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Robert Gessner and Katherine Gessner

Robert Kathering Gessner

Interview Date: July 30, 2018
Interview Location: Disneyland Hotel - Anaheim, CA USA
Interviewer: Lela Cocoros
Collection: Cable Center Collection
Note: This is a Podcast/Audio Only Video

Lela Cocoros: Hi, I’m Lela Cocoros and today is July 30, 2018. I'm at the Disneyland Hotel during the Independent Cable Show. Today we are sitting down with Bob Gessner, who's President of MCTV, and his daughter, Katherine Gessner, who is Director of Strategic Planning and Policy for MCTV. Good afternoon, thank you for joining us.

Bob Gessner: Thanks for having us.

Katherine Gessner:Thanks for having us.

Cocoros: So let’s start a little bit with the history of your career in the cable industry, Bob. And just a little bit of the history of MCTV.

Bob Gessner: Sure. MCTV was started—it was called Massillon Cable TV when it was first started in 1965, 1966, by my mother, Susan, and my father, Richard, in my mother’s hometown of Massillon, Ohio. It really was predominantly owned by my parents and 100 or so local investors, little bits and pieces. Built the system in the city, organic growth through the 60s into the late 70s, growing at maybe 1,000 customers a year, but slow and steady growth. In 1978-79, my father finally said, “Hey, I'm going to buy one of those satellite things.” They bought their first 5-meter earth station. I'll never forget; my wife and I had just moved from Minneapolis to Detroit and closed on our first house in October of 1978. I called my parents to say, “Congratulate us. We bought our first house.” And my father said, “Great. How fast can you sell it? Come home. I want you to start work at the cable company.” And I had told him when I was still in early college years that someday I would like to come back and work in the family business, but obviously in the late 70s, there really wasn’t much to do unless you wanted to climb poles. So starting in early 1979, I came home. We had our first computer system, started computerized billing, had our first earth station to launch our first non-broadcast signals. So starting in 1979, that was my sort of marketing role and over time, we just kept pace with the rest of the industry, purchased one other system. Once you get into the 90s, the whole world changes.

Cocoros: And also, even just in the 70s, those late 70s, that’s when ESPN launched and that was when CNN launched and MTV in 1981. So you were really probably right at that wave, ready to ride it.

Bob Gessner: Actually, the first three signals we added, first three satellite signals were HBO, WTBS, and UPI slow-scan news, which was literally just—

Cocoros: Text, right?

Bob Gessner: Picture-scanning across, very slow scan, with a caption below it. That was huge, you know. Obviously from there through the 80s, we followed the industry by launching lots of networks, first adding set-top boxes and then addressable set-top boxes and two-way addressable set-top boxes. And we fought the battles on programming and you have a big basic tier, a small basic tier. We’ve kept pace. I describe us as a “tweener.” I think I probably did that in 2011 as well. We’re the largest of the small, or the smallest of the large, which gives us some, I think, some really good advantages. I think we've capitalized on those.

Cocoros: Great. Katherine, what about you? How did you get into the business, the family business?

Katherine Gessner:Well, it was somewhat the same, but pretty different, too, I think like my dad I was always interested in the business, so it was sort of a natural progression for me. He did it a little bit differently, inviting me back to work for the company, in that I had a five-year plan. So after college, I was working in a totally different industry and he said, “If you want to come back, you’ve got to go get your MBA, and then go work somewhere else for a couple years. Then you can come back after you sort of earned your credentials, earned your chops somewhere else.” So I did that. I moved to Denver, I got my MBA from the Daniels College of Business at the University of Denver. I stayed out there for a couple years working, and then came back in 2013. So I've been back about five years. It’s been great ever since.

Cocoros: So you’ve enjoyed it.

Katherine Gessner:Yes, it’s a lot of fun.

Cocoros: I'm glad to hear it.

So tell me a little bit about just the people in the industry who've influenced you, both of you. Bob, we’ll start with you.

Bob Gessner: Well, obviously my father was a very big influence in terms of ethics—being an honest, ethical person and business person. Also a great influence on the local community front, to be a contributing member of our community. But also, sort of the philosophy of success. He really believed in a quality of life; that was important. And getting bigger just to be bigger wasn’t going to improve your quality of life if you're the person that’s flying off to these little tiny systems all around the country. That wasn’t his idea of a quality of life. So that was a big influence.

I have to say I think I was influenced quite a bit by my contemporaries, probably going back twenty-plus years ago, when I started to become involved with the NCTC [National Cable Television Cooperative] and the ACA [American Cable Association]. Because that’s when I really started to have a lot more exposure to the rest of the independent industry.
We are in Ohio. We went through the consolidation of the industry pretty early. And Time Warner basically owns the whole state. So there are very few other systems to interact with. But once I became involved more with the NCTC and the ACA, I started to meet people like the Gleasons and Ben Hooks and Mike Pandzik and Matt Polka. And again, I saw a lot of the same things: people who were highly ethical, very dedicated to their jobs with a real community attitude.

Cocoros: Katherine, you graduated from the Daniels College of Business, so that’s one of our great pioneers, but is there anybody who you’ve kind of learned about or learned from at this point?

Katherine Gessner:There are so many people in the industry and it’s such a friendly and welcoming industry, which is pretty unique. Our sales and marketing director came from the agency world and she was flabbergasted when I said, “Hey, we’re going to go to this CTAM [Cable & Telecommunications Association for Marketing] event and share all this information.” She said, “What? We would never do that anywhere else.” So I think its such a cool industry. I think everybody that I've worked with in the industry is just so helpful and welcoming. I interned at WOW! for a short time when I was in grad school and working with Colleen [Abdoulah] and Cathy Kuo and all the folks there. They were just so amazing and just on it with customer service and customer experience, and were so welcoming to me and really helped me learn about that culture. That’s been huge, but really, it’s any industry event, I think, influences you and people you meet and the people you talk to. It’s really one big family.

Bob Gessner: I think one of the largest influences—and I sort of count myself among those influencers—is this group that started twelve years ago or more. I was on the NCTC board. We'd have our quarterly meetings and a couple times a year, we'd meet in Kansas City, always at the same hotel, and it was the same group sitting down in this little Japanese restaurant before the meeting every year. And as we got to know each other and share our experiences, we all said, “This is probably the most productive event of the whole year.” And eventually we formalized that and since then, we’ve probably met 25 times. We meet twice a year. We have NDAs and non-competes and we share information about everything: our finances, our operations, our marketing, our HR, sort of our philosophy and our goals and so forth. That’s probably been one of the biggest influences on how all of us conduct our business. We visit one another, and it’s really helped a lot of us to improve our businesses. One example is one of my employees started a little company called “SubscriberWise,” which is an analytics-based credit qualification service. We knew that it worked for us. And we proved it in our group meetings by saying, “Take a look at our bad debt. If everybody is at 2%, we’re at .2%.” And pretty quickly, everybody’s using that service. And everybody benefited from it. We do the same things with other metrics and ways to improve our business, whether it’s customer service or human relations or employee relations or marketing. It’s amazing. I don’t think you'd find that in any other industry.

Cocoros: No, I don’t think you would.

Bob Gessner: But then again, none of us compete directly with the other. We organize the group so there’s never any overlap, so there’s never any question about price-fixing or collusion or market formations.

Cocoros: Interesting, really interesting.

Bob Gessner: It’s a great group.

Cocoros: It’s like a best-kept secret. That’s terrific. And Katherine, I know you were, you’ve been participating in the C5 [Cable Center Customer Centric Consortium] at the Cable Center.

Katherine Gessner:We do that, and we’re also members of CTAM, so we participate in the Cable Mover program as well. It’s interesting because those groups are similar in that we’re all sharing information, but it’s amazing with a midsize group, the amount of trust that has developed over the years, that there's no posturing or, “oh, we can't talk about this,” or anything like that. Everyone’s really open, which I think is so different than any of the other groups.

Cocoros: So how would either or you describe the difference between serving a small community and kind of a larger market, and what are the challenges and opportunities that you face?

Bob Gessner: Never having done that, it’s hard to compare. But from seeing people in a small company, I think one of the biggest differences is a lack of—Katherine doesn’t like this too much—but sort of a lack of formal planning. We’re trying to change that as our organization has grown larger, but we’re still very much little if any budgeting, and if somebody has a good idea, we ask, “Do we have enough money to do that? Sure. Let’s go. And if it doesn’t work, we’ll try
something else.” I don’t think you find that in the larger corporate structure where everything goes up four or five levels and comes back four or five levels and it's not your idea anymore, but you're still responsible for doing it for half the price.

Cocoros: Very well said. So what are some of the challenges you're facing these days?

Katherine Gessner:In terms of our customer base and the communities we serve, it's an older demographic, and lower on the income scale. They're a little more economically depressed than large urban areas. So it's really tough to get them to buy more or even sign up for service because it’s so expensive. So we really do struggle there a little bit. I think, too, we’re sort of landlocked in that we’re surrounded by Spectrum, so we can't necessarily expand as easily as some of the larger companies, or companies operating in urban areas. They have that natural expansion within because they’re building more apartments, or they're just edging out. We can't do that, so we’re somewhat limited from that respect.

Bob Gessner: I was going to say the same thing. That’s probably our greatest challenge right now. It’s economic development within our communities. And I don’t think it's unique to us. I mentioned this at our ACA board meeting yesterday. Most of our member companies are smaller, a little distant, and ours may be different in that we were heavily manufacturing—we were heavy industry, steel production and all those manufacturing jobs are gone. And they went to China. OK, that’s fine. But I look toward the future now and see that we’re starting to lose our retail economy as well. It's going online. If the people in our community aren’t able to work in retail, where are they going to work? How are they going to have the money to buy things online? The same thing is sort of threatening with the service economy. It's going from a service economy to a sharing economy. And again, not as much money. So where are young people looking to live, work and play? It's in the centers of technology or education or government or so forth, and that’s not us. So what happens to the small and midsize operators in general when suddenly there's no manufacturing economy or service economy and no retail economy. It's going to be a difficult challenge, so as I look at my retirement, I'm becoming much more active in economic development and trying to find ways to attract industry and commerce to our community, so we can build a customer base.

Cocoros: Makes sense. Makes a lot of sense.

So where do you think the industry in terms of kind of where it's headed, and how the smaller cable operators fit into that picture?

Katherine Gessner:That’s a tough question. Definitely Internet is the future for any size operator, but it's also figuring out to provide more services to the customer through that pipe. Be it over-the-top services, streaming services, smart home services—it's just trying to figure out how to do that and be the pipe into the home that lets the customer get what they want as opposed to shoving products down their throat. So I think on the programming side, I think we’re just riding the wave and hopefully there are a lot of new technologies out there that will let us offer content in new and different ways to customers.

Bob Gessner: I think one of the challenges we have as we face a future with different television is keeping our customers. And I've made this comment to a couple other people. You see this big difference between—among operators. At one end of the spectrum are people who say, “I absolutely positively must have this robust, complete television lineup.” And others who say, “If it goes away, I don’t care.” How can we be so different? And as I've looked at it, I've reached the theory that an MVPD’s [multichannel video programming distributor] interest in television is directly related to their competitor’s broadband quality. So that somebody who says that they absolutely positively must have a robust TV platform has a strong Internet competitor. And if they do something to screw up their television service, the customer is going to take their TV and their Internet and go to somebody else and you’ve lost them all. At the other end of the spectrum, if you don’t have an Internet competitor with a good product, your television service goes away; it goes to DirecTV. But you still have the broadband customer.

So we've got that difference there and what we feel about television depends on where you are in that spectrum. But in general, I think the small and midsize cable operators that I know and work with well have found that as long as you continue, as we saw in the sessions today—I don’t know if you had the opportunity to see them—some really great advice there about broadband and systems in general. If you keep making the investment, kind of regardless of the size, as long as you are the best provider with the best pipe and the best customer service quality, you're going to continue to prosper. At least that’s our hope; that’s what we’re planning to do.

Cocoros: And that personalized connection you have with your customers becomes all the more important.

Bob Gessner: Correct.

Cocoros: So what do you think the enduring legacy of the cable system, cable industry, will be? Just kind of looking ahead a little bit.

Katherine Gessner:I'll probably be stealing it from the Cable Center, but someone was just talking about it. I think it was C5. That if you look at the cable industry now, the people that really started it are a bunch of old guys. So people look at the industry and say, “Oh, it's all these old guys. They're boring. We’ve over them. We like Mark Zuckerberg, we like Steve Jobs, we like all these cool young kids that wear hoodies to work every day.” It's because of the old cable cowboys that this new group has risen up, and I think if we can tell that story, that is the connection, that is the legacy of the industry that without it, we wouldn’t have Facebook or iPhones or any of the technology that we have today.

Cocoros: That’s a good point.

Bob Gessner: The platform being built is a remarkable story. You think about the first systems, they were built by men who owned the local appliance store and they wanted to sell televisions. The Walson family. “I need an antenna at my appliance store, so I can sell televisions instead of just radios.” And I like to think the legacy of the cable industry will be being recognized for constant innovation and that sort of scrappy inventiveness that just makes stuff work. You try something, it didn’t work, OK, let's try something else. And it is very, I guess, Ayn Rand in that whole concept of “Atlas Shrugged.” You know, that entrepreneurs will always keep working to overcome adversity. That’s the small cable industry. Whether we do it with our own money or private equity, we just keep going.

It's interesting. I've said this to other people before, that I think—what's interesting is that the legacy of the content industry is that the profits from the content industry built the Internet, because the cable industry could not have built the Internet in the 70s because we were charging six dollars a month for service. It was only the advent of that $40 and $50 and $60 bundle and premium movie channels that gave us the profits and the incentive really to build a two-way plant that then DOCSIS [Data Over Cable Service Interface Specification] could capitalize on and become an Internet platform.

Cocoros: That whole entrepreneurial “let's try this and see if it works” type of mentality is really analogous to the Silicon Valley and kind of what is happening with all the startups these days. And every major city seems to be focused on “let’s get a tech hub going,” if there isn’t one already.

Bob Gessner: And the difference is I’ll say we’ve been vilified because we want people to pay for it. Whereas the tech industry has found a different way to make people pay for it, and that’s by using and selling their data in ways they don’t realize. They're paying for it through higher prices or greater purchasing or, I guess, intrusion into their lives when it comes to their privacy.

Cocoros: Very good point.

Katherine Gessner:And I think, too, the difference too when you look at Silicon Valley as opposed to the cable industry, we may try something that failed miserably, and then another operator reaches out to us and says, “Hey, you guys were just doing X. How did it work? What happened?” Wherein in other industries, and especially in the tech industry, that’s not going to happen.

Cocoros: No.

Katherine Gessner:Ten companies are going to try and fail at the same thing where this is such a collaborative industry that two companies may fail and the third will learn from that and succeed.

