that – we had the support of the operators and the market because that's key to have attendance at your sessions. We had Comcast – who was a big player in the market. At the time TCI was still involved, Continental, Metrovision, Charter to some extent. And we even at times attempted to pull people down state because we had people in Grand Rapids and a little bit further in the northern parts of Michigan and then southeast Ohio as well.

SAMUELS: Did you feel like you got a chance to build some leadership or other business skills through your work on the board. It's a little different dynamic than being in the office where you have more obvious reporting structure – here you're trying build consensus and kind of cooperative work done amongst people from different organizations. Did that come in to play? Do you feel like it helped you as an executive some of the skills you were using as a board leader? Anybody?

KELLY: Yes, I remember one of the big initiatives was the strategic planning process at the national level and as chapter presidents, we were exposed to the thinking that some of the most brilliant cable marketers that were all part of that group. So we got firsthand experience at that level watching the time and effort and the creativity that went into creating the strategic plan – being kind of tasked implementing it at the local levels, at the chapters and staying true to the mission and creating your own vision of that strategy and taking it to a place where you could look back on the effort and feel really proud of the work you were doing. So, you know, there was a lot of very important initiatives and ideas that we were tasked with and you always felt like you had not only the support of all those people but the recognition when you accomplished it. So it did give you another level of expertise, exposure to expertise. I don't think without CTAM we would have never had the opportunity.

HALLING: I think to pull off what we did, which was a tremendous calendar of events and goals that we had to meet for membership, goals that we had to meet for the national organization – it required organizational skills, on being very efficient and having quality programs. Part of that too was to attract as many people as possible, again making sure that your chapter was solvent and you were able to things that you wanted to do. I found that to be the challenge because I think that getting – we had a balance of operators and programmers we all brought together by this one distribution system in the early days, right? That started to expand but operators became very busy as you pointed out – we all became very business but CTAM suffered a little bit if you did not have those skills in place and have people in place to implement the programs and to make sure you were constantly top of mind in getting people there.

LIDDICOAT: And it was key to be motivational because you had to motivate the people who volunteered as well as people to attend the sessions. So it was sometimes it was come along and do this and you'll get this out of it later. We always use to say no one's going to show up and then it was a great problem that we had to add seats to the room so that was always nice.

LEWIS-LONG: And as a programmer to get work with and operator – to take off that hat, you take off your boxing gloves, you're not selling them anything and you're working together, you're at the table all for the same goal. If your president or vice president had the support around the table of these operators that you were working with on a daily basis to see you in that role and to support you, it was very rewarding.

SAMUELS: And a little bit unique too from what I found in talking to people in other businesses to have that kind of structure where people who are normally doing deals with each other get a chance together.

LEWIS-LONG: Exactly, so they you in a different light and you see them in a different light. As I said, they are all focused on the same goal to ultimately to achieve all the goals that CTAM National set out and we all wanted them to be a success. It was nice. It was amazing opportunity and an amazing time and we accomplished a lot and it was very rewarding.

SAMUELS: We talked about Blue Ribbon which has been a huge success over the years and every chapter has established at least one kind of signature event that is a driver of their year along with the 3 or 4 other things that they would do. Other meaningful successes that you can think of in terms of big achievements, a big speaker, a huge turnout or something unique that you did, that you're proud of as a leader of a chapter?

KELLY: I think during that time, if memory serves, CTAM chapters were also taking on altruistic endeavors. So Skitam in Denver and we had our own version in New England where we did SkiTAM East. Most of the people shied away from the ice and snow but we braved the mountains and had great attendance and were able to balance the educational initiatives that were part of the agenda with the contribution we would make back to the various charities that we were working with. At first, it was a little outside of the charter but I think with the success of obviously SkiTAM and some of the things we were doing, it ultimately became part of the culture. I was always proud of that because I think the chapters drove some of that to the national organization saying look I understand but we think there's another mission here. Fortunately we got some good guidance and people agreed. One of the other skills in thinking back to your last question is we a lot of times we had to sell this concept into our own organizations so that they would continue to agree to fund and support CTAM both nationally and on the regional levels. So you get another level, I guess, of selling skills within your own organization to convince them that marketing leadership is a good thing to foster and develop within the ranks. It's a discipline that I think even if you look at the world today, is more vital than ever. We are facing some of the most significant challenges ever – makes it an exciting industry beyond belief but it also calls for the age of marketing to now really be on the front foot in this industry. CTAM being a driver of that at every level has been great.

LIDDICOAT: One other thing, I don't remember the year, I think it's on the notes, of the teleseminars that started which was a great thing for us in the Midwest because it gave us access to national people on a more local level. So we strived to have multiple locations initially in Michigan and then we formed the Midwest Chapter in Chicago and Indiana when we would host it at an MSOs office and invite people in and it was a great chance to bring someone in from the MSO locally to maybe give a pre-speech or after the session but also have the national flavor come down to that level.

SAMUELS: It started to become more challenging with fewer companies and everyone so busy to make sure that when there wasn't as many obvious examples of bottom line results. It was more about networking and relationships and learning to make sure the organizations maybe even more so on the MSO side bought in and wanted to continue to have their management become chapter leaders and to support events and so forth. So bring the event right to their offices and give them a chance to see high quality the content which sounds very smart and sounds like it helped to keep that fire burning with some of the big MSO players at the time. That's great. Anything else up in New England in terms of other activities?

LEWIS-LONG: Well, we have the snow in the winter but then we brought our CTAM down to Newport, Rhode Island which was...

SAMUELS: That was a tough sell.

LEWIS-LONG: Really, really tough sell. We were able believe it or not to get some really big names to come down to Newport.

SAMUELS: Ted Turner came, right?

LEWIS-LONG: Right, Ted Turner, you know so...

SAMUELS: Sailed right up to...with his yacht, with his racing yacht at Newport.

Carla : Absolutely, so New England was fantastic for that. So our participation in the Nectar Convention and always putting on a stellar CTAM panel down there, it was pretty just the location. You know you talk to the secretary of Ted Turner and let him know that the panel is taking place in Newport in July and it was like yeah sure, no problem.

SAMUELS: I think CTAM National played a big part in the Cable Show this year in terms of bringing a whole track around marketing and technology and it seems like this discussion and the others we've been having, that the CTAM chapters have often partnered with the regional associations and regional conferences to add a session or a day to what was happening, so it just furthered the credibility to CTAM as the expert in marketing. And it really added value to everyone attending these regional conferences which aren't as common as they were then. I think, again, that planning process, stepping back and saying what's changed in the business, what do we need to address and how can we continue to grow and who do we need to partner with was so critical and such a smart way that the chapters approached their annual planning and yielded some really creative ways to keep relevant and get big crowds to part of what [was going on].

HALLING: Another thing we did in New York was to join forces with organizations like NAMIC and WICT. Some of their events and our events, we might be bumping up against each other in the same time of the year. So rather divide and see if we can attract a few people, we joined together. That was very successful. One big event was Battle of the Bands. Which you may remember. Industry dignitaries who had? bands – who knew?

SAMUELS: Anyone who could get me on the stage with Limelight with my bad abilities was an event in of itself. That was great.

HALLING: That was a lot of fun. Actually, I want to give credit to Steve Goldmintz who was the co-founder of that event. Steve is an 18 year chapter member emeritus of CTAM New York and he is currently the managing director for A. E. Feldman in New York. Steve has really been the continuity and the person who has allowed us to maintain consistency and continuity for our leadership transitions. He kept every single copy of our newsletter on the chapter and happened to hand me a stack of them just from those few years. The unofficial historian and a great leader. We owe him a lot. So thank you Steve.

SAMUELS: It's a little bit like in the Godfather, once you're in CTAM you never really get out of it. He's a great example of someone who's just continued to make contributions every year. I'm glad you mentioned that. He's a great guy and did a lot of good stuff for New York and other chapters. So it kind of gets in your blood and just like the cable business and you just keep, like you have, working in so many chapters. Any challenges that came about from ownership changes, consolidation, leadership where you're having trouble keeping succession – anything that comes to mind where you found a way to work through the a new phase in the business or a new challenge in the chapter.

KELLY: Well, one thing that I think is important to note is the adaptability that CTAM has become known for. I think of it as more in terms of opportunities versus challenges. Pam and I worked together on the national marketing co-op which was effectively an initiative that came out of CTAM. Char and her brilliant leadership was open to the idea, encouraging the idea so we did National Movers Hotline. Which is still vital today. That all came out of that initiative. We did Only Cable Can, which was a campaign that ran nationally and I think to some degree we still have a lot of potential in that concept to really promote the advantages of cable television and the wonderful services that we've brought to the consumer in advance of any other industry. I think there is still a lot of opportunity there for that group to make a difference in the messaging and important distinctions that we have as an industry. That was a challenge; I think everyone agrees, getting all of the MSOs together to come to a consensus on messaging and what we are going to take to the consumer. Like I said there were some really great things, research projects – the Mover Hotline and some of the campaigns that were executed as an opportunity.

SAMUELS: This year was a little different – certainly Detroit's no small city but not as big as some of these markets with fewer players, people that live there right there in the city. Talk a little bit about your relationship with the Great Lakes kind of region and other chapters in the area. Did you coordinate more than you think than some of the other chapters did?

LIDDICOAT: Well, we had to. Pam brought it up earlier. We would get very strategic. If we knew a WICT event was taking place we might schedule our next CTAM event adjacent to that so people coming in from out of town would be attracted to stay longer. So we got very strategic over the years but the real challenge we faced and it's not a real bad one, was simply not having as large a pool of people to be on the chapter. So we struggled with the chapter positions. We jokingly said we'd have rotating presidencies. We'd flip a coin and you do it this year and I'll do it next year. So we had a lot of the same people for a period of time but we strived to find new blood to come in. So we would pull from the operators for that and we always tried to keep and even balance of operator/programmer so we could attract the programmers in there. It got a little more challenging as they consolidated but they were still very supportive. And as we grew out into the regions, that gave us a larger pool. So pulling in from the Chicago chapter and ultimately the Indianapolis one initially, we pulled all those people and had more people vying for the board positions.

LEWIS-LONG: In running a chapter where you only have one MSO, the dominant one, was a challenge. Running the Carolina chapter, I had to go to the godfather, Time Warner and say Godfather, if I take over this chapter will you support? So that's a challenge. He's a Black Donnelly – I call him that all the time. So really if the Carolinas is all Time Warner and you have a little piece of Charter, but they're so far down so if you don't have the support and the buy in from the MSO, when Char asked me to take over that chapter and they were thinking about closing it, I had to make sure I had buy in and commitment from Time Warner because if they were not going to let their people one - Be on the board or support and send their people to the events we would create then there wasn't any reason to continue. So you definitively, so that's a challenge when you have regions that are made up of one MSO. So tying their key executives too because you want them on your board. So you really have to get buy in and commitment from the MSO.

KELLY: I will defy anyone to say no to Carla to begin with. I have no chance whatsoever.

LIDDICOAT: And I'll go on record saying because he will see this – the reason we formed the three state Great Lakes was Kevin Gardner, at the time was marketing person for Comcast over all those regions and he said I'll support it if you combine it. So that was a big factor in us consolidating.

SAMUELS: I don't know Kevin's history at CTAM prior to that but it was great that he made that decision and supported it, but it just occurred to me as your guys were talking as the industry is – a lot of us have moved around to different parts of the country within or with separate companies – again once you got into and you realized the value, you're going to run into each other in another part of the country, work in another chapter or try to start one or make sure that it stays vital, you had that history of knowing that it could work and believing in it. So you just had to find that other CTAMer that was ready to help you join up and make sure that the chapter in that area did just as well.

Pam: I think that's the great thing about the formation of the chapters' council also - where all the chapters came together with two representatives on the national board. I was actually fortunate to be one of the first to get a vote on the board as a member of the chapter council. Then I know you Brad and Greg went on the following decade to really solidify that relationship and I think that was always very helpful and gave us the forum to share ideas back and forth and really give us the recognition as chapters.

SAMUELS: Well again, Char with her leadership and staff made it so easy for the chapters to get resources and to keep learning from national and from each other that it just kept building the momentum. But that leadership conference that Brian mentioned – once a year going in and 70 or 80 people from the board of all these 15 or 20 chapters comparing best practices, getting to know each other, learning from the national board would sit in and consult with us, really great for exposure, for idea sharing and it just really kept the chapter kind of success and momentum going strong. Just making good decisions on how the dynamics and how to keep people talking and sharing ideas.

KELLY: And there was always a recognition component so the work that you did got recognized at that conference and it just inspired people to more in the upcoming sessions.

LIDDICOAT: We were always trying to beat another chapter.

SAMUELS: A little competition...

LEWIS-LONG: That's right.

SAMUELS: How many members did you grow this year and how many people showed up at this or that event. Good stuff.

LIDDICOAT: It was nice to share ideas from chapter to chapter too. If a chapter had a successful event, you could take it and morph it for your own chapter.

SAMUELS: SkiTAM East.

KELLY: Skiing on the ice.

LIDDICOAT: We can do that in the Midwest.

SAMUELS: Ice skating on a mountain. Nobody got hurt I hope.

LEWIS-LONG: A couple of trees...

SAMUELS: Anything else anyone wants to say before we wrap up? I really appreciate it. It's been great – a lot of really great thoughts, ideas and memories about the chapters and all their success and you guys played key roles in so many of them. Thank you for that. We're going to wrap and thanks for watching. I hope you've gotten a feel for what was happening and what was so great about the cable business during this period in the late 90s and early 2000s. I want to thank my panel for adding so much to the conversation. Again, thanks for watching.

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  BACK TO ORAL HISTORIES

CTAM Chapters - The Early Years

Interview Date: Thursday October 06, 2011
Interview Location: New York, NY
Interviewer: Brad Samuels
Collection: CTAM Collection

 

CTAM Chapters – The Early Days (1984-1994)

Brad Samuels, Moderator

Glen Friedman, Ideas and Solutions

Skip Harris, Harris Communications

Joe Rooney, Cox Communications

BRAD SAMUELS: Hi, I'm Brad Samuels and I've very pleased today to being leading the discussion about the history of CTAM chapters. CTAM, The Cable and Telecommunications Association for Marketing has been a driving force in the cable industry for over 30 years supporting excellence in marketing in the cable TV industry. Shortly after the inception of CTAM, chapters were founded and became a very big part of the cable industry, the careers of many of the top executives in the industry and the growth of the business overall. At the end of 2011, based on changes in the structure of the industry both at the programmer and operator level, it's been decided that CTAM chapters will no longer exist. So we thought that it was important to capture some of the moments in the early days of CTAM Chapters. Today we're going to focus on the period from 1984 to 1994, which was a very exciting time in the industry and really the very beginning when CTAM chapters began to rise around the country and play a critical role in the development of the industry.

So today I'm very fortunate to have three executives who have been in the cable industry for a little while and were there at the time in the late 80s when the business was really exploding. These gentlemen played key roles in several of the bigger businesses in cable growing them and also very much so, in CTAM particularly, at the chapter level. So today we have in the first seat, the hot seat, Glen Friedman. Glen was in New York at the time of the period we are discussing late 80s with Manhattan Cable. Building out one of the biggest cable systems in the country, of course. Now he runs his own company called Ideas and Solutions which does marketing consulting for many media businesses based out of LA. In his career in the cable industry he worked for companies including DirecTV, Century Cable and of course Manhattan Cable. Welcome, Glen.

We also have in the middle, Skip Harris. Skip, thanks for joining us. Skip was with the Disney Channel in Los Angeles when the Southern California Chapter first originated and played a very big role in the leadership of that chapter over the years. He currently runs his own consulting company, Harris Communications and was at different times in his career the executive director of the Los Angeles Marketing Co-op, as well, as an executive at Disney, at Cox and also at Falcon Communications. Thanks for joining us today, Skip.

And last, and certainly not least, Joe Rooney. Joe has been nearly 25 years with Cox Communications and a great career in marketing in the cable industry. He played a role in many chapters around the country as he moved into different parts of the country in his career. At this period, he was mostly in Los Angeles in the late 80s and early 90s. The Midwest and then Los Angeles towards the end - let me correct that. Joe currently is the senior VP of branding and advertising of social media at Cox Communications at the corporate level. He has served in many roles both at the region and corporate functions at Cox over the years.

So let's do a little bit of dial back in time to get our heads back into the period that we are going to discuss. I thought we could just remind ourselves of the some things that were happening in the country politically, socially and culturally as well to try to get our heads back into what was happening in the cable industry from 1984 to 1994. As you look back, what occurs to me is just that it's an incredible period of change both in the country and in the industry. Certainly growth was significant in cable. In 1984, Ronald Reagan was the president and then George H.W. Bush and we finish the period with Bill Clinton. So from Reagan to Clinton, obviously a big turn in the events of the political sphere. It would have been a very good time to have been investing in the stock market during those ten years. The Dow Jones Index started at just under 1300 in 1984 and grew all the way to 3800 by 1994. A good year for Wall Street, a good period for Wall Street. The best picture Academy Award winner in 1984 was Amadeus and by '94 the winner was Forrest Gump. Two pretty different movies. Musically, Madonna had the number one hit in 1984 with "Like a Virgin" and by '94 it was Boyz to Men with "I'll Make Love to You." Which definitely had a different feel to the song as well. So that's what was happening out in the world – to get our heads back into the time.

FCC has always played a big role - at different times – bigger or smaller in cable industry and in the media business. At the beginning of the period, Dennis Patrick was the chairman of the FCC, as you guys may remember. By 1994, we had gone through also Alfred Sikes, then Reed Hundt, who was chairman of the FCC at the point of which we're finishing in the 1990s. So again, just to [re?] in terms of the cable industry, this is a period of growth where cable operators were building out their plant in order to grow the capacity of what the system could do and as a result, programming was growing very rapidly. New cable networks were coming on at a very rapid pace and filling up this new expanded line up of both basic and premium services. That was really the core of what the business was about. Giving more choice in television to consumers that had mostly relied on over the air programming for many years up to that period in time. Now we look back and think of it as a little more simple and a little more basic but that was a big challenge. It was a big concept for the consumer to get used to and so it was customer service and it how to price these packages and how to market and re-market and how to retain customers who were now getting comfortable with these packages and pay services and so forth. Those were some of the challenges. There was growth from 28 to 79 cable networks in the 1980s and by 1995 there were 139 programming services. You can see that the choice and the types of programming that were out there were really starting to expand. A lot of discussion between the programmers and the operators about what services needed to launched, how should they be packaged, how should they be priced. So that gives you a little sense on what was happening in the business at the time. Now I would just like to have each panelist take a couple of minutes to talk about where they were in their career at this time in which they first got involved in the CTAM chapters which were just starting to launch around the country. I think there was a recognition that CTAM was playing a critical role in a bigger level in the industry but the same mission of advancing marketing and helping the industry across all the different facets of it to get better at marketing, also how to roll at a local level. And the same kinds of learnings, discussions and relationships could also be expanded on a regional or local level. That seems to be what generated these first chapters coming to be out in certain key markets where the cable community was very vital around the country. So Glen you were in New York. You were with Manhattan Cable at the time?

GLENN FRIEDMAN: I was vice president of marketing and sales for Manhattan Cable. I was really fortunate to get involved with CTAM at a very early point in my career. I think the chapter's really important because it boosted the accessibility of CTAM to more entry level positions that weren't necessarily fortunate enough to go to the national show conferences. My first involvement on the chapter basis was as vice president of the Mid-Atlantic Chapter which was kind of a super regional chapter that went from New York to Baltimore. The first event I think we did was in conjunction with the Atlantic City Show which was one of the big regional shows of the time and we did a CTAM day. I remember John Malone speaking and again it was available to a much larger audience. But at the regional level it still wasn't as accessible to people who couldn't travel a regional show so the chapters were formed and New York was one of the first chapters. As president of the New York Chapter, we did a series of programs – I think we did 4 or 5 programs in the first year. What was really exhilarating about it was just that it was a very exciting time for the industry. Very different than it is today. There were a lot of different cable companies in the New York area. Now I think there are three, but then, I think there were 20 something and names like Namath?, UA Columbia, even TCI that no longer exists or that have been merged with other entities. There were a lot of other programmers involved in that you didn't have the consolidation that you have today with you know – TNN was an independent network, BET was an independent network. Now, obliviously part of your former life at MTV. So it was a very exciting time.

SAMUELS: We'll follow-up with that. The industry had a very different makeup at that time in terms of the number of different companies and the diversity of ownership. Of course, like many industries, it's consolidated a lot particularly in the last 10 years. But this is a time when major markets had 7, 10, 15 different cable operators that had franchised local areas, a lot of different players and on the programming side as well, the ownership was spread across a lot more companies. A very entrepreneurial period for the industry before a lot of that rolled up into bigger companies. So there was a real need for people to get together to get to know each other and that's a role that the chapters played. So Skip, you're in Los Angeles, you're working with the Disney Channel at this time?

SKIP HARRIS: Well, between '84 and '94, I was at Disney and at Falcon. We had around 15-20 cable operators in the LA market during that period. Even at Disney, we were a premium service when I was there and we were transitioning for premium to a tiered and eventually it went to basic. I left Disney and went to Falcon. I was at Falcon as the VP of marketing and sales at the time we launched the chapter and it was an auspicious launch for us – as I shared with you earlier – we had the ACE Awards. Our industry had this award for cable excellence for programmers and there was a big ACE Award event, Sunday night, January 16, 1994. Monday morning at 4:17 in the morning, January 17th, there was a huge earthquake in L.A.

SAMUELS: This is the Northridge earthquake?

HARRIS: Northridge earthquake. And that was the launch of the L.A. chapter. We had our first meeting the next day, on Tuesday and Char came to the meeting and she was still shaking from earthquake.

SAMUELS: Not a very good night sleep for anybody in that area.

HARRIS: She told has that they had all these senior executives down in the lobby of the Four Seasons in their slippers and robes. Which was a unique sight for the industry. So we had our first meeting and got launched. I think we must of 15 or 20 people at our first meeting. From all the MSOs.

SAMUELS: There seemed to be a lot interest in putting this thing together. What was the thinking about what you thought the chapter would become as far as its value to the market.

HARRIS: We really believed that the mission of the chapters was to – as Glen said – allow the people who don't get to go to the national summit to be able to get exposed to some of the speakers, some of the topics and issues that we get exposed to at the national meetings. And that was really what we felt what our mission was and I think we fulfilled that through the years. I'm still on the board of our L.A. chapter. I've been in and out of it. Even to this day, we still try to bring programs to people in the local market who otherwise wouldn't get to be exposed to those topics and some of the really great speakers that came to the market.

SAMUELS: Thank you. It was interesting, I did notice when we were talking earlier, I came into it a little bit after this in the mid 90s, but you mentioned that it started as a more regional kind of a Northeast – Mid-Atlantic organization that then broke out into different chapters in the major markets. Joe, you were in Pennsylvania in the late 80s?

JOE ROONEY: Yes.

SAMUELS: With Times Mirror and Mid- Atlantic, Mid Lakes kind of level of the CTAM regional organization.

ROONEY: We had chapters in Chicago, Indiana, Michigan, Pennsylvania and Ohio. They weren't all doing great. Frankly, because the cable industry was – cable marketing was kind of nascent – there was a need. We had all these networks. We went from one size fits all packaged to new tiers of networks. Pay per view is new. We had never really driven premium penetration to what people had hoped for. So there was this idea of let's get the marketers together and kind of share best practices and get smarter. So, my role – we created a Great Lakes region for CTAM. And the Great Lakes region to cover those chapters was basically to go share best practices and go help the chapters be a little better. So, it was a group of us – Susan Packard, Kevin Leddy and myself, who would go to these events and kind of say – Ok, when Ohio did this kind of event, here's what they did to really make it go great. You can't just focus on one part of your state. If you're covering your state, you need to kind of alternate between parts of the state. Things of that sort. Also, back in the early 90s, they made the region chapter presidents non-voting board observers, which later became kind of the role that you're familiar with. So I would go to the CTAM national board meetings and sit in the room and represent the chapters and sort of be a fly on the wall and watch all the activity. That was very interesting as well.

SAMUELS: That's a perfect lead-in to what I want to talk about next. Because the chapters, I think in a lot of cases, I know for me, I moved to New York in 1993 and jumped into the New York chapter at that time because I thought it was an opportunity to get to know a lot of people that I hadn't worked with in the past being out in Chicago. It really worked out great in that respect. I got to know the community of executives both across the content and the operations side of the business. What it also allowed for me to do was to build some leadership skills that were a little different than what I was working on day to day in my day job. I think that's part of what, hopefully what I think the chapter involvement that you gentlemen had, meant to you. And you were giving back to the industry but it was also giving you a chance to run an organization and use some skills and develop some skills that were different than what you were doing otherwise. Was that part of what you were thinking at the time, is that why you got involved?

FRIEDMAN: It was again an opportunity to meet colleagues and to interact in a different basis as opposed to having to negotiation or a situation where someone was selling you. And to really look at what one could do boost the industry at time. I think that there was much more commonality of everybody aiming towards boosting the industry as opposed to necessarily the individual self interest at that juncture.

SAMUELS: It was like how can we add a couple of channels and raise rates – it's now like what do we do about keeping channels and keeping our rates where there are.

FRIEDMAN: Again, we were in an expansion mode and the industry was absolutely growing and the opportunities were growing for the individuals and the companies and it was a very exciting time. In terms of leadership, I think what was exciting about it was to me is the fact that we started the New York chapter and that it still a very successful chapter today. And that we were very focused on developing future leaders of the chapter and making sure that there was succession planning in that and I think that was certainly something that's been valuable to me both professionally and in other non-profits that I've been involved in is to apply that logic and same thinking.

SAMUELS: It's a little different when you have to ask someone to do something versus reporting to you – a little different dynamic. It is a different experience and sounds like it was valuable to all of us.

ROONEY: It is. Each chapter had its own personality. The personality of the chapter hopefully reflected the personality of the entire board for that chapter. There's a lot of consensus building kind of leadership. I had the pleasure of being Skip's vice president when he was president of the Southern California Chapter at the end of this period. And being able to see how Skip ran those meetings and basically got us all together to talk about what was new and exciting in this industry. I remember – what was the ISP that was first being trialed for high speed internet that Art Reynolds came out – before @Home...

FRIEDMAN: Prodigy.

ROONEY: Prodigy, yes. High speed Prodigy trial and we brought Art up from San Diego and he spoke to the L.A. chapter. And it was Oh my God, what the heck is this. Of course, that product never really launched, but it turned into a huge business for the industry with @Home and others.

SAMUELS: Let's talk about some of the accomplishments, at least some of the bigger ones that come to your mind for your chapter. Signature events, big speakers.

HARRIS: I'll tell you one of the big events that we did in L.A. that was sort of consistent with a sort of Hollywoodish feel. We launched a program called the Golden Palm Awards. We had so many MSOs in the market and I wouldn't say lower level people but people who didn't' get the kind of recognition that you would get a national event in terms of Mark Awards. So we checked with Char and said we would like to a launch a local awards program. We wouldn't be competing with nationals because we're really trying to focus on the local people and their accomplishments. She said "what a great idea, let's give it a shot." So we launched this awards program. We had 8 or 10 categories to begin with. We recognized local cable system marketing excellence as well as local programming initiatives and marketing initiatives by the programming networks. That went on for nine years. It was a great program. Really recognized the local people. Again, we were always trying to drive the mission of the CTAM chapter back to the experience of a national show or event, but make it available for the people at the local market. For us, that was one of our biggest accomplishments. It happened while I was there and it was ongoing after I left. It was, I thought, very successful. Really paid back to the people who were participating at the chapter level.

SAMUELS: And in a very tangible way to have that event build momentum for programming in general and give people recognition and eventually build a stronger programming.

HARRIS: Absolutely. I think people really appreciated it. Members really got something back from their membership in CTAM other than newsletters and things like that. It was a great program for that chapter.

SAMUELS: Find anything in New York that pops into your mind?

FRIEDMAN: I think that we did a "Learn from the experts". Much the same way that CTAM continues to this day - to bring people from outside the industry to help broaden ones perspective. I was looking through some old notes of things that happened during my tenure and shortly thereafter, and we did things like bring in the head of the local MTA. We talked about how to raise rates and deal with service issues. It's a little scary that we were learning from the guys who were running the subway but the factor is that we were really trying again to build on CTAM's orientation that not all of the good ideas come from here; we need to have a broad perspective. We did things with Nordstrom on service and the MTA and some leaders in direct marketing and brought in experts that again gave exposure to the people that got to go to CTAM as well as people who may not have had the opportunity to be exposed to that. Again it was before you had the advent of online capabilities to be able see people or even video conferencing or satellite conferencing wasn't necessarily employed that often at that juncture. So again it was an opportunity for people to get a broader perspective both within the industry and as a marketer to refine and develop skills, an orientation they might not have had otherwise.

ROONEY: So I have a different tack that I'll take. In was probably in '92-93, somewhere in there, the CTAM chapters – we had a chapter leadership conference twice a year in D. C. and it was timed right around the time of the board meeting so there would be a joint chapter and national board dinner together. That carried on for a long time. The chapters were very unhappy. About half the chapters were threatening to leave and become cable clubs. I was this board observer there to represent the chapters so Char comes on board as the brand new head of CTAM, the new CEO of CTAM. At her first meeting, I have to pull her aside and say "You need to know something. The chapters are wanting to secede from the union."

SAMUELS: Welcome to this new role. I don't think we told you about this but...

ROONEY: It was just incredible to see her leadership and step up and say "Well, that isn't going to happen on my watch." So, she figured out – we worked with her to understand that there were a number of problems, part of it was representation, whether they were really being listened to and part of it was the financial situation where we were collecting a chapter fee and the majority of which was going to the national organization. Which wasn't leaving the chapter organization enough money to really operate and put these good sessions together and all those sort of things. So completely changed all that overnight and the chapters went from ready to leave to very happy and growing. So it was really awesome to see Char step up on her first day on the job and just get that corrected.

HARRIS: I have to say that also, Char absolutely transformed the CTAM organization in incredible levels and ways. Among them really reaching out to the people at the chapter level and making programs available. Again beyond the national program because that is really what the chapters were trying to do. I think she did an incredible job. Still does today. It's just amazing what she's done with the CTAM.

SAMUELS: Absolutely. The industry has been so dynamic and the way the membership and the ownership has changed. And then to also be managing this other aspect of the organization down to into the regions and coordinate to make sure that the programs made sense down to a national and chapter level and which chapters were really going to be able to exist based on the size and vitality of them. She's just done a fantastic job. I couldn't agree more. How about some of the challenges? Particularly when you are trying to manage some smaller market. These are small cities – Detroit – but they didn't have as many people in the markets to obviously step up like an L.A. or New York where you had plenty of leadership ready to be on the board and to step into the bigger roles. There must have been some challenges in places like Indianapolis and Columbus or whatever in terms of just getting the right leaders in place. Talk about that a little bit.

ROONEY: There were challenges. You never want to have a party and have no one come. So everytime you put an event together, you've got hotel expenses, you've got expenses for beverage and food service. You've invited a speaker and you're out there expecting people to come. So how do you make sure that you are marketing your event correctly? Those were some challenges. I mentioned in Ohio we had to get them out of Columbus. We had to say look you've got Cincinnati, you've got Cleveland, you've got these other markets and you've got to kind of take this on the road a little bit. There was also some – they didn't call it telepresence at the time – there was also some satellite delivered ways of getting out of hosting multiple locations with one session. Later on that became a hallmark of CTAM chapters. There were a lot of creative people thinking about how do we solve this problem of most of our membership is in Chicago but there is a Springfield, Illinois and there is a Peoria, there are other parts of the state that want to participate, so how do we do that? I think going to the satellite delivered content was something that really helped as well.

SAMUELS: Anything else that you guys ran into in the bigger markets that you found particularly challenging over the years?

HARRIS: I think that was more recently than the earlier, well even some of the early years, although we were a big market and had lots of talent in terms of managing our chapter and growing it. We still had a hard time getting major speakers, national speakers to come in and work with us. One of the things we did, we actually worked with Char quite a bit to help us recruit senior executives in the industry who were willing to come out. We tried to work it around when they were going to come out and visit one of their regions in the southern California anyway. She did a really great job of recruiting fabulous, wonderful dynamic speakers for our programs. Again it got back to bringing that senior national level person who you'd probably only see at a national summit, bringing them out to the local chapters. She really nourished that and nurtured that. We're also very grateful for that.

ROONEY: Okay, one more thing we did that was creative in southern Cal was – Skip, I don't know if you remember the name of this product – we had a problem where we had a pretty strong base of chapter members but we wanted a more predictable revenue stream. I was in favor of this thing called the bundle. So I had sort of helped invent the bundle for Cox Orange County and I wanted to bundle the chapter membership with all the events. So we put this bundle together, Jay Tapp was my VP at the time and helped with this.

HARRIS: Masters Course? Passport?

ROONEY: Passport Plus. So you got a passport and basically you paid for the year and the four major events all with one swipe of your company credit card. So it was simple, it worked and it was a great revenue driver for us and we know our year was set when we did the Passport.

HARRIS: That's right.

SAMUELS: It was always very interesting to see how ideas were kind of follow back and for the between the day job and the organization whether it was budgeting or packaging. Sometimes I'm sure some of the ideas that came up at board meetings ended being very valuable back at the companies where everyone worked.

HARRIS: That was a great program.

SAMUELS: That part of it was as great as well. Let's spend a minute, certainly the chapters weren't primarily focused on fund raising or charitable acts but one great legacy to many of the chapters was considerable amounts of money were raised and donated to some great organizations around many of the markets. Some bigger and more sustained than others but I think all chapters, at least at some point each year whether it was their holiday event or other things made sure that they gave back to the community in some of the organizations and their markets. SkiTam is probably the largest and most known of one of those kind of events which became almost its own big industry national type of event over time. I think you were there at the beginning and have always been a huge driver of that event. Talk a little bit about SkiTam.

ROONEY: This year, 2011, was our 16th year so it would have started right at the end of this period that we're talking about here. The beginning of the next period and it was incredible. Steve Raymond started it with Chuck Ellis and [Ginny Overbaugh?]. Steve had a buddy who had fallen skiing on a hill in Vail. Steve and I were just on that part of the hill this year talking about it, but his buddy, Bob, had fallen and broken his back and become paralyzed but wanted to still be a skier and wanted to get it going with a disabled ski program. The U.S. didn't really have a disabled ski program at the time. It had tried one and it had not gotten anywhere and was basically being disbanded. Steve said "We've got a great cable group in the Rocky Mountain Chapter; we can probably put a little fundraiser together." Steve went to Char and said "Look, to put this event together, we need a loan. We need to borrow like 50 grand to get the hotel lined up, to all this lined up." So borrowed 50, made a 150, made a 100 profit and that 100 thousand went to start the U.S. Disabled Ski Team.

SAMUELS: The first year made 100 thousand dollars? Wow.

ROONEY: 100,000 the first year. It was a great event out of the chute. Now, I've been involved the last 10 or 11 years. I wasn't there at the very beginning. I have been the co-chair with Steve the last 8 years and the last 8 years we've averaged between 1.1 and 1.3 million gross revenues. We have hotel expenses and lift tickets to pay for out of that but we have been more than two thirds the funding for the Disabled Ski Team for most of the last 10 years plus. That's a great organization and it was really one of the best examples of giving if you look back in the industry.

HARRIS: I'm sure the biggest.

ROONEY: One of the biggest. There are some other great examples of things people do but this is a really do-good, feel good event.

SAMUELS: Fantastic. Anything that you guys were involved with that comes to mind in terms of organizations that you supported? I know New York's done a lot for Toys for Tots and some other groups.

HARRIS: The California chapter supported something some called CHOC – it was the Children's Hospital of Orange County. We've done something with something called Donor's Choose, which Comcast supports heavily. We tried to spread out our give back if you will based on what the MSOs felt was important to them. Each MSO had a favorite and we tried to do something to support them because the MSOs were very heavily invested in the local chapter.

SAMUELS: It really was a local business at that time, wasn't it? Just made sense.

HARRIS: Very local.

SAMUELS: Just to kind of wrap up, a lot of the events had both kind of a learning component and a social component. I think that was another part of it. There were so many people in these markets that didn't have chance to kind of get out, see each other and get to know each other. Again, in a way that wasn't right across the table doing a deal, having to be focused on work right at the moment. I think the best events were a combination it seemed like SkiTam has become. A lot of conference discussion and panels but also just a chance for people to get together and talk casually and get to know each other a little more than they would in the day to day craziness of the business.

Any parties or events that you guys can remember that were particularly fun or that you met somebody that really turned out to be a big part of your career?

FRIEDMAN: I think again that it was a really good opportunity to get to know people on a deeper level and I think it was a very different time for the industry. It was much less combative and much more collaborative both within the operator community and within the operator/programmer community, there really was this objective to grow the business and get cable penetration above the levels that it was at that time. I think at that time was probably was in the 50 or 60 percent range of penetration with no competition. Everybody's business was expanding and it was an exciting time. I think there was also this opportunity of people getting to know each other and people who I got to know at that point who have subsequently gone on and done tremendous things within the industry and moved to different companies. It was just an opportunity to get to know them on a different level than had the CTAM chapter not existed at that time.

HARRIS: I was going to say the same thing. We tried to set up all of our events so that there was a little bit of networking time before the event, then we had whatever it was – a panel or guest speaker. I think that it really nurtured relationships outside of the negotiating room so that when you got together across the table, the person across the table was more than somebody that you had to combat with. You had a sense of who they were and it really did help in terms of relationship building. One of the things that came out of sort of the social networking part for me was Victoria Kent was on our first board and I had known her many years ago when she had pitched MTV to Cox San Diego when I was head of marketing there. Years later we got together on this board and got to know each other socially and we got married four years later in Italy.

SAMUELS: That's significant. Right there, if nothing else happened at the CTAM chapters that would be a great ...

ROONEY: A great example of relationship driven industry...

FRIEDMAN: I was single at the time and nothing like that happened.

ROONEY: It really was and is still a relationship driven industry. I think you don't really recognized how true that is until you bring in people from outside. We launched high speed internet in '96, telephony in '97, so the last 15 years I've hired a lot of telco people or wireless people. They come into our industry and they are like "You guys really like each other". This is incredible, the kinds of parties, the kinds of events, the kinds of networking that we'd do was just foreign to them. You don't see that in a telco environment. You don't see that in a wireless environment. You don't see that in many industries. So, we really do like each other. That was one of the great things about our industry and it's one of the great things the chapters would make a lot of hay with as well.

SAMUELS: We're going to wrap up. The late 80s were an extremely exciting time when the industry really started to take hold and grow and become what it was to be and many of the executives now lead companies that were just starting their careers like all of us at that time. Like you said we developed relationships that many of us value very much to this day and so I want to thank you guys for joining us today and sharing some of your thoughts about the past of CTAM chapters and helping for others in future be able to get a feel for what was going on in the industry at that time and how CTAM contributed to the success.
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Jack Crosby

crosbyJack5

Interview Date: Thursday July 30, 1998
Interview Location: Denver, CO
Interviewer: Jim Keller
Collection: Penn State Collection
Note: Jack Crosby passed away December 30, 2016.

http://www.mystatesman.com/news/local-obituaries/jack-crosby-was-austin-entrepreneur-cable-television-pioneer/cdKQ8ue3JP87XXJ9HJ9LIK/

KELLER:: This is the oral history of Jack R. Crosby from Del Rio, Texas, entrepreneur, financier, venture capitalist, cable pioneer, philanthropist, and chairman of the National Cable Television Association in 1967 and '68. Jack has been involved in many businesses over the course of his career, including of course being a major factor in the development of cable television. Jack served on the NCTA board from 1960 through 1968, an era of conflict and development, an era when many of the issues that were to face us in the future developed and many of which were resolved.