Cocoros: Bob, do you have any stories about the, just in your career, that are particularly important to you, funny, learning moments—

Bob Gessner: There are a lot…

Cocoros: I'm sure there are a lot…

Katherine Gessner:You should ask our employees first. Have them enter their favorite Bob story.

Bob Gessner: The ones I probably remember the most are the ones that were more painful. And it was classic battles with people like Fox, where they shut off—we had been carrying Fox News on a tier and we were required to move it to basic. We didn’t do it fast enough and they weren’t going to pay me my marketing dollars. So without any warning, they shut us off.

Cocoros: Oh, my gosh.

Bob Gessner: And they wouldn’t even tell our headend technician that they had shut us off. So we thought there was some satellite problem. That was probably a two-week battle. And I think I really irritated Roger Ailes. Not that I'd ever met him, but in taking a jab at them. Somebody asked me, from the trade press, “What’s been the response by your customers?” And I downplayed it by saying, “You know, it really hasn’t been that difficult. I’m not sure that many people were watching.” Roger Ailes, I heard later, was really angry about that, and said, “We’re going to show them.” They were taking out full-page ads in the local newspaper and somebody called me—the paper screwed up, and they called me to approve the ad. And I said, “That’s not my ad. You'll have to get somebody else to approve it, but I will buy an ad, full-page, opposite theirs every time it runs. Theirs is black, mine is white.” We battled like that for weeks at a time. I know it bothered them because I actually figured out who their VP of communications was, and I gave my customers their FAX, at that time, I gave them the FAX number, I gave them the phone number. I said, “Have them call Fox and tell them to turn them back on.” And they actually had to hire four people to answer their phones from the response we generated. That was quite an interesting time.

Cocoros: Getting a lot of calls from Ohio.

Katherine Gessner:It’s impressive that you found the information without the Internet.

Bob Gessner: That’s right. That was back in the, it was probably the early 90s that we did that.

But there are so many just wonderful people in our industry that do so many sorts of courageous and interesting things, that I'm not sure I would even know where to start about a favorite story.

It’s very interesting; I'll tell you about how small the industry is. This may be my most favorite story. My father started in 1960. He was working at a TV station in New York and he was working for Paul Harron, Sr. Paul Harron was the boss, and my father got franchises for him, which led to the franchise in Massillon. They parted ways and off we went. It was sometime in the early 90s that I was visiting a system up in New England and a young man came up to me and said, “Hi, we should know each other.” I said, “Sorry—I've never seen you before.” And he said, “My name is Jim Bruder. Paul Harron was my grandfather.” We’d come back together after all these years and we were working together and of course, Jim and I have been friends ever since. We've served on boards together. It just shows how wonderful the industry can be. That was fifty years ago that Dad and his grandfather worked together and now Jim and I have the opportunity to work together as well.

Cocoros: That’s wonderful.

Bob Gessner: It’s very gratifying. Great friendships there.

Cocoros: So speaking of families, what's it like to work with family members? I have never done it myself. There are so many examples in the cable industry, right, that obviously it works pretty well with several families, yours included, it looks like. What are the dynamics?

Katherine Gessner:It can go really badly or it can go really well. I think our family is really lucky that it's gone well. There's a fine line when you're working with family between your work life and your personal life, so it's being able to find that separation. But also understand that we’re probably going to talk about work at some point on Christmas and somebody’s going to probably ask me if I want to come over for dinner on Sunday night while I'm at work. So it's finding that balance and understanding that. And it's also not letting the family dynamics bleed into the work environment and sort of bringing employees into that because you want your employees to see you as a united front. That can be kind of weird. But I think for us it’s worked pretty well.

Cocoros: Sure looks like it.

Bob Gessner: I've started watching “Succession” on HBO.

Cocoros: Oh, yes.

Bob Gessner: Which is obviously fictional but boy, you see the completely dysfunctional fighting families. And I know that exists in the cable industry. I give my mother a lot of credit and I'll say, she is every bit as much—deserves every bit as much credit for starting the company and making it work as my father. Because she is an absolute super-hero. And I wish she were here to engage in this as well. She really set the rules when I first came back to Massillon in April of 1979. She sat my father and me down and she said, “I know you two are going to work together, but I just want to make sure that you continue to have the good father-son relationship you have now and you're not going to fight about things.” And that really set the tone. I have to say that throughout my entire career working with my father, we never really had—I'm sure we disagreed—but we never had a disagreement where we got upset with each other and so forth. There were plenty of times when he would say, “Because I said so, that’s why” or “Because it's mine and I say so.” But that’s where you learn the boundaries and the limits. And it was his company, and that’s the way he wanted to do it, so that’s what you do.

But Katherine’s right. You have to sort of find your way through and set those boundaries. I would say that probably the biggest advantage of a family business that works is that you have complete faith that the people you're working with are working in the best interests of the company or the family. And you don’t have to worry about ulterior motives—this is a non-family person, are they trying to start their own business, or whatever. With family, if it's working well, you know you can trust them, and it cuts through a lot of crap.

Katherine Gessner:It helps us too that we have a very small family, and there aren’t a lot of—when my grandpa started it, it was he and my grandmother, there were three children and now there are three grandchildren. So there aren’t lots of cousins or lots of family members out there that are saying, “Oh, well, I want a cut,” or “I want to work here with my art degree that has nothing to do with the industry.” So I think we’re really lucky in that respect that we've done a good job of making sure expectations are set for family members that want to work in the company, and you don’t have those competing interests.

Bob Gessner: Back in, gosh, I think it was in the 90s, I was fortunate enough to have a great professor at Case Western Reserve, who was teaching an executive course and really worked on family business succession planning and so forth. And there really are some best practices,not for cable but for any family business, that you have to follow; those best practices in terms of succession and hiring and so forth. And if you follow those, it's going to work a lot better. That informed a lot of the agreement that Katherine and I had with how she was going to come to work for the company, and what's going to happen when I retire, and she takes over, leading her generation and so forth. It's not a formula, but it's certainly a good set of best practices.

Cocoros: Well, that sounds really like great advice.

Bob Gessner: It is. But it's so hard, though. What if you had a child who really wasn’t cutting it, but they say, “I really want to work here, and I really want to take care of the family business?” How do you tell them, “I'm sorry.” You know, it's tough, it's really hard. But it's for the better interests of the family or the better interests of the company, and you have to think about all those employees and you think about your community members and the good that you do. I feel very fortunate that I haven’t had to say it to Katherine, yet.

Cocoros: Something tells me you won't have to.

Bob Gessner: I don’t think so.

Katherine Gessner:I hope not.

Bob Gessner: Nope.

Cocoros: Well, thank you very much for your time. Is there anything else you'd like to add or just looking forward to the future?

Katherine Gessner:Yes, just trying to take it one day at a time, one step at a time.

Bob Gessner: I'm looking forward to Katherine taking over in less than a year and sort of finding a new role in the community and in the family. The more I give her to do, the more comfortable I am with giving her more. I'm very pleased with the change in generations, and I'm really pleased for two reasons. One, because the family business, I think, is going to continue very successfully. I'm also really pleased that she can start to take more of a leadership role in an industry that has traditionally been male-dominated. And I think she’ll do a great job as hopefully an industry leader to show the way for other young women.

Cocoros: Wonderful. Thank you both for joining us.

Katherine Gessner:Thank you.

Bob Gessner: Thank you.

END OF INTERVIEW

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Paul Glist

Paul Glist

Interview Date: November 30, 2016
Interview Location: New York City, NY
Interviewer: Seth Arenstein
Collection: Hauser Collection

Arenstein:  Hi, I’m Seth Arenstein for the Hauser Oral History Project for The Cable Center.  We’re here in New York City at the end of November, 2016, and we’re joined today by Paul Glist, who is a partner at Davis Wright Tremaine, LLP.  Welcome, Paul.  

Glist:  Thank you.
 
Arenstein:  Again, this is an interview we could have done in Washington, DC, saved ourselves the trip to New York.  

Glist:  It’s all right, we’re in the City.  

Arenstein:  Yes, it’s a nice city.  It’s a great time to be in the City, too, right before the holidays.  It’s a fabulous time.  Paul, welcome.  Let’s start at the beginning.  Where were you born?  Where were you educated?  What made you interested in going to law school?
 
Glist:  So, I was raised all over, in five different states, Johannesburg, London.  We followed my dad’s career around the globe.  So I have many different hometowns, whatever is convenient.  The rest of the family settled in Texas.  So, during the Bush administration, I was from Texas.  Very convenient.  Went to undergrad in the East, Cornell.  Went to law school at Stanford, got recruited out of school to DC.  I went to law school, as opposed to anything else, because I enjoyed basically putting intellectual puzzles together and trying to solve problems in new ways.  I had no idea that it would be as fun a career as it’s turned out to be, but that’s what took me into law school.  

Arenstein:  And your first job in Washington, DC was?  

Glist:  I got recruited out of school to Hogan & Hartson.  They had a rotation program for young people like me, I started doing mergers and acquisitions, and started rolling up small cable companies into somewhat larger cable companies.  I loved the people in the business and vice versa, and so I stuck with the industry.  

Arenstein:  And at about what year was that?  

Glist:  I started in 1978.  

Arenstein:  So were there any deals that stand out at this point that you remember, of smaller cable operators or smaller cable operations being rolled into bigger ones?  

Glist:  So, most of my work in the earlier years was for TelePrompTer, which was the largest company at the time, for TCI, for Continental, Telecable, but there was also a slew of smaller operators, from Allen’s Cable TV, all the way through the alphabet to United and UA.  And so at various times, we did different deals for different companies, and at all times, we were trying to move through the growing regulatory morass in Washington and the state capitals.
 
Arenstein:  What was the atmosphere like in the state capitals and in Washington, regulatory-wise, regulation-wise?  Was it like it is today or was it more informal?  

Glist:  Well, in terms of the big picture, cable was emerging from a period of basically a regulatory freeze. It was just coming into its own and there was a little cadre of people inside the Federal Communications Commission who were actually trying to promote this new technology.  Which was very helpful, but at the same time, the large incumbent industry was the broadcasting industry and the telephone industry, and both of them were trying to suppress and regulate this industry.  A lot of my job was to try to push back against the rent-seeking and keep the path opened for innovation for the cable business.  In terms of the way business was done at the FCC, it was far less formal than it is today.  You could, and we did, just walk into the building.  There was no such thing as security.  You’d walk into the offices of the primary regulators, put your feet on the desk, and just talk about how to resolve open issues at the time.  And no such thing as social media at the time.  

Arenstein:  Right, and today -- correct me if I’m wrong -- today, if you or anybody goes in to meet with the commissioner, it’s posted; it’s known.  

Glist:  Oh, yes.

Arenstein:  They tell you what time it is and all that kind of stuff.

Glist:  Oh, everything is very strictly regimented.  There’s formal ex parte notice requirements that you file and report on what you said.  I think if you fast-forward all the way to today, policy-making at the FCC in the last several years has morphed from that kind of casual model, or even an adjudicatory model where you’re trying to weigh facts and select the best economic and technical policy over to one where you’re driven by sound bites and social media, and tweets.  It’s as partisan as the Hill.  So, it’s a very different atmosphere at the commission today than it was at the beginning.  

Arenstein:  So as a lawyer, I know you parse your words, you choose your words carefully, I noticed you said it’s a very different atmosphere today.  Is it better or is it more difficult?  

Glist:  I find it more challenging.  I’m a little bit nostalgic for a policy world that is fact-driven.  I think that has a lot of advantages for society.  That’s sort of how independent agencies were designed to operate, and a lot of that is gone.  I remain hopeful that we are emerging from a temporary dip into fact-free policy making but I’m unsure.  I think many Washington observers have seen the same phenomenon outside of this little piece of the regulatory apparatus, It’s why it’s been a problem of decisions being made without careful reflection, and without being based in genuine fact.
 
Arenstein:  Is there any advantage to transparency, what we call transparency today?  In other words, to know that Paul went in and met with Commission Pai or somebody like that, and for me, as an outsider, to see on a website, or maybe in a publication, oh, you met with him at three o’clock on Thursday, the 14th of July and so you spoke about X, Y, and Z.  Is there any advantage for us knowing that today, as opposed to the more informal times?  

Glist:  Of course.  The debate should be held where the policy differences are aired openly.  I have to say that the way it’s actually run day-to-day is the ex parte notices don’t necessarily reflect the behind-the-scenes machinations and that the extensive comments that lawyers work hours and hours on are scarcely read by anyone at the agency.  Possibly by somebody in a Bureau.  But all of the action is in the one-on-one meetings at the Eighth Floor, at the FCC Commissioner level and with their staff.  The debate morphs over time until you’re just on top of the so-called sunshine notice when they’re seven days away from voting, and that’s where the deals are made.  So in theory, the transparency is a good thing.  I’m in favor of more of that.  In practice, we’ve still retreated from a world where the agency is weighing things with an independent judgment.  It’s become a highly partisan, largely fact-free zone.
 
Arenstein:  What does that mean for the cable industry, that kind of atmosphere?  

Glist:  In many ways, it becomes a question of who is in power.  And so --

Arenstein:  Political power?  

Glist:  In political power, yes.  If you have a strong chairman who has a fundamental trust in the operation of the marketplace and a fundamental distrust of the ability of government to manage the evolution of technology, then the cable industry does very well in an environment like that.  On the other hand, if you’re in an administration that has, I would call it a regulatory hubris -- a confidence that they know better than the market, they know better than the industry, they are willing to try to manage the economy, manage technology -- the cable industry doesn’t do particularly well in an environment like that.  I would say at this point when we are recording, we’re coming out of an era in which Silicon Valley has held special favor with the Administration and has had many opportunities to seek rents from industries like cable -- to basically impose investment costs on the cable industry and reap the benefits for themselves.  And that’s part of the Washington game.  They can succeed in a certain Administration, certain political power, and we’ll see whether things change in the coming Administration.
 
Arenstein:  Sure.  So let’s get back.  I know we’ve skipped ahead.  I couldn’t resist asking you some of these questions.  Back in, let’s say, the early ’80s, you’re working on some of these deals, was there anything that attracted you particularly to cable?  It sounds like you got a certain expertise in it, working on all these deals.  Was there a point when you said “Gee, you know, I’d really like to stay working on these types of cases in this industry?”  Were there any people in the industry that you met?  I mean, it sounds like you met people like John Malone and Leo Hindery, who will be here tomorrow, actually.  Tell us about some of that, some of the people you met.  

Glist:  So, I have to say that all of the pioneers and the entrepreneurs in the cable industry impressed me greatly.  Because they were willing to take an enormous gamble on a new technology -- for that matter, a new economic model -- and build something that had never been built before, against great odds.  They really were the Davids taking on the Goliaths.  Hard from today’s perspective to remember that --  

Arenstein:  Yes, yes.

Glist:  -- cable was the upstart and the challenger.  

Arenstein:  Absolutely.  

Glist:  So first of all, the fight was intriguing.  To take on a world in which three, maybe four, television stations were available in a market and turn it into an environment where you had this multiplicity of voices.  And to move from an economic model where a program lived and died solely on the amount of advertising it could command to one fueled by a dual-revenue stream that could finance far more consumer choice, far more niche programming, and to do it with a business model that required enormous patience from the investment community.  We had to invent a new economics to measure it.  We had to measure, you know, earnings before interest, taxes, [depreciation and amortization], and EBITDA was invented in order to justify investment in the cable industry, so that investors would put the money in to build this incredibly capital-intensive infrastructure and reap the rewards way down the line.  That’s the kind of patience that I would love Wall Street to have today.  We could invest in a lot more infrastructure if we had that.  But, the cable guys were pressing all of these new models and they were doing it in a way -- you talked about informality at the FCC.  You could make decisions around the kitchen table.  And you could do it so quickly.  You evaluated it, you made the decision, you went out, you executed it.  You could turn on a dime.  And of course, a lot of that is gone, as the industry has become Fortune 100.  And that’s understandable.  But for, you know, an upstart like me, that entrepreneurial spirit was very attractive.  
Arenstein:  Your analysis is very interesting, Paul.  I’d say maybe the only remnant of that kind of cable cowboys, as they used to call them, is ratings today and cable programming today, where again, on a network -- on a broadcast network, if you have a slight dip in ratings or if your ratings are poor, the rope is very, very short.  The length of time you get to experiment with more shows is very short.  As compared to with cable, which is still much -- in my opinion, much more experimental and entrepreneurial, in terms of programming.  

Glist:  Absolutely.  And because there’s the dual-revenue stream model, and because there is the bundle of programming that allows different audiences to pay for what they value most and get this wide array at what I will still defend as a reasonable price.  

Arenstein:  Okay, fair.

Glist:  But the bundling and the dual-revenue stream allows audiences to be served that would never be served under a mass advertising model.
 
Arenstein:  Agreed.  

Glist:  I think today, TV One is a good example, where wildly successful shows for a particular audience would never have been financed if you had to sell it to one of the big networks.  

Arenstein:  So I can’t resist asking you.  We’ll get off the legal and regulatory track just a little bit.  When you have time, are you a TV watcher?  Are you a cable watcher?  Are there particular programs that you like?  

Glist:  Oh, well...

Arenstein:  It sounds like the answer’s yes.  I’m just betting here, I don’t know.  I’m fishing.  I don’t know.
 
Glist:  I know you’re fishing.  Here’s the -- self-deprecation is always good.  So I sit down with my poor, long-suffering wife on the couch with the remote control in my hand I start going through and I complain that I find nothing to watch.  And she says, “What are you talking about?  I am never at a loss of finding something to watch.”  I am incredibly impatient when I am scrolling through the dial.  I say to her, “Karla, it’s the technology that I love.  I love building the infrastructure.  The programming, for me, is a nice to have.”  (laughter)  So, I’m sorry to say my secret vices are things like Dr. Who reruns because I was a boy in London when it aired.  It makes me feel nostalgic.  But there you have it.  
Arenstein:  Huh.  Because it’s interesting because I’d never really heard an analysis of sort of the regulatory scene the way you were composing it, It just seemed to me that, oh, this is somebody who really cares about having a lot of different voices on the screen, and probably loves one or two obscure programs that, as you said, wouldn’t be around if not for something like cable.  Tell us about your home life.  Where do you live now?  You’re based in Washington, DC.  

Glist:  I’m based in Washington, DC.  I’ve got offices in other cities as well.  I live in Alexandria, Virginia.  Empty-nester now.  The kids are settled, one in Denver and one in Austin.  Great cities to visit, I might add.  So, all’s well.
 
Arenstein:  So at what point -- I mean, again, you were not at cable at the very beginning, but pretty early on, maybe the adolescent years.  Was there any point where you said, “Oh, wow, this industry has changed?”  To your point earlier, in terms of the size and the magnitude of it, and the dollars, which kind of bring in more and more regulation and more and more legal requirements, etc.  Was there a point where you looked back and said, “Wow, from these little mom-and-pop deals that we were doing, this is getting really big?”  Was there a point?  

Glist:  Well, certainly when I started practice, the penetration was relatively low.  And so some people regarded it as a niche practice.  I was practicing in a law firm that probably had more broadcast lawyers than cable lawyers at the time.  So there certainly was -- there was a change, but I think for me, I was trying to fight the fights to keep the path clear for this industry to develop.  And so there were basically two developments that, to me, reflected the emergence of this industry into a major national player.  Any new industry that’s disruptive is going to attract opposition, and so it attracted opposition from the utilities.  I had to fight a lot of fights that we can get into later about getting the physical plant up on the poles.  But, it also faced a lot of rent-seeking from local governments in the franchise process.  So in the earliest days of cable, franchising was basically something that one undertook in order to get the right to operate in the public right of way.  And certainly in many rural communities in the early years, they were sweetheart franchises that put very few demands on the operator, and they were easy to manage.  But as the cable industry began to develop suburban and urban markets, the demands from local franchising authorities began to escalate dramatically.  And so, we had to simultaneously combat efforts by the utility industry to either kill or co-opt the business, and efforts from the local franchising authorities to saddle it with so many costs that it would have been uneconomic to actually develop to its full capacity.  And those -- it was fighting those fights that really awakened me to the size and scope of this industry.
 
Arenstein:  At about what time, would you say that -- what years, would you say, would that be?
 
Glist:  Well, on the first point, the utility resistance, it certainly predated my entry into the business in ’78.  AT&T wanted to co-opt the business by only building a plant that could be leased to an operator under a tariff promise to never compete with the phone company.  And then, the independent telephone companies around the country were trying to get into the cable business themselves, and they made it known to local franchising authorities that “That independent cable guy’s never getting on my poles.  You better give the franchise to me.”  So, there were those fights that predated my entry.  I had the fortune, or misfortune, to join the industry in ’78, when the pole attachment law was passed, the first federal act of Congress that addressed the cable industry.  But that, at least, gave us the tool to discipline the overreach by the utilities.  And so I had to fight all those fights.  “Yes, it applies to your contract, utility, even if it was signed before this Act.”  “It’s not an unconstitutional taking of your property.”  “This formula that we developed at the FCC, it gives you fair compensation.”  I have to say that in fighting that, one of my favorite cases, which I think helped -- I’d like to say helped usher in a new age for cable -- was Heritage.  This was in -- it took until ’91 to get a decision, but it was bubbling up before then.  So the issue was this.  Both the cable industry and the utility industry had discovered fiber optics.  And one of my clients was in Dallas and the Dallas suburbs.  And the Dallas Morning News had a problem.  Their editorial offices were in downtown Dallas and their printing plant was in Plano.  And we knew that we could overlash fiber to the existing support wire that sustained the coaxial cable and get them instant two-way communication between the editorial office and the printing plant, which would simplify their life enormously.  I had to design this strategy -- it’s one of the luxuries when you work with smart clients, that you can set your facts up, real facts, in a way that are going to help you in litigation.  So what we did was we integrated a fiber run from the Morning News to the printing plant in Plano, integrated that fiber into a combination fiber/microwave backbone across the metroplex.  We put some video over it and we put a lot of data over that line.  And the utility took the position, “You cannot do this because that’s not what cable does.  You’re not a cable company anymore.”  And so, I had to go to the FCC and then all the way up the appeal ladder and got a ruling.  It’s the first federal ruling that cable could use fiber,  and it could run non-video services, and still remain a cable company with all of the attendant regulatory advantages that that offered.  And so Heritage became this bedrock for the diversification of cable into non-video businesses.  And so I’m very -- that’s one of the highlights of the pole front, although there were a lot of pole wars.
 
Arenstein:  Yes, of course.  Could we talk a little bit, would you be able to talk a little bit about some of the people?  Again, we touched on some of them but some of the people who are involved in some of these deals and some of the regulations and some of the folks that you’ve met?  I would think you’re kind of like a walking museum of cable here.
 
Glist:  I’ve been called worse.  (laughter)

Arenstein:  So I want to get some reminiscences of some of the people that you worked with, and maybe some of the people you worked against.  

Glist:  First of all, on the legal front, I have to point out Gary Christensen.  He was a South Dakota boy who went to the FCC and started doing cable television law there, and then eventually ended up at Hogan & Hartson in the cable practice there.  I came under his wing when I was a pup.  And he was a fabulous mentor.  He had taught me how to practice world-class law with civility, and humility, and good humor, and to treat your adversaries with great respect because they were going to be your allies someday.  And he introduced me into the cable world and to all of the great entrepreneurs.  And on the client side, so many deserve mention, but Amos Hostetter was one of my favorites, a brilliant man.  He built a fabulous company in Continental Cablevision.  He introduced a lot of innovations in the business, in the management structure.  I learned a lot just by observing how he worked with people inside his company, how he worked with local franchising authorities.  Bill Arnold, in Texas, classic cable guy, basically, you know, out of the field into the regulatory arena, and a born Texas lobbyist.  I worked with him on just about every issue that could arise at the state and federal level.  Dick Green, who ran CableLabs for 20 years at least.  And, of course, turned that into a vehicle not just for seminal research and development -- It was the platform for launching DOCSIS and the internet as we know it.  But also, he was enlisted into many of the regulatory wars that were going on in Washington. It was my privilege to work with him on many of those wars.  There is this chronic problem with a regulated technology business like cable that a lot of the regulators neither understand the current technology nor the direction that it can go in, left to its own devices, but are ready and willing to exercise their power on you.  And so Dick and I, and the folks who reported to Dick, had to fight a lot of those fights -- on the Hill, at the FCC -- in order to try to protect against micromanagement of the business.  I should also mention Dan Brenner, who is a lawyer but a client.  The late Dan Brenner, dear friend of mine.  

Arenstein:  Yeah, mine, too.  

Glist:  He was a superb strategist and lawyer.  Didn’t hurt that he was a stand-up comic --

Arenstein:  No, it didn’t!

Glist:  -- because we need a good sense of humor in this business to get through a lot of those dark moments, but he also was a wonderful client to work with through countless regulatory proceedings.  I think I worked most intensively with Dan first when the ’92 act was passed.  And because the industry had pursued an unsuccessful strategy of expecting it to be vetoed, we didn’t shape the contours of that law as you might ordinarily do on the Hill.  And so we were saddled with this draconian over-regulatory piece of legislation that ended up costing us four years of development, and four years of infrastructure growth, and four years of programming, all the rest of it, not to mention the horrible rate-reg proceedings, just to name one out of many sets of rules.  But I partnered with Dan and a few others in helping the industry get through all of that with some creative strategies that helped recover from what was one of the nadirs of its regulatory history.  

Arenstein:  You know, Dan said something about you that I want to read here.  He said, “Paul has been involved in virtually every major issue facing the cable industry, and he’s a splendid attorney, with a tremendous expertise in technology.”  I think we’ve heard that today.  “He understands the day-to-day operating issues in a way few people do.”  That was the late Dan Brenner, who passed away a few years ago, as a judge in California.
 
Glist:  Yes.  Well, I take it with all humility.  I loved Dan and he had a brilliant mind, I was happy to work as his partner for so long.  
 Arenstein:  And he was so fast, too.  It was like sparks coming out of his brain.  Let’s move on, here.  We were talking about the ’80s, we were talking about the early days of your career.  Today.  Let’s talk about what you do today most of the time.  Obviously, there are still -- actually I think there are somewhere around 1,000 very small cable operators in the country today, believe it or not.  Some have 100 customers, some have fewer than that.  What occupies your time mostly today?  

Glist:  So, I have to say that over the last few years, my time has been almost monopolized by some large proceedings that affect the entire industry.  And so I’ll take one as an example, it has to do with set-top boxes.  Cable systems, as they grow more sophisticated, they basically built themselves out as end-to-end computer networks.  There was the headend that had most of the smarts, but there were smart devices in the home that had to communicate with that.  It was that architecture that enabled tiers of programming, and video on demand, interactivity, and apps to show up, and smart electronic program guides, and the X1 platform, and all of the rest.  But the presence of the set-top box itself became a point of contention when Circuit City, God rest its soul, decided that, “I’m not too keen on the fact that I can’t sell set-top boxes on retail shelves.”  Which I get.  The evolution of the industry was a roll-up of many different technologies sourced from different vendors, and so there was no universal solution that one box could work across the country.  So they obtained a law that required the FCC to work on building a retail market for set-top boxes.  And through many twists and turns in the early 2000s, I worked to negotiate a deal with the consumer electronics industry that had a couple of steps in it, but the first step was, take the security that is present in the set-top box, put it into a little card that can fit into the back of a TiVo, for example, today, and then we’ll work on more of an apps-based solution going forward.  That was the deal in 2002.  And we lived with that for many years.  But this is, again, the hazard of being a regulated business.  The consumer electronics industry, as the internet grew to be capable of transporting video in high def, began to think of this law as maybe a key for shortcutting their entry into the business of distributing copyrighted entertainment programming.  And so, while we were trying to do deals -- and actually reached deals with them, reached a deal with Microsoft on how to get content onto a PC and into the Microsoft home domain, and we worked on a so-called two-way deal with big TV manufacturers that would allow the full boat, the guide and VOD and everything else to run.  There was a pivot point in about 2009 or 2010 when the consumer electronics industry said, “You know something, I think I can get something -- a favor from the Federal Communications Commission.”  And so they basically said to the cable industry, “We’re not doing that.  We’re going to go to the government and see if we can get a solution that will basically take your programming and unbundle it and give it to us to repackage as our own product.  And we can mine the data, and we can put ads into it, and we can brand it as our own, and we don’t have to negotiate those intricate copyright licenses with the content owners, nor do we have to respect them.”  Well, that was problematic for a lot of people, as you can imagine.  And so, in 2010-2011, we fought that to a draw at the FCC, and we went on to do what we told the FCC we were working on anyway, which was to build up apps.  And so in between 2011 and now, you saw the explosion of cable apps on smartphones and tablets and smart TVs and gaming stations, and Rokus, and you name it.  And these were all ways to get the product, the full product, without a set-top box, which is what the cable industry wanted.  We don’t love set-top boxes.  We love audiences.  And yet, the FCC, under the outgoing administration, made another run at this for trying to give Silicon Valley this favor that Silicon Valley was wanting.  Silicon Valley wants to be a multichannel video program distributor, but they don’t want to deal with the copyright owners.  And so for the last two, three years, the majority of my time has been addressing that issue on the Hill and at the FCC.  As we sit, it looks like it’s been fought to a draw again.  We don’t know.  One never knows.  This could rise from the grave again in a few years, but I’m hopeful that an administration that has greater faith in the market and greater faith in technology to find its own way will look around and say, “Wait a minute, these apps have evolved on their own through business necessity.  Consumers don’t actually need to rent a set-top box if they don’t want to.”  If they reach the conclusion that the market’s actually worked well, as I said at the start, cable does very well.  Because we actually want to serve the consumer on the device that the consumer chooses.  We just have to do it in a way that respects all those intricate copyrights that we have to negotiate and respect.  