We are taking this oral history at the offices of The Cable Center, 2200 S. Josephine St., Denver, Colorado on July 30, 1998. Jack, tell us a little bit about yourself, your early days, where you grew up, how you got started in business and we'll go from there.

CROSBY: OK. Started in Del Rio, Texas right on the Mexican border, the Rio Grande River, and in 1954 I was working for my father in a hardware-appliance store and it was very difficult to sell television sets in those days in Del Rio, Texas because we had no television.

KELLER:: So you were another one of those who wanted to sell television sets but couldn't?

CROSBY: That's right. So we actually heard about a rancher friend up in Ozona, Texas who had built a very tall tower, about a 450 foot tower and he was trying to get television from about 150 miles away. So we went up to his ranch and took a look at it and you could tell there was a football game going on but you couldn't tell which team had the ball, there was about that much snow. So went back to Del Rio and called a tower manufacturer, one Tommy Moore from Oklahoma City, and said "Tommy, what would you charge us to put up a 450 foot tower, put some antennas on it in Del Rio, Texas?" He said "What for?" I said, "Well, to see if we can get television." He said "No use putting it up. I can tell you you won't get it anyway, you'll need to go to the expense of putting it up and taking it back down, cause you won't get it 255 miles away." And I said, "I really didn't ask you for an engineering opinion, I'm going to repeat the question – What would you charge to put it up?" He said, "Well, it'd be about $13,000 dollars." And I said, "Good, now what would you charge to put it up, leave it there for 30 days and take it back down?" and he said "Well you know it's mostly labor and that would cost you about $10,000 dollars." I said, "OK, you got a deal. You put it up." So we scrounged together the $10,000 dollars and we knew we were covered. We put it up; put an old bus out at the site, biggest thing to happen in Del Rio in a long time to build a 450 foot metal tower. So we put a bus out there and a fellow in the bus. In those days, basically you only had two networks, NBC and CBS in San Antonio. So we put a field strength meter there and a television set and a fellow to look at them, and I'd go out four or five times a day and look at it and it was pretty bad. We could hear Ed Sullivan and Milton Berle's voices and so we knew we had something, but it wasn't really viewable but people seemed to want it. I'd always say it was my Scotch nature that kept me from paying the $10,000 dollars, so I went out and borrowed the $13,000 and we started the cable system there. And in those days, as you may recall, we had an 8% excise tax, of course we wanted to make as much of the money back quickly as we could so we charged $135 installation fee plus the 8% plus nine dollars a month to watch two very bad channels of snow.

KELLER:: Jack, you mentioned in those very early days that you were able to borrow the money. On what terms were you able to borrow it, on what basis?

CROSBY: (Laughter) My dad was able to "go the note" with me, and we borrowed the money at the local, very friendly bank and a part of that, let me say was a character loan, I'd suppose you'd say. In addition, the banker desperately wanted television. That was the other collateral. So we made a deal with Jerrold Electronics to build the system and proceeded to do exactly that and that was an interesting time. We went to AT&T immediately and asked them for a microwave link going back toward San Antonio to get signals that we could watch.

KELLER:: Who was advising you from an engineering standpoint at that time?

CROSBY: Actually, Fred Lieberman who was with Jerrold Electronics at the time and Fred was kind of our patron saint at that moment and he was advising me. So we got a quote from AT&T and if we hooked up everybody in town we couldn't have paid the line haul for the microwave. So we applied almost immediately, knowing that this was going to be a tough sell, we applied almost immediately to the FCC for a common carrier license. In those days, nobody had a private license. It took about a year and a half and we got one of the very first owner's licenses to bring two channels two hops close to San Antonio.

KELLER:: It wasn't CARS?

CROSBY: No, and my poor wife JoAnn, I would take the irate phone calls during the day from all the people who were watching the snow and JoAnn would take the calls at night and she would go something like this, "Oh, Mrs. Smith, oh, you're watching it or trying to watch it, well don't watch it, it hurts your eyes. Well, now listen, we don't want you to be upset, I know you're trying to watch the wrestling. But no, Jack's not here. He's out at the tower trying to make it better. Let me tell you, we don't want you to be upset. Let me get your telephone number and your address and I'll make sure that they disconnect you tomorrow. Oh, you don't want it to be disconnected, oh, you just want it to be better. OK, well I'll tell Jack that." So this went on for a year and a half. Pretty bad television.

KELLER:: This was before you go microwave?

CROSBY: Yes, then about a year and a half later, we were successful in starting a thing called Southwest Texas Microwave, our transmission company to serve our own system and a couple of systems down river that we were helping to finance.

KELLER:: You were a common carrier, so you had to have additional customers than just yourself. You used the term CARS. Was that a cable antenna relay system?

CROSBY: Yes. So actually you're not correct Jim. That first system was not a CARS system. I don't know whether it was the first, second or third, but it was one of the very first common carrier systems of that kind to serve cable television. We knew that in due course to hold those licenses we would have to have and told the Commission that we would go out and seek other customers as well. Bear in mind, there were no other systems at that point in time in that area. The next system we built was down in Eagle Pass, Texas which was about 60 miles down the river and some local people got the license, came to us and wanted us to finance the thing. Which was kind of an interesting experience because the telephone company at that time was very reluctant, you may recall, no you're not old enough, but anyway, the telephone company was very reluctant to have us attach to the pole systems, okay? So in Eagle Pass, Texas, we ran ahead on with Southwestern Bell and asked them to give us a contract to build a cable system down there to attach to their poles. And they said, "Well, let us think about it. We'll talk to St. Louis and so come back next week." So we came back the next week and they said, "Here's what we want you to do. I looked at it and shoved it back across the table, and they said, "You're not going to sign that contract?" and I said "No. I can't afford to pay you ten dollars for pole attachment" and at that time they'd even stuck something in there that looked like an option to buy, if and when they were ever given permission. And so they said, "What are you going to do?" I said, "Well, I don't know." And so about two weeks later we got a call from the telephone company office, in Uvalde, and our foreman tells us they're unloading a bunch of poles, little bitty poles, off of the railroad cars down there and said "you wouldn't be building a pole system?" I said, "Gosh, you think we'd be crazy enough to do that?" Which we did, and we put them in the ground for nine dollars apiece and then we owned them. The city was anxious to have it done and I think that went a long way toward indicating to the telephone company that somebody would be crazy enough to put the poles in, if in fact you couldn't reach a proper combination.

KELLER:: And then you did get a reasonable contract with Southwestern Bell?

CROSBY: Next time. Not there. We owned the pole system there. We never had a problem with them after that.

KELLER:: This was after Uvalde had been built. Was Ben able to get a contract with them?

CROSBY: Ben Conroy got a reasonable contract there. We got a reasonable contract in Del Rio. One of the reasons that we got favorable contracts back there in those days... my grandfather and his two older brothers had come out from Virginia at the turn of the century. He was 19 years old and they built the telephone system starting in San Angelo, Texas on down to the Rio Grande Valley. He, being the youngest of the three, went to the wilder country and he built the telephone system in Del Rio. So the three brothers, Rust brothers, owned the telephone systems from San Angelo down. The year after I returned from the University of Texas to Del Rio, we sold all the telephone companies. We sold everything to Bell. Bell kept the toll line, which at one time was the longest, I think, independently owned toll line. It served a lot of jack rabbits, not many paying customers. But it was a toll system, so Bell kept the toll system and sold the local exchanges to General Telephone and that became General Telephone of the Southwest. So we had a longstanding relationship. I used to take the top executives of Southwestern Bell hunting and we had a good relationship with them but they were scared of us at that time, as you well remember. We got contracts and Ben got a good contract in Uvalde at about the same time. We built the Uvalde and Del Rio systems almost simultaneously.

KELLER:: But you had viewed the Uvalde system before deciding to go ahead in Del Rio?

CROSBY: We looked at the Uvalde system actually in 1954, I think they were built at the same time. That's my recollection. Ben came down from Vermont.

KELLER:: What system did you view then before starting?

CROSBY: We didn't view any systems. We looked at the tower location.

KELLER:: It was just a tower at that point?

CROSBY: Yes, and Ben and his father had committed to Jerrold to go ahead and build the system in Uvalde. We knew that was the case, but we really hadn't viewed the system.

KELLER:: I have read Ben's oral history, and he had some reservations about being forced into a contract with Jerrold. Were you in a similar position?

CROSBY: They were about the only people around at that point in time, and I went up and met Milt Shapp, met Fred Lieberman and as a matter of fact, it was right after we built the system and just turned it on that I got a call one day. It was Sunday, in Del Rio, from this fellow and he said, "Are you Jack Crosby?" and I said, "Yeah" and he said "I'm Fred Lieberman." He said, "I'm from Philadelphia and I work for Jerrold Electronics. I'm coming out to see you." I said, "Where are you?" He said, "I'm in Del Rio, Texas." I said, "You're coming out to see me?" He said, "I've got a rental car, tell me how to get there." This guy comes to the door – do you remember Fred?

KELLER:: Yes.

CROSBY: Doesn't say howdy or anything else. I opened the door, he walked straight over to the television set, turned it on and he said, "Boy, this is awful." He said, "Did we build this system?" I said, "Yeah." He said, "Are you suing us?" I said, "Not yet, Fred." That was my introduction to Fred Lieberman, later he and I became partners and have been for 40 years. But Fred came down to view the system.

KELLER:: Even after you had microwave he came down to view...?

CROSBY: This was long before microwave. The system was being built.

KELLER:: You built it with two strip amplifiers at each location?

CROSBY: Yes, exactly.

KELLER:: Then where did you go after that, Jack?

CROSBY: We started building other systems, we did Eagle Pass. Fred and I had long talked about getting together and so when Jerrold went public, Fred borrowed the money, bought all the options he could find and he made some money. He borrowed the money to buy Burlington and Montpelier, Vermont, the cable systems up there. So he left Jerrold and bought those systems and he said "We need to get together. We ought to have our systems together and build a company together." So basically, he bought those two systems and they were charging $3.95 a month and he said, "I think we can go ahead and put a 12-channel system in that area and start to charge a little more money per month. We ought to put some things together." And so we developed a partnership and by that time we had built some more systems, he had more systems. I said, "Well Fred, it seems like the first thing to do, I'll buy one of your systems." He said, "Well, I'm going to sell Montpelier, Vermont but I'm going to get too much money for it." I said, "Well, that's my problem to determine if I want to buy it for too much money. We'll buy part of it, and you own the rest of it , and we'll be partners together." And so I called in and I think the price was $130,000 dollars.

KELLER:: How many subscribers did they have?

CROSBY: Actually I don't remember to tell you the truth. There were less than 10,000. I said, "Fred, tell me something. I'm going to the bank. I need to tell them about this system and I've never been to Montpelier, Vermont." He said, "Well, when the leaves start to turn it's the most beautiful sight you ever saw." I said, "Well, he'll be impressed with that. Tell me something about the system." He said, "You don't have to worry about them going into a depression up there because they've been in one all their lives." So that was our first venture together and we went on from there to build a series of partnerships.

KELLER:: Was that company called Telesystems?

CROSBY: No, ours was called West Tex Cable and that system was called Green River Television, I think it was. We put the two of them together and I'm trying to remember, in 1955 to '62 we did our investing together and Fred... we founded Telesystems in 1962 so we put those assets in 1962 Telesystems for the purpose of making additional cable investments in Telesystems.

KELLER:: Prior to that each one was standing on its own?

CROSBY: Each was standing on its own.

KELLER:: Each was financed individually and so on?

CROSBY: Yeah. Bob Hughes was working for a company called Texas Capital Corporation, one of the first SBIC's and we got our early financing from Texas Capital Corporation who put together a small group of venture capital money, a small piece of it. Then with Chase Bank and First National Bank of Dallas was our first financing package for Telesystems. We turned around and in, well in '58 we built the system in Eagle Pass and put it in there.

KELLER:: In '62 then you formed Telesystems with the financing from First National Bank of Dallas and Texas Capital. What kind of terms were they offering at that time?

CROSBY: It was equity basically. We were selling equity in the systems and keeping part of the equity ourselves and putting up some of the money. But the terms we were paying were several points over prime.

KELLER:: Plus warrants or equity?

CROSBY: Yes. There was venture capital money and they owned a piece of the deal. We went back to them after two years and said, look guys, we've gotten franchises for places like Macon, Georgia and all kinds of places across the country and we've outgrown you so we need to pay you off and go get some better financing. They said, we don't want to. This is doing very well. So basically, we made a deal to pay them off but to rotate them into the next deal that we did which was the Tulsa deal. They became equity holders in that as well and we gave them the original money back plus a big profit and then they rode along with the next turn of the wheel.

KELLER:: You were still using Jerrold equipment through all of this?

CROSBY: We were using Jerrold equipment.

KELLER:: Did you ever get into a financing deal with Jerrold at any time along the way?

CROSBY: No, we never used financing from the equipment manufacturers. We did it through the banks and the venture groups.

KELLER:: This was one of the very early venture capital groups in cable.

CROSBY: It was and actually we got home life insurance in the deal. During the early days, Jim Ackerman, who you recall, Jim Ackerman was working for Economy Finance in Indianapolis. They were a car finance company and a mortgage finance company and we first met Jim early on, before he got into this business and we started encouraging him to take a look at it. I'll never forget, because Jim was charging add on interest which counted up into the twenties when you got right down to brass tacks. Every year he'd come to the convention and people would say, well he's not going to be around next year because it's going to be much easier to finance but he did it for about 20 years and we were the first ones to use Jim's financing. And then we formed a little company later on with Becker who Jim had joined, A.G. Becker, and we formed a finance company with Jim to start to lend money separately and apart from Economy Finance when he left there.

KELLER:: That explains many things about how he got involved in venture capital and then how Jim Ackerman with Economy Finance got involved. Was he still doing deals with you?

CROSBY: He was still doing deals with us and Jim also introduced us through his lending to the insurance companies. He introduced us to Home Life and to Hancock and I think we put on some of the early loans with the insurance companies. It took a lot of selling to get the insurance companies to understand the business and yet when they began to understand the very solid cash flow that this business could develop, they were very intrigued with it. But it took a long time to get them to make the first loans.

KELLER:: When do you feel that the major financial institutions really felt that cable was a business?

CROSBY: I think probably the year I was chairman of the NCTA and we won the Fortnightly case. We beat Louis Neiser in the Supreme Court and I think that brought a degree of solidity to the business.

KELLER:: We have to define the Fortnightly case. That was a copyright issue?

CROSBY: Yes. That was the case that said we didn't owe a copyright fee for the programs that were over the air that we just happened to pick up and put on the cable. The day after we won that case, I appointed Bob Beisswinger to a 2 man committee and we called the six motion picture companies together and said we'll meet you in New York two weeks from now and they sent a representative. We sat down and we led off by saying, "Fellas, we don't owe you a thing. The highest court in the land says we don't owe you anything. We're going to be the next theater. So let's talk about what we can pay you for all your product." That was the beginning of the discussions on the copyright deal, which as you know took another ten years to put together.

KELLER:: That was difficult to achieve too because there were some people who never believed we should have paid copyright up to the day that it was required to.

CROSBY: We got permission of course from the board to go ahead and proceed and have those discussions.

KELLER:: Would you talk a little bit about that? I know the copyright issue was a major discussion point at the time that you were on the board in the early '60's and chairman in 1968. What were the various sides of that issue?

CROSBY: As you said, there was a constituency in the ranks of the cable operators that said just don't pay it. Do not pay it period and let's just fight it out. And the other side of the coin was that people said, "This business is someday going to be a content business. It's a hardware business today, but it's going to be a content business down the line. The Irving Kahns of the world – if you pull out some of Irving's speeches from 30 years ago, the same thing we're looking at today. The great wired world is here today and so a lot of people thought we had to develop additional programming to put over the wire. So those were the two camps. Of course a lot of people still had the attitude that this was a small business. I think the first major city franchise that I know of being built, Fred and I in Telesystems got a permit to build a portion of Philadelphia. Philadelphia, in its infinite wisdom, divided the city into four geographical areas, if you'll remember. Gave the best one to The Inquirer, the second best one to The Bulletin, the third best to Jerrold Electronics and the fourth worst to Fred and I because we had a little office at the east of Pennsylvania, right above Easton Road in Philadelphia and we had the worst part of town. We had the Schuylkill River to Broad Street area, Little Italy. And so we were the first to build when you had 10 or 12 over the air signals. At that point in time, you darn sure knew you had to have additional programming.

KELLER:: Did you bring Fred Ford in as president of the Association?

CROSBY: Yes. I was on the committee to pick the new chairman, and we brought Fred on.

KELLER:: I call your attention to the convention in Miami 1966. Fred Ford is the president of the association. He made a speech in Miami in which he said the industry should be ready to give up its right to programming for the ability to get distant signals. Do you remember that?

CROSBY: Yep. I remember that.

KELLER:: What was the board's reaction to that?

CROSBY: The board's reaction was no. I don't recall a majority. But Fred was there three years, I guess it was. It was an interesting time. Bear in mind where he came from to begin with. He was chairman of the FCC. So he brought a lot of those feelings into the association, and I think Fred in all conscience thought that was the way to grow the industry.

KELLER:: I think that was probably true, because we were locked out from distant signals at that time.

CROSBY: That's right. But I think there were enough people who, let's face it Jim, so many rugged entrepreneurs got out of this business when it began to look like it was going to be heavily regulated, and I don't blame them at all. They said tough luck, the government told us how to run our business. And I think from my standpoint, I've come up through the telephone business, and seen a heavily regulated business make some money. And so we decided that this was a business to stay in and to try to help style the regulation. So I think Fred, in all good conscience felt that way. But fortunately, it didn't carry the day.

KELLER:: You remember that. So many other people who were on the board seem to have forgotten that it had ever occurred, that somebody actually made that proposal.

CROSBY: That was an interesting point there.

KELLER:: I can remember the hall when he made that statement and half of them were almost cheering and the other half had gas. And you say it was '66 also was when they introduced the first pioneers. It was the first Pioneer Dinner. There was an interesting story about that. Twenty-one of them weren't there?

CROSBY: I can almost name them. Al Ricci, the Barcos, Kupenski, Al Malin, Clements, Strat Smith and Frank Thompson. Frank was my vice chairman and we kept trying to get Frank elected chairman, as you may recall. He was a bit vocal at the commission. Brilliant, bright guy.

KELLER:: Frank was never known not to be vocal.

CROSBY: Standing there kicking. Never was chairman.

KELLER:: In any event, there were sixteen or twenty-one, I thought it was twenty-one, but it could have been less than that.

CROSBY: I think that was probably right.

KELLER:: You said you were associated with a bunch of them.

CROSBY: Well, there were six of us of whatever it was, sixteen or twenty-one, in the original group. We had just at that time put together a company called Genco. We had a fair success in starting companies. The toughest thing we had to do was think of new names for companies and Genco stood for general communications and entertainment. Ben Conroy and I decided to take Del Rio and Uvalde and put them together in a little company and then go out and try to get other people to come in with their companies, hopefully merge in, and develop a company large enough to go after the public marketplace for financing. So we did that and started this thing called Genco. We went to Gene and Richard Schneider and talked them into putting Casper systems that they had into the company for and equity interest. We went to Tubby Flynn and Raymond Hesh from Tyler, Texas which was one of the largest systems at that time, about 60,000 connections. We bought that system from Tubby and Raymond and Tubby went on the board and that was the beginning of Genco. Six of the original pioneers were in our company; Ben Conroy, Gene Schneider, Richard Schneider, Fred Lieberman, myself and Tubby Flynn were all in the same company at that point in time.

KELLER:: So you picked up all the early old timers and put them all together with their expertise.

CROSBY: Yeah, and then we merged that company after about a year and a half and it was getting up to a reasonable size. I got a call from a friend of mine who said, "We have this little New York Stock Exchange oil company in Tulsa, Oklahoma." He was my ex-college roommate and he said, "I represent the company. They do pretty well at exploration and production, but decided they can't reinvest their cash flow in the oil business. Guess the measures come out on the return. They're looking for a growth area. Why don't you bring your little cable company in and merge it into the oil company. They're looking for someone to be chairman of the company and move it forward. You know a little bit about the oil business. Why don't you merge it in and then try to build a major company." Well this company was a small company, but it was on the New York Stock Exchange, named for Mr. Julius Livingston and it was called Livingston Oil. So we merged Genco for stock into Livingston Oil, took control of the public company and the only large block of stock was owned by Baron Heine Von Tyssen of the Tyssen Iron Works in Germany, a very, very large industrial company. So we flew over to Zurich and bought him out and bought his stock and that gave us a large controlling interest in the company, the cable guys. And so I became chairman of that company.

KELLER:: Who was financing at this time?

CROSBY: At that time Bob Hughes was working for a fellow that had this company called Texas Capital. Texas Capital, that's the way we were able to buy one of the other things, was to promise them they could go into our next deal. And so we brought them in as financiers. They came in and Grogran Lord who was Bob Hughes's boss and I went on the board of the oil company. I became chairman of the board. Inside of about a year, year and a half, it was apparent to us that the company was probably not going to move as rapidly in the cable television business as we wanted and we thought time was wasting.

KELLER:: You still had directors on the oil side?

CROSBY: Nice guys, very nice guys. And so I went in with a proposition one day to build a cable system in Midland, Texas. We had gotten two local gentleman out there and one of them was president of the Chamber of Commerce, the other a very responsible businessman, and told them that if they ever got a license to build a cable system in Midland, a town of about 80,000 people, that we'd come in with the money and we'd build it. And so they had called about a week before the board meeting at Livingston Oil...

KELLER:: Who called, Jack?

CROSBY: John Younger and Decker Dawson, who were Midland citizens, called and said, "Jack, we got the permit to build Midland."

KELLER:: What year was this?

CROSBY: 1967. They said, "Are you ready to do that, have you got the money ready?" And I said, "I've merged into this other company now, let me call you back." Went in and started talking about building a system in Midland, Texas and our oil partners looked into it and said, "You mean we don't get any cash flow for six years?" I said, "Yes, that's right. That's the nature of the business you've invested in here and after that time, it starts to come back." I could tell they were uncomfortable.

KELLER:: Was this the term of your financing at that time – six years or was that just the time it took to turn profits?

CROSBY: That was to turn a profitable cash flow, building it from scratch. And so anyway, I said, "Hang on." I walked out of the board meeting and called Fred in Florida. I said, "Fred, I think we're about to start another company and build Midland, Texas." He said, "What for? You must have promised to do it." I said, "That's right." So I walked in and I said, "Guys, we've got great management here. We got the Schneider boys here and we've got great management and we want to build something. We've got a license to build Tulsa, Oklahoma where we're situated. I'm going to adios and keep the stock, I believe in what you're doing but I've got to move a little faster." So I went out and formed another company.

KELLER:: You kept your stock in Livingston Oil?

CROSBY: Yep. And Gene at that time moved back down to Tulsa and that later became United Video. So then Bob Hughes came to me and he said, "You know I think I can make more money investing in this business and being in it than lending to it." I said, "Probably so." So he says, "I know you're forming a new company, Communications Properties", and we made a deal to buy Del Rio and Uvalde back out again.

KELLER:: I remember that – how many times they kept selling it back and forth to each other. Who's going to buy it next?

CROSBY: Those were great days. We formed Communications Properties and Hughes came in as a vice president and we took Del Rio and started over with them, then eventually built that company up to four or five hundred thousand connections and sold it to the Times Mirror. But Fred and I were the major shareholders. In the meantime, in 1967...

KELLER:: Jack, before you go into that, you mentioned in passing, briefly, that you had a Tulsa franchise. Livingston Oil actually built Tulsa and it was a real drag for a lot of people, wasn't it, because it was one of the first major markets to be built.

CROSBY: Sammy was down there running it. He was a really good operator. It was one of the first major markets as we talked about, and it was not easy. Nothing easy about it. But he did a good job slugging it out and stayed in there making a success out of it. Like Philadelphia, it was an aberration in those days - it was tough building the major markets.

KELLER:: Was this still in the late '60's?

CROSBY: Early '70's I think it was actually built.

KELLER:: Who was the manager in Tulsa at that time?

CROSBY: I think Savage. A very good manager. But most of that construction came after I left, and June was the supervisor then. But Fred and I had an early approach to this business. We had so many antagonists to this business as you well know. The television broadcasters, the motion picture theater operators, the motion picture owners, you name it, and everybody thought we were going to hurt their business so they were fighting us on the Hill. So Fred and I developed an attitude. We had a little company called Telesystems in the construction business as well. As so we took the attitude that we need to get some of these people in the business. So we went out to Lubbock, Texas for instance and Joe Bryant had the CBS affiliate and we said, "Joe, somebody's coming in here to build a system. Let's go ahead and build it. You get the license and we'll come in as your partners and we'll build the system." And so we did a lot of that.

KELLER:: How many of those did you do? That's an interesting era.

CROSBY: Lancaster, Pennsylvania, for instance. What was the family's name? McCullough. They were very, very strong and good people in the media business. They had the newspapers and the television station, a little bit of everything and we talked them into doing business. And then what we did was we built up a thing with Telesystems and we had systems up in the New England area, Massachusetts and Vermont. And so Cox Broadcasting at that time was looking at the industry and trying to decide whether to come in or not. So in 1967 I think it was, we sold about 70 or 80 thousand connections to Cox and that became Cox Cable Communications.

KELLER:: Another broadcaster?

CROSBY: And so we sold them that company and that was the beginning of Cox Cable Communications which was listed on the American Stock Exchange. Cox Broadcasting was listed on the New York Stock Exchange and there was a subsidiary there. At that point in time we decided that this was great fun but we ought to take some of the ill gotten gains and diversify them. And so we had cash that we made from that thing. We went over to Switzerland and decided that the Swiss franc was a good currency. So we started looking for a business to buy in Switzerland, Fred and I and we found that after about six months that the Swiss don't sell companies, they keep them. Lo and behold, we were contacted by the PT&T, postal telephone and telegraph after we paddled around for about six months. And they came to us and said, "Why don't you build a cable television system over here. We understand you're trying to invest in Switzerland." "Well, we're aliens" and they said, "Yeah." We said, "You won't let us own anything." They said, "No, no, no – this is Switzerland. You put the money up, you stand the risk, we have checked you out and found out you know what you're doing about cable television and you know what you're doing about microwave, getting the signal over the Alps from Geneva and that sort of thing, so we think you'd be ideal to build these things and why don't you go ahead and do it. At that time, the only competition over there was – there were no U.S. companies in Europe. The only competition was a company called rediffusion, which was not (feedback on tape). ... it was a Swiss company. We said they grandfathered in by their admission to cable franchises in Geneva and the two larger cities. So we went over and started to build it. Got permission, hired all Swiss nationals and we built our first system in Lucerne and we got an office in Zurich and then built systems in Arou, Schaffhausen...

KELLER:: Did the Swiss finance you in this venture?

CROSBY: The Swiss wouldn't finance anything. Partially we went over with the money. We did it all with equity. We went to the Swiss banks in 1967-68 and said here's what we're going to do. They laughed pleasantly and said "We'd be glad to put your money in the bank and let you take it out." But they certainly weren't into lending any money. So it took about two years before we had anything other than equity, and we brought Citicorp in and we brought First National Bank of Boston in. And immediately on bringing them in, the Swiss banks came and said, "Why didn't you tell us about this?" We said, "We did." And then they all wanted to get into the act as well. So we operated those systems for twenty years and we finally wound up with no depreciation left after that period of time. Switzerland was a small country, so we couldn't build past a certain point; there were no more things to build. So we ran out of appreciation, we had no interest to pay because we'd paid all the money back that we'd put in to begin with.

KELLER:: You were starting to pay taxes?

CROSBY: Not only that. Fred and I owned 97% of the US company, which owned 95% of the Swiss company. And we had a personal holding company and we continued with it. We desperately tried in that ten year period there to expand and we found out you could take a Swiss engineer anyplace and he had instant credibility. Wasn't necessarily the case with a Frenchman or an Italian, but the Swiss had that kind of clout around the world. So we said this is ideal. We'd take our Swiss company and we'd start to build Europe. And so we went to Bonn, we went to Vienna, we went to Amsterdam, and found that all of those countries were happy to have us as consultants, but they really didn't want us to own anything. Bear in mind, this was back in the early '70's.

KELLER:: All communications were owned by the government or controlled by the government.

CROSBY: That's right, except for the Swiss. So we spent about three years, two years in Monaco and the princess was alive at that time and was on the board of 20th Century Fox and knew all about cable. So she was very encouraging, but they couldn't get permission - Radio Monte Carlo - from the French government to build the system. So we built everything underground in Switzerland and each brick coming up out of the street had to go back in and look like it had been there for 200 years. Very costly construction. But it was like owning a bond. People would say in those days, aren't you worried about being in a foreign country and I said, "Look, owning a franchise or license from a canton in Switzerland is a heck of a lot better than owning one in Allentown, PA. So we had a good experience over there and eventually sold it to a Swiss industrial company. Carl Williams had a small interest in it. He and Al Stern had recently started to build it and then didn't and we bought their licenses and worked from there.

KELLER:: What did you do after you took the Swiss company out of Switzerland? Did you build elsewhere?

CROSBY: Yeah. Well, actually we were still in business over here. At that time we had built up Communications Properties.

KELLER:: Were there other systems other than what we have talked about?

CROSBY: Midland, Texas. We started it off with the Midland system.

KELLER:: That's the one that caused the rupture between...

CROSBY: That's right. But it was not a rupture. We had too many investments. One was a public company and in due course we took Communications Properties as a public company as well and I was chairman of that. We formed Communications Properties in 1969 actually. It was financed by a little company called New York Securities which is a very small brokerage firm in New York and we sold Fred and interest in it. And once again, by the time we got up to about four or five hundred thousand connections, we decided that it was time to go ahead and sell it. We never really felt that we had the expertise, the inclination to build an enormous company. If we had some skills it was taking the small situation, growing it up to a certain size and then turning. Anyway, we were looking once again for someone who would strategically come in the business and help the business move forward, so we sold it to the Times Mirror Company.

KELLER:: Another media company?

CROSBY: Another media company. Otis Chandler was phasing out at the time. Bob Riboux was the chairman just prior to Tom Johnson, an old friend of ours coming on as editor. Tom had just moved in there as a matter of fact. Tom we had known from early Austin days when he was an administrative assistant to Lyndon Johnson in the White House.

KELLER:: You never built Austin though.

CROSBY: The minute I moved from Del Rio to Austin, packed my briefcase, moved up there, people said Crosby's going into business with Johnson. No we never had an interest in the Austin system. Pat Nugent, who was married to Lucy at the time, worked for us for a while, learned the business before joining the family again.

KELLER:: How did LBJ company and Midwest Video, George Morrell ever get hooked up?

CROSBY: I suppose you could call it a shotgun wedding. They were certainly going to get the license there if he wanted it. Midwest Video at that time, George Morrell was very closely allied with Senator McClellan and Senator Fulbright and was very helpful to the industry in getting some legislation done properly and it was a combination of powers that went together. Johnny Campbell at that time from Mineral Wells had his equipment company and Johnny came in and got a license as well and they both started building. It was a very interesting time at that point in time. We were helpful in getting J. O'Neil, and old friend of ours to come in and sit on the board. He was the swing vote on the board between Midwest Video and the Johnson family. They in due course bought Johnny Campbell's company.

END OF TAPE 1 SIDE A

START OF TAPE 1 SIDE B

CROSBY: But it was an interesting time. Once again there were powerful forces coming into the industry.

KELLER:: And no one can say that Austin wasn't politically motivated in every aspect of its business?

CROSBY: Lyndon always had the only VHF channel.

KELLER:: Kept it that way for years.

CROSBY: He kept it that way for a long time, that's right. After we sold Communications Properties, Bob Hughes wanted to venture out on his own and I helped Bob form Prime Cable which you know the history of.

KELLER:: No, I don't. We'll get that. We need to interview Bob. What year did Prime Cable get started?

CROSBY: 1979, I think that is correct. In 1986, Prime had 800,000 subscribers so then we started selling those and as you know we bought the system in Atlanta.

KELLER:: Did you have an interest in Prime also?

CROSBY: Yeah, I was one of the founders of Prime with Bob and still serve on the board. In fact, we just about sold all the systems, sold the last one, Las Vegas, the other day to Cox – the last operating system. Atlanta, Anchorage, Alaska, Chicago, etc. And Prime, Bob Hughes did a masterful job of running that company. Brought in Ron Dorchester, who was one of the top operating guys in the business, and Ron was the kind of guy who could take a system like Atlanta, that was a big, big system. Prime's main interest was in taking the major markets, we bought the system in Chicago from Westinghouse. Bought the system in Atlanta and those big markets. Anchorage, Alaska was a unique market and Dorchester would go into each of those, Las Vegas was a ----- situation and shape them up and was one of the top operating guys in the business. So Bob built a very good management team there.

KELLER:: And Lindaeur came in there too, didn't he?

CROSBY: Jerry Lindaeur was an old friend of ours. Jerry had come to the University of Texas as a shot up colonel, much decorated in the Marines. And he came in to shape up the Naval ROTC unit. And we got to know Jerry on a personal basis and he wanted to do something that had never been done before. He wanted to get a law degree while he was going to the University of Texas and while he was a Marine Colonel. Through Tom Johnson's good efforts we were able to get that done for him. He got his law degree, served there for another year at the university and retired and then went to the White House under the Ford administration as an aide to the White House.

KELLER:: I hope to interview Jerry also.

CROSBY: I said, "Bob, we need to get Jerry here." We just got the franchise in Louisville, Kentucky and I said that we needed to get someone in here to handle government affairs and to deal with the cities and we had also bought Atlanta. So we hired Jerry to come in and actually Jerry came into Communications Properties. When we sold it to the Times Mirror, they had to move the company out to California. And then we hired Jerry back away from Communications Properties for the Prime. So he did Prime for the whole area out there and as you know, Jerry served quite well as the chairman of the NCTA. And so he provided a great service to Prime.

KELLER:: So then Prime was built up from virtually nothing to almost a million subscribers?

CROSBY: Yeah. That is correct. In the meantime, in the more recent times to bridge a gap there, at Prime I was approached by a fellow that had been in the cable business a long, long time - Jerry Canty. Jerry Canty was an engineer. Came up through Bob Rogers' organization, TCI, and Jerry approached me and he and a fellow named Brian Owens who was one of the three partners who started E! Entertainment, and the E! channel some years ago. He approached me and Jerry had been going to Argentina for ten years consulting with a very interesting fellow, one of the world's great entrepreneurs. Fellow named Sam Leiberman on cable television. And he says I need to take you down there. This guy, you'll really enjoy the guy, he's one of the world's great entrepreneurs. And he never had a partner in his life but his brother. And he said, "With your penchant for partners and unique partners, maybe you can go down and talk to him. He's got 350,000 cable connections." I said, "Really? I didn't eve know they had cable in Argentina." And he said, "Yeah, he does. This business got very big and he needs to start thinking about taking it into total communication. He's heard talk about telephony and said it's big, but it's a sideline to him and maybe he might take in a strategic and a financial partner. So I went down and met Sam. He was born in Argentina. His mother and father escaped from Poland, went to Argentina and he was born there, years ago and he had a number of businesses. We got to know each other and over a period of four or five months, we talked about how we could come into his company.

And so, at that time a U.S. citizen could not own anything in telecommunications in Argentina. I went down there and found out that here's a country with a GDP twice that of Chile, twice that of Mexico. Then all of a sudden, I found they had 39 million people, nine million television sets of which five and a half million were connected to a cable. There were 1,500 cable television systems operating in Argentina when I went there five years ago. They had to be owned by Argentine citizens and you could only own one. We went in and said, "Well, how do we do this?" Fred Leiberman and I had been partners back in the '50's in Spanish International Network. The Escarga family from Mexico had wanted to be... they found out they could sell novellas soap operas down there in television and make a lot of money but they found that the Mexican people wanted to watch "I Love Lucy" and "Gunsmoke" and "Bonanza" and they had to dub those. And so they were paying a lot of money in pesos to bring the U.S. programming down there and since they had a monopoly, the government finally told them, you've got to find a way to get some dollars coming in instead of all the pesos going out. And so it was tough for them to do because there were no television stations in the United States doing Spanish programming. We were building cable systems back in those days in areas where we had a lot of Spanish speaking people and the only television station doing Spanish language programming was in San Antonio – KCOR.

KELLER:: Escarga?

CROSBY: In those days we were dealing with Emilio Escarga. We'd been through two generations at that time. Emilio Jr., we used to call him Chico and he was better known as El Tigre, was the son and he died about a year ago. His son, Jean, who is 30 years old is now running...

KELLER:: Generally controlled all communications?

CROSBY: For many years. And so they decided they needed to have an entity in the United State that they could sell their programming to. In those days, the Spanish population was rising. And so anyway, we got to know them and Fred and I became early shareholders in Spanish International Network which went on to build a television station in Miami, New York and Los Angeles, KNBX TV, Chicago, San Jose, San Francisco; any population area where they had a reasonable Spanish language segment. We built that up to a fairly good sized company and so we got to know them. When they wanted to build cable systems in Mexico back in the '60's, they did it on a defensive basis, much the same as many broadcasters in the United States went into the cable business – not to make a profit but to keep someone else from doing it. And that was their reason for building. They tried to build it three times, but it never did work and each time they would ask us to come down and try to help them and we finally did. It was tough in those days because the Mexican power system was so badly built, you got a surge. All the amplifiers would go out and you had to reset everything. It was a problem. But anyway, we were long time players of theirs and so we did have a little experience in dealing in foreign countries and especially in dealing in a Latin environment. So that gave us an experience back there when we went into business in Argentina. How to get in before the treaty was approved, if in fact Presidents Menim and Clinton ever signed the treaty, which they were talking about doing. TCI was there in the wings, US West was in the wings, Time Warner was there salivating over this market. Buenos Aires has 12 million people and had almost a million subscribers in the town when we got there and everybody wanted in but nobody figured how to get in. So I went to Sam and said, "Sam, if you're comfortable we'd like to figure out a way to do this." Prime Cable couldn't take the money down there, because they had a rule about going outside the country and I said, "I think I can figure this out, Sam. We get the best attorneys we can find, see if we can find a way to do this legally before the land rush starts, before the gold rush begins." And so we came up with a plan.

KELLER:: You made a statement there that interests me. As much interest as you had outside of the country at this time, why did you put a provision in Prime that you were not going to put your money outside the country?

CROSBY: That was not my provision, I was merely a director in the company at that time. Some of the big investors, interestingly enough some of them outside the U.S., when they put their money up they said, "We know what you guys can do in the U.S., Bob Hughes", and probably we could have stretched it but in all fairness, Bob was not all that acclimated to going outside the country anyway.

KELLER:: It was just an interesting comment and I was wondering about it.

CROSBY: And there were no ironclad rules but the first thing I did being on the board of Prime, I said, "Bob, we've got an opportunity down here, do you want to do it?" He said no and so that cleared the deck. So we went down and came up with a plan whereby we valued Sam's company and I said, "OK, Sam, X dollars is what it's worth and we will lend you half of that amount. We'll put that money in the form of a loan that can be pulled out if you want to and we have a 50% profits interest in the company. If and when Clinton and Menim ever sign the treaty allowing us to have ownership we will convert that debt automatically into equity.

KELLER:: This was in the '90's at this point? When did you start in Argentina?

CROSBY: This was five years ago.

KELLER:: You had not any interest prior to that?

CROSBY: Didn't even know they had cable down there and so we got to know each other real well and I said, "I'll bring a money partner in here, a strategic partner, and we'll talk about a couple hundred million dollars and come in and be your partners and go ahead and build this thing out. And he said, "Let's find out who we're going to get." And so we got the lawyers to write off on this plan. And so I went to Bud Hostetter. I don't know if in any of your interview you've run across an organization called the "ROACH"?

KELLER:: I have not.

CROSBY: The ROACH is the Royal Order of Ancient Cable Hackers of which at one time there were sixteen of us in the business who played golf together.

KELLER:: Indeed I have. John Saeman introduced me to that group not too long ago.

CROSBY: So, Bud Hostetter was one, a real gentleman and a good golfer, we carded down to eight about fifteen years ago. Sixteen was a little unmanageable. So we carded it down to eight and we play golf four or five times a year together and have a great time and so Bud at one time was one of the eight. But he got too rich and too busy, he was still private at the time. I said, "You just bought the cable system in Providence, Rhode Island." He said, "That's right." I said, "I think you paid about $2,400 dollars a subscriber and about 12 time cash flow." And he said, "Yes, that's right." I said, "Well, suppose I find a deal where we can buy 350,000 subscribers for $650 dollars a connection and for five times cash flow instead of twelve. Commit a couple hundred million dollars, then you've got to pass the test to be a partner with a very unique guy." And so he says, "Crosby, you're going to start telling me a whole lot more about this, aren't you." I said, "Yeah, if you'll be quiet, I'll tell you some more about it." He said, "What did you say the guy's name was?" I said, "Leiberman." He says, "We'll do that deal. You've had a lot of luck with that name in the past." I always say the bigger deals are sometimes easier to do than the smaller deals. The timing was right for Continental to do that. So Sam and I formed a partnership with Continental. Time will tell you, I've done a lot of different things. I had a little company called TESCORP, which was about a 20 year-old public company that we'd had in the oilfield equipment business and we had just sold the assets. So we went down there and TESCORP was sitting down there with a little cash and public shell. I said, "My gosh, big company had no interest in these other 1,500 little companies" and so it was a natural consolidation play for us to go in and start to guy the little systems. So TESCORP, separate and apart from VCC, the company that Continental invested in and I invested in started buying little systems, which we did. And we put those into a cluster into TESCORP.

KELLER:: Same old systems coming back again.

CROSBY: In Argentina. The same things we'd done over here five time. Consolidation play. They talk about roll ups today, they've been doing roll ups for 40 years. So anyway, we built that company up and within a year and a half, Menim and Clinton had signed the treaty and the values doubled overnight because U.S. people could come in and buy. And the industry consolidated into three companies basically. We sold TESCORP to a company called Supercanal. We sold VCC the company that Bud invested in, Continental invested in with Sam. We sold that to a company this is now controlled by a big media company called Clademos Canal. Citicorp Equity Investors and Telefonica de Espana are in another company and then Hicks-Muse came down and got involved and so all of that got consolidated into three major companies.

KELLER:: You'll get a chance after this is transcribed to put in these exact names. We won't go into them right now. I can imagine the transcriber trying to spell some of them.

CROSBY: One of the things that I haven't let you question, so I need to let you question, eventually you need to get a philosophy that I had early on. I decided that I knew a little bit about the hardware end of our business. Certainly Fred was the genius in that regard. But that early on I began to see that Fred was the guy that got Eddie Schneider started in a thing called Prism.

KELLER:: Tell us about Prism.

CROSBY: Eddie came to Fred. We were building the system in Philadelphia at the time, Telesystems was. And Eddie had bought the 76ers and the Flyers. This was before the days of the Spectrum I suppose. He came to Fred and he said, "You know, I'm sold out. Season tickets. This is a great business but I need to think about how I can sell more tickets. Can we do something with the cable area up here?" And Fred says, "Yeah, I think I can put that together." And he said, "We'll sell a season ticket over the cable." And so Eddie said, "I've got these two sports teams, we've got the programming." Fred said, "I think in all fairness you're going to have some other programming." He said we'd work out a deal to buy some films.

KELLER:: What year was this?

CROSBY: I wish I could tell you it was in the last of the '70's, early '80's. When was HBO?

KELLER:: They put it up on satellite in 1972. This was before HBO.

CROSBY: I don't know which was first. That was the first one in that particular area. So I got interested in programming then.

KELLER:: So they were going to provide Prism at an additional fee.

CROSBY: Over the cable systems.

KELLER:: Had Jerrold provided a satisfactory trap at that time?

CROSBY: Yes, sure did. But this leads into why. I said, "I need to know something about the entertainment business", because I thought the two should be together. And enough of our financial people were coming to me and saying you need to start learning about this other business. Nobody was really getting into it. Irving always wanted to buy MGM and Irving bought TelePrompTer. He wanted to own a film company because he could see the early blending later on, blending of the programming and the highway that we were doing. So anyway, I proceeded to lose personal money on just about every phase of the entertainment business. When one day I got a call from First National Bank of Boston saying that they had a company that was called Orion. That the people from United Artists had sold their company and they wanted to have their own company film business. Very fine people Arthur Krim, Eric Pleskow, Mike Medavoy and Bill Bernstein.

KELLER:: You're going to have to put those names in when you get it back.

CROSBY: They had done very well in the film business while it had been private after they left United Artists and sold it to Transamerica Insurance Company. They had been very successful. They made "Arthur" with Dudley Moore and "10" with Bo Derrick, both of which were box office smashes but they had not made any money because they did not have a distribution company. They paid Warner Brothers 45 million dollars in distribution fees in a two-year period. They said, "We've got to buy a distribution company and we've got one called Filmways on the New York Stock Exchange and Warburg Pincus is going to come in. HBO is going to put a slug of money in, Warburg Pincus is coming in with a slug of money and we want you and Fred to come in and buy a little piece of it and go on the board. And I said, "I'm not going to worry." And they said, "No, no, they need somebody in there that's got a hardware background because they understand what cable is going to mean to Hollywood. Since you've been trying to learn something about the software business, so it'll be a good deal. And I said, "I'll do it for three years." So I did. And went in there and served on the board, we took it on the New York Stock Exchange.

KELLER:: This was Orion films?

CROSBY: This was prior to the time that Sumner Redstone and Kluge started to play poker over the company but I got off the board after three years, which I committed to do. And in the meantime I met a fellow named Robert Redford through those activities and became the chairman of the board of a non-profit deal called Sundance Institute. And we started introducing the theatrical people to the hardware people through several of those interviews. I became chairman of that board and was on the board for about ten years. And then went on the board of a company called Imagine Films. Ron Howard and Brian Grazer, two very brilliant young filmmakers that made a film called "Splash" and things like that and built a company there. The only reason I mention it is because there had to be a liaison developed the HBO's of the world. We were doing a great job of getting Hollywood involved in the film business. Now you have announced yesterday the fact that Paul Allen is now making another four billion dollar purchase. So you have the software coming in with the hardware.

KELLER:: He already put money into Marcus.

CROSBY: He bought it for 3 billion, I think. This purchase is 4 billion.

KELLER:: Which company is this?

CROSBY: Charter. And Allen made the statement that he has decided that cable was the route to go. And he put his money where his mouth is in that regard. He said he wanted three or four million subscribers. I only mention the other because of the relationship between the Hollywood entities and the cable entities.

KELLER:: Were you ever able to marry the two of them in your own companies, the Hollywood connection with the cable connection?

CROSBY: No, the only way we got even close to that, we got into the theater business some years ago and bought a group of theaters called Wometco Theaters in Florida and Puerto Rico. And in those days the government made the film companies divest of the theaters some years ago. Now they're beginning to come back and we see there's a relationship there of them coming in. We sold those theaters and just recently bought another company out in California called Cinemaster, which is a theater business and we see the theater companies coming back in. They've all looked around in cable and I don't think there's any legal problem with them investing in cable, but that industry has changed so dramatically.

KELLER:: In the early days, you had the Vumore Companies out of Oklahoma.

CROSBY: It's very interesting that you should mention that because they had started out as a theater business as you know. Larry Boggs lived in Ardmore, Oklahoma. There were others, Bobby Rosencrans was connected with the old United Artists in Dallas and they were early investors in cable. There has been some intermingling there.

KELLER:: It's interesting that you in your early days had a telephony background. You went into the cable business and associated with other media businesses, broadcasters, newspapers and the entertainment business, and now it's starting to come back to where the combination of cable and telephony are getting involved together.

CROSBY: They may take it to business, no question about that. And as I said earlier on, if we have any skills, it's more in the entrepreneurial aspects of the game. Opening the South American marketplace, what we started down there five years ago has meant the influx of two billion dollars of American money into that economy in the last five years. It's almost like seeing a forty year history that when the cable business here can run fast forward into a four year ----- of consolidation down there, because bear in mind there are basically three companies down there instead of 150 systems. Three companies now own 65% of the total business down there. Now, the rest of the world down there is not built out like that. Argentina happens to be unique in that it's so much ----. For instance, we on a basic cable in Argentina would bring us 35 dollars a month. If you want American, Americanize it. They trade the peso is pegged to the dollar. And if you walk across the Andes into Chile, from Rio Gajuagos in Argentina 35 dollars a month, walk over to a similar town in Chile, would be 20 dollars a month. And it's a question of what the traffic will bear situation. So the economics are totally different.

KELLER:: Was the economy so much better in Argentina?

CROSBY: Yeah, Chile has always been the darling of the U.S. investment community because Pinochet made them pay their bills when he was dictator. But the wage earners there just don't have the upward mobility that they have in Argentina. In answer to your question, we are now looking at just about every country down there, with the idea of going back in and doing some cable in different areas. But it's a question certainly, every time you go out of your own backyard and have a partner you better have the right partners, you certainly better have the right partner.

KELLER:: There will be a lot of questions about Santo Domingo and Uruguay and some of the others in Central America that have been disaster stories to this point.

CROSBY: That's right. And we were very fortunate, we didn't want to lull ourselves into a sense of security. We were very fortunate to find the right partner down there. Sam Lieberman is an exemplary character. He has 4,000 people growing flowers every day in Ecuador and Columbia and Mexico and he has a company called Flor America, the largest flower grower in the world. He started off as a young man. He wanted to be the Seiko watch distributor for North and South America so he made 40 trips to Tokyo, taught himself how to speak Japanese and convinced Seiko that he should be their distributor for North and South America and he moves his family over to Panama and operated out of there for eight or nine years. He's an entrepreneur of the first degree.

KELLER:: He's still operating out of Rio at the present time?

CROSBY: Out of Argentina. But we were fortunate to find the right partner there. Not just the right partner from a political standpoint but from an integrity standpoint as well. They stood us in good stead. We were very fortunate in that regard.

KELLER:: So you do intend to go back down there?

CROSBY: Oh yes. There's another consolidation play frankly with the smaller systems. And the telephone companies are prohibited still, they divided the country in half and Telefonica de Espana...

KELLER:: Are you talking about Argentina?

CROSBY: They have north and the – companies from Italy and France, and they have the south. They are prohibited thus far from going into the cable business as are the cable companies prohibited from going into the telephone business. But that's all about to stop.

KELLER:: As it happened here.

CROSBY: Exactly. That's why I say, you see the condensation of time that's occurred down there, but it's the same history really.

KELLER:: Do you see in this country a consolidation of the software and the distribution methods continue to develop in this country?

CROSBY: Yeah, I sure do. With the introduction of the Microsofts, the Allens, the people like that, we were a pretty inbred industry for a long time. And a lot of bright new people started coming in from the Wall Street area and we got a little more sophisticated from the money end of the game, and now we're getting a little more sophisticated as to the technologies. Everything's blending. I see for a while we were worried about where does cable play, what part do they play? But with the TCI/ATT thing and all of that sort of thing coming together, the industries not only surviving, but it's still going to have another heyday.

KELLER:: Don't you think that now the term cable television is just about a misnomer? Just as CATV was at one time. Don't you think there's a time when we have to rename the industry?

CROSBY: Oh yeah. Probably so. We spent so much of our time and efforts in styling regulation in the old days and most of that is behind us now.

KELLER:: As you know, you were a great part of it. This country, the whole development of the infrastructure system for communications was developed by private capital, not with an ounce or a dollar of federal, governmental money. And it was a great tribute to the industry and the people who did it.

CROSBY: I think so. A great number of people, a great group of people.

KELLER:: If you were to see into 2025, how many major companies do you see involved in the telecommunications business?

CROSBY: Major players in the telecommunications business. I don't see how you can have internationally over ten or twelve. I think there is going to be a great amalgamation, already is, but a great amalgamation of companies like BT and people of that nature, they'll all cling together. And the dollars that are required to do what has to be done - I hate to say it, because if anybody's ever been a small entrepreneur, that's been our game. And I hate to see it, I don't want to see that taken away from the business, but I don't see how the very small operators will make it anymore. I don't see a place for the small company. Do you?

KELLER:: I don't personally. If there's going to be little systems like little telephone companies spread all over, it'll be those mom and pop systems.

CROSBY: Take for instance in Argentina. The little system with 2,000 connections sitting up in the boonies someplace, they're not going to get the same service that is available in the cities as far as that's concerned. But they obviously moved there because they want to.

KELLER:: We have thousands of those systems here in the United States.

CROSBY: Lots of them. So there is always going to be that opportunity. But I think it will be a few large Mega companies.

KELLER:: I think it was the same thing in the development in the cable industry as you recall. These people in the smaller towns were once satisfied with two or three signals and then they wanted everything that their brethren in the major markets wanted. Don't you think this is also going to happen in smaller systems that are going to demand to be linked together with all the satellites and other means of distribution?

CROSBY: I think so, and I'll tell you a funny story back to the pole situation. We had a friend who was ready to build a system in Munroe, New York years ago. And once again, the telephone company reared its head and said "no poles". And so we said, this is going to be a protracted deal. So we went out and just before dark we got three metal 20 foot poles, very small in diameter and we painted them. We painted one black and one green and one silver and we stuck them in the ground. And the next day we got the three presidents of the three garden clubs to come by and look at our poles. We said, "Ladies, we wanted you all to have the final say on what color poles we could put in town here, we want to build a cable television system." They said, "Oh, we want a cable television system." And we said, "We're going to put one of these color poles, which one do you like?" They all picked the dark green. We had the silver, the black and the dark green and they all picked the dark green because it blended in with the foliage. We get them to sign a little letter. We go to the city council. We say, you know, instead of lashing to the telephone company poles here, because they wouldn't give us a permit, we're going to build these poles in town and the garden club wants us to put the dark green. So this was implied consent, we both assumed.

KELLER:: When do you think the telephone companies finally decided to join us rather than to fight us?

CROSBY: It depends on the personnel running the companies as far as that's concerned as to how you categorize them. I think they've known all along or felt all along that consolidation would come about. And the thing that always worried me, Jim, was the fact that in the early days, especially, was that we never had the money. If we had the skills to develop the equipment that we had to have to learn to compete with the telephone company, we didn't have the capital to really go out. You know, Bell Labs in the early days had equipment sitting in there on the shelves that just put us to shame in our technology as far as that's concerned. You always knew that they were sitting out there with the equipment to rule the industry as far as that's concerned. The thing that used to worry me was whether or not our values were going to come about in time to stave off the great big companies coming in.

KELLER:: Before the consent decree in the middle '60's, all the telephone companies were operating leasebacks. They'd build the system and lease it back. Did you ever consider one of those contracts?

CROSBY: In Munroe. That's what they were trying to get us to do, when they said, you've got to challenge us to get on the poles, we're not going to let you on the poles. And in those days, you could go to court and you could sue over it as far as that's concerned, but I just mentioned how many years ago, doing it if you want. And that was the whole motivation to attempt to delay. They offered us lease backs and we never could make the lease backs work economically.

KELLER:: Did you try it?

CROSBY: Yeah, we tried.

KELLER:: Technically you tried to make it work? When you said "make it work" you meant from a financial standpoint?

CROSBY: We never could make the numbers work. Some people did.

KELLER:: But they couldn't make it technically work either.

CROSBY: That was the other thing. They certainly had the technical capability, but we were used to sinking or swimming, making the darn things work. And you were turning that berth right over to someone else. So it just never was a very practical arrangement.

KELLER:: I think there were very few that were ever signed and fortunately the industry won the consent decree in the mid '60's. Any major mistakes that you made along the way?

CROSBY: Oh gosh, yeah. In this business, I've been in a lot of different businesses, but in this business, probably not consolidating the companies - not a mistake that I'm concerned over. We had too much fun doing these things on a small basis, building up a certain size and selling them off. By mistake, if you mean financially, if we'd kept them all together and sold them all later on at one point in time, the financial rewards would have been much greater. But I don't know if it would have been any more satisfying.

KELLER:: You said earlier on as we started that your main reason for getting into the business was to sell television sets like Marty Malarkey was doing in Pennsylvania. If you had had a reasonable signal, do you think that the business from your standpoint, would have developed at all or would you have gone into something else? You had a choice of many businesses to get into.

CROSBY: Not in Del Rio, Texas, not really. In 1954 in Del Rio, Texas there were not too many things to go into.

KELLER:: You had a telephone background.

CROSBY: I had a telephone background, bought a little radio station out there and had a radio station. Over a period of time, I owned the radio station, the bank, the newspaper.

KELLER:: You were Del Rio.

CROSBY: No. In answer to your question, the scope was rather limited in that regard. I could go on out of there, which we eventually did, enlarging the scope, but it was not an open sesame to other opportunities.

KELLER:: You recognized this very early on?

CROSBY: Yeah, funny thing. Del Rio was the site of the most powerful radio station in the world. Dr. John Brinkley, as you recall, do you know who the first DJ was on that radio station? Wolfman Jack. And I had a 500 watt station, he had half a million watts over there.

KELLER:: Across the border?

CROSBY: Across the border. And there was no shielding. It just bounced it everyplace. When we first put the cable system in, the towers were four miles apart. Here he comes with that half million watts. We'd have our bitty signal and you'd have Arthur Godfrey standing up there with a box of Wheaties and in would come this Spanish language voice in the background. So my early experience in that business was the outdoor radio station. We used to say we didn't need a radio to tune in on it, we could get it off the bed springs or the telephone or barbed wire fence.

KELLER:: I'll bet it was radiating in your system too.

CROSBY: Oh yeah, we had to be shielded. We still couldn't keep it up because the television signal we were getting was so weak. And this thing was so strong that it would just blank us out. Another reason we needed to get closer down the road to the signal.

KELLER:: You jumped around the country. From Texas you went up to New England then to Pennsylvania and then out into Oklahoma. By this time you were almost national in your scope.

CROSBY: I think we built, Fred and I in Telesystems and we were not in the contracting business to be in the contracting business. We were in it as a means to an end. We moved into a little town in Massachusetts and a dentist had sold 93 of his friends stock in the cable system. We came in and he'd built about a third of the town.

KELLER:: What year was that, do you remember?

CROSBY: Back in the '60's. And so we came in and he had television and they had television and they weren't really interested in doing much more, so we came in and said, "Look, how about if we come in and buy control and put a bunch more money in and build out the rest of the system." So that was the kind of thing that we did with our construction company. But I think we counted up one day, I think we built in 38 states.

KELLER:: Your own systems with your own construction company?

CROSBY: Ben Conroy and I years ago were looking for places to build. In those days you went to the NCTA board meeting and you'd be very careful how you showed your papers because everybody was going to get in line for the new franchises. We hadn't heard about a little town called Effingham, Illinois.

KELLER:: John Gwin?

CROSBY: He's from there, exactly. But John didn't build the cable system there. We heard about the opportunity to build a cable system, went down there and made a deal with two families from Springfield, Illinois who had the theater there. The Fracinas and the Jaquetos.

KELLER:: You were in the rent a citizen business far before anybody else was.

CROSBY: We went to Springfield, Ohio. We found out they found a theater that they were a pretty influential people and they had a lot of money and we didn't. And so we went in there and I'll never forget, we went to Springfield to talk to them. Ben and I walked in, they had this little old lady sitting in the outer office and these were two Italian families. She says, just a minute. And she took us into the inner office there. They said, "OOO look at the young ones." Conroy and I walked in and made a deal with them to build systems in Illinois. We built the first one in Effingham and we built the tower right next to the drive in theater. We did it with non-union labor. It came whistling down, so we had our introduction to the union.

KELLER:: It's interesting that you were in Illinois because one of our biggest foes in the industry was also in Illinois, Augie Meyer, who was also a broadcaster both in Champaign and San Diego. He gave us fits for a long time.

CROSBY: We had a few antagonists, didn't we?

KELLER:: Broadcasters had one or two ways to go, either join us or fight us.

CROSBY: That was kind of a theory we had, it was get them in. And you had to do it on the basis of, look guys, don't do this if you're going to do it on a defensive basis. It's a business, it's a compatible business.

KELLER:: Can you think of any other stories that would have a meaningful relationship to your development in the industry and the industry's development itself?

CROSBY: They were some great old days but you heard a lot about the great old days: the rugged entrepreneurs that were in this business. Give us the Al Riccis of the world. I hope you have on tape Al's story of being shot down in Italy of all places, and getting the money for his first system when the banker collected on the loan chips. There are some great, great people in the early days of the industry. I think in all fairness that one of the reasons the industry has grown as it has it that you had some people who came into the industry who were pretty strong individuals. A lot of them left in the early stages but a lot of them stayed on and I think that's the strength of the industry that we've had the courage of the people who've been in it and it's changed dramatically. It became a financially driven industry after the first fifteen or twenty years but it's the only industry that I know of in the United States, if we stop and think about it, that started off in the little towns and made its move to the big towns. Can you name another industry of any size that has done that?

KELLER:: No, I can't.

CROSBY: I used to tell the bankers, we did so much early work with the commercial banks who laughed at us – with the insurance companies who laughed at us and Wall Street. You know we had to get this thing down to a very simple story to tell and now the money is coming.

KELLER:: Well, we talked about this question earlier. The bankers felt that there was a real business here only after we won the copyright question. We've gone over some of our problems with the telephone companies. Then as pay television was developing and we were distributing HBO on a pay television basis, there was a time when the bankers weren't sure whether our projections as to pay television were correct and they wouldn't allow us to use that much of the projected revenue in our pro forma. Do you recall that?

CROSBY: Oh yeah, I sure do. And I used to strike it out of the projection. Totally eliminated most of that was going to be a factor.

KELLER:: They still believe it.

CROSBY: They believe it. And the thing that really saved the industry as far as a financing area was the fact that you could point to these long years of cash flows that kept coming, even through the tough times. We all know that cable television is one of the last things that the family is going to take out, even the lower income families are better basic cable subscribers that the higher income families. We've seen times back in the early days when they'd take out the telephone before they'd take out the cable. By the way, we happened to see that down in Argentina. When we first started buying systems down there, the penetration rate was 15%. You'd ask somebody in the town if they had a telephone. No. Why don't you have a telephone Mario? He said, who would I call? My friends don't have telephones either. It's kind of interesting. The first system we bought down there in the little town Usuiha, which is the southern most city in the world, just before you jump off to Antarctica, the very tip of the South American area there. And they had no bills. There was no post office. So when we put up the system, they didn't know how many customers they had, but they had an idea. Of course, we could take the gross receipts divided by the rate and figure out what it was. But inside of six months, we had twice as many people paying as we did when we bought it. They were out there, but they hadn't gone by and asked them to pay. So we went on paying about two times cash flow instead of four times cash flow for the system. But down there, all services are basic. The package includes premium channel.

KELLER:: You went through a number of recessions in the business starting in '67 but tell us a little bit about the situation in the early '90's. '91 when there was great fear about the re-regulation of the industry after the Cable Act. Congress was going to revoke the Cable Act, and once again put rate regulation on the industry itself. How did you look at those years and how did you go through those years?

CROSBY: That was one of our slack times as far as that's concerned. And we were just as happy to have our investments down at a fairly low ebb at that point in time. Because our crystal ball was muddy, was clouded at that point in time and it was very fortunate from our standpoint we came across the Latin American situation at that point in time because it gave us – we stepped back forty years in time. We could do the same thing that we had done before without the competitive aspects or worrying about what the regulatory proposition was going to be. Bear in mind that our approach to this business as a slower entrepreneur has always been a somewhat venture capital approach and we were usually looking to turn our money at the end of five years. The reason I mentioned that is you had these peaks and valleys in the industry certainly, and back in the late '60's when the interest rates went through the roof, we had CPI somewhere along in there. CPI we operated for about 12 or 14 years and we hadn't anticipated staying with it that long, but we had to ride through an interest period when our cash flows were severely...

KELLER:: Did you have a floating interest rate at that time?

CROSBY: Yeah. And they were similarly restricted. In this business I always tell people I spent my career, most of it, in a capital intensive industry which it has been always. And so you're subject to the vagaries of the interest market. At that particular point in time, we could not have sold that company anywhere within about a four year period because the interest rate, the leverage that we had to the company... That's the difference between the telephone companies with their balance sheets being able to look at the industry differently. One of our problems, I'm sure you've had this chronicled in your discussions, was that the financial buyers coming into the industry and paying top prices and then had to turn around and pay that debt off and in the process had to raise rates, sometimes higher than the normal rates. Some of our problems, as you well know, have come about by the financial players coming in, raising the prices, leveraging the darn things and then raising the rates to get even.

KELLER:: That's what happened after the '84 Cable Act in certain places. That's what got our vice president into the act.

CROSBY: Mr. Gore, as a politician, you've got to admire for the fact that he seized upon the opportunity.

KELLER:: He's a populist, there's no question about that.

CROSBY: There again, those are factors that come in from outside the industry. Doing an opportunity that had to kind of mess up the landscape for a while.

KELLER:: The reason I asked that question is because there are two points of view. Some people looked at it as a great opportunity to consolidate when prices were so very, very low, recognizing full well, as you pointed out before, that even full regulation under the FCC wasn't going to be greatly onerous. There was still going to be a way to be able to make money.

CROSBY: That's a position that we've had fortified through the years, that there is a business here. The margins are going to ebb and flow, but there are not many businesses that are not that way. It was a business to stay in and to ride through the various ups and downs.

KELLER:: There were many limited partnerships that were bought out by the general partner in just that period and there had been many lawsuits filed because of that.

CROSBY: Exactly.

KELLER:: It was an interesting period and I just wondered what your reaction to that was. I ask that question of many people.

CROSBY: It happened to be a period of time when Prime was in the process of liquidating -------- properties. We were at a fairly low ebb investment wise in the industry and then as I said, we came into this situation in a totally different atmosphere down in South America.

KELLER:: But if that hadn't presented itself, what would you have done? Would you have hung on and when things turned around would you have gotten back in?

CROSBY: I don't think we'd have been able to do it. We are looking right now because of our experience down there and the early experience in Mexico and so forth, we're looking at some situations in Europe which we looked at before and were not palatable but now some situations over there look like they're developing. We don't have the capital, frankly, or the inclination or the skills to compete in the U.S. today.

KELLER:: I can understand that.

CROSBY: You've just got to realize your limitations and yet, we love the industry. So if we could take some of those same skills that we've developed over the years and apply them in other areas. For instance, we were in Switzerland when we spent a long time trying geographically to diversify. We were in business with a very large British company at the time and they were the largest contractors and the largest builders in the UK, called Wimpey. When Mrs. Thatcher first came along and said she was going to set out rules under which the islands would be wired for cable, our partners, who we were in partnership with over here in the construction business, Wimpey people called and said this looks like tailor made, this is your business. We're here. We got a strong balance sheet and we are in the contracting business and so come over and see what you think. So we took our Swiss engineers and we went over and looked. Our conclusion was that first of all, the construction cost was going to be very, very costly. And number 2, right or wrong, the incidence of VCR penetration over there was very, very high. The guy that had paid $1,200 dollars for his machine was acclimated to the VCR technique. We just told them, as badly as we wanted to go in there, because we could see ourselves phasing out of the Swiss operation and that was a natural move. We came back and said, we don't think it will work.

KELLER:: Many U.S. companies have been hurt, in London specifically.

CROSBY: And you know what happens then, Jim, I'm sure you've had somebody else say this, but what happens then is the telephone companies being blanked out over here couldn't go into it over here so they all went over there. There were some entrepreneurs from over here as well. Then you had Southwestern Bell and I think Bell South went over there.

KELLER:: US West went over there with a cable partner.

CROSBY: Yes, they did and Jones was there. But anyway, they would have survived because they had enough money to survive but the business just never would have made it except that when they came back and said, OK, telephone companies can be in the business. That made it not a great business still but it produced viability for the industry.

KELLER:: The telephone system over there was so bad, especially London. I think that enticed a lot of companies to go over there and say we can do something about that.

CROSBY: But I think the telephone companies went because they were desperately trying to find a way to learn the business and to be in it and that presented all of a sudden an opportunity. It was a language they could understand so that was an easy diversification for them.

KELLER:: The other big telephone company deal was when US West bought Continental and formed Media One. Do you foresee them continuing to be major players in the business?

CROSBY: I think they vacillate. I think they vacillate as to how strong they want to be in the business. I really do. When they made the deal with Bud, they were going to do all these great and glorious things and basically they've sold out of Argentina when you get down to brass tacks. I think they ebb and flow as to how strongly they want to be in the cable business.

KELLER:: That's quite interesting. Wonder when they're going to make up their mind? Of course they didn't bring any of the real knowledgeable people from Continental with them.

CROSBY: I don't know where this is going to go. I'll probably get killed on some of my comments.

KELLER:: You'll have the opportunity to edit.

CROSBY: I don't want to hurt anybody's feelings. I've gone this far. But anyway, when you pay eleven billion dollars for a company in another industry, it's almost inconceivable that you didn't pay for some of that for the talent. You know what I mean?

KELLER:: I agree wholeheartedly.

CROSBY: So I don't understand the philosophy, frankly.

KELLER:: I don't know if they offered these people positions and they just said they didn't want to come?

CROSBY: I think it was offered to the best of my knowledge and of course we worked very closely with those folks on the Argentine situation. I don't begin to know the ins and outs, but I think it was put on a basis of, if you want to move to Denver you know we'll have a job for you, and I think that's kind of the way it was put. I think we were all disappointed.

KELLER:: And then they bring in some gal who has actually no experience in the business at all and put her in charge. It was surprising to me, although she's done very well with the telephone business.

CROSBY: I think once again, in a different culture you have professional management in all these telephone companies. You don't have the entrepreneurs and the culture. One of the world's great entrepreneurs, Bud Hostetter, in with a very professional group of managers. Especially when they see that somehow or another he's got a few billion dollars in his pocket, it's a different atmosphere, a different culture.

KELLER:: I'm sure that would be the case. I guess Leo Hindery is enough of a professional manager to be able to get along with AT&T.

CROSBY: I guess so. I don't know Leo that well but he's done a masterful job and let's hope that he can be a cohesive force there between the total company people.

KELLER:: The breakup of the Bell system and Ma Bell went into the RBOCs and there were a lot of people who felt at that time that it was just a matter of time before they got back together again and be one of the major companies again. Did you feel that was at that time?

CROSBY: Yeah. As I say, you see that in other regulated businesses or other businesses where the anti-trust department is in a quandary about all this today. But most of the industries, the big ones, are in consolidation stages. There's no semblance of the old banking orbit as we once knew it.

KELLER:: Not even in small towns anymore. They're gobbling small town banks up. Makes you wonder if it's going to happen the same way in telecommunications and I'm sure it is going to happen.

CROSBY: I think so. I think there's always a technological aspect to it. There's always going to be some new technology out there and some young people coming up with a better way to fix things. When we bought the system in Las Vegas, none of the casinos were on the cable. They didn't want you watching television in your room, they wanted you down below in the game room, so they didn't have cable. Our engineers were able to show them that they could get about three times the amount of programming back there in the sports room that they were getting at that time. They said, "Why would you charge for that?" And we put a thousand rooms on the cable. Once we got one, they all came in.

KELLER:: Did you deal with the Greenspan people out there?

CROSBY: Father and a son. Actually we had sold Communications Properties to Times Mirror. Had a good relationship with the --------- and Chandler and that bunch. So they owned 50% of the Las Vegas systems with the newspaper, with the Greenspan people. They came to us and said, "Do you want to buy this thing?" It was a good investment for us but they knew that Bob was going to take it and go with it. They said, you probably can make it grow faster than we can, so we paid them a good price. We had to have a complete understanding and go forward from Greenspan's because there was no way we were going to get into that situation without ------- once again partners. Bob, to his credit, spent a lot of time with Brian who was the son, determining compatibility there. That's been a unique situation in other ways. In that town you could go ahead and do all kinds of innovations there that you couldn't do elsewhere, had all kinds of possibilities. Instead of taking the Specterdyne service, we developed our own hotel movie package, Hospitality Network. They put it in the sales room, I think it was 90,000 hotel rooms on a hotel movie package, and did all kinds of innovations that could be done technically with that system. Technically, you could sit in your room, play blackjack and get a charge on your hotel bill.

KELLER:: There was another player in Las Vegas as I remember. He was in the MATV business, at one time owned the taxi company there. Does that ring a bell?

CROSBY: No, not really.

KELLER:: He was trying to get a franchise there at one time because he wanted to link his master antenna systems together. Doesn't that ring a bell? Jack, how do you want to end this thing?

CROSBY: Golly, that's a great run.

KELLER:: This could go on forever.

CROSBY: No, I mean the industry. I just feel fortunate, Jim, that we went into the business at the time we did. You look back at the reiteration they're in, but the people experiences have been amazing. It's been a really rewarding experience to be in the industry, and you know that.

KELLER:: It's been good to all of us.

CROSBY: Lots and lots of interesting people. I travel so much still, I don't know what I'd do if I were younger.

KELLER:: Thanks, Jack. We really appreciate the opportunity to sit down and visit with you. Thank you very much, you've been very helpful.

CROSBY: Appreciate it Jim. Thank you sir.

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Jim Cownie

cownieJim5

Interview Date: Friday November 01, 2002
Interview Location: Des Moines, IA
Interviewer: Gerry Yutkin
Collection: Hauser Collection

YUTKIN: Hi, I'm Gerry Yutkin, and this oral and video history is under the grant of the Hauser Oral and Video History Project of The Cable Television Center in Denver, Colorado, which is affiliated with the University of Denver. We're here in Des Moines, Iowa, talking to a long-time friend, an old friend, Jim Cownie, who was the co-founder, is still the co-founder of Heritage Communications, and past president. Nice to be with you. It's nice to see you after a long time, and we go back a long time. Tell me about how you got into the cable television business something like 30-some years ago.

COWNIE: Let's see, I was 26 years old. 58 minus 26 – about 30, 32 years ago.

YUTKIN: When nobody was in it.

COWNIE: That's right. We got into about seven years too early as it turned out. It was 1970; satellites were invented about seven years later and that's when the cable television industry became a business. Before that it was a good way to lose money. But in any case, my good friend from high school, Jim Hoak, had returned from helping an FCC commissioner as a legal assistant to Des Moines as a lawyer. I was a broken down municipal bond buy doing quite a bit of work with that law firm, Jim Hoak's law firm, and we always wanted to do something together, and we happened to be going to lunch one day, I looked at a newspaper that indicated that Cox Cable had filed for a cable TV franchise in Des Moines. So we felt – again, I think we were 26 – that it was time to make our move if that was what we were going to do, and in fact, went out and talked to about 150 people about investing in this cable TV deal. At the time – we were absolutely wrong – but at the time, we thought Des Moines, being a second 50 market, market number 67 was going to have good rules from the FCC in terms of the number of distant signals that that market could import. That was very important in those days before satellites. Turned out we did not get those rules, and it was a very difficult first several years for Heritage Communications.

YUTKIN: Go back a little bit in terms of getting the rules. At that point you had how many off-air signals?

COWNIE: We had one public television station and three networks, so there were four channels but there were not independent channels in Des Moines. When we built the system we were able to import independent television stations from Minneapolis and Kansas City.

YUTKIN: Microwave?

COWNIE: How? By building microwave towers every twenty miles in the dead of winter. Art Hutsler was our chief engineer; he's a saint. He used explosives to do the excavation, to pour the concrete because we had to get those distant signals in order to sell anybody. As it turned out we couldn't sell enough people to really operate on a break even basis, but through good fortune satellites were invented and we were off and running.

YUTKIN: You didn't just wake up one day and say, well, let's do this. You say you went and talked to a group of investors and you got some backing. Was there competition to get the franchise? Cox was applying, you were applying – was anybody else applying at the time?

COWNIE: Absolutely! Sure, I hope it's an interesting story: we met Tom Dowden, who was Cox's franchising person, and Tom had gone around town and heard that there were these local guys who were interested in the franchise, so he and we met and ultimately merged our effort. At the time, Jim was going to remain a lawyer and I was going to remain a bond guy and we were going to hire management to build and own part of the Des Moines cable system, and that's how we happened to go down to Atlanta, meet Henry Harris, who at the time was the head of Cox, and had a wonderful day and made a deal with Cox to be our partner. They were going to be our 20% partner. Again, at the time, now we're talking about the early '70s, these markets the size o Des Moines were not being built. Those that were being attempted were not working, so Cox got cold feet on going ahead with the Des Moines franchise, and we wanted to go ahead because through these early investors we had a little money in our pocket, enough money to move ahead. We'd purchased a couple of small cable systems in the Midwest and we actually had a little cable company. Jim quit his law firm and I quit my bond business, and we were fully committed to this thing.

YUTKIN: When you say "a little money," what kind of money was it in those days?

COWNIE: My dad loaned me $25,000, and Jim's dad loaned him a little more than that, and Jim's dad put some money in the deal, and we raised a million dollars from outside investors, so we ended up with upwards of a million dollars to begin.

YUTKIN: What did you get for a million dollars in investor money?

COWNIE: Well, we had a company without any operations, and we had, as I mentioned, in the background an impatient partner in the business, Cox. They were impatient to not do anything, and we were impatient to move forward.

YUTKIN: But you had some money from them.

COWNIE: We had some money from them, but we decided we'd go buy a cable system. So down to Creston, Iowa, Jim Hoak and I drove an hour and a half from Des Moines, age probably 28. We didn't know how to spell cable TV even though Jim is a brilliant person and had a lot of background at the FCC, and J. Howard Brown was the owner of the 2,500 subscriber Creston, Iowa system, and we got there a little early and we thought we'd do a little due diligence on our own. So, I was driving, and I drove right to the tower site and got out of the car, Jim got out of the car, we looked up at the tower and kicked the tower, it looked pretty good and on to the office we went where Mr. Brown met us. "Jim Cownie. Jim Hoak. How do you do, Howard?" "Fellas, happy to have you here. Let's spend a couple hours together. I'd like to show you the cable system. Let's start at the headend, in the tower." Well, we got in his truck and we went to the opposite side of town to the cable TV tower. Jim and I had been at the railroad microwave tower in downtown Creston, didn't know the difference. I still might not. But that was our first effort at due diligence, and we ended up buying that system, Baraboo, Wisconsin; Wilmer, Minnesota; Bronson, Minnesota; the circus, Wisconsin Dells; this and that. So we had this operation with all these small money losing entities without the cable TV franchise that we really got in business to get, which was Des Moines, our home town.