Arenstein:  Are you upbeat about the possibilities or the potential for this to work out in a way that’s favorable to cable?  I’m not speaking about the Administration coming in necessarily, but just, a man of your experience, are you upbeat about it or are you unsure about it?  As you said, it’s kind of at a draw right now.  

Glist:  I’m upbeat about it.  I think that as long as this law is on the books and has not been sunset under its provisions, people will periodically make a run at it.  There were plenty of efforts over the last couple of years to make a run at getting some rent from the cable industry.  Some people made a run at getting subsidized transport of their data from 5G cell phone towers to wireline facilities.  People have prevailed upon the FCC to adopt a privacy rule just for internet service providers that basically leaves the market for tailored programming and tailored advertising and so-called two-way markets over to the edge.  And so, there’s plenty of rent-seeking going on with the FCC.  But it’s been my observation that yeah, regulation ebbs and flows, but in the end, technology prevails.  And because the cable operators have constantly reinvented themselves in order to serve audiences as they are today and as they are evolving, it’s going to happen in this little narrow issue of set-top boxes that I use for illustration.  We went from broadcast retransmitters, where we were fighting over who’s must-carry and who’s not, you know, can I get a waiver of nonduplication rules or not.  And we’ve moved the platform forward.  We invented the internet as we know it.  We’ve continued to pour investment into -- 250 billion from cable alone, in the infrastructure that supports broadband today.  And not stop with DOCSIS, many generations of DOCSIS, full duplex DOCSIS, meaning equivalent speeds forward and backwards.  Last night, this morning, the news broke that Cablevision is going to take fiber all the way to the premise.  This is standard for cable.  You go from coax hanging on poles to hybrid fiber coax to dropping the amplifier cascades, to going to node plus zero, going full duplex DOCSIS, to fiber to the prem.  And simultaneously, you’re inventing parallel methods of distributing your service in IP over wireless, and to customer-owned devices.  That’s the entrepreneurial spirit that attracted me to the business in the first place. It’s still here.  

Arenstein:  Wow.  That’s a great answer.  So, you know, my next question was going to be, when you talk to a young lawyer today and he or she says, “Gee, I’ve followed your career and you were in cable in  the early days, and you’ve done all these landmark cases, and here we are today, It seems like all the battles are over.”  Which they’re not, of course, but it seems like they are.  So my question is do you counsel people?  Do you counsel a young law student to pursue a career in cable law?  I think the answer is yes, based on that very enthusiastic speech.  
Glist:  If people are already lawyers, know they want to be lawyers, then by all means.  I counsel that them that the cable industry is not the sleepy, yesterday monopolist that many people say it is.  We have ourselves as an industry to fault for not telling the message clearly enough.  But it is not the case that all innovation takes place in Silicon Valley or at the edge of the ‘net and no innovation takes place within the cable industry.  If people reflect upon this enormous programming array, the broadband speeds and throughput that are offered, the new business models, the effort -- however  slow -- the efforts by the industry to negotiate with Hollywood to get more choice in bundles, thinner bundles, more choices in ways that protect copyright, don’t break the economics of the golden age of television, the new golden age of television, we’re doing all of that.  You, as a lawyer, not only can you be part of that, but you can come up with a bright idea,  and this is an industry that will actually listen to people and try new things.  I’ll give you a case in point which is not pure communications law, if you don’t mind.  

Arenstein:  Go ahead.  Yeah.  

Glist:  Not many years ago, the Natural Resources Defense Council began to worry about the energy consumption of set-top boxes, and they began to go around to the state capitals asking for state legislation on the boxes.  I would follow them around, writing opinion letters saying, “Wait a minute, you forgot about these three cases that I fought for, that preempts the states from regulating technology in the cable area,” and so they were kind of stymied at the state level.  They turned to the federal authorities and they began to get the Department of Energy interested and the California Energy Commission interested in it.  Well, both of those agencies have a legitimate interest in energy conservation.  We all do.  But, their models were based on refrigerators that you buy.  There are five basic chassis of refrigerators.  You put them in the kitchen, they last 10 or 20 years, they’re not connected to nothing, they never change. I can set an energy spec for them and if you need any changes over time, come get a waiver from me.  And, you try to apply that model to the cable industry where boxes iterate with firmware updates almost overnight.  They iterate with generations of hardware every 18 months.  And those boxes are the delivery vehicle for networks that are changing hourly and offering new stuff, inventing new services.  They don’t match.  So what do you do?  So I put together a consortium of all of the cable operators, satellite companies, telephone providers in the United States and their equipment suppliers, and we all agreed to do something that had never been done in the US:  a voluntary agreement on energy conservation for set-top boxes.  And we created energy standards.  We created a process for people to invent stuff without permission.  We created a steering committee.  We brought NRDC [National Resources Defense Council] and ACEEE [American Council for an Energy-Efficient Economy], another energy advocate, on to the board.  And not only has it worked, in the first three years, it saved over a billion dollars for consumers.  It’s on track to save a billion a year.  It’s saved over six million metric tons of CO2, greenhouse gases, just in the early years.  This has received bipartisan praise from the Hill.  They said, this is exactly how we should address problems.  And the advocates are happy.  The Department of Energy held a press conference to bless it.  And this came out of a lawyer’s head.  All right?  And so, you can conceive, lead, and execute a platform to solve new problems in very creative ways.  That’s a lot of fun.  And you get to do social good at the same time.  And, you get this win-win.  You get energy conservation and you preserve the path for innovation.  So, you don’t have to go to the refrigerator regulator and say, “I want to invent 4K.  I need a change in the law, and by the way, I have to go public with it and my competitors will know I’m about to launch.”  You don’t have to do that.  You can hit the market with the new invention and we have all the procedures in place to do it in an energy-efficient way without that kind of lag that innovative technologies can’t stand.  And so, there are going to be so many new challenges going forward that I think someone who wants to be a lawyer couldn’t ask for a better business to work with because this has always been a business that has looked for -- we know we’re regulated, but we have creative ideas of how to handle the underlying interests in the regulation, find win-win solutions where all the stakeholders can walk away happy.  
Arenstein:  I’ll tell you, you know, when you were speaking, I just had to think that “Well, this sounds like a cable Vanguard-type speech,” and sure enough, you are a cable Vanguard honoree.  In fact, I think you’re the only outside counsel to be awarded a Vanguard.
Glist:  Well, I broke the glass ceiling.  (laughs)  Yes, I was the first outside counsel to receive a Vanguard.  I can’t tell you how honored I felt to be in the company of so many greats in the business.  That was totally unexpected but greatly appreciated.  I’m no longer the only one.  But yes, the --

Arenstein:  Okay.  You were the first.

Glist:  -- industry was good enough to award me with a Vanguard.  I think that was 10 years ago.  

Arenstein:  Yeah, it was.  It was 2006.  

Glist:  But I’ll still bask in the glory anyway.  (laughter)

Arenstein:  Okay.  And then, a couple of years before that, you were named to be a Cable Pioneer.  I know that’s kind of a difficult honor to receive because I believe, what, friends of yours or people who have done business with you are not able to nominate you.  It has to be somebody outside that circle.
 
Glist:  But somehow, I passed the gantlet.  (laughter)  Maybe I just hung around long enough in the industry.  But yes, I was also very honored to be named a Cable Pioneer.
 
Arenstein:  Paul, there are a couple of areas that you have done sort of slightly outside cable, and one of them that I wanted to touch on was the Tahirih Justice Center that you -- you joined the board in 2008, and you’re currently the chairman.  Tell us what that Justice Center does and whom it helps.  

Glist:  So, the Tahirih Justice Center is a national organization that is devoted to protecting immigrant women and girls from violence.  And the kind of violence that we’re protecting against is female genital cutting, honor crimes, that people will be seeking asylum for in this country -- they need help in getting that.  Domestic violence within the immigrant community -- it’s often difficult to even report that, if you fear your immigration status.  Mail-order brides being sold into the homes of known abusers -- we got a federal law passed to protect against that.  Forced marriage of US-born teenagers, who are told at 14, “We’re shipping you back to Pakistan to marry your 50-year-old uncle.  If you don’t go, we’ll kill you.”  So there’s a host of issues that women and girls need protection from.  And we’re the only national organization that focuses on this community.  There are many people who have all of their citizenship rights intact already, and they have access to resources, but this group has no other recourse because of the way US law is set up.  So we provide the legal work at the retail level, we provide the policy work at the legislative level, on the Hill, in state capitals.  We provide social workers for them, to help them through the adjustment issues.  We provide medical care for them.  We take them through the entire process and -- this is extraordinary, but we have a 99 percent success factor in litigation.  I wish I had that in my commercial life.  

Arenstein:  How did you get interested in this, Paul?

Glist:  Well, I became aware of this when the founder was actually a law student.  It appealed to me, because it’s grounded in principles of the equality of women and men, and the principle of human rights, and the principle of access to justice.  And for me -- I’m a Baha’i -- these are spiritual principles for me.  And so when an organization is formed that is inspired by that same spirit, then I want to be a part of it.  I became a supporter early on, eventually ended up on the board, and here I am, chairing the board.  But it’s -- I have to say that I take a lot of pride and pleasure in the work that we do.  We’ve helped 19,000 women so far.  We’re coming onto our 20th year next year  of service.  And we have just -- as we tape, we’ve just come off a presidential campaign with some very heated rhetoric that at the very least presents uncertainties about the protection that the immigrant community will enjoy, even under existing US law.  So I say, now, more than ever, we need the work of the Tahirih Justice Center.

Arenstein:  In 1984, you started teaching a course at the Practising Law Institute in New York about cable television and communications law.  What is the Practising Law Institute, and do you still teach today?

Glist:  I do.  Practising Law Institute is a nonprofit that is devoted to providing continuing legal education to other practitioners.  I started teaching cable law and different slices of it.  Sometimes it was franchising, sometimes it was renewal, sometimes it was rate-reg at the height of the ’92 Cable Act, privacy,  where technology is going, which is what I currently teach for PLI.  And for me, it’s a great joy, because it gives me the opportunity to teach without grading papers.   (laughter)  That’s a wonderful joy  to do that.  And at its best, PLI is a highly interactive exchange among very sophisticated and opinionated practitioners, and that’s fun.

Arenstein:  Paul, we want to end on a couple of sort of legacy questions, although you’ve really touched on so much legacy material, it's been great.  I guess one of the things that I take away from this interview is that at some point, you and other legal minds looked at technology and concluded that there’s absolutely no way we know where it’s going, so we have to prepare legally for that.  You have to, when you draft something, or you draft a regulation, you have to leave it open enough so that it can adapt to new technologies.  What new technologies do you envision, coming down the road?  What excites you?  What sorts of -- are there pie-in-the-sky dreams that you would like to see from cable?

Glist:  So, this is the fortunate thing about envisioning the future, is that we never do accurately.  And so the things that all of us can see -- that the cable industry is going to have a mobile feature, whether it’s MVNO on the wireless side, or federated Wi-Fi that covers large and small operators -- all of that is going to be put in place  so cable operators will be able to offer the quad play.  We are the platform that can offer the home for new programming that cannot be cultivated on a broadcast channel.  I think there are many, many more opportunities for that, with virtual channels and VOD and the way that VOD is offered today with the opportunities for binge viewing  if you want to go to the next series, it’s almost quasi-linear in that way.  That’s all conventional thinking, what I have just described to you.  It’s the unknown.  And cable operators -- you know, I take a lot of pride in what they’ve invented.  But cable operators are also fast followers and fast responders.  So that when a new way of doing business emerges, we are able to actually execute on it and put it into play on a very large scale, an economically efficient scale,  and to do it in ways better than many others.  And so whatever that is going to be, whether it’s the perfectly skinny bundle, whether it’s a new way of doing VOD, whether it’s immersive video, whether it’s broadband that allows the home to become virtually anywhere because the throughput is almost limitless, I don’t know.  But these are the folks who are going to bring it.
 
Arenstein:  Another legacy question.  What -- I think you’ve touched on this several times today, but -- what is a big story that’s a big cable story that hasn’t been told, that needs to be told?

Glist:  It’s retelling the story of how cable has invented so much of what we take for granted.  And we owe it to ourselves and we owe it to the regulatory community and we owe it to the public to explain...  We need to explain that there is no cloud.  That internet is not free just because you can pick it up at a coffee shop.  That programming is not free just because you don’t see the price yourself.  And all of that is an explanation that we owe.  But I think there’s also something on -- you alluded to Net Neutrality.  I think this is a going-forward issue that we need to tell the story on.  The cable industry has never been opposed to letting internet customers get wherever they want to on the net.  They have not been the ones who block sites or bring it down to a trickle.  Quite the opposite.  We’re the ones who keep expanding the sites, and expanding the capacity.  If anyone’s doing the blocking, it’s programmers at the edge of the net who are actually blocking internet delivery of their programming to gain leverage in cable distribution negotiations.  So there’s all that.  But you can, and we will as a society, come to agreement on general principles of no blocking, no throttling.  But one does not have to kill the future of the internet by going as far as the last administration has gone.  And they’ve done a couple of things that are very dangerous and need to be undone.  One is, they’ve said that no one on the edge of the ‘net may pay an internet service provider for the delivery of content to an internet service customer.  And that’s called destroying the two-sided market.  You know, if you pick up a newspaper, you may be paying a subscription for the paper, but the advertisers are also paying the paper to reach you.  And there’s nothing even in the old telephone world that prohibited 800-number calling.  And when I think about the future of the internet, there should not be a rule that says that an immersive game cannot sell its product to the public with high-throughput internet built into the price  and the gaming company is the guy who picks up the freight.  There’s no reason that a green appliance should not be sold with permanent internet connectivity at a trickle built into the price for smart management of energy.  There are so many business models that rely on this two-sided market  and the Net Neutrality rules that were just adopted outlaw that.  I think that is a terrible moment of micromanagement that’s actually going to stop the internet’s natural development towards more and more optimal models.  I think that’s a problem.  It’s a lack of regulatory humility that gets you there.  So I’ll draw this analogy.  I know you’re trying to get to the legacy question.  I approach my legal practice with the understanding that law can contribute, but it is part of an overall solution.  The overall solution, to get a complete answer, it has to fully account for policy and finance and business and tech and consumer relations, and all of that has to factor into the total solution.  Law’s a part of it.  The same should be said by regulators about regulation.  That regulation can be part of a solution.  You know?  But you’ve got to recognize that you as the regulator, you have not created the value of the cable industry.  You have not created the value of the internet.  And you need to start with the understanding that you may have a role to play, but it’s a measured role.  And you need to start from the do-no-harm philosophy.  And then take it from there.  And have respect for the wisdom and the entrepreneurial spirit and vision of the guys who are actually out there in the market, in the technology, who are inventing the future.  You know, the cable guys I grew up with did that for a generation, and the current generation of cable guys are doing it again.  And there needs to be a healthy respect for the wisdom in this industry.  Industry’s willing to work with regulators.  But everything’s got to reflect that balance.