YUTKIN: They were all twelve channel systems?

COWNIE: Yeah, basically. Twelve channels, twenty channels, yeah.

YUTKIN: And they were all losing money?

COWNIE: Sure. But we had enough money; we had a wonderful board of directors and a good following even then on Wall Street that we were able to raise a lot of money over the years, and enough money to survive. So when we finally went for the Des Moines cable TV franchise and we had 800 shareholders or so, we had commitments, we thought, from the requisite number of Des Moines city council people all things being equal - if it's locally owned, we're going to give you young guys the benefit of the doubt and give you your hometown cable TV franchise. It turned out we didn't get the franchise, they voted against us. A real smart lawyer, who was savvier than we, at city hall, had a few people who were closer to the city council than our 800 people collectively, and the vote was four to three against us. Now the winner of the franchise was Athena, which was Gulf & Western, Paramount, and we were just defeated. So were prepared to liquidate the company.

YUTKIN: And when was this? '72?

COWNIE: This would have been probably '73 or 4, probably '74. Our tails were between our legs. We went to our board – we were a public company from the beginning, as I intimated – and suggested to our board that we would present to them a plan of liquidation as soon as possible, and we were sorry that we failed. A wonderful board member by the name of Jim Cooney, now deceased – C-O-O-N-E-Y – a fellow who used to work at the law firm that Jim worked at, said, "Wait a minute, men. I don't want to hear anything about that. This is not right, this is not fair. I want you guys to present to us a plan of victory, not defeat." We went back to work and we discovered an obscure law that allowed us to file petitions with the Des Moines city council to force the Des Moines city council to let the voters vote on our franchise, not just the Athena franchise.

YUTKIN: Was that a city law or a state law?

COWNIE: It was a city law. Whatever it was, it was an obscure law. I think it was a city law, and we had a friendly mayor who had the ability, statutorily, to determine the date of our referendum, and he determined that it should be on the same date as the referendum to approve the Athena franchise. So we went out, all of our friends in our hometown, and we sought and received the number of signatures we needed in each of the 99 precincts – it was a gargantuan task – and presented these petitions on a timely basis, the mayor set the vote, the referenda occurred, 99 precincts. We won in 99 and lost in 0. Athena lost in 98 and won in one. So the mandate clearly was for the locally owned hometown franchise, an embarrassment to the city council, and it still refused to give us the franchise. Long story short, Jim and I went to New York, met with the number two guy at Gulf and Western, Jim Jettleson, wide-eyed young kids, and made a deal to sell 20% of the company to Athena.

YUTKIN: So they had 20%.

COWNIE: They inherited 20%, we returned to Des Moines, declared victory for the city council. "City council, you were right. Their construction expertise was so compelling that we're bringing them in to help us build the system," and everybody was happy.

YUTKIN: And they withdrew their request for a franchise?

COWNIE: Yes, they had 20%; they saved face and agreed to buy 20% of the operation. Just to skip ahead quickly here, later on as things continued to deteriorate in the cable business, we called for their capital. They defaulted on the capital call, and we inherited their 20% back by default, and we bought Cox out somewhere along the line because they were, as I said, not willing to risk money in this environment, the pre-satellite environment, and we had 100% of what we sought out to get originally.

YUTKIN: And nobody else had competed with you?

COWNIE: No, in those days, Gerry, in those days you could walk in... We had 300 franchises! "If you guys are crazy enough to take 'em, you got it. We've got four television stations, there's no way!" And it worked. So we took the franchises and we were just so fortunate that at the time that it was time to deliver on our promises satellite technology, in large part because of the generosity of the cable TV industry – there was a consortium, if you'll recall, that invested in the technology associated with satellites that was successful – and all of the sudden satellites were there, and you could efficiently deliver programming. HBO, ESPN, MTV, all of that happened because of satellites and our little company, which was so under-capitalized and over-committed in 1977 was in a position to grow because we had an accounting department and a marketing department and an engineering department and this and that, and we had a ball for ten years, just had a ball.

YUTKIN: So you got the franchise settled in, what? '73, '74, and then what did you have to do? Did you have to get your first subscriber on by a particular time?

COWNIE: No, it went on and on and on. I'm not sure. Then it was difficult, but we went ahead and we built some suburbs of Des Moines and we built as much of Des Moines as we could. We had a wonderful financing package that allowed us a certain amount of flexibility, and we had enough relationship with our local politician so there was a measure of patience and we were able to pretty much do what we said we would do and everybody was happy.

YUTKIN: And you kept the other franchises?

COWNIE: Yeah.

YUTKIN: And did you keep those for a long time?

COWNIE: Forever.

YUTKIN: Creston?

COWNIE: Forever.

YUTKIN: You kept that until you sold.

COWNIE: Forever.

YUTKIN: That's the first one – was that your good luck charm?

COWNIE: Yes, J. Howard Brown. He ended up inventing a self-propelled golf cart after that and probably made more money on that than he did selling us the cable system.

YUTKIN: The reason I question you about whether that was a city law or a state law is because we met in 1978 during the franchising for Council Bluffs, Iowa, and if I recall what had happened was there was a competitive bid going on for Council Bluffs, and I believe there had been a state law that the city council could award a franchise, but the state law required a referendum on each award. So the city could endorse two or three or four companies – that is the voters could endorse two or three or four – but then the council could award one or two. We got involved, when I was with ATC, the parent of AOL Time Warner, in those days, we had an award and we got something like a plurality but not a majority. So the law mandated that we go back and have individual elections for each company that applied. ATC dissolved their partnership with their existing local partner and then forged a relationship with Heritage. And then there was... each company that applied had an individual referendum, and that's how we got going together and I thought that had to do with a state law.

COWNIE: I think you're right.

YUTKIN: It was a mess!

COWNIE: It was a mess. My recollection of Council Bluffs is a little different. It is a state law, but what normally happens is that the city council chooses a prospective franchisee, submits that name to the voters, the referendum occurs and if it's approved, it's approved. If it isn't, they start over. My recollection of Council Bluffs – it was a little embarrassing to me – is I was in charge of franchising for our little company at the time and my heart was never in it because we were in competition with the big guys like you who had the departments that could crank out these applications that were magnificent Hollywood productions, and we didn't really think that way in Des Moines, Iowa.

YUTKIN: Looking from the outside it may have appeared that way to you, but on the inside it wasn't quite like that.

COWNIE: It was pretty impressive, but I remember running a bluff with your company because as you were considering your first effort, your company and our company were having discussions about joint venturing and we were bragging about how strong we were in the state of Iowa. We really weren't, but we were trying to represent to you out-of-state people how strong we were politically, and up until the 11th hour I thought that I was going to get a phone call from Fred Dressler or Mike McCruddin or Monty Rifkin, "Yeah, we're going to go 50/50," or whatever. I would have gone 90/10, because I had represented to you guys that we had this monster application ready to go and all they had to do was hit the button to print it and to get the film and all that, we were ready to get in the car with our contingent of franchising experts and compete. We hadn't done anything. The call never came. The call never came! I waited for days. It was a matter of credibility then. We had to apply. We had to show up or you people would have known that I was bluffing. So our controller, Arlen Van Wilko, another saint, and I stayed up all night and patched together a little black and white application for the Council Bluffs cable TV franchise. And I went over to Council Bluffs all by myself and presented, against you and others, for the franchise and lost, and you won, and you had your referendum, as you suggested, and you lost. And then, we had your attention and then the phone call came and that's how we happened to go 50/50 joint venture in what was one of the cutest names in the industry, we called it American Heritage, remember? American Heritage Cablevision. That was the story of Council Bluffs.

YUTKIN: And that was in, I think, 1978.

COWNIE: Okay.

YUTKIN: My view from inside ATC, well, I thought, you know, these guys were local and they really were well-connected and had a lot of experience and they had the Des Moines franchise, and they were at that time probably the biggest operator in Iowa, if not in the Midwest.

COWNIE: Why didn't you call? We could have saved all that trouble.

YUTKIN: I didn't know you then! And then it was operated as a joint venture...

COWNIE: Correct.

YUTKIN: And one of the most important aspects of that was to deliver so that it would appear to the folks across the river in Omaha that we knew how to build and operate cable television systems because the Omaha franchise was to be awarded, I think, about two or three years later in 1981.

COWNIE: I think that's right.

YUTKIN: But we did not continue the partnership between American Heritage, that is ATC and Heritage. Everybody decided to go it alone; there were other players – Cox, United, CableComm, and I think that Heritage had probably the most unique method of involving local partners in the cable television franchising business. They used to call them rent-a-citizens, and companies would go in, affiliate with two or three or four or five local powerhouses, sometimes political, sometimes what I called blue-ribbon grand jury type people, above and beyond reproach, and everything in between. But Heritage went in with a different plan and created a lot of problems for some people later on. How did you see it, and tell us about it.

COWNIE: Well, really, it's almost embarrassing because we repeated the same mistake we made in Des Moines. It was a reverse rent-a-citizen strategy in that we rented ourselves as a management company to the citizens, and the quest was what should the ownership be, how many citizens, how many shareholders should be involved. In the case of that effort, which we called Omaha Telecommunications, Inc., OTI – I still have memorabilia upstairs from that effort – we allowed 800 people to participate on a subscription basis, and if we made a certain amount of progress those people were expected to fund 10% of their investment, a little more progress, another 10%, a little more progress, another 10%, and we got to the point where we had a very credible application and did go up against the entities you just mentioned, and sure enough the same thing happened to us in Omaha that happened to us in Des Moines. The company that in fact won, which was Cox Cable – a good company – had a small number of people who were closer to the political situation than our 800 people were. We had 800 silk-stocking, wonderful people who really didn't know their way around city hall. Cox had orchestrated its efforts so that it had a few people who did know their way around city hall and with those people came credibility for the Cox effort, and that's when I first met Bob Wright. He made the presentation for Cox and then went on to GE, and almost succeeded Jack Welch as head of GE, but he did a good job. That was... help me, Gerry, it was their answer to Qube – I forget the name of it, but it was some fancy two-way technology that they were touting. It never happened.

YUTKIN: Yeah, and I remember the phrase was "When it's technologically and economically feasible."

COWNIE: Yes!

YUTKIN: I think everybody used that.

COWNIE: Exactly.

YUTKIN: Do you have any idea how much your individual 800 people had put in by the time they lost?

COWNIE: In those days, an effort would cost $150,000-200,000 to most all the way through the franchising process.

YUTKIN: But they came up with it, the 800 people?

COWNIE: Sure.

YUTKIN: When they lost they were disappointed.

COWNIE: Well, they were upset with their city council, exactly, as we were in Des Moines. I've learned subsequent to that that there were political repercussions in Omaha directed at the people who our people felt were responsible for that injustice.

YUTKIN: I used to hear stories of people going door to door trying to get people to vote against any incumbents who were on the city council at the time. There was a great deal of viciousness, vindictiveness, anger, and it wound up being a pretty terrible thing even for the Cox local partners. I think the point was with some of the cable operators when they would have local partners, the local partners did not really put any money into it. Or if they did, it was a very small amount of money. It was primarily their prestige and their contacts and so on. And then when it was time to sell out x number of years later they were going to become wealthy people, and I think that people were angry about it, and especially with your 800 folks who had put in whatever they had put in.

COWNIE: Real money.

YUTKIN: And they got nothing for it, and they felt that it was a political process, but that was a very interesting time. That was in the early '80s when the franchising process was just taking off.

COWNIE: It was the gold rush because cable started in the tiny towns and slowly moved to the medium sized towns, and nothing happened in the large towns until satellite technology allowed programming to be developed. But as programming was developed, especially pay television programming, cable was perceived to be viable everywhere, so it was a gold rush and these large companies with great expertise managed franchising efforts all around the country. I was never comfortable with it myself. We were out of our league, but it was a gold rush and those companies that did the over-promising – when feasible, and whatever – are the ones that served their shareholders best, I think.

YUTKIN: Was Omaha the toughest franchising that you did? Was that the toughest city?

COWNIE: Well, we lost it. And maybe it was the toughest in that we worked the hardest and lost there. But we were unsuccessful in St. Paul, Minnesota in a joint venture with ATC. We were unsuccessful in a number of places because frankly our heart wasn't in it. We were a better acquirer of troubled cable properties than we were franchisers of new, big, urban markets, and that's how we developed our company.

YUTKIN: Okay, so you were not really into the big time franchising business, you were more acquirers?

COWNIE: We were acquirers, and we did a lot of franchising around Iowa, a lot of fun, met a lot of people, but in those days – this was now back to the pre-satellite days – it was a simple matter. I remember going to Red Oak, Iowa, a county seat town, Montgomery County, Iowa, hiring a wonderful lawyer to represent us, a former city attorney, and I think Jim Hoak and I were together, and we hadn't made a presentation, we hadn't submitted an application other than a model ordinance for a cable TV franchise, and our lawyer, John Bowie, walked in the council chambers, the council was meeting, and said, "Jim, Jim come over here. Just pull those chairs right over here." So the three of us pulled our chairs up to the council table and we started to talk a little bit about cable TV and why it might be good for the city of Red Oak. One of the council members raised his hand, "Gentlemen, if Mr. Bowie thinks it's okay, than I think it's okay with the city council. Am I speaking for a majority?" They said yes, so, "I move that we give this franchise to these young guys," and that's how it was in the state of Iowa.

YUTKIN: And then did you start construction on all these right away?

COWNIE: We built the Red Oak cable system and had such a horrible response that it's the only incident where we thought about scrapping the cable system. We were going to take it off the poles and sell it for scrap. We sold 10% of the population cable TV. The city council was right, we were wrong. But again, good fortune, satellites developed and all the sudden we had a good business.

YUTKIN: So you were in the right place at the right time.

COWNIE: It was totally good luck!

YUTKIN: Do you remember what it cost you to build a mile of plant in those days?

COWNIE: It was so inexpensive.

YUTKIN: Did you do it yourself?

COWNIE: Yeah! We built a couple of systems internally, just with people who worked with us. Nothing, you know, a few thousand dollars a mile.

YUTKIN: But a few thousand dollars in those days was a lot of money.

COWNIE: Especially when only 10% of the population responded. But it all worked out great. Great fun.

YUTKIN: So timing and location is kind of important too.

COWNIE: Location was important for us. We had a foundation. Jim Hoak, my partner, was the CEO of the company, I was sort of the COO of the company, and Jim was brilliant and acquisitive and aggressive, and I was none of those things. I was the guy who said, "Hey, we had problems with our last three deals. Let's get those things under control before we think about our next deal," and Jim won just about all of the arguments and we were always on to the next deal. But again, luckily, between 1977 and 1987 one could do no wrong in the cable TV business. The tide kept rising, values kept rising, so the more you acquired, regardless of how well or poorly one managed those properties, the values kept rising, so Heritage built a lot of value for its shareholders at that time.

YUTKIN: What was your first experience outside of Iowa, other than those first few systems that you bought at the very beginning, Baraboo and some of the others? What was your big venture outside? Was it San Jose?

COWNIE: No, I'll tell you a couple. The funny one was we were so unsuccessful financially that we had a bunch of tax credits that were going to expire, and those were assets because they could be used to offset tax liability. So we needed to buy a company that was profitable, a tax paying company, and we went up to St. Paul, Minnesota and bought a business in the commercial display business, a trade show exhibit business, and that was our first real acquisition outside of our field of expertise, if you could call it that. That led to acquiring four or five more of those companies, and we ended up acquiring a bunch of manufacturing companies. We ended up acquiring a bunch of television stations and radio stations and outdoor advertising operations through acquisition of Rollins Corporation down in Atlanta. As I mentioned, we did a lot in that ten year period – Dallas, Texas; San Jose; Wilmington, through Rollins.

YUTKIN: But those were cable.

COWNIE: Those were cable, but these other manufacturing things obviously weren't. So a lot of our company, virtually all of our value in terms of our share price came from our perception, as our Wall Street perception, as a cable television company, but frankly a lot of our cash flow came from these other entities. It was a pretty smart business thing.

YUTKIN: Was San Jose though the largest system that you bought? Was that the first large cable system that you acquired?

COWNIE: My timing is wrong – I can't remember when we did San Jose versus Dallas, but those were the two largest stand alone operations we purchased, yeah. I do believe San Jose was first.

YUTKIN: And did you buy that from Gill?

COWNIE: Yeah, Al Gilliland.

YUTKIN: And how many subscribers, do you remember, at the time?

COWNIE: I think we ended up with 120,000, or something like that. It was a big system. It was a great system, and I credit a guy by the name of Russ Calkins, who was beating the bushes for good acquisitions for us, with that opportunity. And Dallas worked out terrifically well, even though it was a very difficult market to operate in.

YUTKIN: Why?

COWNIE: Dual cable. Dallas had its expectations built way up by the franchisee, Warner Amex at the time. Drew Lewis was in charge of the company, former secretary of transportation, and he wanted to clean the portfolio up, so Warner Amex put the system on the market, we ended up buying it because we thought there was a lot of upside, but the upside was very, very hard to capture, it was such a difficult environment.

YUTKIN: And expensive?

COWNIE: We bought the system for, I think we paid 125 million dollars for it.

YUTKIN: When? What year?

COWNIE: I can't remember. It would have been '84? And we sold it actually before our main transaction to TCI for I think 200+ million dollars, so we did capture some upside, but it was more the tide rising, values rising in cable TV, than any great management job on our part.

YUTKIN: I'm still curious about the Iowa guys, the Midwest guys, the smaller operations. By the early '80s, how big was Des Moines? How many subs did you have then?

COWNIE: Early '80s in Des Moines? Early '80s I'm going to say Des Moines was about 45,000 subscribers.

YUTKIN: Okay, and then all of the sudden you're jumping into these other big city operations. Did you have any trepidation about that, worried about it?

COWNIE: We did a lot not so much in the early '80s, Gerry, as the mid-80s, 1985-1986. We were growing rapidly and the bigger a company gets the more it can afford to hire brain power, and we felt pretty comfortable. 1986, which was the year before we sold our company to TCI, we were the second largest banking customer to Goldman Sachs, second to Ford Motor Company. So we were doing a lot of business. It was hard but we had airplanes and young, ambitious, hard-working people and we were everywhere. We were the same size – I'll tip my hat to Brian Roberts here at Comcast – at the time we sold our company we were a mirror image of Comcast. Now Comcast, everybody knows what's happened.

YUTKIN: Yes, well, at this point, we're recording this in November of 2002, it appears that Comcast is going to be buying AT&T Broadband. That'll be the largest cable operator that anybody ever could conceive of.

COWNIE: Right. Congratulations Brian. You're a good boy.

YUTKIN: Tell me about the circumstances about why you decided to sell. Did you not think that you wanted to continue, to compete, it was just the prices weren't going up? Why did you decide to sell?

COWNIE: A very complicated question.

YUTKIN: Heritage was the 9th largest at that point?

COWNIE: I think we were. You'd have to ask Jim Hoak that question certainly also, he and I had different motivations, but the fact is when we started at age 26 with my small contribution from my dad...

YUTKIN: Did you ever pay him back?

COWNIE: As a matter of fact I did. That's a good question.

YUTKIN: Did you give him a little interest there.

COWNIE: I don't know; I hope I did. We'll see. Anyway, as I said, Jim was the CEO and I was the COO. He enjoyed the navigation of the ship more than I enjoyed running the boilers, I think. Because our company grew so much and it put so little money in at the beginning, found ourselves diluted down to a level where we were really vulnerable. I think Jim owned a couple percent of the company, I may have owned 1% or three and one, or two and a half and one, or whatever it was, and we were at that time, again the late '80s, we were the most vulnerable public cable company. There was a perception that an unfriendly bidder, in fact one or two did rattle sabers, was going to come in and take the company over which didn't sit well with Jim or me. So we decided that things were pretty good and that's the time to make a move like we made, and we became very proactive and allowed a couple of companies to take a look at us, and John Malone came in and blew our socks off and bought the company.

YUTKIN: And this was when?

COWNIE: '87.

YUTKIN: But you continued to stay with the company?

COWNIE: We made a deal with John. He wanted us to run the company for five years, and it was a great deal for John and it was a great deal for our employees because John's John and very simple, very fair, and said if you guys grow the value of the company I'll share it with you to some extent over that five year period, and it was easy in our business to measure value – cash flow times some multiple, less debt or whatever, and we then proceeded to try to do that, and it became very simple. Jim and I took the percent that John had allocated and allocated it out to 120 people who worked for Heritage and it put everybody on the same team more than we ever had been. We had never had a team problem, but all of the sudden we were wonderfully directed.

YUTKIN: Upside growth.

COWNIE: Wonderfully directed and it just worked out beautifully for TCI and it worked out beautifully for Heritage. We, in fact, terminated that five year deal a year and a half early because everybody wanted to and we all sent our separate ways. We, in fact, kept some operations with the help of TCI that became successful companies later on, namely Heritage Media, another public company that moved to Dallas, ultimately sold to News Corp., Rupert Murdoch, and some other operations that we still operate.

YUTKIN: You still have some?

COWNIE: Um-hmm.

YUTKIN: And what are they?

COWNIE: Not cable. Stuff that TCI didn't want. They couldn't have the Heritage Media assets because of cross-ownership problems at the time. That was TV and radio, etc., and they didn't want to have some of the manufacturing. So we ended up, with the help of some outside investors, taking that off their hands, if you will, and we in fact still own it.

YUTKIN: To what do you attribute the success of Heritage? Partnership? Certainly the people. Timing, location? You started out sort of in the middle of the country, extraordinary growth. The fact that you took the growth and went out of the cable industry? Why were you guys so successful when so many others starting out in the same way were not?

COWNIE: Well, I have to say first of all...

YUTKIN: Is that a fair question?

COWNIE: I think it's a great question. It's a flattering question.

YUTKIN: Well, you were.

COWNIE: I have to say for about the fourth time that we were very lucky, and in my opinion, if it were not for satellite technology there wouldn't be a Cable Center.

YUTKIN: Yeah, but the satellite came for everybody.

COWNIE: I know that, but it did come for us, and we certainly didn't know anything about satellites in 1970 when we started the company so it was very fortuitous that satellite technology developed. Now, having said that, what made Heritage okay?

YUTKIN: Different from anybody else. Heritage was on the map as a national company.

COWNIE: It was a good company. We had smart people, and Jim Hoak is brilliant. We hired smart people and we worked hard and we had a culture of give and take where we argued constructively, but often, about this and that, and we tried to make good decisions, and I think by and large we made good decisions because it was very much a democratic process and we were able to argue through the alternatives that ultimately would have been bad. So that worked out okay. I found it also Gerry very interesting that we were so well received on Wall Street, and I think that Wall Street is not used to the Midwestern culture. They're not used to straightforwardness. Wall Street's not used to people who under-promise and over-perform. They're used to a slicker person who behaves differently, and we had wonderful sponsorship from investment bankers from day one, Goldman Sachs being the most notable. We never had problems raising money.

YUTKIN: Was that Jim Hoak, you?

COWNIE: We had a number of people. I used Dave Lundquist as our chief financial officer, I certainly used Jim Hoak who loved that part of the business, and they did appreciate our operating side because ultimately if you don't deliver what the pro forma suggests, the sophisticated financial guys are going to get run out of town, so it was a combination.

YUTKIN: Did you ever think about doing anything overseas?

COWNIE: I was lazy and a little bit afraid. We had an opportunity to work with a very prestigious London company. In fact, they chose us over anybody, they came to us and said we want you to be our partner, the Labro Group. That was one battle I won, and it was partially out of timidity, partially out of laziness, partially out of lack of confidence, partially out of the fact that I thought we had too much work to do domestically, but looking back I think maybe that was a pretty good battle to win because a lot of money's been lost overseas.

YUTKIN: Especially in the U.K.

COWNIE: Yeah.

YUTKIN: You've been out of the business now for ten years?

COWNIE: Well, I got back into it. After we terminated our three and a half year period with TCI, I was out in Colorado vacationing and some of our management team had moved to Dallas to take on this Heritage Media responsibility. Others had remained in Des Moines, good people, and I called John Malone and I said, "John, what do you think? We've got these good people. Should we tee it up again?" They had a history of sponsoring affiliates – Bill, any number of them, Gerry Lenfest.

YUTKIN: Bill Bresnan?

COWNIE: Bill Bresnan, yeah. I said, "If you want me to keep our group together and be our partner, you can decide how much you want to own and we'd be happy to work with you." I said I do need a quick answer. I want to either move or not move on this. He said let's do it, over the phone. So back to Des Moines I came and started to plan on that. As were breaking down the old company we were building up the new one.

YUTKIN: '90?

COWNIE: '90. It would have been '91-'92, something like that. Some things happened that were unfortunate, miscommunications between some of our people and some of TCI's people as the negotiation was developing, and the deal fell apart. It left a bitter taste in my mouth, but it did fall apart and I returned home again and happened to be socializing with a friend of mine who ran Meredith Corporation at the time. They're just down the street here, wonderful person, wonderful company, and I told him about this deal. Meredith Corporation at the time had a lot of cash flow that needed to be spent somewhere. They had magazines, a real estate operation, and at the time, television. They used to have radio, too, but now just television. But they needed something like this, so we made a deal with Meredith. We had a wonderful few years with Meredith, a company called New Heritage Associates. We operated under the name of Meredith Cablevision with their logo, and we did some business in the upper Midwest, and that's when re-regulation occurred, Gerry, and that's when the Bell operating companies were talking about spending hundreds of millions of dollars, or tens of billions of dollars to compete with cable, and we felt, as a management team, that we weren't going to be able to get large enough quick enough to compete with those Bell operating companies. So we went down the street to our friends at Meredith and we told them, "Fellows, we got you in this deal. We think we ought to get you out," and we got out. They made a little money, we made a little money, but it was probably the biggest business mistake of my life. It was again motivated by timidity, sometimes that works, sometimes it doesn't, but none of the onerous things that I anticipated from re-regulation or the Bell operating companies in fact occurred, and we would have had a great company and made a lot of money and had a lot of fun for our friends up the street, and I've apologized many times, facetiously, to them. But such is life.

YUTKIN: But now you're out.

COWNIE: Now I'm out of the cable business.

YUTKIN: And you've been out since this was...

COWNIE: Mid-90s, yeah.

YUTKIN: Miss it?

COWNIE: I miss the people immensely. I do not miss going to bed worried about the same issues that I worried about every year for 20+ years.

YUTKIN: Such as?

COWNIE: Such as obsolescence, such as direct broadcast satellite, such as every time I drove down the street I'd see lashing wire that needed to be redone and I'd worry about it. Every time I'd see a port that wasn't connected I'd say we've got a marketing problem, why didn't that house become a customer. I worried about those things. I worried about them constantly. So that I do not miss whatsoever. I've had a lot of fun with my post-cable life. I miss immensely the people who I was honored to be able to work side-by-side with in the cable business, not just with Heritage but in the industry.

YUTKIN: Would you say it's an entirely different business now?

COWNIE: I don't know enough about it. But it's over my head now. I have children, or a child in the business now who keeps me informed, but I think it's quite different. I know the people are different, and I think it's a more sophisticated business in terms of technology and packaging and pricing. You remember how simple it was. It was kind of compelling for a simple minded guy like me.

YUTKIN: I think one of the first things we did, and I'm not sure if it was in Council Bluffs or it was another ATC system, before HBO had launched Cinemas and before Showtime had launched The Movie Channel, we put together a package that turned out to be the best selling package at the time of special basic, and HBO and Showtime. You couldn't do anything like that anymore because we were already starting to become tools of the programmers, and the programmers were exhibiting more and more control. Do you think the same is true now? Worse? Better? More?

COWNIE: Worse, better, more?

YUTKIN: You can't take anything off. If you're a cable operator you can't take anything off.

COWNIE: Let me go back. The aberration was this, as I recall. We had little basic programming. Satellites came, HBO was the big deal. People bought cable to get HBO, and we took advantage of that. They bought cable to get HBO. Then, after many years of basic programming development, the equation shifted and people bought cable, I guess they were more interested in the basic side than the pay-TV side. Now I don't know how it is. There are so many options out there that I'm not sure if the programmer's in the driver seat or if the operator is in the driver's seat. I kind of think... I'd rather be on the programming side right now. Why? Because I wouldn't have to worry every night about that direct broadcast satellite competitor. I just read this morning that Charter, a good company, has fewer subscribers today than it had three months ago. Why? Because of erosion caused by direct broadcast satellite. My relative in the business, my daughter Trish, takes care of one account for HBO, EchoStar. EchoStar is a wonderful company and they sell a lot of HBO product, but it's a formidable competitor for traditional cable.

YUTKIN: What about interactivity? We didn't do too much in the '80s. We talked about it, we knew that it was coming, we knew it was going to be a big deal, and that was really before the internet. You got out before that really became a major issue.

COWNIE: We had to talk about it. When technically feasible and when financially feasible. We had to talk about it. A lot of lofty thinkers experimented with it. Hundreds of billions of dollars were lost on it. But I think it's all driven now by high-speed data and really it's moot. The internet handles it. But I think cable is the medium of choice now. We can offer video, we can offer voice, we can offer data. For awhile I think we can compete with everybody out there, and I hope we're smart enough to always be able to do that.

YUTKIN: You played a role outside of just Heritage, and you were involved with the NCTA and the formation of CSPAN. Tell us about that, and did you consider yourself to be an outsider compared to all these other large MSOs?

COWNIE: Initially absolutely! I remember the first trip I took. HBO used to host a wonderful Super Bowl trip, and I remember Patty, my wife, and I going to somewhere in the Caribbean, and ran into Vicky Myhren, Tryg Myhren's wonderful wife, and she was so nice to us. In fact, I'm not sure Patty was with me, but she kind of put me under her wing and introduced me around. But absolutely, it took years, not years, but awhile to become comfortable, but ultimately that would be my fondest memory of my 20+ years in the cable business. I was able to meet wonderful, bright people from all over the country and fight some battles together, and we fought real battles. We had a real trade association.

YUTKIN: Let me ask you about that because the NCTA was the organization of the large cable operators and CATA was the organization of the small cable operators. The small operators, I guess there was some friction between the two because sometimes the interests of the larger operators were not quite in sync with the smaller operators. You wound up being a very active part and chairman of the NCTA. Were you drawn between, as you were growing, between the goals of the NCTA and CATA as you were starting out in terms of a smaller regional operation? Did you ever find a conflict there?

COWNIE: I never found a conflict. In fact, I found it silly that such a perceived conflict existed, and I worked really hard as a young member of the NCTA before I became an officer or whatever to encourage other medium sized companies and small companies to join the NCTA. I never really saw a reason not to. I thought we were stronger with one voice and I remember the friction that you are referencing, but I never paid much attention to it. In terms of other conflict, there was conflict between programmers and operators, and I have a vivid recollection of Terry McGuirk, as a member of the NCTA board, carrying a lot of water for the programmers, principally the Turner interests, but including other programmers, in a peacemakers role, and he did a masterful job at a young age of playing that role and keeping programmers and operators together.

YUTKIN: Tell us more about that and the conflict.

COWNIE: The operator didn't want to pay as much as the programmers wanted him to pay, or it to pay, for the product. In the old days, early, earliest days of satellite technology, the ESPN Rasmusson brothers would run around in their red sports coats...

YUTKIN: Who's this?

COWNIE: The Rasmussons founded ESPN, and all of the sudden there was this sports channel of Bristol, Connecticut that was willing to pay ten cents a subscriber if we, the operator, would put ESPN on our cable system. So you have to understand that things changed and instead of getting ten cents we were pretty soon being asked to pay 30 cents. So there was need for a peacemaker like Terry McGuirk to explain to us operators the economics of programming so that we didn't feel like we were being victimized, and that was the conflict. It continues, it continues.

YUTKIN: Because the ultimate control that the operator has is to take the programming service off.

COWNIE: Right, and then the programmers go directly to the people, full-page ads in the local newspaper to try and sell.

YUTKIN: Did you ever do that? Did Heritage ever take anything off?

COWNIE: I don't remember any big flap like that, Gerry. I think we always worried about every penny we spent on programming, but I don't remember ever having to do that. We had a magnificent relationship with our vendors. It's another thing I remember most vividly.

YUTKIN: Programmers?

COWNIE: All vendors, especially programmers. I think we were the second or third HBO affiliate, and we always enjoyed a great relationship with HBO.

YUTKIN: Never fought about price?

COWNIE: If we did it was very professional and relatively amicable, and always resolved.

YUTKIN: I remember once in one of my old systems we had to take off Off Track Betting on a system in New York State because nobody was watching it, but there were about 35 people who watched it constantly and for years afterwards every time you had to go to a council meeting we had 25 people demanding that they put back on Off Track Betting. So even though the operator had the ultimate control over that, how much control did it really have?

COWNIE: It's not complete, for sure.

YUTKIN: What do you think about the future relationship between satellites and broadband, and cable TV?

COWNIE: And cable TV? Again, I've gone to bed worrying about this for a long time.

YUTKIN: Now you don't care.

COWNIE: Well, I certainly care, but I don't lose sleep over it like I used to. What do I think about it? I'm a conservative person, I kind of assume the worst, and in that context I think the satellites have certain advantages. Now, stir in data, stir in high-speed internet access and I think right now we are the medium of choice, but things can change in a hurry. I'll tell you, and then I'll go back to your previous question, I remember a funny story. I remember a story, at least. Ted Turner was always wonderful to our company, visited Des Moines many times. I had a lot of fun hunting with him here and there, a very busy guy but he was always willing to come help us promote this or that, and we had a vice-president of programming who was a very careful negotiator, God love him, he saved a lot of money for our shareholders, but he was unable to negotiate this final element to this multi-million dollar contract with the Turner organization, a big contract. I'm sure it was 50 million dollars if you looked at it over a long period of time. Well, Ted came to Des Moines to help us do something. We had dinner downtown and I had invited this individual to join us. So we had this wonderful dinner and cocktails before, and we were having an after-dinner glass of wine or whatever, and Ted's kicking back and kind of enjoying himself. He has a hard time relaxing but he was sort of relaxing, and all of the sudden I see my marketing friend pull his chair up to Ted and said, "Ted, there's something I'd like to talk to you about," again, the denominator here is a hundred million dollars and numerator's ten thousand, and my friend engaged Ted on this ten thousand dollar issue. It's the last thing he wanted to think about at 11:15 at night, wasn't familiar with the issue, didn't care about the issue, just wanted to get to bed, and by God, he stood up and said, "I didn't come here to talk about ten thousand dollar issues. Thank you for the evening," and to bed he went. And we made friends the next morning, but...

YUTKIN: What happened with the ten thousand dollars?

COWNIE: I have no idea.

YUTKIN: What happened to your programmer?

COWNIE: He's a wonderful guy, and I love him – marketing person – and I think he learned a lesson.

YUTKIN: Was Turner the most unique character that you met in all the years?

COWNIE: Turner?

YUTKIN: Yep.

COWNIE: Unique is a good word, yeah – eccentric, brilliant, probably in terms of high-profile, I would say so. But you've got to put John Malone in there in terms of raw brain power.

YUTKIN: Highly different personalities.

COWNIE: Yeah, entirely, I mean politically and attitudinally. But who do I remember the most? Brian Roberts, a colorful young guy. I met Brian when he was 28 years old at a golf tournament in Houston. We were partners, we won it, we've been good friends every since. I always have respected Brian's brain power and love his relationship with his father. So he's a guy who I'll always remember in the cable business, but I can go on and on, Gerry. I was the oldest of the second generation. The first generation, let's say, John Saeman, Bill Daniels, it even goes back further, but the John Saeman group, a great group of guys, Bob Hughes, etc., Doug Dittrick, this was the first generation. Magness goes even back further, but of the guys who were active in fighting these battles and building the industry, they were the first generation. Then we had this other group. Now, Brian Roberts was the youngest of the second generation. I was the oldest of the second generation, and we generations would get together once a year for gold outings and the first generation, the old guys, would always beat the young guys, still do.

YUTKIN: Now because you let them, right?

COWNIE: Are you kidding? They're just better. But Tim Nehr, Amos Hostetter, Billy Grumbles at HBO, Terry McGuirk, Steve Davidson, Andy Armstrong – good guys. You ask what I miss, the interaction with these guys. Bobby Miron was one of my best friends at Newhouse, and now has moved on with the joint venture, but a great guy, great guy.

YUTKIN: CSPAN?

COWNIE: Jim Hoak was more involved at the beginning with CSPAN. Jim was a history and government student, loved CSPAN, and I think was one of the initial board members. I did serve on the board for awhile and loved it. I think Brian Lamb is a very special person. You remind me of him as you conduct this interview.

YUTKIN: Thank you.

COWNIE: You're very welcome. And I think CSPAN is something the cable business will always be proud of.

YUTKIN: Didn't cost that much money.

COWNIE: Well, I guess not, but coincidentally, I thought about that just a couple of days ago. I wonder what it's worth. You've got to look at opportunity cost. Look at the channel space it has, look at the viewership it has, look what it could be worth if it was to be commercialized a little bit.

YUTKIN: But it's not generating any revenue.

COWNIE: But it could be if it weren't pure, and the industry, under Brian's leadership, has elected to keep it pure. If a more commercial approach were taken to CSPAN it would be worth billions of dollars and I think it's a credit to the cable industry that it has been allowed to stay pure.

YUTKIN: So then you're in favor, I mean you think that's the right thing.

COWNIE: Absolutely, absolutely.

YUTKIN: Because if it would become commercial it would be just like...

COWNIE: It's something that we as an industry have done well.

YUTKIN: Could it do more good?

COWNIE: I don't know how.

YUTKIN: It's just kind of laying things out now.

COWNIE: Yeah, I think it's refreshingly honest. I certainly couldn't criticize it editorially, and I can't criticize the industry for supporting it. I think it's been an immense success story, and it's one that we don't brag about and I think that's good on our part that we don't. We don't threaten Congress with this or that if they...

YUTKIN: We'll show what you do.

COWNIE: Yeah. I guess that's an implied threat.

YUTKIN: Cable's answer to public broadcasting.

COWNIE: Okay, I'm okay with public broadcasting but I think CSPAN's more focused and I think more impactful.

YUTKIN: So you don't think that there's going to be a time when we'll see commercials on CSPAN?

COWNIE: Not while Brian Lamb's alive. I hope not. CSPAN has had a great history. If you look at the chairmen of CSPAN, I can't come forward to current times, but Jack Frazee did a fantastic job. That's how he cut his teeth in the cable TV industry. Jim Whitson at Sammons, terrific job, totally committed to CSPAN. And when guys like that get excited they can influence other people and that's why CSPAN built the circulation it was able to build even when shelf space was precious.

YUTKIN: And now it's got a couple of channels.

COWNIE: Yeah, I'll say. It's doing fine.

YUTKIN: I've got friends who set their alarm to it at 5:30 in the morning.

COWNIE: Tell them to get a life.

YUTKIN: Well, that's later on in the day. It's great, it's very interesting stuff.

COWNIE: Future for Jim Cownie? I'm 58 years old, a bunch of kids.

YUTKIN: Do you have grandchildren?

COWNIE: Bunch of grandkids.

YUTKIN: You like Des Moines?

COWNIE: Love Des Moines. I will always stay in Des Moines.

YUTKIN: You've got a list an arm's length in terms of your duties and accomplishments here.

COWNIE: I like Des Moines. It's a mid-sized town that one can...

YUTKIN: What's the population?

COWNIE: Call it 400,000, 500,000.

YUTKIN: Surrounding.

COWNIE: Grew up here, my wife, Patty, and I grew up here, been here forever, we love the people. We travel whenever we want to travel, volunteer a lot, and have a lot of kids here and activities here. We know the rest of the country, and to a lesser extent the rest of the world, but this is home and couldn't be happier.

YUTKIN: What's the industry going to be like in ten years? 2012.

COWNIE: Boy, I wish I knew. I wish I knew. I don't know what it's going to be like. I really don't. I think the satellite guys are going to be in business, and stronger. If technology isn't developed that allows the satellite guys to offer high-speed data any better than it now can cable will probably be still in a good position if not the favored position, and I think telephone will settle down so that the over capacity situation we've had over the past five years will work itself out and maybe we'll have a fairly peaceful coexistence.

YUTKIN: Well, it used to be a lot worse twenty years ago. If you were trying to get some construction done, depending on the telephone company and depending on which manager operated in a particular area you could wait for six months before they'd help you out.

COWNIE: Sweet justice, Gerry. When U.S. West was formed, the local corporate boards were disbanded, but in place of the local boards they put some advisory boards together. I was asked to serve on the Iowa advisory board, and I said to the individual who asked me, "My gosh, that's going to be awkward. I'm a cable TV guy, don't you think that's going to be awkward?" He said, "Let's try it."

YUTKIN: And?

COWNIE: I lasted one meeting. Just a different way of looking at things. I had to resign. Just too much conflict.

YUTKIN: Conflict philosophically or conflict bureaucratically.

COWNIE: Well, they spin things, what the competitive marketplace should look like. This is twelve, thirteen years ago, but it was the old days when we had a hard time getting make ready done and pole attachments agreed to and things like that. It was the old days. Things are better now.

YUTKIN: I'm glad you didn't say the good old days. There were some things good about it, but the present is good and the future is better.

COWNIE: I just hope the people who are privileged to be in the chairs that you were in and I was in then are having as much fun as we had, and if they are, appreciate it because special times.

YUTKIN: Did we appreciate it then? Certainly in hindsight we did.

COWNIE: In hindsight for sure. I think we appreciated, I know I appreciated it a lot because it was very exciting for this Midwestern boy to do, but probably not enough. We were so busy! You have to slow down to appreciate it.

YUTKIN: One of the things I learned in the Council Bluffs franchise, everybody was bidding on when they would complete the builds when they were trying to get franchises. We bid – I don't know if it was your idea or whose idea it was – we bid on when we would get our first subscriber on, and it was Labor Day, I think, 1979, and we had somebody out from Denver at 2:00 in the morning hooking the headend to the subscriber next door, and we fulfilled it and we got them on, I think, two hours late, and from that point on, at least the cable franchise in Council Bluffs was on its way.

COWNIE: Yeah, good.

YUTKIN: We had a lot of very good times. Thank you for spending time. Anything we forgot about?

COWNIE: Probably a thousand things, but let me say thanks to Gus for sponsoring this program. I think it's a good idea and kind of fun.

YUTKIN: Thank you very much for taking the time, and again, this is for the Hauser Oral and Video History Project of The National Cable Television Center and Museum in Denver, Colorado. Thank you, Jim Cownie for being with us today.

COWNIE: Gerry, my pleasure. Great fun.

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Ron Cotten

cottenRon5

Interview Location: Denver, CO
Interviewer: Rex Porter
Collection: Hauser Collection

PORTER: I'm Rex Porter, and I'm here at the AT&T Media Facilities to interview cable industry pioneer Ron Cotten for The Barco Library oral histories. Ron is presently the vice-president and director of technology with CH2M Hill here at the Denver Technical Center. Ron, why don't you start off by giving us a little of your background before you ever heard of the term cable television.

COTTEN: Well, let me see. I was born in San Francisco. My father was in the Navy. We moved liked gypsies from coast to coast and finally ended up in the Bay Area in the early '50s. Then when my father got out of the military after 21 years of service, through World War II and Korea and all of that, we moved over to a little town, what was then a little town, Concord, in the East Bay. I graduated from high school there in 1960. This is my 40th reunion this year, which is a scary thought. I immediately went in the Air Force as soon as I graduated. I spent a year down in Biloxi, Mississippi at Keesler Air Force Base. They put me into an electronics program; I was there for a year, and basically learned how to maintain long-range search radar. After I graduated from the technical school there, I moved on to a radar base about 30 miles west of Albuquerque, New Mexico on top of a mesa, it was West Mesa Air Force Station, and spent three years in the Air Force there. So that kind of got me started into a career in electronics. I got out of the Air Force in 1964, just before the Gulf of Tonkin, and went back to California. I was going to go back and start going to college, and on the way back the transmission in my car broke down. The guy I was traveling with, we hooked a tow bar up to it, it was on a bottom line and the tow bar broke, and we ended up wrecking both of the cars. So I ended up back in California with a broken foot and had lost everything, didn't have anything but the shirt on my back. So the prodigal son returns, right? At any rate, I went to the unemployment office in Pittsford and I was still on crutches. They told me about a couple of different jobs and one of them was something called cable television over in the little town of Lafayette, which is on the eastern side of the hills from Oakland.

PORTER: Is this just an interim thing? I understand you wanted to go back to school, finish your college education, or had that been a plan at that point in time?

COTTEN: Oh, no, that was the plan. The job was strictly to put a roof over my head and food on the table, you know. And of course my oldest son was on the way; too, that was a complicating factor. So, no, I had absolutely no plan whatsoever to get into cable television as a career.

PORTER: Long-term.

COTTEN: Yeah, and the more I've talked to other people, I think that's a pretty common experience, too. So at any rate, I went over there, I was on crutches, and Jerry Sanders was the chief tech there. Jerry's still in the industry; he works at, I think it's Adelphia now, it's in Ventura County, California, and I see him periodically, but Jerry hired me and I started as an installer and worked on the long end of a shovel and did aerial construction and underground construction, worked as a technician.

PORTER: Tell us about the cable and the equipment that was in Lafayette at that time.

COTTEN: Oh, it was awful.

PORTER: Younger guys want to understand about if a cable system was really a cable system back then.

COTTEN: Well, this was a system that kind of had a checkered past. I don't know who the original people that owned it were, but at any rate, it ended up being owned by Greyhound Bus Company, which also had a financing division, and SKL, which was the equipment vendor that sold the electronics that went into this.

PORTER: That's Spencer-Kennedy Labs.

COTTEN: Spencer-Kennedy Laboratories, right. But the system had... it was a tube type; the only amplifiers were tube type SKL amplifiers. It was a 12-channel system, but it only had nine channels on it because the headend equipment at the time simply could not handle adjacent channels on the high-band which is channel 7-13. All of the signals were off-the-air from either San Francisco or Sacramento. The cable was a real mix of different types of cable. Most of the newer stuff was a CommScope cable called 49/20 and 49/30, which was...

PORTER: Even back then it would have been Superior Continental.

COTTEN: Superior, right, excuse me, Superior Continental. That's pre-CommScope, and it had a foam dielectric, it had a solid copper center conductor, and then it had a copper tape, a corrugated copper tape that was simply wrapped – there was no seal on it – it was just wrapped around and overlapped, and then it had a jacket over it. You can imagine how water friendly that cable was. But the original core system of Lafayette that had been built... that was all the outlying areas was 49-20 and 49/30 – the core area had been built with a cable called Alumigard, and Alumigard was a similar construction, foam dielectric, solid copper center conductor, but the corrugated wrap, the shield, was made out of aluminum instead of copper, and this was really fun because with the copper when it gets wet all it does is it oxidizes and stuff, but it doesn't basically evaporate into thin air. It doesn't completely oxidize away. Well, the aluminum does. So, I mean, you can imagine. This was clearly before CLI, too.

PORTER: You didn't have pressure taps. That was kind of funny that you didn't have pressure taps back then even.

COTTEN: No, not there, but we had chromotaps, which was one step up or down from a pressure tap, depending on your point of view. They were awful. And then the taps, the taps... we had chromotaps, which were in a little circular can, and then you had two connectors that you put the cable into, stripped back the center conductor and stuck it in there, and crimped a ring onto it with, and then you put the drop to it. Well, the next generation up from that was multitaps. The chromotap only had one output, so if you had four customers on a pole, you had four chromotaps on the pole stacked up one right after the other.

PORTER: And we didn't have C-center conductors back then like we do now.

COTTEN: Oh, no, oh, no. But the multitap, the SKL multitap did have C-center conductor. It was a tin can, and when I say a tin can, I mean a square box tin can with a lid that kind of just came off, which was attached with a little chain so you wouldn't drop it. You would strip back the cable, put the center conductor about that far, you would strip back the shield, and you would stick it in there, and you had a clamp that went over the shield to hold it in place, and then you wrapped the center conductor around a screw and screwed it in. That was the first C-center conductor. And then you had what was called a tap adder, and you had basically on a printed circuit board either a two-way splitter or a four-way splitter that you could stick inside there, and then you brought in the RG-59 drop from underneath, and you did the same thing. You stripped it back and you wrapped it around the terminal screw and then clamped down the shield. It was rough around the edges.

PORTER: About how many amplifiers deep was the system?

COTTEN: Well, that was an interesting story. When I got there it was probably 25-30 deep, but this was back in the days before people in the field, anyway, really understood the basics of what the limitations were in these systems and so forth. So we were just in the process of turning up the towns of Orinda and Danville and so forth, and in Orinda, the cascade went to 55.

PORTER: Not very well.

COTTEN: Hey, it's a great number! You can divide it by 11! So I was running service at the time we turned this up, and I would hate getting the service call from this lady right out at the end of this new area that we had turned up. I would go out there in the daytime and she would come in, and the pictures were more or less there. You can imagine 55 amplifiers deep. But she said every time the sun went down the pictures went away. They just went away! So I set up a time when I would go out there at night, and I went out there at night and they were gone. There were no pictures whatsoever, nothing! Well, what it was, of course, is none of us knew anything about the temperature changes and the affect of temperature changes, especially on long cascades, and long cascades where there's no effective gain control at all. We figured that out though, and it really took us awhile, and it took us a while to get new customers out there even before we finally... What we finally ended up doing was putting in a trunk, this 55 amplifier cascade, again, nobody really knew what the limitations were and how to go about engineering the thing, and so it kind of meandered around in a great huge horseshoe. So of course what we did was, eventually just before I left there, was put up a trunk line to cross the top of the horseshoe and reduce the cascade, which was really what was needed.

PORTER: So when you left there it was still SKL equipment in Lafayette?

COTTEN: Oh, yeah! It was all this tube type equipment, and it was all hooked together with RG-11 jumpers with in-fittings. So you would come into one of these amplifier locations, you'd go half-way down the pole, you'd have an in-connector, you'd have a thermal equalizer, you'd have another in-connector, a piece of RG-11 go into the trunk amplifier, come out of the trunk amplifier with an RG-11 jumper, into a 208 bridging amplifier, which was another tube type amplifier, and then you'd have two outputs out of that. One of them would be the trunk, and if the trunk went up and split, you'd go up to the top of the pole, there would be a splitter hanging up there with in-connectors on it, you'd go into that, and then you would hook up all the trunk lines to the various connectors. So it was all put together with jumpers. Lots and lots of connectors. The line extenders beyond that were what's called a 209, and then you just came into that and out of that, but again, all of the splitters were mounted on the pole and there were individual connectors and individual jumpers. So that leads us to the adventure we had on the Danville side of this thing. This was about the time that the Dow-Corning 5 Silicon compound came out, and I forget who it was, but somebody got the great idea that we had so much trouble with these connectors filling up with water, we were going to go and we were going to stuff these connectors all full of this silicon compound DC 5 so we didn't have all these outages caused by water. We took a vote, it was unanimous. We thought this was a great idea because nobody knew!

PORTER: All you knew is what the people that were working in the system with you knew. We had no network back then.

COTTEN: No, no, there was no network. There was no network, and actually the Bay Area had quite a bit of cable in the East Bay, but still there was no effective way to trade war stories and a little bit of knowledge, hopefully, to avoid some of this stuff. So we started about midnight and the whole crew of us, there were four or five guys, we went out and we took connectors apart, all of these jumpers throughout this long... the cascade to Danville was only 45 or 50 or something, but all of these connectors, we took them apart in the middle of the night, and oh, by the way, there were no bucket trucks in those days. Bucket trucks did not exist. This was all ladder work and hooks in the middle of the night. Well, the next morning about seven or eight o'clock, it was cold, it was raining, and we finally got the last of it done. We sent one of the guys to go check signals and see what they looked like, and there weren't any. We couldn't figure out what was going on here! So we went back halfway and there weren't any. A quarter of the way and we could just barely get a reading! Well, as it turns out, of course this Dow Corning, one of the wonderful things that it does is it changes the dielectric constant of the connector and with that many connectors it basically, over the span of this long cascade, just absolutely destroyed the pictures. So we had to go back to every single one of those connectors and take them apart, and clean them out, and put them back together.

PORTER: That'd be an all day job!

COTTEN: Oh no, it was a three day job. This was a major deal, and again, it was because we didn't know any better. We were just a bunch of kids and we were out there doing the best we could, and it seemed like a great idea at the time, and there were no standards. There was no legacy within the system, within the industry to draw upon of guys who had made a lot of really dumb mistakes so we wouldn't make them again. Well, we were the guys making the dumb mistakes for the guys that are coming along now.

PORTER: Probably a lot of DC 5 sold to everybody back then who did the same thing you tried.

COTTEN: Oh yeah, it was unbelievable. That was a couple of war stories about that. At the same time, we had a lot of success. People would chase our trucks down the street to get service because this was a hilly area and the whole area was full of 30-foot masts with people trying to get television signals. So in spite of the problems, the business was successful.

PORTER: You told me one time about an entrepreneurial move you made, and that was working out a deal or having a deal where you could take down antennas. Want to tell that story?

COTTEN: Well, you know, one of the... I told you I'd gotten this job through the California Employment Service. It started at minimum wage, and minimum wage was like $2.25 and hour. So, this was not something that we were going to be able to retire early on, you know what I mean. When I was doing installs, I would do installs during the day and do all of these hook-ups, and just as a matter of course, I would offer to pay the folks $25, remember this was in 1964, 25 bucks and I would come and take their antenna down and haul it off for them. Lafayette and Orinda, that's all kind of upscale area, so a lot of people wanted to get rid of their antennas for aesthetics of their house. So I would do that, and then I would have an ad running in the paper and I would take that $25 antenna and I would take it over to Concord and sell it.

PORTER: Where you worked later!

COTTEN: Where I worked later – I would sell it and put it up for $225, and I used to make more on the weekends than I made working my day job. It was relatively cool, and so it was a good little business for a while, and of course later, when I left Lafayette and went over to build the system in Concord I suppose I could have taken some of those same antennas down again, but I didn't.

PORTER: Well, talking about not being a network of engineering, people and technicians, and being unable to talk to each other and find out that we were doing the same things over and over again wrong, and having no affiliation from system to system unless the same MSO owned those systems, that leads me into your involvement in starting what changed the labs really of all the engineers and technicians in the broadband industry today and the cable industry, and that's the SCTE. So tell us, since you were the first president that we had, and you were there, as I was, at the founding meeting back in San Francisco, talk to us a little bit about starting the SCTE.

COTTEN: Well, there's probably 12, 14, 20, I don't know, war stories that could be told like that where we had made a lot of really dumb mistakes. Trying things to make the systems work better, to make them more reliable, it was a very challenging time. If you look at today, of course the technology is much, much more sophisticated, but the problems, I think then, required just as much creativity to solve because the technology was in its infancy and it was really bad. I mean, by today's standards it was horrible. That was the bad news. The good news was that we were able to build an industry in spite of those problems and rapidly, I think, over time the technology started to improve and a lot of that was driven by the experience of the people in the field providing feedback to the vendors. But there was really not a lot of interaction between the various operators until, I think, the vendors started to kind of get their act together, and then I think there was a lot more cooperation on the part of the operating folks to take advantage of the new technology, to understand all the quirks of it, and to compare notes in the face of very, very rapidly changing technology to make sure that we were all dealing with reality and how things really are, as opposed to how we might be led to believe that they were, or what conclusions we may come to on our own that were out in left field. So, in the Bay Area... we had a lot of cable in the Bay Area for a major metropolitan area because of the hilly terrain, and in 1969, 1968, of course Chuck Tepfer's publication, and Bill Karnes had talked about this, the need for some sort of venue for the industry to share technical knowledge, experience, solutions, how to point out all the potholes in the road out there that you could and did break axles on. So it was this kind of an idea who's time had come, and for myself personally, having been in that earlier stage and having made so many of those fundamental mistakes simply because there was no textbook, there was no place you could go to say, okay, I'm going to build a cable system, how do I do that? How do I do that in a way that's going to work? How do I do it in a way that I can predict its performance before I build it so I can optimize it? There was nothing to draw upon.

PORTER: Even the home study courses, like CIE and RCA had home study courses, but they weren't dedicated to wide-band frequency...

COTTEN: Oh, no, no, they were more focused on television, radio, FCC licenses, stuff like that. There wasn't any resource. And the vendors, the vendors, with all due respect to the job that they did, which I think was credible over the years, a lot of times the vendors didn't really understand the limitations and how this equipment should be taken and assembled into a complex, large network that would work well. That's certainly not a shot at the vendors because I think the vendors, given the times, and given the available technology in general, did a great job. It was clear, I think, by the late '60s it was clear that the industry was going to grow, and in fact I think it was in '72 that the FCC froze all new construction. I know it was '72 because I built a headend in Piedmont in a redwood tree, but by God we beat the grandfathering clause. That's another one of those war stories. It was about that time that I think it was really clear that we had an industry here that was going to grow, that had something to offer. The operators were starting to dabble with local origination, and there'd been a couple of experiments in pay-per-view and those kinds of things. Those were outside of the industry, it was the thing that John Saeman had been working on in San Francisco, but it was clear that there was a market for multi-channel television services, and really in 1972 the FCC confirmed that because the broadcasters jumping up and down and protesting that their ox was being gored. But about that time, the equipment started to get better, the cable started to get better, the construction techniques started to jell in terms of what would work, what wouldn't work, the real fundamental flaws in the equipment were really kind of being revealed, and it was a time when I think everybody kind of... at least the colleagues that I worked with in the industry kind of lifted their head up from what they had been consumed with and kind of looked around and said, hey, you know what? We ought to get together and talk about some of this stuff because we can really help each other.

PORTER: So to put it in a nutshell, here we are, a group of technicians and engineers and installers, and we're facing the dilemma of having to really learn only by making mistakes. And then there was a group of you guys, of us guys, but there was a little core group of you guys who were willing to step forward and say we're going to start our own technical association society, and we're willing to stand up and be counted. We'll have a president and secretary and treasurer, and sort of lead this group and come up with all the groundwork and paperwork that has to be done, and you were quite a leader in that because I know you were elected as our first president. So I'll hush and let you tell us about what it was like in San Francisco in 1969.

COTTEN: To kind of set the stage, I'd mentioned the manufacturing side of the industry before, and in general they had done a fairly credible job, but a lot of the problem was that the management would typically, at that time, basically follow the directions of the vendors whether it was problematic or not, and a lot of times it was because manufacturers were great at manufacturing, but they weren't so great at implementing their equipment much less other people's equipment with it into a complicated cable system. And I think the general attitude at that time of the operators towards the technical people was really one more of... people weren't viewed as having an engineering capability at the time. They were really viewed more as grunts that would simply go out and get the work done, and didn't have a great deal to contribute. Well, that simply wasn't the case. I mean, the fact of the matter is, speaking for myself and I know lots and lots of other people who were out there in the field making it happen, I think that to a large extent we, as a group, invented the technology in the broad sense of the deployment of that technology. As I was saying before, it was kind of a time when people just in general kind of stuck their head up above the fray and looked around and said, jeez, we ought to be talking to each other. At the time Bill Karnes and Chuck Tepfer and others were kind of kicking this around; there was a real concern on the part of some people in the industry that this was a veiled attempt to unionize the industry because of course the telephone industry was all unionized, the utility companies were all unionized, unions were big back then. I think what they didn't realize is that we were all rebels and we'd have never stuck with a union.

PORTER: We'd have struck against the union!

COTTEN: This was not in cards! And I think history has pretty much bore that out, but there was a real general perception with some in the industry that this was a veiled attempt to unionize the industry. But you know, we decided we were going to do it anyway! We didn't have to ask anybody's permission. We didn't need our employers' permission to do this, and we didn't ask. We did it. So there was somewhat of an element of rebelliousness in starting the Society because we were dealing with problems that we would find out this guy over here had found a solution for, or this guy over here had the solution for another problem, and I had a solution that they could have used. We felt that this was... we weren't going to do this anymore. So in 1969 we kicked the thing off, and of course none of us had any idea of how to go about setting up a professional organization. But we did know what we wanted to accomplish, and what we wanted to accomplish was to really get a venue for the exchange of ideas, and hopefully turn that into some sort of training capability that would help all of us that were working in the field and the technical arena. Remember, back in those days, the division between the technical and the management in the industry was the great divide. Today I think there's a lot more crossovers with a lot of the people in management come out of the technical ranks, and there's a much keener appreciation in this day and age, there has to be. The technology has to be precisely deployed in today's market if you're going to keep customers, and I think there's a keen appreciation of that on everybody's part. Back in those days, that was not the perception at all.

PORTER: And even today at the MSO level, especially, the engineers have taken on an executive role and been given some credit now for being intelligent, trained members of the team instead of like you said before, being grunts, or being presumed to be... just go out and change a tube and that'll fix it.

COTTEN: Oh yeah, there are some really bright guys in this industry, really bright, bright guys.

PORTER: That brings me back to, before we get away, while you were still in Lafayette, and especially when you moved on forward, you were one of the first guys, probably the first guy that I ever met in the cable industry that was really reaching out for electrical engineering training, formal training. Can you tell us a little bit about what it was like to go to work in the daytime in a cable system and have to carry a load of electrical engineering studies?

COTTEN: Well, it wasn't much fun, I can tell you that! I started night school in January of 1965. I typically carried nine units, three nights a week, and then did homework on the weekends. In 1968 I went to Diablo Valley College and in 1968 I got my associate's Degree. I started on my bachelor's degree at a little college over in San Francisco, Heald Engineering College. It was the only state accredited college that had an engineering degree at night in the whole Bay Area. Today that sounds kind of weird, but back then it was the only alternative. So I had to commute, work all day in Concord and then commute over to downtown San Francisco after work.

PORTER: So you left Lafayette Cable System and went over to Concord?

COTTEN: In '67.

PORTER: Now was this an SKL system?

COTTEN: No, and one of the things I wanted to say before we leave Lafayette, one of the things that was a real fundamental turning point in the industry was the transition from tubes to solid state equipment. We went through that in spades in Lafayette. The system had originally been built with SKL tube type amplifiers, and in 1966 the transition started for SKL to solid state. SKL was kind of reacting to Ameco and Jerrold, who had come up with the TML series and the Ameco 60 series, I think it was, which were basically a rack mount little amplifier that went in a box up on top of the pole. SKL kind of reacted to that. Well, this is back when the solid state stuff was really, really primitive by today's standards, and the reliability was just horrible. We had times when SKL had stuck with the model of jumpering things together with RG-11 jumpers, but now they had a little transistor trunk amplifier and they had a little line extender, and then they would have a directional coupler up there and you'd hook all the stuff up with jumpers, and you'd do this out through the system. Well, we built up some of this stuff and the power transients... one time the power went off and it came back on, and it blew out every single amplifier in about a five mile piece of plant, every single amplifier. The trunk amplifiers were all individual, what you would call a bridger amplifier was nothing but a line extender which was fed by a directional coupler, then you had line extenders off of that. Every single one of them. This made the Dow Corning thing look like a cake walk.

PORTER: I take it the transistors held?

COTTEN: Smoke 'em. We are talking cooked. In that section of plant you could see the smoke slowly waft above the treetops. And of course it was because the solid state stuff was so fragile. SKL had made a fundamental strategic blunder. They had just on the power supply, they had a little power supply like this that went in the little box, and it was just a transformer, just a transformer! So there was absolutely no transient protection. It worked us to death. We had an assembly line going with guys going back and forth into the field. It looked like... I don't know if you've seen ants that'll find a pile of stuff and they've got a big... We had technicians' trucks coming and going bringing these amplifiers back, and then we had an assembly line set up in the back shop trying to go through and simply take circuit boards out, find a good circuit board and match it up with a housing that hadn't been fried. And the thing that was really irritating, and these guys are probably all dead by now, so I'll go ahead – this is kind of not so nice thing about SKL – SKL was having this trouble all over the country, and they owned us. So they'd take all the stuff that other paying customers had sent back to them and they'd send it to us.

PORTER: So you had to fix them?

COTTEN: Had to fix them.

PORTER: And then it was your equipment?

COTTEN: It was frustrating. So at any rate, Ed Allen had been the manager there for a while, and I was the chief tech at Lafayette in 1967. Ed went over to Western Communications, and he asked me to come over to build a brand new system over in Concord, and this was a chance to get away from them SKL amplifiers, and I was out of there!

PORTER: Was it a Jerrold system?

COTTEN: Yeah, Concord was a Jerrold, Starline One. Now this was back when Starline One was the latest and greatest, you know. And Starline One was no work of art, either. A lot of problems with that, but it was a lot better than the SKL. My point here is that the transition, once we got into the solid state equipment, the guys who went through that on the early stages, which was the early Ameco, Jerrold, SKL, and some of the others, this was a very difficult time because the manufacturers struggled with the reliability problems, the operators struggled with it. It was clearly how the industry had to go. For the guys out there who've never worked on one of these tube type systems, as bad as this stuff was, it was an improvement. So that was the road we needed to go down. But the first few steps along the road were very painful for everybody involved. Today, equipment is great. It is great today, and you can go out and you can buy almost any vendors equipment today and it's all good. Back in those days...

PORTER: And it'll interface with other people's gear, too.

COTTEN: Oh, yeah, and back in those days you were taking some big chances because there was some stuff that was terrible and there was some stuff that was really terrible. You wanted to minimize the damage. That made me very, very conservative in terms of my approach to system design in terms of architecture and layout, and in terms of the reliability of all the components. It just made me really conservative over my career.

PORTER: So you finished this cable system in Concord...

COTTEN: Ran out of antennas! I bought and sold all the antennas in the system, so I had to move on to Concord.

PORTER: But at the same time you're going to school trying to get your EE.

COTTEN: Yeah. So in 1967, I moved over to Concord, brand new build, we started that from scratch. That was fun. Rick Cleveringer and I built the headend together. We had put in a solid state headend in Lafayette and had to take it out because we couldn't get it to work. It wouldn't work with adjacent channels on the high-band channels, and we finally ended up putting in an Entron mixer, an active mixer that had additional filtering and stuff in it. We went back to the strip amps in that headend. Well, the Concord system we built with Channel Commander Ones, as in one, for the younger guys out there. So the headend was all tube type, the system was Starline One, this system had aluminum cable, thank God!

PORTER: And you had your own standby powering at the headend, I understand.

COTTEN: And for those days, that was revolutionary to have a standby generator. We had put a quarter-inch plate steel roof, and quarter-inch plate steel around the... we still used a wall type air conditioner, but then the door was made out of quarter-inch plate steel because this was up in the hills and people would go up there and they'd break into anything that they could. They'd also shoot up the place. So the whole place was kind of bullet-proofed, literally. Concord was built with very conservative architecture, and in fact, my understanding is that it's just in the last year or so that the original cable is being taken down and replaced with...

PORTER: Is that aluminum sheath?

COTTEN: Yeah, it was aluminum sheath cable, but the P-1, this was early P-1, we built it with ¾-inch trunk and half-inch feeders, which was unusual for the day. Usually it was half-inch trunk and four 12 feeders. We did a lot of things, I think, that were relatively innovative. We did some good grounding in the system, which made the system, for its day, relatively reliable.

PORTER: Now did you get your degree while you were still at Concord?

COTTEN: In 1967 I got my associate's degree. I continued to go to school, and then in '68 I started over at Heald Engineering College, and continued there until I left Concord, which was in 1971. I left Concord to... When I was at Concord, one quarter – now Heald was on the quarter system – I figured, hey, it's only, what? Nine weeks or whatever for a quarter? I forget, nine or ten weeks, whatever it was. So the stars were aligned in terms of the schedule. You have to understand, when you're going to night school, you've got courses that you've got to take in sequence and you've got pre-requisites that you have to take and all this stuff, well, the planets all aligned and I could take differential equations, physics, physics lab, and some other...

PORTER: Calculus?

COTTEN: No, this was post-calculus, but there was some other difficult course, and I could get them all in one quarter, and I could knock them down and be done with them, and that would really tidy up my schedule moving forward. So I went for it. It goddamn near killed me. It was tough. Four nights a week, four hours a night, and of course all the homework that anyone could ever desire. It damn near killed me.

PORTER: And working in the daytime?

COTTEN: Working in the daytime, yeah. I never did that again! That one went into the bin with the Dow-Corning and some of the others. There's something to be said for seasoning, and I learned my lesson.

PORTER: So tell us about how Focus Cable started in Oakland. That was one of the biggest cable systems of its time.

COTTEN: Well, at the time, it was one of the first – this was in 1971, before the freeze – it was when ThetaCom had finally figured out that their single-ended 20-channel attempt to make a silk purse out of a sow's ear wasn't going to work. They had come out with a fairly respectable solid state push-pull 270 megahertz amplifier. It had stud mount transistors and some other things that were pretty cool for the time. So Oakland was going to be built with... it would have been one of the most advanced systems anywhere at the time – 270 megahertz, it was going to incorporate AML for local distribution to reduce cascades down to a reasonable level, and of course this was another learning experience, it was going to use the latest and greatest of the day in cable, which was dynafoam. Oooh, that hurt!

PORTER: Which was a styrene dielectric.

COTTEN: It was a polystyrene dielectric like a polystyrene cup, and if you take the dielectric and just handle it, it will just crumble away and go away, and it also propagates water like a pipe. It was one of those things that seemed like a good idea at the time that didn't work out too well. There have been a lot of those in the industry. The idea was it had lower attenuation, which at the time was a major deal. Systems were, at that time you were talking about 1-inch foam dielectric, regular polyethylene dielectric cable, and bigger and bigger cables to get the loss down because the pass band of the systems were going up and it was getting lossier, and the dynamic range of the amplifiers was so limited that you just couldn't get the reach that you needed in these systems without lower loss cable.

PORTER: Or multiple headends which nobody wanted to do, right?

COTTEN: Right, and of course that's where AML came in, but AML was brand new at the time, too. So, anyway, cable in Oakland was going to be a world class system for its time, and I was the first employee hired there to go over and do that. I was still going to school. For a number of different reasons, I wasn't too happy there so after about nine months or so, I decided to go do something different and that something different was because I'd been going to school now since 1965 and this was January of 1972. I'd had it. I had had it. I wasn't going to do this anymore! I had three quarters to do to finish my degree and that was one of the big motivations, but there were some other things. TelePrompTer and I were not a wonderful fit.

PORTER: TelePrompTer owned the cable system, or was a major partner?

COTTEN: TelePrompTer was a major partner, there were local partners, but TelePrompTer was the managing partner, and so at any rate, I told them I was leaving, and Roger Wilson, who was the vice-president of TelePrompTer, great guy, came out and asked me to stay part-time, to go ahead and finish my degree during the day, and to ensure a good transition to the next engineering person to just work part-time there and go ahead and finish my degree during the day, which I did. To this day, I think it was wonderful of Roger to do that, and the industry had a lot of guys like that that were just great people. So I went part-time at Oakland. Rick Cleveringer came in to basically pick up the reins and go with it, and I concentrated on getting through my degree, which I did by the following October.

PORTER: So it's 1972, and you're a young man with your EE and now you've decided to leave Focus Cable in Oakland, California. What's next?

COTTEN: Well, some of the folks I had worked with at Concord, Gene Jack, who's a wonderful guy, wonderful guy, he's retired and lives in Montana now, hooked me up with CableCom General out of Denver, and they came out and talked to me. They were looking for an engineering vice-president for an MSO in Denver, and of course I had lived in New Mexico for three years and just loved this part of the country. So they didn't have to ask twice. I actually started for them before I graduated by about a month, and kind of just worked through all that. I moved out here to Denver and was with CableCom for about five years. CableCom had lots of the old, old systems through Arizona, through the Midwest. In fact, in Clay Center, Kansas, we rebuilt that system and the old Ameco 60 series we had serial number 001. It was absolutely incredible and it had been modified to put sockets in place so that the transistors could just be popped in and popped out. It was incredible. And of course in Arizona, some of the old systems there had G-line, which is a single conductor transmission scheme.

PORTER: We called it microwave over a wire.

COTTEN: Microwave over a wire. I think it's this town of St. Joe, Arizona, which is just west of Holbrook.

PORTER: St. John's?

COTTEN: St. John's, maybe. The G-line came from Holbrook and came underneath a, I think it was a 215,000 volt transmission line. So you talk about lack of shielding! This little town only had 50-60 homes in it, it was a tiny, tiny little place, but it was rough around the edges. It was really rough around the edges. We had strip braid... the trunk line that went through Cottonwood was military surplus 50 ohm coax with a solid dielectric cable, it was about that big around, and in Cottonwood the headend was in a chicken coop, and I mean a chicken coop with chickens and all that implies. It was rough around the edges.

PORTER: So those Arizona systems were some of the original cable systems built.

COTTEN: Some of the very first built, so we got to deal with a lot of the very, very early way people did things and how they improvised because that was earlier yet, and you have to keep in mind that there were not products that you could go out and buy off the shelf to do this with. You had to basically get what you could and jury-rig it to make it work. A lot of ladder lead... now, underground... one of the original underground subdivisions in I think it was either Holbrook or Winslow that had direct buried, unjacketed 412, and it would come up out of the ground in a little arc like that in unjacketed cable and then attached to this little piece up here were pressure taps and they would go off across the sand to various trailers in this trailer park. And where it came out the ground it looked like a big spider, is what it looked like, and of course you just scratched back the dirt a little bit and the shield... there wasn't any shield. The shield was gone. A lot of interesting stuff. And of course there I got introduced in a big way to microwave. CableCom had common carrier microwave, it had CARS band microwave, both FM and AM, the original laser link was not an optical fiber product, it was an FM multiplexed microwave system that was built in the early '70s that ultimately they took off the market.

PORTER: Was it Hughes?

COTTEN: No, no, this was not Hughes. They were competing with Hughes. I think the only deployment was in Colorado Springs, which they just could never get it to work. If you looked at kind of the blocked diagram of it, it was just too complicated to operate in an analog world where you had to have very, very high dynamic range. It just didn't work very well. CableCom, one of the interesting things about that period of time, sweep testing was just really starting to come into its own, and a lot of that had been driven by in the early '70s and late '60s the new solid state equipment, the Starline One, the Starline 20 single-ended, and the Starline 20 push-pull to a lesser degree, and some of the Vikoa and Ameco and some of the other stuff on the market had a lot of problems maintaining its frequency response. The sweep testing was invented to basically – and I forget the name of the guy that did it, but it was at Teleview, Charlie Clements? Do you remember Charlie? Charlie Clements and his group up in Seattle built a temperature chamber, which was really revolutionary at the time, and kind of figured all this stuff out, and kind of jury-rigged some of the early equipment to do sweep alignments. Well, in the middle '70s, sweep testing started to really become a fundamental tool of system technicians and engineers to keep a system running. Some of the early sweep systems, the Avontech and some of the high level sweeps and so forth, were just coming into use at that time. So that was an interesting time, and again, as always the technology was moving at a very, very rapid pace, even though it was at a much more primitive level than it is today. The rate of change was still nonetheless very, very rapid.

PORTER: So when did you leave CableCom General?

COTTEN: I left CableCom in 1977 and hung out my shingle. I was in business for a lot of years through the franchising wars of the late '70s and the early '80s. I had about fifty people in the company and we did a lot of system design work. There were no computer programs at the time to do system design, and so we kind of pioneered some of the software to basically allow us to put the system design process into a production line so that you could do it rapidly and effectively and optimize the systems.

PORTER: You were doing system layouts and designs for both cities, aiding the cities and their selection of franchisees, and you were helping the franchisees...

COTTEN: With the detailed engineering design of the systems, right. We did a lot of work for operators on one hand, and the cities on the other hand, with the cities in evaluating the various proposals that would come in on the operators, for the operator we would come in and develop an engineering plan to be incorporated into the proposal to basically demonstrate how they would go about building out the system if they were awarded the franchise, and we did a lot of those. Most of them, frankly, were successful. Now the technical piece of it was only one part of the franchise, and certainly not the most important part, but we had, I would say, probably 60 or 70% of those that we did that the franchise applicant was successful, and the architectural approach that we had recommended and documented was ultimately adopted in those areas. So that was an interesting business in the sense that it was an opportunity to do lots and lots and lots of fundamental planning for big systems and little systems. We built some little systems on turnkey basis. We operated a couple of systems, small systems, for some new entrants into the industry that didn't have established operations. I had a little cable system over on the Western Slope that I built and operated for awhile, and then we had a part of the company that did contract installs and SMATV systems, which of course satellite had come into its own at that stage and we did a lot of satellite work.

PORTER: About the same time fiber optics came on board. Tell me about the first time you saw or used fiber optics.

COTTEN: The first time I saw anything about fiber was in 1973. I went to a kind of think tank seminar out on the East Coast about optical fibers. There was really nothing being used at that time, and it was really kind of a what if, and here's maybe some of the theoretical possibilities and so forth. That was really the first time that I had seen anything about fiber. I didn't deploy fiber until the late '80s when fiber started to become really a... at that time it really wasn't a commodity but it was pretty commonly deployed at that time. And then of course in the '90s it basically revolutionized the network architectures for cable systems. I think without fiber you simply could not have the loading capacity that you have today. You couldn't have the bi-directional transmission capacity that you have today. And I don't think you could have the reliability that you've got today. So fiber really has been a fundamental change and huge improvement in the technology, and probably, in my opinion, maybe one of the most – in terms of the transmission network – the one with the most impact since I've been in the industry. Prior to fiber, we had basically been refining and refining and refining existing technologies which were RF amplifiers, coaxial cable, and they got really, really good compared to what they were in the old days, but it was still the same basic technological approach to the problem. Fiber has really fundamentally changed all that, and much, much for the better.

PORTER: You got to work for Bill Daniels for a period of time as his vice-president of engineering. Can you tell us what it was like to work for Daniels?

COTTEN: You know, you hear about people that have great reputations, and sometimes those people live up to those reputations and sometimes they don't. Bill was a guy who if anything probably outpaced the reputation that he had. Bill was a great guy, he was fair, he was demanding, but in a very, very positive way that I think inspired people rather than made them angry, and I think Bill was one of the best people, outside of working for him, one of the best people I ever met, much less worked for. Bill was a great, great person, and he truly deserved the reputation that he enjoyed.

PORTER: You worked there, and then I believe you hung your shingle back up a time or so.

COTTEN: Working for Bill was really fun. I had, in 1984 – I think it was in '84 the FCC froze rates...

PORTER: Again.

COTTEN: And business, and basically the industry slowed way down as a result of that, and at the time I was kind of looking for something else to do anyway. There's pros and cons to running a business like that. It's a lot of fun for a long time, but it's a lot of work, too. Daniels and Associates had been a client of mine for a long time, and Bill Kingery, who worked for Bill, was going to start up an operations group again, and I had done a lot of work for Kingery over the years, and so they asked me if I would like to come join them, which I did. It was a very entrepreneurial environment. The business model was to buy systems, generally systems that were distressed, at a low price, invest the necessary capital and resources into those systems to turn them into... basically to turn a broken down old nag into a racehorse over a period of two or three years, build the value in that system, and then at the right time have an exit strategy to sell that system at a much higher profit than it was purchased for.