Arenstein:  Paul Glist, thank you so much.  This was a lot of fun!

Glist:  It’s been a pleasure.

Arenstein:  This was great.  Thank you.

Glist:  Thank you, Seth.

END OF INTERVIEW

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John Goddard

John Goddard

Interview Date: Monday, July 21, 2014
Interview Location: Denver, CO USA
Interviewer: Paul Maxwell
Collection: The Cable Center Oral History program

Maxwell: The Cable Center Oral History program. Today is Monday, July 21, 2014. I’m Paul Maxwell, a board member of the Cable Center here to interview John Goddard.

John, how did you get into the cable industry?

Goddard: I am a second generation cable operator. My first recollections of the cable industry is Ed Parsons from Astoria, Oregon, coming up to Aberdeen, Washington, where my father was in the radio station business, and started a cable system, and he was on the roof of our house looking for television signals off-air that came from Seattle. Because Aberdeen was a classic market with no television reception at all because of the distance from Seattle.

Maxwell: How far was it from Seattle?

Goddard: It’s about 100 miles.

Maxwell: Oh. Quite a ways.

Goddard: And then after that, my next recollection is a couple years later, when Dwight Eisenhower was being inaugurated as President of the United States in January, 1953—if my dates are correct—the cable system had been built partway through the town and they had it installed in a hotel in downtown Aberdeen and everybody in the community got together to see the inauguration on cable television.

Maxwell: How big was the TV?

Goddard: It was one of those small kind of green-tinted and kind of rounded—it wasn’t rectangular-shaped by any means.

Maxwell: How many people were there?

Goddard: Probably 200-300 people. I mean, it was a major event in the community to have television. Then after that as the system was constructed in Aberdeen and I was in high school, I ended up being vacation replacement for the field employees doing house drop installations and construction. But then I went off to college and I while I was in business school I started 2 cable systems with three other young men who had associations with the cable industry. We built the cable systems in Pinole and Crockett. I was going to school and on the weekends we went out and built plant, went home, took a shower, cleaned up and went out and sold door-to-door. It actually was order-writing door-to-door because everybody was so desirous of having television reception.

Maxwell: That was chasing the vans, chasing the string while stringing the cable along. This was all above ground and all...

Goddard: One of the interesting things that happened—part of this town, Pinole, was underground and we put conduit in and we didn’t have our engineering totally correct. We were trying to pull in long sections of cable and the cable would bind to the vinyl of the PVC and we would have a hard time pulling it through. So the solution was to go to the supermarket and buy soap, detergent soap, and put it in the conduit to facilitate it being pulled through. There was one interesting outcome of that. Guess what happened when it rained in the winter? We had soapsuds all over the subdivision coming up through the concrete vault boxes.

Maxwell: That, I guess, went away after a couple winters or a couple seasons of rain. But that took away the friction so you could do that.

Goddard: So after that, after I got out of business school, I went to work for a company called TeleVue Systems, which was a series of partnerships of cable operations in the Bay Area and I’ll move along pretty quickly. I stayed with them for three years and then CBS came along and bought out TeleVue Systems as well as the remaining interest in their cable system from the Iacopis in San Francisco. But it didn’t take the FCC very long to decide that vertical integration wasn’t proper for one of the three major networks. So the FCC mandated the spinoff of the cable properties and their syndication business. Two very dissimilar businesses into a new company called Viacom.

Maxwell: Back then it was pronounced “Vee-a-com.”

Goddard: It was pronounced “Vee-a-com” because that was the way Ralph Baruch pronounced it.

Maxwell: So what year was that?

Goddard: That would have been in 1971 and at that point in time, it was probably pivotal in my career whether to continue in an entrepreneurial sense or to stay with the bigger organization. Looking back, it was probably a flip of the coin because I was pretty intolerant of the bureaucracy of the big corporation. But it all turned out for the best and I had various jobs with Viacom and became the CEO and President in 1980, and stayed with them until 1996 when it was sold to TCI.

Maxwell: So we’re all done? I’m kidding.

Goddard: You asked me how I got into the business and that’s a quick track record to where we are.

Maxwell: You had some partners in the beginning, including some friends.

Goddard: The original partners that were involved were Claude Cody, who was involved in a construction company, and Scot Bergren, who is still a current friend of mine and his father was in the cable business with my father, and another young man by the name of Richard Spight, whose father was a partner in Tele-Vue Systems in the Bay Area. And the four of us put in the capital and built the two systems in Pinole and Crockett.

Maxwell: Where are they exactly in the Bay Area?

Goddard: They’re on the edge of the Bay and they would be northeast of Richmond so if you go Berkeley, Richmond, El Sobrante, Pinole, Crockett. Crockett is where there’s a bridge over to Vallejo to get across the Carquinez Straits.

Maxwell: So you got involved—obviously the FCC made a big decision that changed everything—who owned whom for what reason. So you got involved with the California Cable Association pretty early, I bet.

Goddard: Yes, it would have been in the early Seventies and I went through various officer positions with the Association and working with Walter Kaitz.

Maxwell: Walter was a force of nature for the cable industry in California.

Goddard: Absolutely. And I considered Walter one of my mentors in the industry. I came out of high school, college, biz school and thought I had all the mechanics, but knew nothing about politics and he took me aside and taught me the facts of life about how to be honest and fulfill your obligations to your legislators to succeed. It was a very important element of business besides just selling something to the consumer.

Maxwell: Especially as the cable industry grew in California and became a center. The California Show became a major factor. What about the other personalities as you were growing up through the cable industry in those early years?

Goddard: The other people that I would consider are my mentors would obviously include my father for his entrepreneurial spirit which he passed down to me. Homer Bergren, Scot Bergren’s father. I admired him for the fact that both Scott and I are the same age. We were in our mid-twenties, out of college and he gave us the operational responsibility of these cable systems. Scot managed half the systems and was responsible for all the marketing. I ran the other half of the systems from an operational sense and did all of the financial budgeting/controller type work. We were given a huge amount of responsibility and authority at a very young age and it was a wonderful learning experience on the job.

Maxwell: Do you remember any mistakes?

Goddard: There were lots of mistakes. We won’t go into those.

Maxwell: Fair enough. In those early days of the industry—it started in the Fifties, you’re doing this in the Sixties and early Seventies. What were the things that were really serious problems that had to be overcome by the industry?

Goddard: I think probably as a category, rather than individual events, I would consider it critical for the cable industry to establish its First Amendment rights. This would have covered everything from a compulsory copyright license to the Second FCC Report and Order which placed all kinds of restrictions on the industry in terms of importation of distant signals, warehousing, movie product, prohibiting pay cable—all these items. These were eventually overcome through a series of court cases and legislation. But it was a long, slow, gradual process earning our ability to be true First Amendment speakers.

Maxwell: If I remember right, there was the freeze in the Sixties—1966, was it?

Goddard: 1968—I think the FCC froze expansion of cable systems in the top 100 markets.

Maxwell: And that didn’t loosen until the early Seventies?

Goddard: I think about 1972.

Maxwell: 1972 or so. There was a Report and Order then that I remember. The process then wound up resulting in—because there was no copyright at that time...

Goddard: No, copyright was in 1976.

Maxwell: That was a large industry argument. It had two sides of it. One to gain that right to pay copyright in order to take away a whole bunch of other problems. How did the fight go within the industry?

Goddard: I don’t have a total recall of that but as you said, it was a fight in the industry and I think the most important part, it gave us legitimacy in the marketplace. The people that created the intellectual property were compensated for it. I think that was the most important part of it.

Maxwell: That was a huge step forward at that time. In all of this era of making more viewers for broadcasters, what was the relationship between the early cable companies and the broadcasters?

Goddard: Must-carry was probably the biggest issue and also syndicated exclusivity. The local broadcasters obviously wanted access—particularly the weaker stations. It didn’t so much involve the three major networks and then Fox and PBS. I mean, everybody wanted those signals but the smaller UHF stations obviously were very desirous to have parallel access to the cable industry and to the cable subscribers.

Maxwell: Which brings us to the point of content was so important and the big three networks and whatever else you could get. It wasn’t until the late Seventies or so that programming became part of this business. What was it like when the first guys knocked on your door to get carriage for something different?

Goddard: I can remember when ESPN used to pay us for carriage.

Maxwell: It was a dime, wasn’t it?

Goddard: I think it was a couple of cents a customer. But obviously the advent of non-broadcasting independent programming allowed the industry to build into the major metropolitan markets that had good off-air reception. So it provided an element of exclusivity and diversity for viewership that drove the ability to drive subscriber penetration to pay for the construction of the systems. As the technological capacity of the industry expanded in terms of channel capacity, the programming side of the business came along to fill that need and to be able to drive demand and penetration in the major markets.

Maxwell: Which was interesting because it then let companies like Viacom, which was then spun off of CBS because of vertical integration, to vertically integrate.

Goddard: Right.

Maxwell: And to create different kinds of programming.

Goddard: Viacom eventually did buy CBS later and then spun it off.

Maxwell: And then spun it off again.

Goddard: But now they’re talking about buying it again.

Maxwell: Yes, they are. But that has to go by Sumner first, of course. So as you continued to be promoted within the company, what were some of the accomplishments that you were part of that helped shape the industry today?

Goddard: I think probably the one that is the most important to me would be the rebuilds of our cable system in Castro Valley. We had purchased that cable system as a dual cable system. It was basically a total wreck and we decided to rebuild it and we decided to do some limited experimentation and the two things we did in this cable system, which would have been in 1994, was we provided high-speed data and the StarSight electronic programming guide. What amazed me when we installed the high-speed data into homes and into libraries and schools and watching the consumer experience and watching the experience of people in libraries was how fascinated and how pleased people were with the accessibility of speed. Before that, everybody talked about, what? 250 kilobits a second? We were talking megabits per second. And this experiment in Castro Valley predates @Home and Roadrunner, but it was the first step and proving to the industry and a lot of people and CableLabs that there was a real business in high-speed data. There was a real need to be filled.

Maxwell: That was a significant step. That changed from dialup to access to the AOLs and the Compuserve, if you remember some of those businesses.

Goddard: And then CableLabs’ efforts to standardize the DOCSIS modems so that if you were a customer, you could take your cable modem with you if you moved to San Francisco to Manhattan and went from Viacom to Time Warner.

Maxwell: Or whomever.

Goddard: Whomever, yes.

Maxwell: So you were involved in CableLabs from its beginning.

Goddard: Yes.

Maxwell: Tell us a little bit about what that was like from an industry consortium getting started. It’s the one that worked.

Goddard: It worked, not without its battles, which would be expected. But Dick Green was the first president and he just did an absolute outstanding job maintaining peace in the valley between the competitive players in the industry, particularly the large operators and the small operators. And really driving the culture of standardization so that the industry could compete with scale in terms of cost of equipment and manufacturing. I spent a good deal of time with CableLabs even after I formally left the industry as an operator at Viacom when Viacom was sold. I stayed on their audit committee until a couple of years ago.

Maxwell: And it’s now doing the next steps in that technological standardization. So in the beginning you just connected the cable to the TV. And then set-top boxes came along. Then set-top boxes have changed radically. Can you take us through some of the development of that you got to implement?

Goddard: We tried a lot of different set-top boxes and I guess what you could say when you’re on the cutting edge of technology, sometimes you get cut.

Maxwell: Right. That’s true.

Goddard: I don’t want to go into the names of the specific manufacturers...but obviously they served to expand channel capacity over the tuner of the TV set and then they also added the feature of scrambling or encoding so the programming could be secure. Those were the major benefits.

Maxwell: Theft was a big problem in some of cable’s early days of people creating their own drops off of the trunk lines running. So the scrambling helped change that part of the business, I imagine.

Goddard: That and traps, but traps were terribly labor-intensive and particularly underground subdivisions, people learned how to take the traps out.

Maxwell: Yes. Pretty easy actually. It’s very easy. Where were some of the people that were peripheral to the industry that had an impact on it? I’m thinking like you talked about being involved with the start of CableLabs. It would up in Boulder County because of the Congressman from Boulder, Tim Wirth. Were there some other players that helped influence how cable developed and grew? I’m thinking like Van Deerlin and C-SPAN, for example.

Goddard: Yes. Van Deerlin was, I think, a good friend of Walter Kaitz over the years and he was very helpful in shepherding probably the first cable act that went through.

Maxwell: He was a California Congressman.

Goddard: Yes, he was from San Diego.

Maxwell: San Diego, right?

Goddard: Right.

Maxwell: And if I remember right, when Brian Lamb wandered in to talk to him, he was very helpful in actually gaining access to the House Floor, which allowed cable to create C-SPAN.

Goddard: They created C-SPAN and now the multiple versions of it, but it was a way for the industry to give something back to society and it opened the door on the legislative process.

Maxwell: That was a big singular accomplishment for the industry over the years and you could get to look at some dark sides of it, I suppose. Other people that you’ve had interactions with. I’m thinking of the guys like that get all the news, like Turner. Characters that have been in this business that made a big impact on the programming side, which you, of course, helped push.

Goddard: Programming is a mixed blessing with me because I worked for a vertically integrated business, Viacom (Vi-a-com), after Sumner bought it. It was “Vee-acom” with Ralph.

Maxwell: I know.

Goddard: There was obvious competition for cash flow and where the money was going to be spent. Do you spend it on bidding and franchising for new cable systems or do you do more programming? Obviously Viacom has had a lot of successful networks.

To talk about Ted Turner a little bit, I have quite a few memories of Ted getting started with Channel 17 and then after that, putting CNN on the satellite. Then after that, buying MGM and getting in...

Maxwell: Over his head.

Goddard: ...deep financial trouble and the memory I have of that event, was that—this would have been 1987, I think, and he ended up selling about 35% of his company. But the meeting that put this all together was HBO’s Super Bowl weekend for all of us affiliates. During this event in the Virgin Islands, a whole bunch of us were shuttled aside to hear Ted make his pitch in two sentences: to start TNT to provide the cable industry another element of exclusivity, and also to buy some stock in his company. That was Ted at his best, being a salesman and that’s the background story of how TNT got started and bailed out Ted and sold interest in his company and it all turned out for the best at that point in time.