PORTER: When you went to work for CH2M Hill – I always get it wrong, I'm probably saying the name of the company even wrong – but how did you get to that company?

COTTEN: Well, I kind of have to go back to Daniels. When Bill sold his business out to United Artists in '89, which subsequently merged with United Cable, which was subsequently acquired by TCI, when Bill sold out we all had a nice payday out of that, which was great, and I decided to go back and hang my shingle back out and started a company called Engineering Technologies Group. We had that company for... Dale Lutz was my partner in that, as well as Roland Heeb and Byron Leach over at NCTI. We had that company until, this was in '89, until 1995 when it was acquired by Antech, or '94, excuse me. We did some great things there, we did some innovative software stuff. We had about 100 or so people in the company, and really did a lot of the pioneering work on fiber and fiber architectures, and all the different modeling on how to optimize that, develop the tradeoffs and so forth. That company was acquired by Antech in 1994, and I stayed with Antech for three years, which was part of our acquisition contract, and left them in '97, and had really kind of semi-retired. I got hooked up with these guys in late '97 and they were, CH is one of the largest engineering companies in the country, and they were starting up a telecommunications group. They wanted me to help them out as the director of technology, chief technical officer, which I agreed to do for a while, and in the last three years we've built the company up, the telecomm group up to one of the largest design groups in the world. We've got about 600 people, and are doing some really great things. In April, I went from full-time to part-time with them, and so I'm working part-time now and kind of...

PORTER: Going to relax?

COTTEN: Little more relaxed, little more relaxed pace.

PORTER: At least 30 years ago, all of us charter members of the SCTE got asked an intriguing question, and we thought it was kind of funny at the time, I'm sure. But I remember we were asked to say what we considered as the most important product of the last 20 years in the cable industry, and then we were asked to look out in the future and I can remember, I've still got all those forecasts, and I can remember your forecast, and it was pretty right on. You talked about there would be computers hooked up to cable systems. We had no idea of that back then.

COTTEN: You remember this? I don't remember this.

PORTER: Oh, I absolutely do.

COTTEN: I hate it when that happens!

PORTER: You hit a lot of these things right on the head. I've still got the old directories. I'll let you read this sometime and see what you said. You'd be surprised. What I'd like for you to do is kind of give me an idea... let's do that all over again. How do you see the future of broadband communication and HFC networks going out into the far future?

COTTEN: First of all, I think the future in this industry is as bright as it ever was, and it probably will be. My youngest is eight and he could probably say the same thing when he's my age, is my guess, and the reason for that is if you look at the world economy and the world situation, of course we have tremendous population difficulties on the planet, which is one of the bad news things. One of the good news things is the threat of at least a general highly destructive war has diminished tremendously, and I think as a result of both of those things, most governments are turning their attention towards economic development with some view at political stability and the need to provide jobs, the need to solve some of the problems, and so forth. Economic development, if we're going to solve the problems we have today and in the future is something that we just have to do, and if you look at what are the underpinnings of economic development, and of course one is an affordable labor force, and two is transportation, and three is communications. If you have those three elements, you can build your factory, or whatever it is, you can build it anywhere. You can go to sources of less expensive labor if you've got transportation and communication. While simultaneously transportation is getting more and more expensive, and of course we all read about the oil situation, and the reality is there will never be more oil available to us in the future than there is today. It's going to diminish and continue to diminish, and of course that's going to drive prices up. So what that means, in my view anyway, is that for telecommunications, telecommunications is one of the fundamental underpinnings of economic activity, but its role is going to increase in the future as opposed to transportation's role which is going to decrease. So when gasoline hits $20 a gallon, people are going to be substituting communications for transportation, and that's probably the only thing that's going to help the traffic here in Denver, I suppose. But the networks that we're starting to build today are really, in my opinion, the precursors of very extremely sophisticated networks that will really serve society as a major, major element in driving economic activity, not just here in the United States, but worldwide. And I think we're just starting to scratch the surface on the complexity and the capability of these networks. I think we'll see a trend toward a greater and greater optical content, and of course more powerful computers, but also a dispersed network where as transportation becomes more expensive it becomes less important in the overall scheme of things. For people working in the industry today, at least in my view, they're in the right place at the right time, and I think even into the distant future that you're going to see lots and lots of opportunities in telecommunications that are going to get better.

PORTER: I want to thank you, Ron. I've enjoyed having this opportunity to talk to you, and I'm sure the Barco Library thanks you.

COTTEN: Thank you.

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  BACK TO ORAL HISTORIES

Frank Cooper

Frank Cooper

Interview Date: Thursday June 14, 1990
Interview Location: University Park, PA USA
Interviewer: E. Stratford Smith
Collection: Penn State Collection
Note: Audio Only

SMITH: This is Tape 1, Side A, of an oral history interview with Mr. Frank Cooper, a cable television pioneer whose career has spanned almost the entire history of CATV, or cable television, in a variety of capacities. This oral history is one of a series of interviews with pioneers and current leaders in the cable television industry being conducted by the National Cable Television Center and Museum at The Pennsylvania State University. We are in the Oral Histories Reading Room at the Center. It is June 14, 1990. The interviewer is E. Stratford Smith, Director of the Oral Histories Program and professor of cable communications.

Frank, we have known each other too long not to do this interview on a first name basis.

It is our practice to develop somewhat detailed background information on those we interview. Let's start at the beginning. When and where were you born?

COOPER: I was born in Philadelphia in 1921. My mother was a native of Philadelphia. My father was born in Russia. I went all through the school system in Philadelphia. I went to the same elementary school, as a matter of fact, as my mother did. Then I went to West Philadelphia High School and after graduating from West Philly High, I went to Temple University. These are all Philadelphia institutions so I got into the cable television business many years later by virtue of my interest in Philadelphia and Philadelphia politics. Curiously enough--if I'm beginning to ramble here, don't hesitate to stop me.

SMITH: No, I'm going to want that information, but I thought maybe we would follow up with your parental background a little bit first.

COOPER: Their background?

SMITH: What was your father's occupation? You said he was born in Russia.

COOPER: That's right. He came over to the United States as a young boy. He was a jeweler on Philadelphia's famous Sansom Street. That's where all the jewelers are, it's called Jewelers' Row. Hundreds of them. He was one of many Russian immigrants who opened a little store on Sansom Street and manufactured jewelry, made rings, pendants, things like that. My mother, whose family had also come from Russia, was one of five children. And even though my grandfather was an immigrant who came over here absolutely penniless and got his first job as a huckster, he managed to send every one of his children to college. We recently had a reunion and there is hardly anybody in that family, and there were over a hundred of us at the reunion, who did not have a college education. It's sort of an interesting American story, at least to us.

SMITH: It's remarkable. Did your father know your mother before he came over here?

COOPER: No, he was quite a few years older than my mother. He did not know her, but he met her socially somewhere in Philadelphia, in the West Philadelphia community where we lived. That's where I grew up. It has always been a source of amusement to me that I had actually gone to the same school as my mother had; in fact, I had some of the same teachers, many years later.

SMITH: That is interesting.

COOPER: That's not so unusual in rural or small towns, but in a big city like Philadelphia that was an unusual story. After I graduated from Temple University, I was at the teacher's college there, but I got my first job in a textile plant. I became assistant to the president and then an executive vice-president; and I guess if I ever got solid business experience I got it there. Later, I took a job with an advertising agency because what I found most interesting about the textile business was the marketing. While I was in the agency, I got a call from a friend who asked if I wanted to do some specialized advertising and promotion for a political campaign.

A gentleman by the name of John Kennedy was running for president and the Kennedy people were creating all sorts of campaign centers in cities all across the country. The Kennedys were very, very aggressive and they weren't waiting for the party to catch up. Among other things, they created a "Citizens for Kennedy" movement, which was kind of a parallel campaign staff to that of the Democratic organization. In Philadelphia the man in charge was Milton J. Shapp. That's where I met Milton for the first time.

SMITH: Milton J. Shapp, the founder and president of Jerrold Electronics Corporation.

COOPER: Exactly. Milton and I were on the campaign trail several times together. Milton took an interest in me. When the Kennedy campaign had concluded I took a job with the City Democratic Committee and subsequently the State of Pennsylvania Democratic Committee for the next four or five years. By this time I was in my mid to late '30s, I was actively involved in Democratic campaigns and in fact was state campaign manager during one of the primaries for a very well known jurist, Michael J. Musmano. He hoped to win the Pennsylvania Senate seat. He was well known in Pennsylvania, because as a young lawyer he represented Sacco and Venzetti in a very famous civil rights case having to do with whether or not those two Italian immigrants had been "railroaded" or whether they were guilty of the terrorism events of which they were charged.

Musmano, being an Italian, was very, very anxious to get involved. He did become their counsel. Subsequently, he wrote many books and articles about the case. He was well known in the state, but he, unfortunately, lost the primary.

SMITH: That was a civil anarchy case based on union activities, was it not?

COOPER: I'm not an expert on that case. I only know its reputation.

SMITH: Frank, you were talking about organizing a political campaign for the judge and I think this was about to lead up to your introduction to the cable television industry through some of the people in the industry.

COOPER: Well, yes. Two stories. First during this period, as luck would have it, I heard of cable TV, I guess, for the first time through Milton Shapp. Also a relative of my then wife was in the business, a man by the name of Fred Lieberman. Mr. Liebermann had also been born and raised in Philadelphia. He had left the city and had taken a job out on the west coast and the family lost track of him. When he turned up again, I remember meeting him and asking him what he was doing and he said he had taken a job with a firm called Jerrold in Philadelphia. A firm up to that point I had never heard of.

"What do they do, Fred?" He said, "Well they bring television to people by putting up a tower and antenna and bringing the wire down city streets into individual homes." "Well, what holds up the wire?" I asked. He said, "We put the wire on telephone poles. That's what holds up the wire." I said, "You know, Fred, you better go out and get yourself a real job. How long do you think that thing's going to last."

That was my attitude and that was the public's perception of cable TV at that time. It sounded, at best, like a flimsy industry. A business that would be dependent upon borrowing poles from a telephone company didn't seem like a very sensible way to get television pictures, to me.

Later, when I got to know Milton Shapp, Milton made me a real devotee of the industry and got me very interested in the business because his attitude was positively contagious. At some point in 1964, he was putting together a campaign team because he thought he would like to run for public office. For one reason or another, his political office opened and closed, mostly because at that point, Milton was an absolute political unknown. When he took polls to determine his public identification, the results were generally very, very poor.

I had worked with him off and on, in building a campaign leading to his governor's race. During one of the down-turns I referred to he said, "I'm going to shut the office for a while. I don't know whether I'll really make a run for it." He offered to get jobs for his staff, and he got me a job at the Jerrold Corporation. He recommended me to the then General Manager, Bob Beisswenger, saying that Frank COOPER had a certain amount of political experience, that he was not uncomfortable with the political arena, and would be a good CATV franchise man.

Jerrold not only manufactured CATV components, but also had a systems operating division; and did indeed need a specialized franchise man. I became that guy.

At first, the Jerrold people weren't especially enamored of me, nor I of them, because we had come from different disciplines. I was a "politician" and they were "cable guys/businessmen, etc."

It turned out that over the course of the time that I was at Jerrold, I proved fairly effective at bringing in those franchises. I didn't find it all that hard to do. (Incidentally it really wasn't all that hard to do.) If you came into city hall and made an intelligent case to the city manager or to the mayor, the local pols didn't have any particular objection to CATV. Franchises weren't all that hard to get in those days.

SMITH: What was the time span?

COOPER: When did that occur?

SMITH: Yes.

COOPER: I started at Jerrold in 1964 and I stayed with Jerrold until 1968. By September '68, I was at Malarkey‑Taylor Associates. I had decided to leave Jerrold. Milton Shapp was now completely out and Monty Shapiro of General Instruments had come in. Although Mr. Shapiro, over the years, subsequently became quite friendly, I found the new environment of a big public company like General Instruments inimical. I knew some of the people at Malarkey‑Taylor Associates, such as Jerry Looby and Martin Smith. We were talking at one of the cable regional shows and they introduced me to Martin Malarkey and he thought that I ought to come down to Washington and I did.

SMITH: Before we get too far into that, then your sole area of activity when you were with the Jerrold Corporation was in franchising. Is that correct?

COOPER: That's not quite correct, because you may recall Elmer Metz. He was division manager and my immediate superior. Elmer, although very eccentric with an exotic personal manner, he was very well versed in the cable industry. He really understood it. If I learned anything about the cable TV business I did, in fact, learn it from Elmer.

He had very little tolerance for specialists. Elmer really insisted that the staff learn every phase of the business. Although I don't have much of a technical background I had to learn how a cable system worked. I had to learn a certain amount of theory. I had to learn system operations. I had to learn cable finance, how to read the financial projections. Elmer insisted that we know the business. During Elmer's term of management, it was sink or swim, because if you didn't make it with Elmer you got fired.

So I learned the business.

SMITH: What was Elmer's title at the time?

COOPER: When I worked for him, he was the manager of the Jerrold C.O.D. (Community Operations Division). So, I was at Jerrold until General Instrument took it over, and then left for Washington with great expectations. No sooner had I arrived at Malarkey‑Taylor Associates before the FCC issued its famous Microwave "freeze" and refused to allow cable systems to import distant signals. I'm sure that you can elaborate on the legalistics of the freeze far better than I can, but it created a terrible depression in the industry.

I had been taken on at Malarkey‑Taylor Associates to head up a newly opened brokerage division. I knew enough about the business to represent to buyers and sellers how to acquire or divest cable TV systems. But now, with the freeze it was very tough. Business was literally drying up. Shivers and tremors went through the industry at that time. Martin Malarkey, who headed-up the firm practically said to the staff that if you see a better opportunity, don't hesitate to take it.

Lo and behold, as luck would have it, this very freeze was creating a most interesting opportunity for me. There was an opening at an operating company headquartered in New York City. This was TVC in New York, headed by Alfred Stern, and his chief operations officer, Gordon Fuqua.

SMITH: Before you go into that, Frank, let me just ask you, during the Malarkey‑Taylor period, which was apparently relatively brief, did you actually handle any system brokerage?

COOPER: Yes, I sold one small package of systems to a friend of many years in the industry. An appliance dealer by the name of Alan Gerry. Mr. Gerry was someone I had known since my earliest day in the industry.

SMITH: Did you start Mr. Gerry in the cable business? Were those his first systems?

COOPER: He was already operating a few small systems and we got friendly. We used to exchange, as we still do to this day, visits at each other's homes and we always talk cable. I certainly would say that in exchanging information I encouraged Alan to go after more franchises. He was concentrating on his appliance store at that time which was typical. Robert Tarlton, who practically with Milton Shapp, invented this business was also an appliance dealer. Gerry had been selling TV sets and radios since about 1951. He lived in the Catskills where signal was a problem. That's how he got into the cable television business, making certain that the people that bought his TV sets would get a picture. I encouraged him to go out and get more franchises. I used to tell him, "Don't worry so much about the banjo business, go out and get the cable TV franchises!"

If I can, just for a moment, go aside, Mr. Gerry in those days was not the nation's fourteenth largest MSO. In those days he was a very small independent. I met him at a cable convention where I was active on the floor. This particular convention, was I think the 1966 NCTA convention.

SMITH: This is while you were still with Jerrold.

COOPER: I was still with Jerrold, yes. One year at the convention I met him on the floor and asked him had he voted for the NCTA president yet because I was heading Jerrold's campaign to elect Bob Beisswenger. Gerry said he hadn't voted and wasn't paying much attention to the election and didn't think he would vote. I said, "I need your vote very badly. Go get your ballot from the NCTA and try to have it up here in less than ten minutes. The vote is about to begin and I need every last vote."

About nine minutes later I was looking around the room, buttonholing people for ballots and I see Gerry's right there, but he hasn't handed me his ballot. I walked over and said, "Did you get me the ballot?"

"No".

"Why not?"

He said, "They wouldn't give it to me."

"Why wouldn't they give it to you?"

"I didn't pay my dues."

"Well, go back. Pay your dues and bring me the ballot."

He said, "Well, not today." And that tells you all about Mr. Gerry's financial situation in the late 1960s.

SMITH: As you say, now he's probably the fourteenth largest operator in the country.

COOPER: And probably the largest independent. He's bigger than Rigas. Rigas is one of the largest independents.

SMITH: With assets so large we shouldn't even speculate about it.

COOPER: I would hate to do it.

SMITH: It's a neat story because it shows some of the rags to riches careers that characterize the cable television industry. Frank, go on. You had advanced from Malarkey‑Taylor‑‑perhaps advanced is not the right word. You had moved from Malarkey‑Taylor to this organization in New York headed by Al Stern. Do you want to pick up with your story there?

COOPER: I was attending a regional convention for Malarkey‑Taylor in the early months of 1969. I met Gordon Fuqua at a reception and he asked, "Would you be interested in discussing some things in New York with Alfred Stern and myself? We're working on a project that may be of interest."

I knew the situation at Malarkey-Taylor wasn't looking too good, so I went to New York and met with Fuqua and Stern. I had dinner with them and they were very candid in revealing that if the cable operators such as themselves didn't develop new streams of revenue, if they didn't start doing innovative things, if they didn't start expanding their base, there was going to be no future. The Commission was just crippling the industry.

SMITH: By the Commission you mean?

COOPER: The FCC. TVC was already beginning to feel the pinch. TVC had started a large system, one of the largest urban systems in the United States in Akron, Ohio.

SMITH: What do the initials TVC stand for?

COOPER: It was Television Communications Corporation.

They had started major construction in Akron, Ohio. I think at that time there was not a larger urban system anywhere. That's my memory of it. Millions of dollars were going into this system. TVC was becoming very alarmed at the thrust of the rules and their diminishing ability to attract investment.

You might say, "Shouldn't they have had their investment in place already in Akron?"

Well, a lot of it was in place, but there were vast technical problems in Akron. There had been a big changeover in the amplifier industry relating to increased signal capacity, so cost overruns were staring TVC in the face.

Gordon Fuqua was a kind of a universalist in his attitude towards cable. In other words, he thought in terms of the Industry. He didn't feel that Akron, in and of itself, would break the company, but he thought that it wouldn't be good for the industry if the Akron problem and the FCC problems curtailed operations, thereby throwing the industry into a significant downturn. He thought the industry had a future. He believed in things like local origination; multi‑purpose usage of the cable system, e.g. surveillance systems which at that time seemed to make sense. He had even talked Alfred Stern into creating a division known as Televigil which was a security-surveillance idea.

He had another idea which was positive blasphemy. He said, "Alfred and I believe that the way to save this industry is to bring in the money you need to solve technical problems such as we're having in Akron, by going into a situation where‑‑follow this now‑‑we open up three or four new channels exclusively for cable TV. For example, a medical channel for doctors offices, and an instructional channel, and among those channels, he said, we'll have a movie channel."

We all sat quietly there for a moment. I asked, "A movie channel? What do you mean by a movie channel?" He said, "We'll get new movies and we'll pipe them from the headend into the subscriber's home and charge the subscriber for it."

I said, "That's pay TV."

Now, in 1990, the words pay TV aren't unusual, but pay TV in 1969??

The movie people and the broadcasters had been hammering away in print and media for years that one of the things that might happen with cable was that operators were going to introduce the idea of pay TV..."charging people for what they once got free." Of course, cable already was charging people for what they "could get free," but now here was an additional charge coming...for the movies. This was really "worse" than pay TV. This was subscription television--which had already been tried in a couple of referendums. This had been the subject of all sorts of media opposition for years, and the public was trained to believe that pay TV was kind of a dirty word (or at least a dirty phrase).

SMITH: When you say it had been tried in a couple of referendums, Frank, specifically what are you alluding to?

COOPER: Well, I'm alluding to the fact that subscription TV was on a referendum in California under the leadership of Sylvester Weaver. He had formerly been president of NBC. It bombed. (Incidentally that's Sigourney Weaver's father. You knew that.)

SMITH: No, I didn't know that.

COOPER: Weaver lost a fortune in this concept as did all of his investors and it lost because the public just wouldn't accept the idea of pay TV. The newspapers and the broadcasters, all the media, said that Weaver was trying to charge people for television. Although the cable guys in effect had been charging for television since the '50s, the public attitude towards cable TV was "small town." Cable was something that happened in the backwoods so it didn't concern New York, Philadelphia, Washington, Chicago, Los Angeles. The majority of people didn't pay all that much attention to it. But when Weaver threatened to bring pay TV to the big cities, that bothered people. The connotation of pay TV resonated poorly.

(The interview was interrupted briefly.)

SMITH: Frank, while we were off the record for a moment, I had inquired whether you had been with the Jerrold corporation at the time of the Bartlesville pay TV experiment and you said no, but you had mentioned another one in Canada that you had done some research on. Could you tell us about that one?

COOPER: Yes, let me take you back to 1969. When I went up to meet Fuqua and Stern to discuss their idea they introduced it to me by saying we're going to create a medical channel, an educational channel, a cultural channel and a movie channel. We're going to introduce a CATV diversity concept. Being fairly ring wise I knew where the money was and I knew what cable needed was money. The money was going to come, not from their medical channel, and not from cultural channels. It was going to plainly come from the movies, pay TV.

I thought to myself, on the one hand down in Washington, Malarkey‑Taylor is practically inviting the staff to look for jobs, and on the other hand, these guys are offering me a job in pay TV. Why pay TV is almost as popular in the United States right now as murder. I'm between a rock and a hard place here. I didn't want to turn down a new job, but people don't like pay TV.

Mr. Fuqua and Mr. Stern were very persuasive. They convinced me that pay TV was a practicality. They convinced me that their concept was sound because it had tremendous ramifications, cultural as well as financial...and that I ought to have a shot at it...so I came to New York and my first job was to seriously research pay TV. As a result I found out to my own astonishment that there had been start-ups in pay TV. One in Bartlesville, Oklahoma and another in Etobicoke, Canada.

In Bartlesville a local cable entrepreneur who I believe also owned or had an investment in a movie theater obtained the rights from his distributor to run film from his theater to his headend which in turn passed the movie into subscriber homes. He was able to do this for four or five days. The picture that he opened with I discovered, was "Pajama Game."

SMITH: Now you're talking about what?

COOPER: "The Bartlesville experiment." I'm talking about a period long before I met with Stern and Fuqua. I'm talking about somewhere in the late 1950s. Unfortunately, the Hollywood distributors shut him off real, real fast.

SMITH: Actually, Frank, he built an entire system solely for the pay TV experiment. It wasn't his cable system. No, he built the entire system for the specific purpose of the pay TV experiment, and I think that he had one or two years that he was allowed to test it under this contract and then they shut him down.

COOPER: Well, it's a long since I did the research, more than twenty years ago. I certainly won't dispute the kind of system that he ran it on, but my memory is that he wasn't on long because Hollywood shut him off very fast. You're saying two years. My hunch is he didn't go that long.

SMITH: Well, Henry Griffing, who was the man we are talking about, owned a chain of theaters throughout the southwest, Video Independent Theaters. He was a client of mine which is the reason I'm interposing. I thought it might refresh your recollection. He got several motion picture producers to make pictures available to him for at least a year, but he built a complete system from ground up for this one purpose.

COOPER: Well let me reverse field and ask one question. Am I right that it was the late '50s?

SMITH: Yes, you're right on the time. I interrupted you because I thought you might be confusing it with the Canadian operation that you were about to talk about.

COOPER: The Canadian operation did not work out of a movie theater. My memory of Etobicoke is that it operated over the air, and it was in Cooperation with the Zenith Corporation.

SMITH: It could have been.

COOPER: I do know that it failed, but why it failed I don't know. Zenith, I think, subsequently moved the experiment into a relatively small town in Connecticut. There were, in fact three experiments: Bartlesville, Etobicoke, and one in Connecticut. But none of them worked. What worked was what Mr. Fuqua and Mr. Stern and I put together...that worked and that changed the history of American entertainment. We called it the Gridtronics Plan.

SMITH: Your Gridtronics. Let's go back to that. I did interrupt you and I should have let you continue.

COOPER: Essentially, when they presented the idea to me they were going to try to convince the industry to adopt pay TV which eventually was called pay cable, I was very apprehensive. I knew that because of the experiments and the failed referendum in California, that the public perception of pay TV was very unfavorable. It had a positively murderous image. For example, you could picture somebody putting a gun at your back and making you pay for something that you thought was free. This was what had been "sold" to the public by the broadcast industry, and by the motion picture exhibitors, and by a certain amount of print media that never did like cable television.

As I pointed out, although cable and pay cable were of course, closely related, cable TV had been tolerated because it was "small town." It had not yet reached the big cities. What brought cable to the big cities was, in my opinion, two developments: first‑‑pay cable, and second--the use of satellite to distribute the pay cable pictures.

When I agreed to take the job with Fuqua and Stern for TVC, (Television Communications Corporation) we developed a modus operandi that consisted of calling on the cable operators in person, any system operator, MSO or independent provided he had at least five thousand to six thousand subscribers. Our idea was to get operators to form a cable pool by signing up for our so‑called plan, we called it the Gridtronics Plan, or Gridtronics Diversity Concept. At the same time, Mr. Stern and I, would call on the motion picture producers: MGM, United Artists, Paramount Pictures, Warner Brothers and so forth. We would call on them and say, "Look, we've got a half million people that will watch your films every day if you'll provide them for a separate channel on the cable."

Well, this was very revolutionary. When we called on the operators a lot of them asked a simple question, "How can I deliver another picture? I've got ten or eleven channels and that's as many as I can really expediently utilize. Other channels that would appear to be available aren't, due to various co‑channel and adjacent channel reasons, so that I don't have any space to deliver another picture."

The whole darn thing didn't make much sense to many of these operators.

SMITH: Frank, I am going to have to interrupt you again. The red light is flashing to tell us we have to turn the tape over.

End of Tape 1, Side A

SMITH: This is Tape 1, Side B of the oral history interview with Frank Cooper. The date is June 14, 1990. The interview is taking place in the oral histories room at the National Cable Television Center and Museum at Penn State. Frank, you were telling us about some operator reactions to the Gridtronics proposal, and specifically, the question of whether they would have a channel space available to carry the Gridtronics signal. Would you continue?

COOPER: Well, we had a separate engineering department for this problem. It was headed up by an engineer named Austin "Shorty" Coryell. His job was to perfect a headend adapter that would make it possible for the average cable operator to utilize his midband‑‑his unused midband frequencies--so as to distribute our special signal. Then to be compatible with what occurred at the headend, he devised a special converter that would deliver that signal to the subscriber's receiver in such a way that the subscriber, with a simple click of his TV dial, was able to tune in a new picture, provided he had paid for this additional service. Now even though we were meeting resistance in the early stages of the game, we were beginning to talk to movie people, "opening the door" to this idea through certain people in the movie industry that Alfred Stern knew. Now, I'm going to do an aside and discuss how Alfred Stern came up with the Gridtronics idea; that is, the background he had, that I am aware of, that created the whole concept for TVC.

SMITH: Please do.

COOPER: Alfred had worked at NBC and he was an executive in the film department. As you know, the networks always used movies. They needed someone experienced in film buying. Alfred had developed relationships with the studios and became a significant cog in the film acquisition wheel at NBC. As a matter of fact, if I'm not mistaken, Alfred knew David Sarnoff personally and that's how he wound up working at NBC.

When he left NBC and began his own business, mainly the Television Communications Corporation, (TVC) he hadn't forgotten the skills he had honed there. With his knowledge of the film industry he thought he could use his buying skills to obtain films for the cable industry.

The cable TV people did not come from the entertainment business. The backbone of the cable business in the early '50s and throughout most of the '60s, were people who related to television sets; i.e., appliance dealers, repair people.

As a case in point, John Walson, a leading independent, who frequently claims that he built the first commercial system, used to sell refrigerators and connected TV sets to a cable that he put up in his spare time.

So along comes Alfred Stern to present this idea: "Hello, cable operator, I'm a fellow operator. I have an idea that will bring us additional revenue. I've got a guy on my staff who is going to travel around and meet with you and other operators. He's going to form this great big subscriber pool and when we have a pool of a half million subscribers, we're going to sit down with the movie guys and say, "Give us enough films so that a half million homes will pay nine or ten bucks a month--and we'll split the take."

When Stern and Fuqua brought me on in March of 1969, they knew that less than a few months away was the National Cable Convention in San Francisco. Heading to that show were all of the industry's movers and shakers. TVC wanted to do a major presentation that would convince the decision makers that pay TV was the next wave.

All of TVC's immediate effort was now directed towards doing an impactful presentation (and a very costly one) at the NCTA show in San Francisco. I remember that my budget of $50,000 which in 1990 doesn't sound like all that much money, but it was a huge sum for a "one night stand" at that time.

With $50,000 we put on a whale of a show. It was a multi‑media event. We hired people who were specialists in industrial presentations using nineteen or twenty projectors going off at once. It was a dazzling performance. We even convinced the major movie studios to lend us trailers so that we could show the cable operators the kinds of films we would be using. We carefully crafted a script for this kick‑off of pay cable presentation. We assembled a mailing list of every significant cable operator. We produced a gala evening and we packed the house. At the Fairmount, there wasn't an empty seat. Everybody who was anybody in the cable business was there, including the FCC commissioners.

Strat, do you remember, when was Alfred Stern the NCTA chairman?

SMITH: Stern was the national chairman in 1966‑1967. If that helps.

COOPER: It does help because it accounts for the fact that we were able to get such a tremendous turnout-- because Alfred was not just some guy with a "hustler's" idea. Alfred was a man taken seriously by the industry. They had elected him their chairman. He had very good pedigree and he was quite a magnet when it came to attracting people to this event. We broke the idea of pay cable as a reality at that show.

Following the show, our technique was to be sure that the operators "signed on the dotted line." We had prepared a form that invited them to participate in the Gridtronics plan. It was our intention to take those forms to the various movie studios.

Peppering my diary for 1969 there are notes about our many meetings with the various heads of the studios. We met with Lou Wasserman of MCA, we met Irwin Ezzies at UA; we met Silverman of Paramount. In fact, we met every leading executive in the movie industry. We tried to convince them that the time had come to release movies to the cable industry in return for a stream of revenue that we would share and at the same time would expand our mutual audiences.

SMITH: How successful were you with these people?

COOPER: Well, I may be foreshortening the story, but I'll tell you how successful we were. Today, I gave Pamela Czapla, at the Cable Museum a commemorative clock that Alfred Stern presented to me on the date that Gridtronics actually inaugurated new motion pictures from the cable headend into the subscribers' homes. It took four full years, until February 1973.

SMITH: This was after you had been successful in getting the programming available.

COOPER: Right.

SMITH: How did you deliver the programming to the individual systems that were participating?

COOPER: It was a tremendous work-out, a gnashing of teeth to secure the film; and still keep the operators in line. Even at that we were scooped. In other words we were not the first to activate a pay cable signal, although we in fact, were the first to do a multi‑system pay cable performance. We activated ten systems on the day that Alfred Stern gave me that clock...but I'm getting ahead of myself.

Curiously enough, prior to our activation, by three full months, Home Box Office, a division of Time‑Life, scooped us. Somewhere in the middle of the four year span, Jerry Levin head of Home Box Office came to see me and told me very frankly that Home Box Office was tracking the Gridtronics experiment. HBO was watching our progress, was aware of the fact that we were beginning to make inroads, and now HBO wanted the same rights to the films. They were going into competition with us and they did not expect us to sign the kinds of contracts with the producers that would prevent them from getting the same films. The overtones were that HBO would treat "exclusives" as restraint of trade. Here we had broken the back of the problem by ourselves through hard work; but by activating first, HBO got the credit. Even though I reached my goal of a 500,000 Gridtronics "pool," our efforts at reaching agreement with the studios just wouldn't jell until in 1972. A firm by the name of Warner Brothers came along and decided they wanted to get into the cable business. Warner bought out TVC.

That is when the floodgates opened. It became obvious when Warner bought out TVC, it had, in effect, become a cable operator and would in fact, provide film for "pay" purposes. That was indeed something to motivate the other movie studios. The majors then fell into line. They decided they better share the pie rather than allow Warner to get this tremendous hold on the cable industry all by themselves. They weren't about to let that happen.

In 1969, right after the NCTA convention, Alfred Stern asked me how long did I think it would take me to create the pool of 500,000 subscribers. This sounded like a big number then. I had been out in the field, I saw that we had "sold" some of the operators at the convention. They were beginning to think that pay cable was a possibility, and I was becoming optimistic. I told Alfred, by December 31, 1969, I'll have a half million homes in the pool. On the day before Thanksgiving, because I remember Thanksgiving dinner in 1969, I had signed up 500,000 homes. I have my notes right here in my diary and I got them in an interesting way.

I had to get operator's signature on a form of some kind. The form had to look contractual, "engraved in stone". The movie guys had to be convinced. Their question would be, "Who is this operator? Did he sign on for our product? Will he live up to the agreement? Will he really use the product and promote it? Will he pay his bills? Is he honest?"

I became a missionary. I hired a small plane. I crisscrossed the country, stopping wherever there was a cable system. I had a TV Fact Book marked up so that I could stop in every city. I called on every operator who I thought could be brought into the fold. Getting a 500,000 subscriber "pool" doesn't sound like a lot today, but 500,000 subscribers in 1969 was a very big number.

SMITH: Can you remember, Frank, or estimate at least, the number of stops you made in that plane? The number of cable systems that you talked to in building up that 500,000?

COOPER: How many different stops?

SMITH: We won't count the ones where you just went down for fuel.

COOPER: Well, I didn't take the plane cross country. I would go cross country commercially and then hire planes on each coast. I would go north‑south in a small plane. I would crisscross with commercial flights and where I could find a suitable system in between I changed planes. I would estimate somewhere between fifty and one hundred stops. I would periodically come back to my office and publish a monthly journal on the Gridtronics plan. The "journal" was really a friendly, folksy letter with a little graph and it said, "Operators you remember last month we had 16,000 potential subscribers? Would you believe that Monty Rifkin (for example) has signed up now and we have 43,000 subscribers in the plan? Every month I would draw a new bar graph.

Some of my memories of the campaign, people who were helpful, and people who weren't, amused me still. Alan Gerry who wasn't able to help me with the ballots in the early '60s because he said, "Not today", signed up early for the Gridtronics plan. He was very helpful.

I remember another operator on the West Coast who was also in the real estate business. They used to build housing projects. I called and I said, "This is Frank COOPER. I'm going to be out in your area next week and I wonder if I could interest you in the Gridtronics plan?"

"What is this Gridtronics plan?"

I said, "Well, it's the one you probably read about where we obtain the films for you and you sell them to your subscriber."

The operator said, "Listen, I don't sign no plans."

But we got our 500,000 anyway, and we got them by Thanksgiving. From there on it was a long, tough, wrestling match with the movie studios.

I should add a footnote here. When Home Box Office scooped us and got on the air, I should say cable cast, their first pay cable picture in November of 1972, they did it via microwave, but they quickly realized this was not very efficient. John Walson's system was their inaugural outlet. A great many of the systems in Pennsylvania were not reachable by microwave. There simply was not a complete microwave network in place. HBO realized that to reach subscribers in big numbers, they needed the audacity to think in terms of satellite.

Satellite technology in 1972 was something the government utilized. When you talked satellite, you were talking about NASA, you were talking high-tech. It was not yet something we really understood. In cable we hadn't yet accepted the idea of satellite delivery.

It sounded tremendously expensive. In fact it was tremendously expensive. Somebody had to lease transponder time. Then each operating system would have to have a dish with which to obtain the signal. So it looked like a big capital investment. The dish didn't bother Home Box Office. With Time Life's money they could afford to be daring. That's how they took the play away from Warner/TVC. Home Box Office is still in first place in pay cable because they shot craps when it really counted. It was a very courageous move. Then they went one step further, they told the operators, "Listen, if you can't afford a dish to get our signal, we'll help you buy one."

They probably didn't realize that in making that promise they were opening the door to the cheap proliferation of satellite dishes. In doing that they really changed the business. TVC/Warner pioneered the concept...but HBO came up with the commercial practicality.

Of course, in turn, that made it possible for Ted Turner to succeed. He was able to make a small Atlanta TV station a national outlet because there was going to be enough dishes out there to make TBS viable. The idea of using the satellite and earth stations soon penetrated the industry's consciousness. The satellite welcomed multiplicity of signal, and thereby changed the economics of the cable business, and made cable a force to reckon with.

I remember talking to people in the broadcast industry prior to the advent of satellite technology. I remember having a conversation with one of the operating vice-presidents of CBS. He was very contemptuous of the cable industry. To him, cable people were positive nobodies. But boy, did the satellite change all that.

SMITH: Well, most everybody credits the development of satellite transmission for revolutionizing the industry. It certainly did. Let's follow up with a couple of questions on the Gridtronics story. When was it decided not to go forward with Gridtronics? Apparently in the face of the HBO developments.

COOPER: No, we did go forward. I guess I haven't explained that well. We went forward in February of 1973. We opened with ten systems; one of them very close to here, in Clearfield, Pennsylvania. We cablecast new movies right from our headends with the Coryell type equipment that I described to you. We used so-called "stand alone equipment" and we would get our films in by "bicycle," send the can..

SMITH: You mean you shipped it in, for the people unfamiliar with the terminology.

COOPER: Yes, shipped in, and we would obtain enough copies to cycle these through the various headends in our ten system chain. We would cablecast the film from our headend to subscriber homes and the subscriber required a special converter to receive this picture. We invented our own converter. We called it the "Plus Two." So, as you see, Gridtronics didn't disappear. We opened with a new name. We decided that the name Gridtronics was unwieldy for advertising purposes. People didn't understand it. We renamed ourselves "Star Channel."

We offered a different movie everyday for somewhere around $5 or $6 a month. Eventually the Warner people who had taken control of the business decided they didn't even like the name Star Channel. They didn't think that was sufficiently descriptive. Warner changed the name to TMC ‑ The Movie Channel. So it's still in business and it hasn't disappeared at all. What has changed is the price and the method of delivery.

SMITH: I must say, I was not aware that the antecedents of The Movie Channel were in Gridtronics.

COOPER: Gridtronics is The Movie Channel.

SMITH: Something new to learn everyday.

COOPER: Let me tell you a funny aside to getting the thing perfected. In 1972, at Home Box Office, a block and a half away from our offices in New York, they are determining that they are going to go up on the bird and deliver the picture that way. Meanwhile, at Warner (TVC, Gridtronics, etc.) We haven't quite come to grips with the satellite idea. We're trying to originate signal from the headend. And on our side of the aisle, scientifically was Dr. Peter Goldmark, who as you recall invented the LP record.

SMITH: He did. He was the vice-president in charge of research for CBS.

COOPER: CBS Labs, right. Well, Warner brought in Goldmark and charged him with the responsibility of dissemination of the picture out of the headend. In the meantime, Home Box Office had already solved the delivery problem when they decided to go satellite.

SMITH: Peter Goldmark invented the color television system that CBS proposed to the FCC and got the FCC to adopt at one time. The one that used the rotating mirrors.

COOPER: The color wheel.

SMITH: Yes, and that was presented in competition with RCA's electronic systems. In the initial stages the CBS system was so superior in picture quality that the FCC adopted it. However, it was never actually put into nationwide operation. Enough for Peter Goldmark; he was a genius.

COOPER: Yes, he was and I remember sitting in a Gridtronics meeting with him and he was very patiently explaining efficient headend techniques. But, I will say this, Goldmark did not know what was going on at Home Box Office; they weren't telling us and we didn't know. But Goldmark said, "Well, maybe we ought to be on the satellite."

Well that went around the room you know like, sure, let's take on the national debt. That's why we're here right now. But Goldmark understood that the cost efficient way to disseminate that signal would be satellite; but we hadn't digested the idea yet.

SMITH: You have to give Jerry Levin the credit at HBO.

COOPER: I will say this. From time to time, because they are a big company, it's easy to take a shot at HBO. But even more than Jerry Levin that idea had to get approval at the top because the investment was First Magnitude and you were talking about big money.

SMITH: J. Richard Munro, the chief executive officer, took it before the board. I interviewed Mr. Munro last week, but he bends over backwards to give credit to Levin for the idea. Well the original idea was Chuck Dolan's, but Jerry Levin apparently shepherded the thing through the developmental stages and Munro presented it to the board. So you're right, it took commitment and a massive monetary tab.

COOPER: You brought up a very interesting point. It frequently gets forgotten, Chuck Dolan was a big player in all of this. Because he's done so many things since, it's forgotten that he used to pump pictures into hotels before any of this. He didn't do film for cable TV, but he did do films for the hotels.

SMITH: Just for your information and it won't hurt to have it on the tape for researchers who want to look other places for information, not only will we have the oral history of Munro, but Gerald Levin is scheduled to tell his side of the story and we're looking forward to that. Then in due course, we'll nail Chuck Dolan down and get back to the very beginning.

COOPER: When you talk to Jerry Levin, don't hesitate to tell him that Frank Cooper said he and I met for lunch at the ice skating rink at Rockefeller Center to discuss the fact that HBO wanted the films. I'd like to see how he responds to that.

SMITH: Ok, I'll not fail to bring it up.

COOPER: You could even play this tape for him so he could hear it.

SMITH: Did you stay with the TVC when it was purchased by Warner?

COOPER: Yes, I stayed because by the time we activated, Warner was now already fully in control of TVC. TVC had already expanded operations in conjunction with Warner. We bought out the Cypress system, which I believe was a Burt Harris operation. I think Burt owned or was a major participant in Cypress. We also bought some Continental telephone systems. We were getting to be a very big company.

I did stay but you can imagine the kind of layers of management that now were beginning to pour into the company. Whereas at TVC, there was Gordon Fuqua, Don Anderson, myself, Joel Smith, just a handful of us. Now at Warner there was a vice president on every floor and in nearly every office. It was becoming a giant corporation. I left in January of '74. Just about a year after we kicked off the so-called Star Channel.

SMITH: Did your duties remain essentially what they had been when the company was owned by Al Stern?

COOPER: For the most part, yes. In other words, when we were a smaller operation and during the course of those four years, we waited patiently to perfect the Gridtronics experiment, I was occasionally able to wear some other hats. For example, I would sometimes go out and get new franchises. Also, I did some evaluations of existing cable systems in Europe. We all used to double in brass at TVC because it was a much smaller outfit.

Now at Warner, with a tremendous number of management executives in place, the only responsibility I had was Gridtronics or the Star Channel as we were now calling it.

That only lasted about a year because there were tremendous conflicts with so many players involved. The internecine rivalry, the currying for position with the new owners, became quite abhorrent. So that became the end of my corporate life. I left to become an independent cable consultant and sometimes operator.

SMITH: I want to go into that too, but let's backtrack again back to your days when TVC was owned essentially by Al Stern. Can you remember any specific incidents in some of the negotiating experiences you had with Al with the motion pictures industry that might be worthwhile to put on the record to show the kind of problems you were faced with, and who first broke the ice. Could you give us a little more background in that area?

COOPER: Well, ok, let me try to put together one of our first fiascos in negotiating with the film guys. Alfred very properly decided that if we were going to break the ice with them, they had to see Gridtronics as a commercial practicality. The studios were aware of the cable television business. Although cable wasn't yet in the big cities, there was enough cable out there for the movie people to be well aware of its existence. When our chief engineer, Coryell, had perfected our headend devices and a converter to play a picture, we decided to do a test in Winter Haven, Florida. We invited key executives of the movie industry responsible for distribution to the television industry to fly to Winter Haven at our expense. We put on a brief seminar at the headend and we put the executives into cars and took them to individual homes where they could see the pictures.

As you know, Winter Haven in Florida, is beautiful country in the winter, warm and pleasant. The movie people were delighted to jump into planes provided by Mr. Stern and fly from less salubrious locations. So the group arrives in Winter Haven, on a beautiful day, hosted by Alfred Stern, himself.

SMITH: How many guests were there?

COOPER: Well, you figure your two from each studio and we had maybe seven studios in those days represented and then a few press types, we must have had a show for twenty-five or thirty people. We had six or seven cars lined up to take them from the headend into subscriber homes and we had alerted certain subscribers that they might get a visit. We reminded the subscribers to let us in so that our guests can see that you are really getting an experimental movie, in this case, absolutely free. It was a demo. The movie people had lent us the film.

Unfortunately, the night before our guests arrived the temperature changed from an afternoon high of around 90 down to 35.

SMITH: Pretty low for Winter Haven.

COOPER: A tremendous swing and nothing was working the next morning because in the early '60s a temperature fluctuation of this magnitude would knock out the system. The amplifiers were set to play at a given level and the cold weather changed the decibel balance and the pictures were not playing. When the guests arrived we were forced to stall and kept stalling them because we knew one thing. We had a weather report and knew that the temperature would heat up in another hour or two and if we just hold them at the seminar for another hour, it would get warm enough to get good pictures. And we did. We held them. They couldn't understand why we were stalling. We had everybody talking to them. Droning on and on explaining heterodynes and every other damn thing. Our stomachs were flipping because it was very important to make a good impression on these guys. Fortunately the pictures were playing beautifully when we finally got them into the homes.

SMITH: What kind of reactions did you get from them in terms of their evaluation of the whole show?

COOPER: Well, these were sophisticated businessmen. They were able to see through a lot of our machinations. They knew they had been stalled, and they saw a headend that looked to them like a file cabinet. They weren't terribly impressed with the technology. These people know good technology when they see it. They have good technicians themselves.

In brief, even though they weren't terribly impressed with the cable business they took this position: "Let's assume that you, Mr. Stern, can really deliver our pictures in an efficient manner. What do you get and what do we get?"

That now became the question.

SMITH: Frank, we're getting a red light again so we'll have to put in another tape.

End of Tape 1, Side B

SMITH: This is Tape 2, Side A of the oral history interview with Frank Cooper. Frank, at the end of the last tape you had been telling us about the special show that Mr. Stern and his company had put on in Winter Haven, Florida for the motion picture producers and distributors. Do you recall any other experiences that you had with Stern and in your negotiations with the motion picture industry that bear on the problems of getting a pay television service started?

COOPER: Well, let me go back to 1969. I came to New York to take a job that in effect made me the first director of affiliate relations in the cable industry. My main concern was the fact that I could be tarred with a nasty brush because essentially we were talking about pay TV. I was concerned that Gridtronics could prove so politically unpalatable and so commercially non‑viable that I could quite possibly say good‑bye to the cable business. But on the other hand, Stern and Fuqua convinced me that there was not another viable idea around to compare with it and that this was really a path breaking opportunity.

I took the job and it became my responsibility to act as the key figure in a new business. Having engaged me, Stern went back to being chairman and Gordon Fuqua went back to operation of the TV systems. Cooper was the Gridtronics president and now headed up every phase of it. I had to be sure the engineers were perfecting the headend devices. I had the public relations aspect to handle, the press relations aspect to handle and I'm looking at a note here in my diary dated, Wednesday, May 7. I called a gentleman in Washington by the name of Al Warren who, of course, you and I know very well.

SMITH: May 7, 1969?

COOPER: Yes, and I wanted to acquaint him with the fact that TVC had in place a whole new idea for cable television, a "CATV Diversity Project, or plan." We didn't want to call this pay cable or pay TV, or pay anything. We simply wanted to call it a program diversity project, and I have in my diary that I pointed out to him that we're going to unveil this plan at the NCTA convention in June (1969). I wanted him to be well aware of it because the TV Fact Book was in those days, and I think still is, a journal of record.

SMITH: You're talking about the Television Fact Book.

COOPER: Yes, TV Fact Book, and TV Digest. The weekly was a kind of industry Bible. Every executive read it, and if it appeared there it bore watching.

Al Warren asked me, "Well, what does this thing do if, in fact, you perfect it?"

I replied, "It's a move whereby cable revenue will be going up. We will change the business from a $5 (monthly) business to a $15 business."

Al did publish our intentions in TV Digest, the weekly. He said, "TVC will unveil a CATV diversity plan, a CATV diversity plan at the forthcoming convention in San Francisco." I think the article went on to say the proponents claim that the plan will change industry revenue figures.

SMITH: Well, you are emphasizing your desire at that time not to call it pay TV or subscription TV or, pay anything. But how much diversity were you actually going to be producing when you unveiled this and did you include the medical programs?

COOPER: At the '69 convention when we introduced it we did indeed feature a medical channel, an educational channel, sports and movies. When we activated, four years later, it is true the only channel we delivered was the movies. But the promise had been fulfilled. When you turn on your TV set tonight, on the cable you will, in fact, get medical information, an educational channel, sports channels, and a movies channel. It has all happened. We didn't have either the wherewithal or the technology to perfect it all in 1969. So what did we do? We delivered movies which assured a new source of cable revenue. That much we were able to accomplish first. But right behind on our heels, all the other channels did, in fact, materialize.

SMITH: Yes, the vision has been borne out by history. No question about it.

COOPER: You know what Irving Kahn used to say about things like that. He once came up with a great line. He said, "You know our wildest exaggerations have all become perfect truths."

SMITH: The only reason I raised the point with you was the fact that you wanted to promote it as a diversity service rather than as a pay movie service at a time when the only thing that was feasible for you to do was the movie service.

COOPER: Yes, but politically we couldn't present the concept as a movie channel or a pay channel. Even though the public had demonstrated over the years that they liked cable. Our enemies knew how to stampede the public. And that's what we were afraid of. Subscribers like multiplicity of channels, they like plentitude. They love the cable. It's been demonstrated. Sixty percent of the homes cable passes, take the cable. And it hasn't been a terribly hard sell. (We've been accused of being too soft on marketing.) The public likes the produce and the service. We always knew that they would devour the movies but, in the hands of our enemies, we could be hung by the specter of pay TV. That's why we introduced Gridtronics in this round about fashion.

SMITH: Does your glancing through your diary suggest any other items that we ought to get into the record about those early pay television days?

COOPER: You remember I said just before Thanksgiving '69 I knew that I had reached my quota. I had to get 500,000 homes into the pool for Stern and Fuqua and I had 525,000.

I think I went over the top with help from TCI. They agreed to come into the plan reluctantly. They weren't as aggressive in those days as they are now. Mr. Magness was much more conservative than TCI is under Dr. Malone. They didn't cotton up to the idea right away. I just can't swear to it and I don't have the records at my disposal, but I think it was TCI coming in that brought us over the top. They didn't have nearly the number of subscribers they now have.

In my notes I'd have a good day when I'd sign a few systems, and I had days where it became very worrisome. I was afraid people were losing interest in Gridtronics because they had other fish to fry. The operators weren't concentrating on the Gridtronics plan.

I remember at one point I had 300,000 subscribers and I went to Fuqua and I said, "I think we have enough. Let's see if you and I and Mr. Stern can start calling on the movie people." Fuqua said, "No way. 500,000 is our number." Back I went.

SMITH: Well, you got it. Which of the motion pictures producers was the first to decide to go along with you on this experimental operation?

COOPER: Well, here I'm going to conjecture based partly on what I am aware of, and partly on what I think happened.

One of the executives that never took a negative view of the Gridtronics plan was Spencer Harrison at Warner Brothers.

SMITH: Could you keep your voice up just a little, Frank?

COOPER: Yes. Spencer Harrison at Warner Bros. was never skeptical. I believe that because the idea made economic sense to him that he persuaded Steve Ross to go along.

SMITH: I didn't realize Ross was in Warner that early.

COOPER: Yes, his company, Kinney, took control of Warner during our negotiation period. I think Spencer told Ross that we had an interesting idea here and Warner ought to take it and run with it. The TVC people were a relatively small organization. Here was an opportunity for Warner Brothers to obtain a strong position for the future. That I don't know for a fact. That has always been my suspicion. I thought that everything that Warner did as regards our concept was positive, whereas our negotiations with the other movie producers were very, very negative. They wanted to quibble. Columbia was exceptionally tough.

SMITH: Who was the Columbia negotiator?

COOPER: I think his name was Cohen.

SMITH: Sounds like Ben Cohen, I think.

COOPER: I remember at a meeting with Columbia where Cohen said, "Certainly you like our ice cream sodas, but can you afford them?" They were very hard people to negotiate with.

But Warner never quibbled. Warner's attitude was, Can you do it? Can you really deliver these pictures? Will people buy them? Can you demonstrate that there is a public out there for this?" Warner said, "Give us something in the nature of proof. Show us a poll, show us a market survey. Give us a demonstration." Warner's attitude was really more scientific. "Prove it!" was the attitude of Warner.

SMITH: Well, when Warner took over TVC, Gridtronics was in operation with a number of systems.

COOPER: No, not quite. Warner took over at the end of '72. We had become a Warner operation when we activated in February '73.

SMITH: And the service though, then, got apparently adequate support from Steve Ross to keep it going.

COOPER: Oh yes, because he had been in negotiations with TVC for, about a year. Internally we knew that we were becoming a Warner company; and Warner insisted that the Gridtronics plan was important.

SMITH: And the Ross you are talking about is Steve Ross who is now Chairman of the Board of Time‑Warner after their recent merger.

COOPER: Yes.

SMITH: Are there any other happenings of interest during that period that you might recall that we could get into the record here?

COOPER: Why don't we take a break a minute and let me think.

SMITH: We're back on the tape. Off the record, we were talking about some personalities in the industry and I mentioned Wally Briscoe.

COOPER: Strat, you remember that I had been invited to come to New York in late February, early March, 1969 to discuss this pay cable idea, the Gridtronics plan. It was decided at the end of my first meeting with Fuqua and Stern that I ought to visit the laboratory that TVC had opened in Winter Haven, Florida. They had hired Shorty Coryell as engineer and were able to do a small in-house demonstration for key executives. Lo and behold who did they invite along with me, and we flew down together, but Wally Briscoe of the NCTA who was executive director at that time. TVC had already decided that they wanted industry input and that they thought that Wally could be a key figure. So Wally and I were standing together in a laboratory watching the first of the many Gridtronics demonstrations. Wally was very encouraging. Wally liked the idea.

SMITH: I might mention to you that this oral history program of the Center has memorialized Wally. We have a program where we are trying to raise money to conduct the program. It's known as the Wally Briscoe Memorial Fund.

SMITH: This is the morning of June 15th, 1990 and we are resuming the oral history interview with Frank Cooper. Before we started the tape, you mentioned an operation called Cable Philadelphia that you were involved in with Milt Shapp. Could you tell us something about that?

COOPER: Yes, long after the Gridtronics experience and long after I had left Warner Communications I started a consulting firm. I also became an investor in cable systems so that over the years I have operated quite a few of them.

In the period that I am now talking about, Milton Shapp, the former governor of Pennsylvania was no longer "incumbent." He located an office in the suburbs of Philadelphia not too far from his home and got in touch with me. We met for lunch on a half dozen different occasions discussing the fact that in Philadelphia the cable systems had still not been built. A corner of the city had been wired by Fred Liebermann‑‑many, many years before, sometime in the late '60s. The old Liebermann franchise had technically expired. His cable system was serving only 12‑14,000 homes in this huge city. City officials were continually holding cable hearings to see if some operators would undertake a state-of-the art system(s) for the entire city.

SMITH: What year, roughly, was this Frank? Could you approximate it?

COOPER: I believe, 1983. And Governor Shapp, the ex‑governor, in one of our lunches said, "Can you believe that I was in the forefront of getting a cable television franchise issued in Philadelphia. After I left Jerrold no one had any intention to build a cable system in Philadelphia. This is, after all, my adopted hometown. I still want to put cable TV in Philadelphia.

I said, "Well, how could you possibly do this now? You've never applied under the new franchise ordinance that the city is considering. You're not an applicant of record, and I think the date for applications has expired." He said, "Oh, I don't need a franchise."

Milt enjoyed being a "cable lawyer." He said, "Who invented the fact that an independent businessman needs a cable TV franchise to be in the cable TV business. I'm a qualified operator. I'm going to the telephone company and tell them to give me the joint use agreements and I'm going to put up a system. Would you like to be in on that?"

I said, "Well, Governor, I don't know of a case where you have ever lost. Your track record in cable has always been impeccable and if you'd like to have a shot at it I'll put a few bucks in with you and let's start a little company and we'll call it Cable Philadelphia. Let's see if in fact, we can get on those poles because if we can, a formal city franchise notwithstanding, it certainly would be an interesting adventure."

He said, "Well, I'll see my lawyer."

There was lawyer in Philadelphia by the name of Harold Kohn who had a tremendous reputation in all of the legal and legislative aspects that would have been the underpinnings for the non-franchise idea. Milton and I went in to see him and he was kind of intrigued. After all Shapp had been the Governor and so even though Kohn was a busy man, he offered to research the idea.

About two weeks later we went back to his office. He said, "Now, I'll tell you the good news and the bad news. The good news, as I see it, is you probably do indeed have a right to go on those poles. And you probably don't need a franchise. It would all have to be tested of course." He said, "But as a practical matter I will tell you it will be a helluva long time before you actually get on them." This discouraged Milton and that was the end of Cable Philadelphia.

SMITH: One thing I remember about Milt that was so typical of him, and this is an example of it. Milt loved nothing better than to make statements that took positions that were inconsistent with what anybody else might be thinking.

COOPER: He always opposed the conventional wisdom.

SMITH: He really enjoyed doing that. You may recall, Frank, perhaps you weren't with Jerrold at the time, because it was very, very early in the industry, when there was a lot of talk about pay TV. Zenith had a phone vision plan for pay TV and Skiatron had another plan. There were several that were talking about it, very, very early in the game. Milt became very interested in the subject and Don Kirk...

COOPER: You remember I referred to Don Kirk?

SMITH: Yes, you did. He put Don Kirk on the problem of scrambling and unscrambling.

COOPER: That was Don's specialty.

SMITH: Encoding. So one day at a convention in New York, one of the early ones, Milt called a press conference and said that Jerrold was going to go into the pay TV business, but that it couldn't be done the way Zenith wanted to do it, or the others, and that his engineers assured him that Jerrold could sell an undo‑it‑yourself kit to decode the programs. This was another of the examples when I think of Milt and his shock technique. We'll have an undo‑it‑yourself kit. He liked the turn of the phrase.

COOPER: I think that what you're reminding me of is, if you had to take a guess, would you agree that was probably early '60s?

SMITH: Yes, it would have been the early '60s.

COOPER: That was just before I came to Jerrold. I still remember that from the newspaper talk. Don Kirk whose name you just mentioned was indeed, the leading figure at that time in scrambling and descrambling techniques. When Gridtronics was perfecting the so-called Plus Two Converter, we went to Don Kirk, who was in business in Tampa, Florida called Digital Communications. Don made our first model converters. In fact, he applied for a patent under the Gridtronics name. Gridtronics had its own converter and we paid Kirk to perfect it.

SMITH: And the patent was issued, was it?

COOPER: The patent was issued.

SMITH: That's interesting.

Frank, you mentioned in connection with the Cable Philadelphia story that you had been a sometimes operator over the years. Would you identify some of the systems that you were in and perhaps the people you were partners with while you were?

COOPER: Sure, let me see if I can remember them all. I think the first cable system in which I had an investment was in Stuttgart, Arkansas. My partners in that system were Gordon Fuqua and Si Pomerantz. Si Pomerantz had been treasurer of the Jerrold Corporation for many, many years. We were in that system together. He died at a very early age.

COOPER: Then, I applied for a franchise in Greer, South Carolina along with my first partner in the consulting business, Joel Smith. We couldn't afford a lawyer so we brought in a third partner who provided us with legal services a certain, Stanton Dubin, who I might add is my personal attorney to this day.

The three of us obtained the franchise but we ran out of money and had to create a limited partnership through a specialist in New York. The limited wound up with the lion's share of the investment. The general partner for that situation, was a fellow in New York by the name of Stuart Spitz. He became enamored of cable operations, he liked the cash flow aspects of it, and although he knew very little about cable he knew a lot about venture capital. He asked us to help him acquire a few more systems in which Smith, Dubin and I became participants.

They were in Chincoteague, Virginia. It's famous for its oysters. Also, Crisfield, Maryland. These are systems on the eastern shore. There was a third system in that group there. It was a very small appendage. It won't come to me for the moment. I'll come back to it.

SMITH: Was it near Ocean City? Would that help any?

COOPER: It escapes me. I just seem to be drawing a blank on it. Joel Smith and I were becoming more solvent. The cable television business was looking better by the mid‑'70s. Once satellite dishes began to proliferate, cable began to look like a good investment. The whole industry was in an acquisition mode wherever a small system may have been for sale or the franchise had not yet been let.

We bought a small system in Salem, Indiana and after that I owned systems in partnership with a minority group in Newark, New Jersey. I was also a partner is a system built for a series of resort communities in the Pocono Mountains. We also tied together a few small towns in the Thousand Islands area of New York state and then sold them to Newhouse (New Channels).

Now we're coming to the '80s, modern times. An old friend of mine from my days at Warner Communications was visiting Poland. While talking with local authorities in Warsaw, he mentioned cable TV.

SMITH: Would you mind identifying him?

COOPER: Sure. The man is William Sinkunas. He so fascinated the locals that they entered into an agreement with him to bring cable television to Warsaw. The municipality was, at this point, a year or two away from its break away from the communist system. They took a rather open minded view, even then, of a device that could disseminate so much information. They were willing to issue a franchise provided they had government access channels which, of course, Sinkunas assured them they could have. Then Sinkunas returned to the states to put together a cable company that would meet the requirements for financial stability, technical expertise and so forth.

Bill took his franchise which at this point, had not been fully confirmed, to various MSOs and several of the large brokerage houses to obtain financing. He couldn't get it because the American attitude towards the Polish economy was abysmal. No one appeared willing to take the risk on building a cable TV system in Warsaw, Poland.

Sinkunas called me and said he had the Warsaw franchise and the rights to wire at least another four communities. It sounded fascinating to me, and I offered to assist him in return for equity if we were successful in attracting investors.

Bill Sinkunas and I soon got lessons in Polish jokes. You can't tell me a Polish joke that I didn't hear from our prospects. The jokes were the responses that we were getting. And yet, we eventually made a breakthrough. I found some "seed money" for Bill. He was able to return to Poland with assurances that he had start-up money.

Now he had to obtain final government approval so he could raise the much larger sums necessary to fully meet construction commitments.

Finally a joint venture was created whereby the Polish authorities held 30% of the cable TV system and the American side, 70%.

SMITH: Frank, would it be proper to identify the group that came up with the seed money?

COOPER: Well, Strat, to me it's a very interesting story how we got this thing financed. Keep in mind that Poland was still essentially a communist country and the Lech Walesa "revolution" had not yet taken place. In fact, this is about two years prior to the changeover. When Bill first came back with his franchise, he told me that he had talked to most of the significant brokers in the industry. No one was willing to finance him and he actually had a chance for a national franchise.

He said, "What do you think Frank? Could you find some money to get me financed, at least start up money? Get an expression of interest so that I can report that my cash flow projections etc. are adequate and the construction money is somewhere down the pipeline but will come from traditional cable TV sources. Could you do any of that?" I offered to take it on.

It was an interesting challenge. This is how an example of the independents in the industry, we survive. We survive by our wits. I began to think of who would be interested in this rather exotic franchise behind the "Iron Curtain." It occurred to me that if a breakthrough was made, how valuable it would be for one of the component manufacturers. I had cut my teeth in this industry at Jerrold and so I went to the Jerrold people first, and I said, "Do you want to get into a deal with a Polish cable TV franchise?" They couldn't have been less interested. They paid no attention whatsoever. In fact, there was no follow up after my original contacts.

I then remembered that I knew Sidney Topol going back to when I bought equipment from Scientific Atlanta, for the headend in Greer, South Carolina. I got a hold of Sidney who said, "Yes, Scientific Atlanta was indeed interested." He would put some of his best people on it. And he did.

But his best people soon lost interest. Sidney has since told me, to his chagrin, that he is very annoyed that Scientific Atlanta did not get into this situation.

Finally, I met an old friend, formerly with Jerrold, now at Magnavox, a guy by the name of Chuck Anderson. I told him what I was doing, and I asked, "Is this something that Magnavox ought to take an interest in?"

He said, "Hell, yes. I'll talk to Dennis Horowitz, the President of Magnavox, and I'll see if I can get you some help." The Magnavox people didn't waste any time. They took a very aggressive attitude. They advanced us some start up money. We were able to send Sinkunas back to Poland.

In time, we ran out of the start up money. I had to put some of my own cash into the deal. But we kept the franchise alive and finally an associate of mine, Ed Rutter, came into the deal. He, in turn, brought with him a guy from the old TelePrompTer corporation, a fellow by the name of Norval Reece.

SMITH: I remember Norval Reece.

COOPER: Well, Norval came in and put a considerable sum into the next phase. We were alive and well at this point.

Now we all had to go out and negotiate for bank money because there were various trigger dates when we had to have significant sums on deposit in Poland in U.S. hard currency. We are talking about money in excess of $1 million.

SMITH: This was all pre‑revolution dates?

COOPER: This period is only about a year ago, 1990. So the "revolution" had by now occurred. Nonetheless we had to have real money on the line. Reece found through his contacts a certain David Chase of Chase Enterprises in Connecticut. But Chase came in with very strong financial commitments.

SMITH: Not part of the Chase banking group?

COOPER: No, not that Chase. This is a certain David Chase who is a survivor of the Auschwitz prison camps. The idea of investing in his native land, in this new revolutionary environment, was tremendously emotionally, appealing to him. He's a man of great wealth. All of itself earned...climbing up by his own bootstraps, as a sixteen year old, a penniless refugee from Auschwitz, here in the United States. He came here with absolutely nothing and very recently was in "Forbes 400" as one of the richest men in the United States.

SMITH: Frank, this might be a good time to turn the tape over because we have the red light flashing.

End of Tape 2, Side A

SMITH: This is Tape 2, Side B of the oral history interview with Frank Cooper. Frank, you were talking about the financing problems involved in getting money for a cable system in Warsaw, Poland. Could you continue with your comments?

COOPER: Yes, in getting the money for what was then considered a very exotic idea, (cable in a communist country) was among the hardest things I've ever had to do. I take pride in the creative thought processes by which I said, "I don't want to hear any more Polish jokes from the American investment community. If I hear one more, I'll get sick. What I want to figure out is, "Who would like to see this work."

That was my best idea. I finally reasoned that a manufacturer of components would like to see it succeed, because there is a tremendous amount of untapped opportunity in eastern Europe if you can break the back of the problem. Magnavox recognized that. Then step by step by step, we brought in more players and more players.

Today, my share through dilution and by virtue of the fact that my own cash investment is very small, in turn my investment percentage wise in the Polish franchise is small. But nonetheless, the old saying is that it is better to have a small piece of pie than no pie at all.

Today, circa 1991, if you go into Europe today, behind the so-called Iron Curtain, you will fall over CATV franchise men. Americans that you and I know. They are all over there now. They want Russian, Rumanian, Hungarian, Czechoslovakian, cable TV franchises.

One of my associates is there at this very moment and told me, on the phone, that all he sees over there are U.S. franchise men.

We, in a way, were on the cutting edge of a really remarkable achievement. We know that television, and the proliferation of signals and the distribution of television signal is changing the face of the world. It's very plain to me that in not being able to keep out TV signals, the Russians themselves were overcome by the capitalist or the consumer revolution. Once "Western" pictures started getting behind the Iron Curtain, once the Soviet masses saw how the rest of the world was living--once their intellectuals saw freedom of expression, once their kids saw blue jeans and MTV...the word was out. They saw something they liked. They suddenly realized none of this originated behind the Iron Curtain.

"Comrade, where are all these wonderful things that were supposed to happen as a result of Marxism? We've got nothing. The capitalists have everything. Maybe it's time to change direction."

SMITH: I was going to ask you Frank, what your feelings were about the future of cable/satellite international programming in terms of international relationships? Do you think it's going to have any significant impact on international affairs?

COOPER: Indeed, I do. I think the franchise process is going to throw both the western and eastern European community into a real shock. We Americans built a franchising and regulatory process that is understood by all interested parties. The Europeans now have to come to grips with it.

In addition, because cable TV got to Europe late, competing delivery methods have proliferated there. Direct broadcast satellite we started there. Cable TV is there now. Multi‑point distribution services are already there. Most of the European countries govern their television systems through their postal and telegraph departments. Just how the voluminous legal issues will finally be resolved I have no idea. There's going to be an interesting decade ahead in the communications industries.

In my experience in dealing with the international community...as a case in point, I was in Israel a few years ago using some Philadelphia connections. I called on the postal telegraph department to discuss my interest in getting into the cable television business in Israel.

The bureaucrats there were very possessive about who could build, own, and operate cable TV systems. The only thing they really showed me was the door.

Even though the Poland experience made it a little easier for us, I feel that a tremendous number of legal problems must be resolved, not to mention operating experience, before money is going to be made by American investors in international telecommunications.

In telling my little experience in Israel about seven years ago, what I'm alluding to is the fact that we Americans are not alone in recognizing the impact of cable television. It's recognized by the investment community and by the bureaucrats all over the world.

What I'm alluding to is they were very jealous of their preserves in Israel. They did not want some American coming over there and "helping" them create something called CATV service. Their attitude is that can do it themselves. At this point in time they have issued their franchises. The franchise conditions are fairly stringent. As you know, Strat, Gene Schneider, an old CATV pioneer has made an investment in "United International" in Israel.

SMITH: I think that's the name.

COOPER: He's in there. I think that in the international arena, we Americans are the founders of cable TV, are going to find it's not going to be a piece of cake getting your profits out. Dealing with foreign governments and the thicket of both political and legal issues resolved is going to take a while to learn.

As I was saying, the American franchise applicants are now all over the world. Just as they were once all over the United States. Well, rightly so. I'm not disinterested, myself. In fact I was an applicant who lost a cable bid just a few weeks ago in Malta. I still think it's going to be a difficult decade before anybody sees profit.

SMITH: Are you thinking of any other potential franchise applications in Europe or in any other country?

COOPER: Yes, very much so. Spain, for example, does not have any significant cable TV. Nor does a market we consider tremendously valuable which is East Germany. I have been trying to make contacts there.

Incidentally also looming on the franchise horizon is Latin America. I am beginning to make franchise applications in Latin America. They want cable TV as much as the Europeans do. They are dying for it. They know about Home Box Office, ESPN. The problem is that the government in most Latin American countries right now is unstable, perhaps more so than the Eastern Bloc countries.

SMITH: It means, of course, that you're not going to get the money.

COOPER: It's going to be hard to get the financing. But in a couple of, hopefully, stable situations, we are making applications there in Latin America. I'm not mentioning some because someone will be behind me saying, "Cooper's down there, I'm going to go down there."

SMITH: Well, I won't have you put any business secrets on the record. When you mentioned Malta, the question just occurred to me, "I wonder if he's doing any others?"

COOPER: In a word, "Yes."

SMITH: Frank, if I've got the sequences correct, after you left Warner, was that when you set up your own consulting business?

COOPER: Yes, I started a consulting firm with Joel Smith. Both of us having been at Warner and we called the firm Smith‑Cooper Associates. Joel was with me from '74, when we both left Warner, to 1978. Joel was offered a very good job with part of Capital Cities. When Cap Cities went into the cable television business, somebody there liked him and brought him over for start-up

I was an independent consultant on my own for a few more years, and I had assembled a fairly good sized staff. I realized that I was starting to get older. Cable TV consulting business is very demanding and very hard work. So one day, I sold the business out to the young men that were working in it. It's had several exchanges in name, much like a law firm changes its name when the partners leave. So it went from Cooper Associates after Smith left, to Cooper‑Rutter Associates. It's now Rutter‑Dunn Communications. A lot of the apparatus and old records are still in place, but I am no longer a member of the firm, but I have an office there.

SMITH: Would you mind identifying some of the franchise applications that you were active in? This would have been during the period of franchising frenzies in major markets, wouldn't it?

COOPER: Okay, let me tell you some of the things that were happening while I was in the consulting business and why it was necessary to maintain a good sized staff. In the mid-'70s and for about ten years, there was a feeding frenzy in franchising. My firm would get two types of business calls: A) cities would call for consulting advice, saying, "We are about to let a franchise, but we want final input on how the franchise should read, how it should best serve the public interest, and how to determine who is the qualified or the most qualified of the many applicants."

So we had to put together a consulting staff that consisted of a lawyer for franchising language, an engineer who was able to set the technical specs, a marketing specialist who was able to determine the quality of the sales plan, a financial specialist who could interpret the financial schedules.

Then, "B", we would get some of the major MSOs who because of the feeding frenzy were running out of staff to prepare these many applications. They asked us to help put together their proposal books. We were accused of working both sides of the street. Our fiercest enemy at that time was the Cable Television Information Center in Washington, D.C. Boy did we ever go hammer and tongue with them. We thought of them as anti‑cable, especially anti-operator. The CTIC created unreasonable demands on the franchises. They stretched the bounds of good sense. They were insistent on all sorts of local access conditions. They demanded an exorbitant number of channels. The Cable Television Information Center had no sense of commercial viability. When we worked for operators we frequently had to contend with the CTIC serving the municipality.

If, in an all together different city, we were acting as the city's consultant the Cable Television Information Center, would come in and claim to represent the public interest. The CTIC had no experience in system operations, and no interest in "P&L." The fact is that circa 1990 is they're apparently out of business. I'm still in it.

SMITH: Yes, they are out of business. And Frank, your emotional response to the CTIC, I have found, is shared throughout the cable television industry. Are you aware of how they got started?

COOPER: Was it the John and Mary Markle Foundation that gave them all that money? Somebody gave them a hell of a lot of money.

SMITH: Now that raises a question. I thought it was the Ford Foundation. But we'll have to find out. (Ford is correct.)

COOPER: I know they were funded by a foundation and I thought it was the John and Mary Markle Foundation, I may be wrong.

SMITH: And it probably was. We probably have some in the file here.

COOPER: If I could find my old files I would be able to give you the name. I used to send away for their publications. Incidentally I was the City of Philadelphia's cable consultant for three or four years, during the evaluation process.

SMITH: I did not know that.

COOPER: Oh yeah, I was a long term consultant to the city of Philadelphia. There were several turn-overs of mayors and finally a mayor came in that really didn't like me and I was out, but I was with the city for a long time. I was there during the tenure of famous Frank Rizzo. You've heard of Frank Rizzo.

SMITH: Everybody's heard of Frank Rizzo.

COOPER: Well, during his tenure I was the city's cable consultant.

SMITH: Well, having gotten on that subject tell us something about the inner-workings of that period in the city of Philadelphia. That would be interesting to hear about.

COOPER: Well, if you could turn that off so I could gather my thoughts.

SMITH: Frank, we went off the record for a moment right after you mentioned that you were for several years a cable television consultant for the city of Philadelphia. It would be helpful if you would review for this record your experiences during that period of time, relative to the franchising process in Philadelphia.

COOPER: Well, extensive evaluation hearings were held in the late 1970s. The city, with our assistance, issued an RFP.

SMITH: Request for proposal?

COOPER: Yes. A franchise was passed and the hearings were held. The Philadelphia Department of Public Property (with Cooper Associates sitting in as advisors) conducted the hearings during which each of the applicants presented four volume proposals, some the size of a telephone directory. It should be noted that it was the influence of the Cable Television Information Center created the demand for these unduly costly proposals. One applicant was said to have spent a million dollars on its application.

SMITH: You're talking about the influence of the CTIC.

COOPER: Right. The CTIC would send a public interest advocate who would say this is a sloppy process here. So Philadelphia officials were "under the gun." It became necessary to hold a very elaborate hearing process. The proposals came in volumes. All of the major MSOs were applicants. You needed derricks to get the books hauled into the basement of the Department of Public Property.

Just picture it...this huge number of directory-size books being suddenly brought into city hall. No one knew what the hell to do with so many of them and they're probably still there. It is not logical to suppose that the politicians would read them--but of course our staff was required to read every word. Suffice to say, we earned our fee.

William Green became the next mayor. Rizzo, as his last act, said he could not approve of the franchise.

There were all sorts of rumors that the city councilmen had taken undue interest in the franchise procedure, and Rizzo who was being now replaced by Green, wanted to make certain that his skirts were clean on the cable TV issue. He refused to preside over the disposition of the cable television issue. It fell to the William Green administration.

Green finally did, in fact, hold hearings and made the franchise awards. It took him another year or two. For about a year I continued to be the city's cable consultant but the Green administration and I were not as compatible as the Rizzo administration had been. So that consultancy was terminated. But finally the franchise awards were made-‑ Comcast won one. Greater Media won one. Wade Communications, a black minority company, won one. I think Comcast now has two of those franchises because there was another franchise, Rollins, went out of the cable business and the franchise went to Comcast.

Wade had a lot of trouble raising the necessary money. I knew this from my experience with the situation. The local authorities were concerned that he might fail.

I was instrumental in getting Alan Gerry interested in taking a position with so that sufficient funding could be brought in for Wade.

SMITH: Could you give us a complete name for Wade?

COOPER: James Wade. But he called himself Wade Communications. He was the franchise broker.

SMITH: He was a black man.

COOPER: Yes. He was not precluded from bringing in white investors and he did. And Alan Gerry, of Cablevision Industries, was deeply involved in getting that franchise built. It's operating now and they've got a considerable number of subscribers. Each one of the Philadelphia franchises...I was part of the deliberations by which the size and boundaries of those franchises were finally determined; each of them had approximately 155,000 homes.

This city manager carved out sensible franchise boundaries. Each franchise has about 155,000 homes to serve. They each have similar demographics. The operators are overcoming many big city problems in completing the construction because the city is replete with difficult construction conditions. There are some parts of Philadelphia that require many miles of underground construction.

In 1979 when I was the city consultant a city block of underground construction was $65,000. Today, I would think that doesn't touch the cost of doing a city block. Philadelphia is a very old city and its downtown area has been rehabbed and gentrified. You don't have such a thing as telephone poles around Independence Hall or Center City. So construction conditions are very difficult. In "Center City," or downtown Philadelphia, there's a lot of conduit construction or bracket construction required.

SMITH: That must have been a real problem.

COOPER: The problems have been intense. There were also sides of the street where there were transformers with high voltage lines. This also precludes cable TV. The companies encountered every difficult condition for construction that could transpire. But of course, that's also true in places like Chicago, Washington, and other big cities. And it's among the reasons (not the only reason) that cable TV came to the cities late. Of course, as I was discussing earlier I personally opposed building CATV anywhere near Philadelphia in the 1970s.