Maxwell: And nobody lost, right?

Goddard: No. Everybody made money on that stock. There’s no question about that.

Maxwell: That’s pretty good. So other players in the business, like HBO. Viacom competed with— “Vee-acom” at the time—competed with HBO launching Showtime. And Showtime started in your systems.

Goddard: It started originally in our systems out on Long Island. But Showtime lagged HBO in getting on the satellite and the early versions of Showtime were taped and played back at the headends. So you can imagine the quality control problems, the labor problems and everything else to make that work successfully. It was challenging, but Viacom made the right decision and eventually got on the satellite with everyone else.

Maxwell: That must have been some interesting conversations between the two sides of Viacom at the time. Because it was clear HBO was on the right track.

Goddard: And way ahead.

Maxwell: Ralph Baruch was an interesting person to have worked for.

Goddard: I consider Ralph one of my mentors based on the strength of his personality and character. Ralph—I think most everyone knows came from France just prior to World War II. A real survivor, but has the highest degree of honesty, integrity and competiveness. What I remember most about one of his great successes was actually the HBO suit vs. the FCC, and pay cable. That was one of the First Amendment victories that primed the cable industry with another source of revenue. But Ralph was the real—although it was titled the “HBO Suit”—Ralph was the real industry leader who organized that campaign, that legal battle that the industry won.

Maxwell: Another impact out of the California group that you were part of: when Walter Kaitz died, the industry was quick to rally around an idea of doing something in his honor and created the Kaitz Foundation, of which you were a major part of as it was organized.

Goddard: I was involved then; I was a Kaitz director for a lot of years. At one point in time, I was acting chairman between minority chairmen of the foundation. So I spent a lot of time particularly helping Spencer and the rest of the board pushing that organization along and it’s still doing well. It’s under the auspices of the NCTA now and still has an annual fundraiser every year.

Maxwell: I remember when we all started that. It was my pleasure to be there along with you on all of that stuff.

Goddard: And Ray Joslin.

Maxwell: Right. Very important.

The industry has done an awful lot of giving back, I think. The Kaitz Foundation from diversity and minorities involved in the industry, from the C-SPAN that it created, yet it has a lot of trouble with its audiences, its customers. The cable industry always comes out pretty bad in customer service and things like that, yet it seems to deliver something everybody wants. It’s an interesting conundrum for the business.

Goddard: Absolutely. I would like to think that I would be remembered for my viewpoint on customer service. As you pointed out, it’s a real dilemma. There’s the issue, as we got into pay cable, whether we could sing in the shower and chew gum at the same time, in terms of providing good customer service and getting things done. But the real issue came down to spending the money short-term for hiring enough CSRs, providing enough training vs. the financial community looking at the industry and demanding higher and higher cash flow percentages to drive the stock prices. So this was always a balancing act between do you get the long-term benefit of having happy customers or do you appease the financial community and have the best metrics for today’s stock price. It’s still an ongoing problem today.

Maxwell: One that won’t go away.

Goddard: No, absolutely not.

Maxwell: So from the standpoint of other influences in your career, any other highlights of people you looked up to or argued with or disagreed with?

Goddard: I can’t think of any individual I want to comment on, but I’d like to share one humorous event of my experience in the cable industry. At one point in time, there was a newspaper article in the local paper in Petaluma and the title was something to the effect, “Bugs in the Box Delay Implementation of Pay Cable.” Well, “bugs in the box” was not a technical problem. It was real bugs. Somewhere—and again, I won’t mention the manufacturer—somewhere along the manufacturing process, they were stored or in a bad environment and quite a few of the boxes ended up with cockroaches in them. Unfortunately we installed a few of these boxes in customers’ homes before we realized the problem and obviously we ended up then having to pay for exterminators and overcoming the bad PR...

Maxwell: That would be pretty bad PR. A nice stain on the record there.

Goddard: Yes.

Maxwell: From a social standpoint or societal standpoint, how has cable changed America and the world?

Goddard: I think probably the most important aspect would be its provision of the diversity of voices and speakers. Then in addition to that would be the technological advancements when the industry went digital and high-speed data. I would think those would be the two major areas where the industry has contributed to our society and across the world.

Maxwell: It’s certainly changed how information moves.

Goddard: Yes. And the number of speakers. You would think back to the Fifties and Sixties, we had three networks and maybe PBS. We had a very, very closed entertainment society and very few voices.

Maxwell: That’s true; very few. Although there were more newspapers then and there are fewer of those today. But it’s an interesting point about the voices. Now it’s cacophony instead of the pipeline of just the three. And it wasn’t until the Fifties really that they even began—the late Fifties really—till they began serious news coverage.

What do you hope your personal legacy from being in the business will be, or do you think about that much?

Goddard: I don’t think of that a lot. I think probably the experiment that we ran in Castro Valley...

Maxwell: It helped jump start the whole data...

Goddard: The whole high-speed data situation. And also my commitment to customer service and being willing to spend a little more money and sacrifice current cash flow.

Maxwell: And pay for exterminators.

Goddard: And pay for exterminators.

Maxwell: What’s up next for cable? We’ve watched it change—I mean, from your first experience, were you twelve-channel in the systems you built in Crockett?

Goddard: Those were twenty channels.

Maxwell: Twenty channels. OK.

Goddard: Well, I think going forward, the challenge for the cable industry is to avoid the creative destruction of other technologies. You kind of touched on it when you mentioned newspapers. We have seen high-speed data have a significant impact on the number of newspapers. But the other important area there is the quality of journalism. I think the same challenge is going to exist for the cable industry when it comes to avoiding cozy capitalism and legislation and regulation. Specifically in today’s terms, making cable a public utility or a utility. I think we have—the industry has to be prepared to defend itself so they can maintain the quality of the programming that’s provided. If the industry gets fractionalized between the programmers and the operators and the revenue streams get disrupted, that’s ultimately going to affect the quality of the programming that the public receives.

Maxwell: It’s an interesting point. Cable has grown and developed and shifted so that it’s far more than just connecting that television like you did in Crockett and the other town. And that metamorphosis of what it actually does and what each of the companies do, we’re watching right now more consolidation within this and how far can that go?

Goddard: Consolidation is driven on cost scale. And that’s because of the scale of the industry’s competitors. The Amazons, the Netflix and the Googles and all.

Maxwell: So it’s a re-definition of the landscape.

Goddard: It’s a re-definition of the marketplace.

Maxwell: And where’s it going to go?

Goddard: I don’t have an answer to that. I think it’s going to continue to be extremely competitive on all fronts.

Maxwell: On all fronts and all different aspects. So how about the globalization of the business? It’s not just an American thing anymore and it seems to be growing in lots of parts of the world. There’s interesting things stuff happening in Europe, for example, and in China.

Goddard: Obviously Liberty Global has done very well in Europe and they’ve been at the forefront of a lot of technological changes in high-speed data faster than exists here and many places in the United States.

Maxwell: And all those things will keep growing, I presume.

Goddard: Hopefully, yes.

Maxwell: So you’re still playing any part of the cable industry?

Goddard: My tenure in the cable industry is coming to a decline in a couple of months. I'm still on the board of BendBroadband, the Tykeson family company in Bend, Oregon. That company was recently entered into contract to sell and that will close in early September and that will be the end of my active day-to-day participation and involvement in the cable industry.

Maxwell: So it’s been a pretty long career from pre-high school...

Goddard: Right, like 1956, 1957 to 2014.

Maxwell: So a nice long trip. What’s next?

Goddard: A lot of duck hunting, a lot of skiing and a lot of fishing.

Maxwell: Good, thanks. We appreciate your time and appreciate the conversation.

Goddard: Thank you.

Maxwell: Thank you.

END OF INTERVIEW

'

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Madie Gustafson

Madie Gustafson

Interview Date: Thursday October 6, 2005
Interview Location: Denver, CO USA
Interviewer: Kristin Van Ormer
Collection: Share Your History Collection
Note: Audio only

GUSTAFSON: My name is Madie Gustafson and at the end of my career with cable companies I was Senior Vice-President of Government Affairs and Franchising for AT&T Broadband, but how I got in the industry was really enormous, wonderful luck.

I had graduated from law school in 1981 and went to work for Holme, Roberts and Owen thinking I'd be an oil and gas lawyer and after a year doing actual coal work instead of oil and gas work, I was transferred into the corporate department and grabbed by Dean Salter who was the partner in charge of the United Cable Television Corporation account and for a period of about four years I did cable work from a transactional basis. I did deals, I did stock offerings, I did acquisitions, I did sales, I did limited partnerships, and in 1986 United Cable approached me and said, "Would you like to come in-house at United Cable and be an attorney for us?" and one of the things I'll never forget is going in for that interview with Gene Schneider and Gene said to me, "Madie, why would you want to leave the most prestigious law firm in Denver to come in-house with us?" I said, "Gene, I have sons that are 1 and 4. I don't ever see them. I work 24 hours a day, seven days a week doing your various transactions and I don't get to see my kids." Gene looked at me and said, "A mom needs to be with her kids." So the deal that we struck was that I would come to United Cable and I didn't have to work nights and weekends unless it was an emergency and it was a great gift to me and it was a great gift to my sons, and Gene's word held true until 1988 when United Artists decided to acquire United Cable Television Corporation and I was in charge of obtaining the regulatory consents for that process.

1989 is when the transaction was completed and I ended up at United Artists with Marvin Jones who was the CEO of United Artists Cable. A wonderful group of people from Daniels, great people from ATC, great people from TCI and United Artists was about the most fun of any place that I've ever been at in my life. It was a great organization. One of my fond memories from United Artists days was a meeting that Marvin had for all of the managers and the senior staff people up at Keystone and Marvin had just taken up golf and was obviously not a very good golfer and the system manager from Grand Junction finally said to him, "You know, Marvin, I really admire your sense of calm because if I played golf as badly as you do I think I'd be throwing my clubs." And Marvin said, and it's something that I remember often, he said, "I'm a new golfer. Anger is a function of expectations. It is not appropriate for me to have expectations at this stage of my development as a golfer." That statement of Marvin's has made me go back so many times to think when I get angry about something, what's my expectation here, and is that expectation an appropriate expectation that's led to my anger? So it's one of my favorite stories and one of my favorite things to remember about Marvin.

United Artists was bought by TCI in 1991. TCI had owned a piece of United Artists, but TCI acquired all of United Artists in 1991 and that was a difficult transition for me because I was general counsel of United Artists Cable Systems and I became a staff attorney at the much larger TCI, but it was also a great opportunity to work with new people and develop new areas of expertise and at TCI I was really asked to focus on government affairs and franchising – franchise transfers, franchise renewals, franchise compliance – everything related to that contract between a cable company and a particular operator. I became known in my career as the "Queen of Transfers". I oversaw more transfers of franchises from one company to another then anybody else in the industry and while being "Queen of Transfers" is not a great title, it does give one an opportunity to be a queen and it does give one an opportunity to develop an expertise in a critical area of cable because cable could not do the transactions that it did unless it got consents for the transfer process from the cities.

So what was the single most significant accomplishment that I made that's helped shape the cable industry? The most significant thing that really happened to me is that I was introduced to WIC – Women in Cable, now Women in Cable and Telecommunications –and up to that time I had not met many women in the cable industry. I kind of felt like the Lone Ranger at United Cable. There were some women in the marketing department but certainly not in most of the departments at United Cable and I was introduced to women at the Betsy Magness Seminar and these women absolutely shaped my career – many of them remain lifelong friends today. I was put in charge of running the Betsy Magness Seminar for several years, and then through that was very instrumental in getting Bob and Sharon Magness to contribute the money to Women in Cable to create the Betsy Magness Leadership Institute and in fact I flew back to Chicago with Bob and Sharon when they made the $100,000 contribution to WICT that funded the Betsy Magness Leadership Institute and I think it's had a profound and wonderful effect on the industry and on the women who have had the privilege of participating in the Betsy Magness program.

The challenges? Well, my view of the challenges obviously comes from the challenges that I got to deal with and the challenges that I got to deal with were the regulatory challenges for cable. Unlike telephone or unlike broadcast, cable was regulated at the local level and we were required by federal law to have a franchise with each community that we served and that gave the cities enormous power and authority over all aspects of our operations and it was always a challenge to both keep on very good relationships to the extent possible with the communities so that we could run our business the way that we needed to run it, to challenge the communities when we thought that they were overstepping their appropriate regulatory boundaries, to spur the corporation on, to deal with the complaints of the cities because we knew that those complaints would lead to more and more regulation if they weren't taken care of, and those were always the challenges with which I had to deal in an industry for the most part that resented being regulated at the local level and I understand that resentment. In 1993 when Bell Atlantic was talking about selling TCI, the telephone company didn't know what a franchise looked like and they came to my office and said, "Well, we want to see what these franchises look like," and I gave them a one-page letter from a mayor in Pennsylvania dated 1948 that said, "You can use my right-of-ways to provide cable." And I said to them, "This is my very favorite kind of franchise. It allows us to use the rights-of-way and it doesn't regulate us and it doesn't have a term of use, but unfortunately most of our franchises don't look like that." Today I've just finished negotiation on behalf of Adelphia and I just finished negotiation on an 80-page franchise and a 90-page enabling ordinance and that's what's happened in the process is that the franchises have become more complicated. The cities are trying to regulate much more then they used to in the past and that is a constant challenge for the cable industry. AT&T bought TCI in 1998. The deal closed in 1999 and I spent most of 1998 and a good part of 1999 getting the consents. We had to get consents from over a thousand communities for the AT&T/TCI merger and in that process the city of Portland decided to require TCI and AT&T to allow non-discriminatory access by all ISPs, an issue that the industry called forced access and an issue that our competitors, who had the much better term, called open-access, and that was one of the greatest challenges that we had to overcome to try and get those consents and try and stop the proliferation of the lawsuits such as the Portland decision because of cities deciding that they wanted to regulate cable as a common carrier.

The greatest success of the industry? What do I attribute the greatest success to? You know, everybody's greatest strength is their greatest weakness and the greatest strength of the cable industry was its entrepreneurial spirit, its willingness to make decisions and what we at TCI sometimes called the "ready, fire, aim" nature of the industry. You'd fire and then afterwards you'd look at it and go, "Oh, I could have aimed a little better," but you moved, you know, and it was just an extraordinary ability of cable companies to make decisions and move on a dime that I think has contributed to their success and they made mistakes – of course they made mistakes – but the momentum was more important ultimately than the mistakes and the momentum is what has led the industry to the extraordinary technological improvements – digital cable, high-speed internet access, the proliferation of programming and the enormous diversity of voices that cable provides to the American public. So its greatest strength was its ability to make unbelievably quick decisions on a moment's notice and it was also its greatest weakness but I think the strengths outweighed the weakness.

Let's see... do I feel that the cable industry has had a societal impact through the wealth of programming content? You know, absolutely. If you go back and look at the framers of the Constitution and what Madison, for example, who put the First Amendment into the Constitution wanted, they wanted the First Amendment to serve and the communication industry to serve as a basis for a wide variety of public discourse and a wide variety of voices and opinions so that the public would be more informed, more able to participate in this wonderful new democracy that was created by our founders, and cable has contributed enormously to that diversity of voice and to the fact that we have an informed electorate, informed citizens, people who can choose the wonderful programming on C-SPAN to see actually government in action, or the news programming from CNN or MSNBC, or the entertainment that's available from so many different programs and the fact that we have programs that appeal to just a particular interest. So I think that the diversity of programming and what it has done for the public has certainly been the greatest and most enduring legacy of the cable industry.

My personal legacy? Well, I don't know if I have a personal legacy other than being the queen of transfers. I think that in the industry I was widely regarded as trying to create bridges with the local franchising authorities in order to have cable operate its business the way it wanted. I took time to educate cities about our business and why we needed to make the decisions that we needed. I think the cable industry always saw me as fair but trying to understand, perhaps, the cities' side too much and the cities saw me as fair but certainly understanding the cable position way too much. So given that both of them thought I was fair and both of them thought I was a pretty fierce advocate for the other side, I think that's a pretty balanced view of how I was regarded in the industry.

So what am I doing now after AT&T acquired TCI in 1999? I had an opportunity to leave the industry in 2000 when AT&T acquired Media One and my energy to be a transfer queen had just been exhausted, and so I took some time off to be with my younger son. Both my sons hadn't seen a lot of me during the AT&T/TCI merger, but my older son was in college and my younger son was just starting public high school and I had an opportunity to be with him. Cole Raywid and Braverman, the greatest law firm in the communications industry, approached me and said, "Would you like to work with us?" and I said "There isn't a group of people I'd be more privileged to work with," so since 2001 I have been a partner in Cole Raywid and Braverman. I am their Denver office. I am a solo office. I work in my home and I have a wonderful group of clients – Adelphi and Comcast and Charter are my primary clients – and I do the things for them that I have always done well, which is franchise transfers and franchise renewal and franchise compliance, but I also have had the privilege to do my greatest love which is training. I have done a lot of training for Adelphia and a lot of training for Charter and it is truly what I enjoy more than anything else, so I am not out of the industry yet, I am just one of those outside counsel people, but I had an absolutely wonderful, wonderful 16 years within the industry and I'm not out yet.

VAN ORMER: Madie, what kind of training do you do?

GUSTAFSON: I do training on all of the issues relating to franchising, so I train on how to do negotiations, negotiation skills. I train on what are the appropriate ways to accomplish a franchise renewal, what are the issues that are important to cities, what are the issues that are important o operators, what's the law behind it, what's the business basis for taking a particular position, what would be the effect on the operations of the system if you agree to one provision over another provision. So that's basically the kind of training that I do. Operational, franchising, negotiation skills – that's the kind of training that I do.

VAN ORMER: Madie, thank you so much for sharing your experience in the cable industry with us today.

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Ken Gunter

Ken Gunter

Interview Date: Tuesday January 15, 1991
Interview Location: Unknown
Interviewer: Robert Allen
Collection: Penn State Collection
Note: Audio Only

ALLEN: I am talking with Ken Gunter and we are going to be talking for the next few hours about your career in the cable business. This interview is part of a series of interviews of pioneers and leaders in the cable television industry being conducted as part of the Oral Histories Program of the National Cable Television Center and Museum at The Pennsylvania State University. I want to thank you for the time that you are making available to us.

GUNTER: It is an honor to be invited.

ALLEN: Let's start back with early days and family. Are you a native Texan?

GUNTER: Yes. I was born in San Angelo, Texas, on September 25, 1933.

ALLEN: And what were your parents' names?

GUNTER: My father was Elma C. Gunter who was born in Bridgeport, Alabama, in 1900. My mother was Cleo Bennett born in Dallas in 1905.

ALLEN: And when did they move to San Angelo?

GUNTER: My mother moved to San Angelo with her parents probably when she was a teenager, maybe as early as grade school. I don't really know for sure. My father came from Alabama with his mother, father, and two brothers in 1913. He was the oldest of three brothers, and was 13 when they arrived in San Angelo. My great-grandfather, W.M. Gunter had come out to Texas and looked around and encouraged his son, my grandfather, to come out and bring his family. There was a lot of dissension in Alabama after the Civil War that still had not settled down by the turn of the century. A lot of the old family from the Gunter clan left Alabama around the turn of the century and the first decade or two thereafter because they were all good businessmen and had been successful entrepreneurs, but the reconstruction days left quite a scar on the South and most of them were interested in looking elsewhere. That is really how they happened to come to Texas.

ALLEN: Texas was then a land of opportunity.

GUNTER: It was to some in Northern Alabama in 1900 or 1910 because the after-effects of the war had been severe, socially and on business.

ALLEN: What kind of business did your family get into when they moved into San Angelo?

GUNTER: My grandfather was probably in his early '40s when he arrived there in 1913. He was actually retired. He had made quite a bit of money in Alabama with his brothers and other relatives running paddle wheel boats on the Tennessee River between Decatur and Chattanooga, and they were basically grain brokers. So when he came to San Angelo - he came there to primarily relocate his family and he didn't really enter into any new business activity on his own after he arrived in Texas except to speculate in some land and real estate. Other than that, he really didn't do much.

ALLEN: And your father?

GUNTER: Well, my father completed public schools in San Angelo and went to Texas A & M, got out about 1924 and came back to San Angelo and went to work He became a part owner of a Goodyear tire dealership and he worked in that partnership for probably six years. Around 1931, he opened his own business nearby and it was basically a retail appliance, white goods, and radio store. He ran that store from 1931 until about the mid '70s. After he formed that, he brought in his two younger brothers, probably in the mid to late '30s. That partnership persisted until about the mid '70s when my father was 75 and the next younger brother was probably around 70.

The youngest of the three younger brothers split away in the early '50s and formed a company called Gunter Wholesale. Gunter Wholesale was wholesaler of the same sort of goods, wholesale electronic parts and electrical supplies. That business actually started in the Gunter Company, which was the name of Dad's business shortly after World War II and did well because there were really no sources of wholesale electronic parts and electrical supplies between Dallas and El Paso. But, due to some differing views of the world and business philosophies, the younger brother took that business about 1952 and moved it six or eight blocks away. It is still there today; however, that particular brother, the last of the three, died this past week at age 78. His name was R. C. Gunter. The middle brother was named William M. Gunter. He died about 1983. My father passed away in 1985.

ALLEN: Was he still active in the business at that time?

GUNTER: No. For a time he was, in order to stay busy I think, and because he liked the business. He created a lot of clientele and good friends in the West Texas area. He continued to operate an appliance operation outside of the building where it had been in San Angelo for 45 years. The reason for this is that it only needed to be a smaller operation because he just wanted a place to kind of come to work everyday and meet friends and sell them something they wanted or just talk about politics and business if that's what they wanted to visit about.

The reason my father left that building was that I needed that building. It has around 27,000 square feet in it. It was a rather large retail operation and after we opened the first cable company there in 1958, that business expanded from a local cable TV company which took its cash receipts in over the appliance company retail trade counter. It had no front. It was really a room in a back office of an appliance store. By the time my father was ready to close that retail business, the cable company had practically crowded the appliance operation out of the building because now the local company had grown significantly. By that time our original cable company had merged with friends in Florida and formed International Cablevision, gone public, and around 1969 we merged with Bob Rosencrans and his associates and formed a company called Columbia Cable Systems. We then had not only the local company in that building; we had divisional offices growing up in that building. I was always the head of engineering for International and for Columbia when we merged the two companies. Not only were we competing with the local company for space, we had divisional and corporate offices there. By the time my father left that building in 1975, I would say the cable company had moved from a back room into probably two-thirds of the building.

ALLEN: Was you father active in setting up the original cable company in San Angelo?

GUNTER: Yes, that is an interesting story. My father was the original and only Magnavox, Zenith, RCA television dealer in San Angelo for many years. He had gone to a Magnavox meeting in San Antonio somewhere around 1956 and a lot of the Texas Magnavox dealers were complaining that they were not meeting their targets for television sales. They blamed it primarily on the lack of good diverse television channel choice. It just wasn't available in a lot of small towns in the mid '50s. One of the fellows stood up and remarked that he was from Tyler, Texas, and that a cable television company in those days, which I am sure was then referred to as a community antenna television company, had been built in Tyler by some businessmen. They brought in the Dallas channels to Tyler, which had only one local station, and it had tripled his television retail sales. The conversation went like, "Why don't you people out there who know the electronics business and have television shops and have some technicians, why don't you think about building a cable system in your hometown? Put a big stick outside of the city limits, bring in some over-the-horizon television, pipe it into town and sell that for $5.00 a month like they do in Tyler, Texas. It may not make any money, but it will sure pep up your television sales and probably pay its own way." This was really the way my father began to envision the cable business in the early days. He thought it was a stimulus to retail television set sales.

I was finishing Rice University in the late '50s and I had originally planned to go to medical school because science has always been a first love of mine. By the time I finished Rice in May of 1958 I was pretty burned out on academics. I had also had a little opportunity to spend time with a brother-in-law who was just getting out of medical school in those days. I worked with him with scrub suits on in Parkland Hospital in Dallas. Rice University made it possible for a lot of us that were aiming towards medical school to spend time working the emergency room and other wards of the City County Hospital in Houston and also Hermann Hospital in Houston, to give us some hands-on experience and see if this is really what we loved as much as we thought. I found that I really didn't like dealing directly with blood, gore and sick distressed people as much as I thought I would. I thought for a time I might go to medical school and then come out maybe as a teacher or maybe go into research, but really by the time I was ready to graduate from Rice in 1958, I was not sure what I wanted to do in the way of medicine.

So, on a trip home probably around Easter, Dad had already begun to talk to a local two-way radio operator that he knew there (that was really the only two-way radio shop common carrier in town) - an old friend of his. They didn't know much about what they were doing. But at least they had some beginnings to discuss what it would take to build a four or five hundred foot tower out of San Angelo, run the cables into town, and build some distribution lines up and down the streets and alleys. By the time I got out of Rice and I realized that Dad wanted to do this and was getting serious; I decided that was what I would do. I never wanted to come back to retailing. I don't think I would have liked retailing for some of the same reasons that I don't believe I would have been a good medical practitioner. So when it became obvious I was interested, Dad encouraged me to come home and join him and that is when we began to build the system.

ALLEN: Had you worked in the appliance store before you went to Rice?

GUNTER: Oh, sure. In the early years, in high school, and summers between college sessions, I worked in the appliance store a lot, not doing as much of sales floor work as my father and uncle. I was primarily back in the radio and television repair areas, or back in the refrigeration and washer/dryer areas. I loved to work on anything mechanical or electronic, so the shops were my favorite part of the appliance store. Not the sales floor.

ALLEN: Do you remember when you started? What age you were when you started working here?

GUNTER: Well, when I started working there, in a sense that you might call working with the company and doing something of value for the operation, I would say I was probably a junior in high school. But I probably spent more time in the electronic shops of my father's retail appliance as a ham radio operator from between the ages of 10 and 15. I probably spent more hours in the evenings and weekends there than I did all of the time after that until we formed the cable company. I got my ham license when I was about 12 years old, and for a time I was the youngest ham operator in Texas. That also was part of my background that made me realize early on that cable television would probably be something that would use all of the time and study I had put into electronics through ham radio, and I was right. Cable television really uses just about all of the electronic disciplines, everything from coaxial transmission to microwave and now earth stations and computers. So those early days as a ham operator and all the science that I took while in college, although I did not get a science degree, I took all of the physics, chemistry, and biology that I could take in preparation for med school. All of that really had a big impact on what I became in the cable industry.

ALLEN: Did your parents have their heart set on your going to medical school?

GUNTER: No. There was no pressure whatsoever from my mother and father about going to med school. For some reason as a student I didn't really want to become an engineer. I can't really explain this because I liked electronics and communications equipment very much, but I didn't want to become an electrical engineer for some reason. I just thought that my love of science would be best expressed in medicine. But that is a decision that I have never regretted, never looked back on as a mistake of any kind. I didn't belong in the world of medicine and I think I joined a dynamic and growing industry at just the right time. I couldn't have found a more exciting way to apply my love of science and knowledge of communications equipment.

ALLEN: Did your siblings share that interest in ham operating?

GUNTER: No. I have only one sibling, a sister who was five years older and she cared nothing about science or the retail appliance operation. She was out of college and married by the time we opened the cable operation. She died at age 57, about four years ago. She died of leukemia in San Antonio in 1987.

ALLEN: What kinds of activities other than ham radio were you involved in during high school?

GUNTER: I was in the band in the ninth and tenth grade and then I was shamed out of that by some of my more athletic and macho pals. That was supposed to be sissy. That is one of the things that I look back on as a mistake because I always loved music.

ALLEN: What instrument did you play?

GUNTER: I played clarinet in the band and I also had four or five years of piano prior to the time I went to junior high school and I always liked that. I have even fantasized a few times that if I hadn't gone into the business I did, I would have liked to have gone to a high level of musical education.

ALLEN: Have you maintained any performance skills at all?

GUNTER: Unfortunately cable hasn't left the luxury of much time for that.

ALLEN: So when you got out of band, did your friends get you into the athletic program?

GUNTER: No. I didn't really want to play football. I guess I was large enough in those days to have done it, but at that time I was beginning to get progressively myopic and there were no contact lenses in those days, so I really couldn't play football very well. I played a lot of tennis. I played varsity tennis in high school and enjoyed that very much. I kept that up through the years until maybe the last two or three years. It has been more and more difficult to find the time and the schedule and the people to do it. A lot of the people that I used to play with in San Antonio and San Angelo are busy, are gone, moved away and doing other things. It just became such a scheduling hassle that I haven't pursued it recently.

ALLEN: You were obviously a good student in high school if you were going to consider going on to medical school.

GUNTER: Yeah. That is a funny story in itself. San Angelo schools had a good reputation, but I found them rather easy. I didn't really crack many books in high school. I am sure that I graduated in the top 10 to 15 percent of my class. The entry requirements at Rice at that time, and I imagine now, are still pretty high. I really felt that when I went to Rice I would probably burn up the road there too, but I found out that they shifted into different gears down there and I actually was challenged to just make decent grades, much less the Dean's List. I made the Dean's List a couple of times, I think, but I was practically a straight "A" student in high school, and I struggled to make "Bs" and "Cs" at Rice. That's another reason I think that I was burned out academically after I graduated, because it was a challenge. There were some real curve busters in that school, and to stay afloat, not ahead, just afloat, you really had to really work. I think that had a lot to do with not wanting to go to med school. I was ready to do something else.