Well, this is a case, among others, where I've been proved wrong. Once the cheap satellite dish came in, once HBO went on the air, with the satellite signal and Ted Turner went on with TBS, the ball game changed. For example, the Cherry Hill, New Jersey franchise became a valuable piece of paper when Irving Kahn decided he was going to acquire it. Irving went out and raised the money and built a tremendous complex in Cherry Hill, for all practical purposes, "eastern Philadelphia." He subsequently built there one of the biggest systems in the country and then sold it to the New York Times. The New York Times very recently sold it to Comcast.

SMITH: Frank, you mentioned earlier off the record, some of the better known names in the early and mid‑years cable industry that had early franchises in Philadelphia and decided not to go forward with them. Would you put that on the record for us?

COOPER: Oh, sure. Fred Liebermann was one of the first round franchises and now I'm talking about the mid‑'60s in Philadelphia. Franchises were also awarded to the Bulletin Company and to the Philadelphia Inquirer which was Triangle Publications. One was issued to Milton Shapp, of the Jerrold Corporation. Only Liebermann had the courage to build at that time and he only served 12,000 subscribers. Things stayed that way for many, many years because of signal.

The Bulletin folded. Walter Annenberg divested himself of Triangle. Jerrold sold out to Sammons. Sammons acquired all of the Jerrold operating systems. Sammons turned back the cable TV franchise. For a period of about fifteen years, there was simply no cable, to speak of, in Philadelphia.

To the extent that the original franchise that Liebermann built under the small pocket of about 12,000 subscribers. That's all that was in Philadelphia for 15 years and the franchises expired. What this illustrates is there was no hope under the then existing signal conditions to build systems in most of the large cities.

SMITH: Then to go back to a point that you've made in other connections in this interview it was the advent of the relatively inexpensive satellite dish that made Philadelphia and cities like it attractive prospects for cable.

COOPER: Yes, but we should keep in mind that indeed, cable came alive once you could bring something that the public was interested in, namely the movies. Going back to what we were talking about all day yesterday, the Gridtronics CATV diversity plan, the idea of giving the subscriber something other than broadcast channels was responsible for creating demand for the dish. Home Box was desperately seeking a way to distribute that signal because it became very evident to them that there weren't sufficient microwave lengths to make a national network for pay cable. Some other method had to be found. Satellite transmission was thought of as a very exotic military device. Who would use the satellite other than the Army and the Navy? It wasn't considered a commercial practicality when it was first discussed. In my opinion the Gridtronics plan, and HBO's daring, changed television forever.

When I look back at the revolutionary impact of the events in which I was privileged to participate, it is a source of pride and pleasure.

Pride, in that, however small or large my role may have been, along with my associates in Gridtronics, we made a historic breakthrough. We actually delivered films, new, uninterrupted, feature films into millions of American homes. No one can discount the success of that commercial venture. The development of pay cable, I believe, was responsible for the penetration figures that the cable industry enjoys today and in turn it makes possible the employment of thousands of creative people in the film and television industries.

The pleasure I find in the achievement is that, like millions of others, I am a viewer, too.

End of Tape 2, Side B

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  BACK TO ORAL HISTORIES

Ben Conroy

Interview Date: Friday May 22, 1987
Interview Location: Manchaca, TX USA
Interviewer: Robert Dudley
Collection: Penn State Collection
Note: Audio Only

Ben Conroy

In Memoriam

Cable industry pioneer, and enthusiastic jazz pianist, Ben J. Conroy Jr. passed away on February 28, 2016. He was 92. Conroy was also instrumental in the beginning and early development of The Cable Center, where he served as the first Chairman of Board of Directors of The Center when it was at Pennsylvania State University. In a letter to the Cable TV Pioneers in 1987, Conroy wrote, “The National Museum of Cable Television [now The Cable Center] is the brain child and a project of the Cable TV Pioneers in association with Penn State University.

The project grew out of the notion of many of the Pioneers that the group should use the opportunity to give back something for the industry that has been so good to note its founding history and to help perpetuate it.”

The Cable Center was saddened to learn of Conroy’s passing. Jana L. Henthorn, president and CEO said, “Ben Conroy was one of the founders of The Cable Center and as early as 1974 he floated the idea of a “cable TV source library,” to his fellow CATV Pioneers. It was also at his suggestion and foresight that The Center started its one-of-a-kind oral history program. We owe a debt of gratitude to Ben and salute the man and his legacy.” Diane Christman, senior vice president added, “Ben had a deep passion for the cable industry and preserving its legacy. He was intelligent, an accomplished jazz pianist, and he had the sharpest wit and was really very clever. I always enjoyed when our paths crossed!”

Les Read, Executive Director of the Cable TV Pioneers and close friend with Conroy said, “The Cable TV industry had lost a true Pioneer and a heck of a piano player. His passion for cable and service to his communities he served provided the best of cable service. He felt it was important that the story of this great industry be told and he worked to bring The Cable Center into being.”

Oral History

DUDLEY: We're in the offices of Ben Conroy in Manchaca, Texas. It's May 22, 1987. We're going to be talking with Ben, a Cable TV Pioneer, about his involvement in the cable industry from the early days up through 1987. Ben, let's start out with some background, biographical information. Tell us a bit about yourself and your family.

CONROY: Okay, I was born ... Is that back far enough?

DUDLEY: I think so.

CONROY: October 28, 1923, in St. Johnsbury, Vermont, mainly because that's where the hospital was. My parents lived in a small town of Island Pond, Vermont. My father had actually been a Brooklyn-born and bred person, and in 1920 he, supported by funds from his father and his father's associates, went up to Island Pond to operate and manage a furniture factory. I won't go into details surrounding all of this, but this is how he came to be up in Vermont. He'd been up there since 1920, so he would have been about twenty-two years old, at that time. My mother was a native Island Pond girl. Her father was a locomotive engineer on the Grand Trunk, the Canadian National Lines, hence my interest in engines. We lived in that small town until 1932, with the onset of the Depression when the markets for that kind of furniture dried up completely. So my father then moved the family--by that time I had a brother and a sister. Incidentally, my brother was also born on October 28, but two years later than I.

DUDLEY: Your brother's name being?

CONROY: Jack. And my sister's name is Eleanor. One other sidelight on that is that we have a first cousin who was born on my brother Jack's birthday, so there's the three of us on October 28. How they arranged all of that is still a mystery to me.

But we moved to Brooklyn where my father's home had been originally, and moved in with his sister's family until my father could get settled. My father was always very proud of the fact that when he closed the furniture factory, he didn't owe anyone a dime. There was actually a small surplus. He paid off all the debts. However, he didn't have much money left so he was starting all over again, and I believe the '30s were as tough a time for him as a lot of other people.

On through the '30s I used to go back to Vermont during the summers and spend them with my grandparents. It was always a great treat for me. Not only riding on the engine but fishing, playing tennis, swimming, and, actually, even haying and doing some farm work. It made for good summers.

So on up to the onset of the war. Let's see, in 1941 I had finished high school. I was going to Brooklyn College. I took a year there. And held some summer jobs. All during that time I'd do various jobs--delivering Saturday Evening Posts, shoveling snow in the wintertime, and mowing lawns to get a little spending money. The first summer I had a real job was working in Wanamaker's Department Store in New York as a stock boy. The next summer I worked in the Brooklyn Navy Yard where they were building dry docks. This would have been the summer of 1942. I liked that because I thought the pay was tremendous. I was getting all of $42 a week, where at Wanamaker's I'd only made $18 a week. But it had looked pretty good to me then. With the money I earned that summer of '42, I put myself through a semester at Brooklyn Poly Tech Institute because I had an interest in going to the Naval Academy and thought I needed some more engineering courses. I took engineering and mathematics there.

DUDLEY: Where did that interest develop from ... going to the Naval Academy?

CONROY: I can't tell you where. It just always appealed to me. In high school I'd had a friend, a close friend of my father's, named Tom Fitzsimmons, who was a captain in the Navy. Once or twice we'd get tickets to go to the Army-Navy game and freeze our butts off watching the game in early December. I just always had an inclination to water in terms of sailing and that type of thing.

My father's brother, however, had a lot of military service in the Army. He was an attorney in Brooklyn, always a very patriotic man. He was in the first World War and in the second World War and ended up as commanding officer of the Fighting 69th in the Pacific. As a matter of fact, he was killed there. Even with that background, I had no particular interest in going to West Point which, at the Naval Academy, we used to call, "Hell on the Hudson." I can't tell you, really, where that started. But my interests were always in the ships.

In January of 1943--I certainly was of age--I enlisted in the Navy and took the boot camp training. Later that year, I qualified for entry into the Navy V-12 program, which was an Officer Candidate type thing. I ended up going to Holy Cross in Worchester, Massachusetts for a year. I got an appointment to the Naval Academy, at that time. It was a Congressional appointment. All my college work had qualified me so I didn't need to take exams. I entered the Naval Academy in the summer of '44. I'd expected it would be a three-year course because they had shortened the curriculum during the war to get people out sooner. Our class was split. The upper half continued on the accelerated three-year course. I was in the accelerated program, and we got out in '47, although I am in the class of '48. A lot of us felt that if we were in the upper half of the class, that was the place to be because the attrition rate was fairly high. Following graduation, I spent active time in the Navy until 1954.

I think, at this point, I'll bring you up to date on my father's progress. He established a partnership with a man by the name of George Blake. It was Blake and CONROY, and they specialized in representing various factories--B.F. Goodrich and such people--and they were wholesalers. They specialized in children's toys and furniture. They would sell to people like Bloomingdales, Wanamaker's, and Strawbridge and Clothier. He made sales trips to all of these places. He was always very good with numbers, so he was really the business head of the organization. Really a better salesman than George Blake. As time went along--although things were tough during the '30s--he prospered, certainly during the war years. He stayed in this business until his partnership interest was bought out in the early '50s. He still lived in the same house, which was, more or less, an ancestral place. I think his father bought it, originally, in 1906. Eventually in the '30s, I think, he bought out his sister. She and her son moved out and we remained there. This is in Brooklyn. So I lived, essentially, nine years in Vermont and the next ten or so in Brooklyn.

Once my father left the partnership, he remained active. He had always been active in charitable things, and became fairly well known. As a result, he became a trustee on the board of directors of a Brooklyn bank. He was in charge of liquidity, buying and selling of bonds. He was very adept at this. He knew the stock market quite well. He was always very good at numbers. It was largely he who was responsible for helping me get into the cable TV business.

He lived in Brooklyn until 1956, when he and my mother moved up to a place in Stamford, Connecticut, where he stayed another ten years until 1975. He finally retired to Boca Raton, Florida. It was interesting that he became acquainted with Boca Raton because he was there for a bankers' convention. He became interested in the area, and ended up buying a condominium.

Following my graduation from the Academy, I had a variety of duties. I was on sea duty on different kinds of ships for six years. It is interesting that right at the present time, as we are having a lot of things going on in the Persian Gulf; my first duty was on a Navy tanker. We were often in and out of the Persian Gulf hauling oil to different ports in Europe, such as the port of Athens, which is Piraeus, or up in Naples. Sometimes we'd deliver to an oil depot north of Naples--a little town called Pozzuoli--which is famous, not so much as being an oil depot, as being the birthplace of Sophia Loren. Although I don't recall seeing her then, she would have been about twelve or thirteen, I guess. Sometimes, we hauled oil all the way back to Norfolk. That was usually on our final trip back. We'd make one more oil run to the Persian Gulf.

One time in August, 1947, the senior Navy captain in Bahrain said, "Okay, you've got it." They always wanted to have a naval presence there. So our captain was the senior officer present as the SOPA (Senior Officer Present Afloat) for two or three weeks. This was in August. It was a very, very hot time. I don't mean hot in war, but hot in weather. To the extent that once we got under way with a load of aviation gasoline, we had to keep hosing down the decks. If we didn't, it would get so hot the gasoline would vaporize and impose a danger. So we made a lot of trips in and out of the Suez Canal, and operated quite a bit with the Sixth Fleet in conjunction with their maneuvers. We did a lot of fueling at sea. This would have been '47 and '48. In 1948, all the trouble started breaking out in Palestine, and Israel was becoming a nation. We used to patrol up and down with the fleet about fifty miles off-shore of what was then Palestine. I never did see the coast and I never did get up to Rome. I remember one time I had a five-day pass to get up there, and then they called everybody back on board and over we went to the eastern Mediterranean.

During the ensuing time, I was on a sea plane tender, which wasn't very exciting duty. We had an admiral on board. He was Commander Training Command Atlantic. What was nice was that we spent a lot of time in the Caribbean visiting different islands for training purposes. I spent a lot of time at Guantanamo Bay, Cuba. Also, at the conclusion of my duty on the Albemarle--the sea plane tender--I took some submarine training at New London, Connecticut one summer, but did not continue in submarines. I would have liked to, but as good as I thought I was, technically, I wasn't quite up to what they wanted in submarines.

My next duty was on the battleship New Jersey. It discouraged me very much, at first, because I thought it was a floating hotel, and who wants that. But I ended up spending nearly three years on board the New Jersey. By the time it was over, I hated to leave. Not because it was so comfortable, but because the duty was so interesting. While I was on board, we made two trips to the Far East. We spent a lot of time off Korea, east and west coast, doing shore bombardment missions. I had duties in CIC, Combat Information Center, which is primarily radar. Then I was transferred to a deck division, a duty that I really liked. Deck and gunnery division, where for a while, I was turret officer of a 16-inch turret. During battle stations I was battle stations Officer of the Deck, which is very, very interesting because, under the captain, you are responsible for conning the ship. That means that you are responsible for the conduct of the ship and steering it. You are right up there where the action is.

I should have mentioned earlier that my duties in the Navy involved communications on the tanker and various administrative and gunnery duties on the other ships. On the New Jersey, as I've mentioned, my duties involved CIC and, also, deck and gunnery. I enjoyed it very much. During one period--I think our first tour to Korea--I spent some time ashore in Korea on a gunfire spotting mission, where we would direct the fire of the ship pretty far inland. Those 16-inch guns could shoot nearly twenty miles, so they needed some spotting. A Marine and I were ashore doing this work with a couple of our enlisted men. The Marine, incidentally, was Claude Kirk, who later became governor of Florida.

DUDLEY: Could we talk about hobbies and avocational interests? You mentioned sailing as a hobby when you were younger. What about up to college? Your avocational interests.

CONROY: Of course. At the Naval Academy sailing was not only a hobby, it was required. But even previous to that, I had mentioned that I liked to fish, and still do. I played various sports. Principally, I liked tennis. I was always too light for football, and I never cared much for basketball. But I liked tennis. I did different things in track. I also played baseball.

I always had an interest in music. When I was a real small kid--seven, eight, nine years old--Mother, who was quite an accomplished pianist, had seen to it in Vermont that I had taken lessons. When we moved to New York, we didn't have a piano for a few years. Music always seemed to have been a part of me and a part of my interests. Sometimes during my summers up in Vermont one of my uncles and I would listen to the radio at night, get good skip reception, and we'd listen to the different bands around the country. That must have been in the late '30s, around '37 or '38.

We heard what I thought was a very strange sound of music. I never heard of this kind of stuff before. It turned out it was boogie woogie and the music of the Black people. I thought, "Boy, that's a funny way to play the piano." So I followed up on that. I found out where some of the exponents of this style were playing. They were all Black people, and they played in clubs in Greenwich Village in New York. My father used to take me over there. In the meantime, I was buying their records, trying to imitate what I heard them do in New York, and what I heard them do on the records. By this time, we had a piano again so I was driving my mother crazy learning the various basses and other things that you play in that kind of music. My interest in that stayed from then on. Whenever there was a piano around, I'd try to get to it. I'd play the piano during lunch at Brooklyn College, and I'd take part in all the music programs. I did the same thing at the Naval Academy, although I never was in the band down there. Sometimes our ships had pianos, so I kept that up.

DUDLEY: Up through the end of the military service, you were not married?

CONROY: That's correct.

DUDLEY: Tell us about married life.

CONROY: All right. I'll complete my naval service. I didn't get married at all while I was in the Navy. My final year in the Navy, I was brought back to the Naval Academy for duty. I hoped to be in the Seamanship and Navigation Department, teaching. But I ended up having to go in the administrative or the executive department, which was really the white glove department in charge of administering and disciplining the midshipmen. I was responsible for a company of midshipmen. I would have preferred the other work because this was much more demanding. You had more duty hours, but that's the way it went. So I spent a year at the Naval Academy before resigning my commission. This will then lead us into the cable TV involvement. I'll cover that in a minute.

I didn't get married until 1956, after I'd already gotten into cable TV. The interesting thing was my brother had married a Brooklyn girl in 1951. I couldn't make the wedding. We were in Korea at that time. I had known the family. In fact, my brother's wife had come to know us because she was a friend of my sister. Just to make a longer story short, I ended up marrying the younger sister. So my brother and I are married to sisters, and have developed fifteen double cousins, at this point.

DUDLEY: Tell us more about your family and children. What are their ages?

CONROY: We were married in '56 in Brooklyn. Her name is Toni, Antoinette. I took her down to Uvalde. Of course, this was a much different environment for her, for a Brooklyn girl to move to a small Texas town. Uvalde was a town of probably nine thousand, maybe ten thousand people. Not only was it a small town with small town attitudes and mores, but it was a town in the southwest with a vastly different culture than what she was used to in Brooklyn. But she acclimated very well. In due course, over the time there, we produced six girls. We thought, "Well, it's just going to be girls from here on." When we moved to Austin in 1968, the final child was born, and he was a boy. He is Ben III. My father was Ben; I'm Ben. He, actually, should have been Ben IV, because a grandfather on my father's side was Ben. My father should have kept the "junior" but didn't, and I should have been Ben III, and my son Ben IV. But, I guess, in the long run, it doesn't make that much difference.

DUDLEY: For the record, will you give us the names?

CONROY: Yes. First one is Mary Katherine and she was born in 1956, so she is now about thirty. We call her Kate. She is an attorney. She's married and lives in Salt Lake City with her husband who is a doctor. The second one is Toni, Antoinette, Jr., and she was born in '58. She now lives in Houston with her husband who is in the oil business. They have one child, another on the way. I should have mentioned that Kate has two children. Of course, two daughters. Toni's child is a daughter. The third one is Patricia, Pat. She was born in 1960. You can see an even progression here. Pat is in business. She works at a resort out on Lake Travis. She is in sales, arranging conventions, meetings. She is getting married this coming October. Pat was born in 1960, so that makes her twenty-five or six now. The next one in line is Anne Therese who was born in '62. She has just completed law school at Trinity Law School in San Antonio and will be starting with a law firm in Fort Worth this summer. But she has to pass the Bar first. And the next one was Sloan who was born in '63. Sloan was named after my grandparents, whose name was Sloan. Sloan works at a savings and loan here in Austin. She is still single. Then we go to 1965. We skipped '64 for having children. We must have bought some appliances or something that year. At any rate, the final girl, our sixth girl, is Megan and she was born in Uvalde in 1965. Megan has worked at a variety of jobs and is just getting settled down here in a career in Austin. After we moved to Austin, Ben was born. Must have been the change in water or something. I was very, very surprised when the doctor came out and said, "Well, your son is doing fine." I said, "My what?"

Toni was well known in Uvalde and in the NCTA. If she wasn't with me on a trip, they'd say, "Well, is she again?" And I'd say, "She sure is. She's pregnant again."

DUDLEY: It appears to be time to start pulling together some things about how your father helped you get started in the cable business. How you ended up in Uvalde, Texas, instead of Brooklyn. Do you want to start pulling those threads together?

CONROY: Okay. Well, I wouldn't have ended up in Brooklyn anyway because, in the early days of cable, cable was only started in places that had problems with reception. I think I might have stayed in the Navy if I could have stayed on ships. In any case, I was ashore in Annapolis again that final summer of '54 and I had a 30-day leave. I participated, as a training officer, on a midshipmen cruise. It was on a destroyer. I had this 30-day leave and I was thinking, "Well, this is about the time I will decide if I'm going to be a twenty- or thirty-year man and stay in or get out. And if get out, do what?" So I used part of my leave time interviewing with different people in New York. I went back to Brooklyn and stayed with my folks during that month. I had made up a resume of sorts. As you can imagine, that resume showed that I was a qualified 16-inch turret officer, first division officer, qualified underway officer of the deck. Just what any civilian employer is looking for! So I really talked to quite a few people with not many results. I remember talking to the Texaco people; these were all leads that my father had given me. Texaco said, "We've got an opening over in West Africa at a little place that you might be interested in." I thought, "Well, no thanks."

Out on the beach one day, a fellow that I knew, not closely, was talking and visiting over at our cabana and he had some literature. He said, "This sounds kind of interesting." It was a folder from Jerrold Electronics, talking about community antenna television. He had a couple of them so I took one, looked at it, and brought it home and showed it to my father. He said, "What do you think about that?" I said, "I don't know. From the description of what's here and from what a friend told me, it just sounds like a big promotion business. Sounds almost like a hit-and-run. I don't know as I ought to get into something like that." However, I talked with my father further about it. Since Jerrold was located in Philadelphia, he said, "Let's call them and make an appointment and go on down there and see what this thing is all about." He called. We had an appointment with Milt Shapp. This was August of '54.

Of course, the cable business had hardly gotten started then. It was really in the earliest days. I guess Ed Parsons had done some experimental things in 1948. The end of '48 out in Astoria, Oregon. And '49 and '50--particularly in Pennsylvania, but in other places, too--found a lot of systems in little towns that were in valleys and remote from signals. They might be close to Philadelphia, but if they were in a valley, they couldn't get a signal. And they don't build little towns on tops of mountains.

So we went down to Philadelphia. We talked to Milt and a few of his people there, and got a much better idea of what this thing was all about. We talked about what it would take in terms of money to install one of these things. What it got down to was my father was willing to commit a certain amount for the investment. We'd have to figure what size town would support that kind of investment, or vice versa. They said, "We'll look around. We've got franchise proceedings pending in a number of places."

DUDLEY: This was Jerrold?

CONROY: This was Jerrold. They were going to look around, because we knew nothing about this. In fact, I've got some correspondence from those days saying, "We recommend Uvalde." In any case, I remember Milt asking me, "Where do you think you'd like to settle?" And, again, I was still in the Navy. I was a lieutenant in the Navy. I said, "Well, I prefer not to be in cold climates. I don't want to have heavy winter all the time." He said, "That's interesting. One of the places we're looking at is Bemidji, Minnesota." I said, "No, no." Milt said, "We'll keep looking around."

I decided this sounded interesting enough for me to do ... this field. So when I went back to the Naval Academy from my leave, I prepared a letter of resignation and submitted it. Of course, this wasn't received too well by the superintendent of the Academy. Here you are on the training ground for future admirals and one of the training officers is leaving the Navy. Immediately they transferred me out of my duties as a company officer, and I was given a make-work kind of job over at the admiral's headquarters.

In the meantime, Jerrold was investigating properties and they eventually recommended Uvalde, Texas. They wrote a letter outlining its characteristics. It was a town that would support the type of investment that we could make. I had no money at that time. I think probably even as a lieutenant I wasn't making much more than about $5,000 a year at that time. I had little savings, nor did I have any credit with which I could do it myself. So my father helped me along. I did resign from the Navy. It became effective on my birthday, October 28, 1954. I came home. I guess I had a month without an awful lot to do. This was the time during which Jerrold was looking around.

The end of November or early December, I went down to Jerrold to attend a two-week schooling, spending time with their people. How do you manage one of these things? Learning something about the engineering of it. I'd had no business training whatsoever. I didn't know anything about accounting. During the course of working with Jerrold down there, they suggested it might be helpful if I actually went out and saw one of these things. So I made a trip down to Clarksburg, West Virginia, one of the systems that Jerrold had a part-ownership in. They didn't own it, but they were partners in it. Sandford Randolph was the manager. At Jerrold, they thought a lot about Sandford. They said, "He's one of the best there is. Sandford always does everything right." So they said, "He's a good man for you to see."

I spent several days with Sandford down there and visited his headend, and talked with his technicians, and spent a lot of time with him in the office on procedures, customers, customer forms, and the whole bit that you go through. Thinking back years later, I don't know how many people Jerrold trooped through down there, but Sandford must have had an awful lot of young guys coming through to learn about the business.

Following on the heels of that, I went to Williamsport, Pennsylvania, and Ray Schneider managed there. At the time, Williamsport was probably the biggest system in the country. Probably had under 10,000 customers, but it was still pretty big. I went through the same thing. I spent time with Ray. I went up on the mountain and looked at the headend and followed the lines down. I talked to his people. The interesting thing about Williamsport was that, toward the end of my cable career, I was in a company that owned Williamsport. Williamsport was an interesting town because it was big enough that there are always two or three systems at a time going on there. They'd get consolidated, and then somebody would start up another one. Fred Lieberman bought it from Milt Shapp back in the late '60s. Lieberman joined our group and we ended up owning Williamsport.

Our involvement in Uvalde with Jerrold was what Jerrold termed an equity system. What that meant was, simply, that we put up all the money and they had some equity. In fact, it was a 51/49 situation. They owned 49 percent. They didn't have to put up anything, and we did.

DUDLEY: Now was this true of Clarksburg and Williamsport also? I think they had the name Jerrold in those systems for a while.

CONROY: Yes, but Jerrold did not by any means own all of them. A lot of them were owned by investment houses. J.H. Whitney, I think, was an owner of, for instance, Williamsport. I forget who was an owner in Clarksburg. Maybe somebody like Fox Wells. Goldman Sachs, possibly. So I think that Jerrold probably didn't have a lot of money. They had the equipment and, supposedly, the know-how, although sometimes we wondered if they really had that all the way.

I would suspect that they had started all of these things out on an equity basis to where they came into ownership, supplied expertise. You bought the equipment. But they ended up with some of the equity. Usually a minority position. I don't know if it was always 49 percent or whether they got 49 percent of us because we were neophytes. Jerrold also, at that time, had a contract with operators and possibly with anyone who bought their equipment, whereby you paid them so much a month for each subscriber. Twenty-five cents and you have to buy all of your equipment just from Jerrold. This got to be known as the Jerrold "Yellow Dog Contract." I think, eventually, there was an anti-trust action brought against them by the Justice Department in '56 or '57. They had to abandon that. So we ceased paying anything to Jerrold on that basis.

End Tape 1, Side A

DUDLEY: We were talking about your experiences with Jerrold and the service contracts. Can you tell us a bit more about that service contract and what it provided?

CONROY: Ostensibly, it provided Jerrold's advice and some engineering time. I haven't retained a copy so I can't tell you. But with that went a certain amount of free engineering time. And, of course, a lot of that time was used up at the inauguration of--the building of--the system. After you'd exhausted your free engineering time, you'd pay the engineers' travel and other rates. I don't think we were charged for visits to the system by management people.

Jerrold had some very good people. They called it their community operations department. Bill Miller headed the thing up, at that time. He was interested in a number of systems. Jerrold had quite a few of these equity types. One example was Berlin, New Hampshire. Another was Pocatello, Idaho. And I think they had one in Flagstaff, Arizona. All of these had started about the same time. Bill Miller made a trip, one time, to Berlin, and his plane made a crash landing. Bill was never quite the same after that. I think he got pretty badly hurt. Within a few years he died.

Another person in that department was a lady who I remember, Claire Ostroff, who later became Claire Bloom. She worked under Bill and worked directly with the managers. We sent our weekly reports to Claire.

Bob Tarlton was working with them, at the time. He was their construction expert. Bob was responsible for drawing up a bill of materials. It was Bob who would provide for field engineers to go out. To build a system, initially, you'd have to make a design of the system and map it out. In the old days to do that you'd walk the poles. Today, you do it with trucks. Back then, you'd walk it with a wheel to get the exact footage between each pole span. Generally, you would try to follow an existing distribution system, usually the power system. You'd have to go where the poles were, but you'd follow a distribution system much the same as the power company did. But you'd have to start at your headend.

Let me pause for a moment. We were talking about the service contract. That's really about all that I remember about it, except we did have a monthly charge for a while. With this, Jerrold not only provided engineering services, but they gave advertising and promotional help, too. They'd give promotion aids. That part was kind of a turn-key thing, although we didn't build the system on a turn-key basis.

DUDLEY: Caywood Cooley. Were you involved with Cooley?

CONROY: Yes, I was. Not in the beginning. But later on in our operations. It might be better if I came to him a little further along.

DUDLEY: You're now in Uvalde, Texas. Or about to go there.

CONROY: I went down there in January. I drove down in January '55. The first appearances before the city council had been made by Jerrold. It was called Jerrold Southwest, and Jerrold's manager, at that time, was a man named Lee Green. They were based in Dallas. The engineer was a fellow named Herm Roeder. Lee Green appeared before the council. When I got there the franchise proceeding had been started, but it took three readings. I think the third reading might have been in February. I was only there for the final reading.

One provision in the franchise related to the airport. The city council was afraid the tower--which, incidentally, had already been put up--would interfere with operations of the little municipal airport. When I got there, there was that tower, all four hundred feet of it. They had hopes of getting a larger airline with regular operations in there.

Trans Texas Airlines, which exists today as Texas Air, and all of its subsidiaries--we used to call it Tree Top Airlines, TTA--had been going in there but had pulled out because they were averaging only three-quarters of a passenger a day. However, the city wanted to have a facility that could adapt itself to having airline passengers. The airfield was built during the war as a training place for pilots. A bigger one was in Hondo, somewhat east of Uvalde. So we had to agree that if the tower ever became a detriment to establishing a good airline service, we would move the tower.

It's ironic because we ended up moving the tower but it was for engineering reasons, not for reasons of the city council. But that was one of the provisions that had to be in the original franchise.

DUDLEY: What was Uvalde like at that time? Population and terrain. Give us a picture of why that community was selected.

CONROY: Uvalde was roughly ninety miles west of San Antonio and, therefore, was getting spotty reception. This was one of a number of towns that Jerrold had under consideration. For a variety of reasons, they felt the economy was quite good. We did not take into account--which gave us problems later on--that it was a split population. Really, half the town was Mexican-American. So while it may have been a town of nine thousand or ten thousand, it really had the purchasing power of a town of six thousand. This explains some later problems that we had.

At that time, that part of Texas was in very severe drought conditions. The economy there was mainly farming and ranching. When you have a drought condition, everything dries up. If you're a rancher, you don't have any grass for the cattle to eat and you have to feed them. You have to buy feed. A lot of ranchers went broke. It was, however, a good time for the irrigating farmers, not for the dry-land farmers, but there was a lot of irrigation farming there. They prospered because they could make their own "rain." They had water when they needed it.

So it was a split kind of economy. It was tough going for a lot of people. The Mexican-Americans were not by any means a high-income group. Typically, whole families would leave in the spring to go north to work in beet fields or sheep shearing. They'd come back in October or so. They had dollars in their pockets then and would be able to have a little spending money. Much of the year they just weren't there. When they were there, they just didn't want to work much. They had the money they got from working up north. This is not to say that the whole population did that, but this was typical of many. The buying power was very low. As a result, once we got the system going, our penetration into the Latin areas was very low until we were able to bring in a Spanish-speaking channel. We'll talk a little more about that in due course.

DUDLEY: But when you first fired up Uvalde, you were basically bringing in San Antonio broadcast stations?

CONROY: We were bringing in two stations. Two. Our system used what was then the most up-to-date equipment, which means we provided a total of three channels. These were Jerrold strip systems. A few years later, they came out with broadband, low broadband, which provided five channels. We used their W line, as they called it. WMC-5 amplifiers. You could carry only the three channels.

DUDLEY: These were one or two steps removed from their apartment amplifier.

CONROY: That's correct. Although I think apartment amplifiers were strip also. I'm not sure, but I think it was a modification.

DUDLEY: After Uvalde got up and running, was that mainly your cable system or your involvement in cable? You got involved in a number of other systems.

CONROY: I think I should bring you a little bit along in Uvalde, because it was a while later on before I got involved in other systems.

I've mentioned the drought conditions there. This affected the whole area. It was at this time that I met Jack Crosby. Jack was a native of Del Rio. His father ran a hardware store. I think it was Rust Hardware, and Jack used to work there. His father was also a Texaco consignee, so he was distributing gasoline in that area. To this day, Jack still uses a Texaco card. I got to know him simply because of timing. We started construction in Uvalde in April of that year (1955).

Jack had gotten interested in this business. Consider that Del Rio is seventy miles west of Uvalde, which means it was one hundred fifty or one hundred sixty miles from San Antonio stations. Jack had an awful time once he got up and going because he was showing only a better grade of snow than what the people could get. I know Jack was restless. He'd walk up and down the hardware store and say, "We'd better do something." Our system was inaugurated in June of '55, and Jack's came on the air in September of '55.

At that time, there were several other systems starting up around our part of Texas. As an example, in a town called Brady. A man named John Threadgill. John is dead now. John and his wife ran a jewelry shop. See, everybody who got in this business did something else. There was always some opportunity that came along and they said, "We'll take a flyer on this thing."

DUDLEY: Was Crosby selling TV sets in his hardware store?

CONROY: He probably was. Although I don't know how many because you couldn't receive anything out there. It was a hardware/appliance store. I've said "hardware," and it was more of an "appliance" store, refrigerators, washers, and that type of thing. Once I got to know Jack, he'd come over to Uvalde, and I'd go over to see him. And our families got friendly. We'd go over across the river. There's a restaurant in Cuidad Acuna, called Mrs. Crosby's (no relation to Jack) where we went to eat, but it was a good restaurant. We did a lot of visiting back and forth.

There was another fellow named Oscar Kost from Ozona, Texas, not far from Brady, in central Texas. Oscar was a leather worker. He made shoes and other things. He got into partnership with about eleven or twelve people, and they each put up a certain amount of money, $5,000 or $10,000, and they built their system in Ozona.

John Threadgill was in partnership with a bunch of people. Of course, John was the guy who ran his system. Oscar was the guy who ran his system. Each of these people, once they got a system up and going, wanted to be rid of their partners because they wanted to be able to run it themselves. But they still had to be responsible to these people. As far as I know, even to this day, Oscar still owns that system and still has those partners. One is a motel owner.

Another system close by Ozona was Sonora. These are all pretty small towns. Sonora probably had three thousand people at that time. It was strictly a ranching community. They raised sheep and goats up there. It's rocky country. Two people owned that, Jack Mackey, who ran a hardware store, and Edwin Sawyer, a rancher originally from Maine. They used to go back to Maine every summer, but he and his wife live in Sonora year round except for vacations in Maine. We got friendly, particularly with this Sonora group, in a social way.

During the winter the ranchers would shear mohair from the goats and wool from the sheep. They'd sell it in the spring--March or April. Then they'd clean out the big warehouse used to store the wool and mohair. There would still be wool on the floor. They'd get big name bands down there and have what was called a Fling Ding. They'd invite people from miles around. They had Tex Beneke and so on. They had lots and lots of people. We got invited. We'd spend the night up there with the Sawyers.

So we began to get acquainted with a lot of these people just through cable operation because we had a lot in common. I was different from a lot of them. I was solely cable, and they had a lot of other pursuits. Cable was something that looked pretty good to them.

I probably should back up a little here because you mentioned something before about financing this thing.

Initially, Jerrold had estimated it would take about $70,000 to do Uvalde. They had figured so many homes, therefore, so many miles of plant, and so much a mile for plant. It cost about $2,000 or $3,000 a mile, in those days, to do this, if you figure it on an overall basis. Jerrold had figured eastern figures. They had figured one hundred or one hundred thirty-five homes a mile. That's all right for a Pennsylvania town, but for a west Texas town we had fifty to sixty to seventy homes a mile. So it ended up that we had to put in many more miles of plant than Jerrold had estimated. By our agreement with Jerrold, we put up the initial $70 and then would put up another $14 if needed. That was part of the deal. Jerrold had underestimated this thing and there were some other problems, which I don't mind relating. They admitted ... Bill Miller wrote a letter saying, "Well, yes, this is our fault here. We applied figures for eastern towns and did not take into consideration what exists out there." We found out how many miles of plant we'd need by walking the poles.

This began to get underway in February when I went there. I'm not going to try to bring you month-by-month, just the typical start of a system in those days. When I'd gotten down there, Lee Green, who was Jerrold's manager in the southwest, had been in touch with a man named Faber Spires. Faber ran a TV repair shop. He was a very good electronics man. I guess he'd spent time in the Army Air Corps Air Force during the war and had worked in communications. He had his repair shop. They tentatively agreed he would come with the company. When I got down there, met Faber and talked with him, he decided, "Yeah, I will come with the company." I think we both started off, in those days, at a hundred dollars a week. That was the agreed thing, which was probably about equivalent to my Navy salary at the time when I left.

Faber went out with Jerrold's man and actually walked the poles. He would take one of these wheels and you'd make strand maps. Typically, you would go to the power company and get power company maps. I don't know if the phone company was helpful in providing them or whether their maps weren't useful to us. Typically, we'd go to the power company which, in this case, was Central Power and Light. So you drove to wherever you were situating your tower and branched out from there. In those days, your headend was at the tower. These days, if you have a tower at all, your headend is much more centrally located. Eventually, we did this at Uvalde.

So you strike out from the headend, going pole-by-pole over the whole town. Once you did that, then you'd begin to lay out the electronics part and determine what size cable you should use and so forth. In those days, it was, of course, regular military-type coaxial cable. A typical feeder would be designated as trunk cable RG-11, which is a little bigger, and the feeder was RG-6, about the size of today's drop cable. The losses were pretty high. The biggest cable we used was for long trunk runs, runs to town. I forget the designation. In Times Wire it was called XE101A but it was ... K14 military cable. It was big, thick stuff, terribly hard to splice, very heavy. When you lashed that with strand onto a pole, if your span was three hundred or four hundred feet, my Lord, you would be dipping way down onto fence tops. So we had some of that, but that, typically, is the way it got going. It was a physical thing, you just had to walk it, and that took a little while.

So then these maps would go back to Bob Tarlton and Jerrold, and Bob would lay out the system. They laid it out in pieces. That is, we didn't wait till the whole thing was laid out, we would lay out from the tower to this section to this section, so that bit by bit we began to get our electronics and cable requirements together. By that time, too, they had contracted with a contractor up in, I think, Abilene, Texas. From our point of view it was sort of turn-key but we didn't give it to any one man and say, "Build us a system." Jerrold was essentially responsible for doing all of it, so in that sense, it might have been turn-key.

We actually began construction in April and opened up in June. Of course, you don't open up a whole town at one time, so we generated publicity which said, "Here's when we expect each section of town to open up." We did have our grand opening in June. Later I can show you some pictures of what the pictures on the TV looked like.

We had problems out on our antenna site. We were pretty close to a 135,000-volt line, probably a couple of hundred yards. In the hot, dry weather, that would emit a lot of power noise, which appeared as specks on the picture. It would even come through to the audio. Because we were fairly remote, other channel fours and fives, from, say, down the Rio Grande Valley or from Dallas, or eventually even from Florida, would come in when we had particular weather conditions to create co-channel interference. I always watched the weather because you saw on the weather map on TV when an occluded front was coming. I thought, "Oh my Lord, here comes the co-channel." It was worse in the spring because that's when all the storms would be coming in--spring storms. The phone used to ring off the hook. "We're supposed to get perfect reception here! This is just like our old antennas. What are you doing about it?" I used to tell them, "I'm praying!" And, "Will you join me in a prayer?"

DUDLEY: What would people pay to connect? And what were the monthly costs?

CONROY: Our connection charge was $125. Our monthly charge was $4.00. To that had to be added a