ALLEN: How did you choose Rice as an institution?

GUNTER: Oh, there was a high school fraternity and one of the sponsors was a Rice alumnus. It was his habit each year to take three or four of what he considered the more appropriate students out of that boy's fraternity and encourage them to go there. He would always put them in his car and just drive them down there and run them through the campus and let them talk to the registrar. I think that was exactly why I picked it. I didn't even apply anywhere else. By the time he got through brainwashing me about what a wonderful place Rice was, I just didn't really consider anything else. My Dad was an "Aggie" as I have said. He didn't pressure me, but I know that he was disappointed that I didn't go to Texas A & M

ALLEN: At least to visit.

GUNTER: I didn't even consider it. That was not something that we ever really talked about seriously, but I know that it was not his preference.

ALLEN: Did you continue playing tennis?

GUNTER: Yes. I did play. I didn't play varsity tennis at college. I did go out for track. I threw the javelin and that was really for a mercenary reason. I was still athletically active and liked staying in shape then as I do now. But the only reason I went out for the Rice track team was to get on the training table at the dormitory mess hall, because they had a lot better food than the rest. . That was my vehicle to get out of the regular chow line over to the training table, the athlete's chow line.

ALLEN: Had you been in track in high school?

GUNTER: No.

ALLEN: Why not tennis in college?

GUNTER: Well, it just took more application than track and I was already feeling the pressure of staying ahead of the academic curve. I felt like to be really good in tennis it would take three or four hours of practice a day, and track, particularly a field like javelin, required a workout and staying in condition, throwing and maybe weight work, but I did that in an hour or an hour and a half in an afternoon. I made the trips with the Rice track team and that was fun too. I made the training table in the chow hall. That was as cheap a price in time that I could pay to make the team, rather the team trips, and to eat with the jocks in the chow hall.

ALLEN: Get some good food?

GUNTER: Uh huh. . Very good.

ALLEN: How big of an institution was Rice at that time in terms of students?

GUNTER: Rice is still small. At the time I enrolled I believe there were 400 freshmen and the entire student body including graduate students was probably not more than 1,700. Today it might have grown to 2,000 or maybe 2,200 including grad students. But, it has a fine campus in the Ivy League tradition and a faculty, I thought at that time that was second to none.

ALLEN: Coeducational?

GUNTER: It was coeducational.

ALLEN: Did you meet your wife at Rice or...

GUNTER: Well, you will have to say which one.

GUNTER: No. I didn't meet anyone that I really had a serious love affair with at Rice. I went with a couple of Houston girls that were not Rice students. I guess I got serious about one or two of those along the way, but nothing ever came of it. But I married my wife after renewing an old acquaintance in San Angelo. She was three or four years behind me in school. I didn't know her that well in public school, but when I came back she had been at TCU for a couple of years and had come back home. I was back and we began to date and decided to get married. Her name was Sandra Freeze and she is the mother of my three children. That marriage lasted around 13 years. After being single again a year and a half, I married Nancy Richey, who is from a rather famous San Angelo family of tennis players. Her father, George Richey, is a wonderful coach. He was the tennis pro at the Houston Country Club for many years and then later at Brook Hollow in Dallas. He retired, I believe, in the mid sixties. I would say 1965 or '66. They came back to San Angelo, which is where he and his two children were born, mainly to work on their professional tennis careers. Cliff and Nancy - I should go back and pick that one up - Nancy was the older sister of Cliff Richey and they were then and I believe still are, the only brother and sister tennis players that have been ranked in the top ten in the United States or in the world. I can't name you another brother and sister team that played contemporarily in the same careers. There may be some that one played, quit and then a sibling later played. So that was a marriage that lasted six and one-half years and involved my traveling with Nancy all over the world to a lot of tennis tournaments. About the time we got married was the first year that the tennis world converted from amateur to professional tennis days. The men were on the way in the late '60s but the women were organized to play professional tennis in about 1970, the year we got married.

ALLEN: Can we touch base then on your three children, as to when they were born and then? Your first marriage took place when?

GUNTER: My first marriage took place November 1955. The first child, my oldest son, was born December of 1956. My daughter, Elizabeth, was born June, 1959, and my youngest son is Kenneth Sloan Gunter Jr. - he goes by the name of Sloan to avoid confusion - was born in 1962. They are spread roughly three years apart.

ALLEN: Are they still in San Angelo?

GUNTER: No. My oldest son Bart graduated from the University of Texas with a BBA and a minor in Engineering, and he went to work for Sammons Cable in Dallas after leaving UT. He worked there several years, took an offer to move to Atlanta to work for Cox Cable and while there he met two friends, one in Marketing and one in Business Management. Those fellows decided to leave Cox about five years ago and form their own local area networking company - that is the business of networking computers. So he has been there for about eight years. Elizabeth, my daughter, is divorced, has three young girls and has recently moved to Taos, New Mexico. She is very artistic. Her mother owns a home up there and they, I believe, are involved in art work. They are probably going to set up their own art dealership up there. Sloan is a graduate of SMU in Business. He is now a stockbroker in San Angelo, but has only recently come back there from Dallas. He grew to like Dallas while he was an undergraduate at SMU. So he is there now and I expect he will be there for a while. He has never married.

ALLEN: Let's go back now to the start of the cable business in San Angelo. Did San Angelo have a television station at all at the time that your father got the idea of putting the system on?

GUNTER: Yes. That is what attracted Dad's attention about the experience of the Tyler Magnavox dealer in the late '50s. We were in a situation very similar to Tyler, Texas. Nothing had happened in San Angelo at that time in the way of cable distribution as it had in Tyler. We had one local VHF station just like Tyler did, and to Dad it seemed a direct comparison between two very similar marketplaces.

ALLEN: That one station was cherry-picking from the three networks, then?

GUNTER: The San Angelo station was cherry-picking in those days. It certainly was, and we had an opportunity to put a tower and office in San Angelo at the four or five hundred foot height range that would pick up Odessa, Midland, Sweetwater, and Abilene, Texas. That was about all that we could get off the air in those days and that is what we began the company with. That was in 1958. It was not until 1964 that we fought our way through the FCC with some business radio microwave licenses and imported three channels from Dallas.

ALLEN: Were you involved in the original engineering of the system?

GUNTER: Yes. I spent most of my time on the technical side of the business because Dad was very much of an autocrat in business. That was not only his first love and best aptitude - it was just his style. His family, his two brothers, and his father were all pretty independent and even secretive in their business management styles. So because he was there, it was fortunate that I was in love with the technical side of the cable at that time because if it hadn't been for that, I think we would have been scrapping about who was in authority in the management area. So he was happy that I was doing the technical work because in those days there really wasn't that much cut and dried engineering information. You had to go out and really do some of this by trial and error.

There were three major vendors in the business. Ameco was big in those days, the Phoenix Company that Bruce Merrill started. Of course Jerrold out of Philadelphia was big, and Entron was a quality producer of CATV hardware in the early '50s to mid '60s. We bought a lot of goods from all three of those companies and we bought cable from various companies, depending upon who was pricing it the best at the time. This was before the aluminum cable days. We were just buying newly manufactured World War II cable sizes such as K-14, RG11, and RG59. Those numbers were World War II MIL numbers. The Tyler, Texas system was built with World War II cable. Some of those systems in the early '50s were built from war surplus sources as opposed to American

manufacturers who were currently making those same coax versions.

So along the way and buying from these three companies primarily - Ameco, Jerrold, and Entron - I met the President of Entron, a fellow named Hank Diambra. A very bright engineer, an ingenious dealmaker and businessman. We were buying pressure taps and some of his tube-type trunk and bridge amplifiers in those days. He had a very nice line of compression fittings for coax which we began to buy because it enabled us to stop soldering the old World War II fittings on poles with soldering irons. Pretty tough in the West Texas wind. During one of his visits out to San Angelo he talked to my father and me around 1960, only a couple or three years after we had gotten into the business, about some friends of his in Florida he wanted us to meet. He thought a way to raise capital in this industry was to go public. My father was very skeptical of all of that talk.

Dad was basically a very bright guy, but he was secretive and somewhat a hip-pocket operator and didn't like delegating authority to too many people. He knew that getting into a larger combine of companies and certainly going public and having FCC reporting requirements would severely impact his personal management style. He was very skeptical about that, but the single VHF that we had in San Angelo at the time and the supplemental stations that we brought in from the area by off-the-air means was a scene that was about to change. There was an NBC affiliate in Abilene that filed for a VHF satellite in San Angelo about the time we were talking to Diambra in 1960 and '61. It looked like, at the time, that it would severely impact our offerings, which were priced at about $5 a month for four channels.

ALLEN: How far away were you pulling signals?

GUNTER: Odessa-Midland, was coming in from about 110 miles, and not so well by the way. That was a pretty long stretch in those days for the kind of preamplifiers and antenna systems that we used. Sweetwater and Abilene were much closer. Because we were north of San Angelo about 15 miles with our original tower site, the Sweetwater-Abilene transmitters were probably no more than 70 miles away. So they came in pretty well. Since Channel 2 - Midland NBC was not so good and susceptible to fading and co-channel, Abilene Channel 9, which had applied for the VHF satellite in San Angelo, was really our big drawing card. So when they applied for that, we realized we had to do something and do it fast to import Dallas, to stay ahead of the off-the-air competition.

ALLEN: Before you go on to that, I assume that you were the one who chose the site for the transmitter or the tower rather.

GUNTER: Yes.

ALLEN: How did you go about doing that? What were some of the computations or figuring that you had to do to select the site?

GUNTER: Well, in those days, I will have to admit to you, I don't think we even knew how to calculate and predict fringe area reception levels. We do it now with frightening accuracy with computers. We could have done it then with available propagation formulas that were in most of the textbooks of the day. But a lot of this was done by other means. We would actually go out with a crank-up, 50 foot mast and run field- tests on different hills or mountains. We did it just that way. The other constraint, of course, is real estate itself. You kind of have to know the rancher or the farmer, believing that he is going to let you put a big, ugly 500-foot tower up on this land and at a reasonable price. So it was a combination of factors; field-testing, known distance from the transmitter sites, and some knowledge of the owner of the land and belief that he would lease it to us if we liked the result of the field test.

ALLEN: How long did it take you to find a good site?

GUNTER: About three months.

ALLEN: A pretty hefty job then?

GUNTER: Yeah. I think we could have cut that time down, but we were still managing the politics of the franchise application in San Angelo. We knew all the people and the city manager well. It was really rather routine compared to the modem franchise activities that we have all come to know, but we were still putting in all the spare time we had, but we weren't in any big hurry. I think we could have done it in a month or two if we had to and done a thorough job.

ALLEN: Can you tell me something about the process of getting the franchise? Did you have opposition from bidders?

GUNTER: No. There was no opposition. This is the irony and the entertaining part about the cable industry. As late as the ' 50s you could go into a town like San Angelo, which was then a population of 65 thousand, and the mayor, the city council and the city manager might have only recently heard of what cable television had done in a neighboring town from another manager or a mayor.

There was little or nothing about it in the trade publications of city governments in those days, and darn little coverage in newspapers. It made the franchising process really a snap. If you went into the city council chamber as a known quantity, as we were in San Angelo in those days with my family being there many years, it wasn't something that they were afraid to risk. You would walk in and say, "We want a franchise that permits us to use the city streets and alleyways. We are going to rent some telephone power poles and string these lines up and down the alleys and hook up some people and bring in some more TV stations. Really, the reaction was usually enthusiastic. "When are you going to do it and what is a franchise supposed to say?" were the only questions. So we would get together and just flesh out a franchise with the city attorney and it would read almost the way we wanted it to read.

ALLEN: Was there any payment to the city for the franchise?

GUNTER: In those days and probably persisting until now, the typical utility franchise rate in Texas that was paid to cities was around 2 percent, and so for lack of any other number, they just applied the 2 percent franchise tax to most of us. There have been some cable systems that have paid no franchise fee for the first period of the franchise.

ALLEN: The local television station operator didn't get concerned over your bringing other stations in?

GUNTER: Yes. They saw this as fractionalizing their market, and rightly so. They did argue the point, but fortunately for us, the owner-publisher of the local newspaper was a very powerful and influential man named Houston Harte, the founder of Harte-Hanks Communications. San Angelo was his home. He was a friend of my father's and he happened to own either a large share or perhaps control of the broadcasting company that owned Channel 8 in San Angelo. He soon owned a little stock in our company. It was a little bit of a smoke-filled room deal that was struck between him and my father. I think he had a little bit of our stock, which we later bought back, to calm down his local television station manager and cause him to withdraw any complaints at the city commission.

End of Tape 1, Side A

ALLEN: This is Tuesday the 15th day of January, 1991, and this is Side B of Tape 1 interview with Ken Gunter. We just finished talking about the franchising process and the fact that your family had been able, through its connections in San Angelo, to get the franchise. You had mentioned earlier that you had talked to both Ameco and Jerrold in addition to Entron. Did you buy most of the equipment from Entron or were you buying equipment from all three companies?

GUNTER: Well, that is a two step answer. To begin with, the two-way radio common carrier personality that I mentioned, whom Dad had spoken to earlier about the feasibility of this...

ALLEN: Do you have a name?

GUNTER: His name was Wilbur Anderson. He was really "Mr. Electronics" in San Angelo in the '20s, '30s, and '40s. He kind of grew up around Dad and some of his associates, so he was the first fellow that Dad went to. Wilbur Anderson was a very nice and creative man, and he was also a fellow that grew up in the depression years. He was used to poorboying everything he did to make it pay. His instinct was always to see what he could do to cut corners and even build it himself. He, too, was a ham operator in San Angelo probably from boyhood into his career in business. First of all he loved to save the bucks by cutting out a middleman here and there. He always loved the creativity of building things and making them work. So he convinced my Dad that we shouldn't buy any electronic goods from any of those manufacturers for the first two years.

Now this is what I walked into when I came home from college. I, too, liked to build things, but I had a little more commercial view of this company than that. I realized that if nothing else, it would cause a delay in construction because he could build them just so fast. Nevertheless, my Dad bought the idea that we should be building our own amplifiers and we did. We built our own line of amplifiers in Wilbur Anderson's shop for the first two years. But, it became obvious after a couple of years of operation when we had already strung maybe 50 miles of coax that these amplifiers were ill-conceived and had no automatic gain control. Anderson began to do the best he could to bootstrap those amplifiers with some afterthought circuitry to control the gain due to thermal changes in the cable. We were able to at least make it work well enough to get pictures into the initial 500 to 1,000 homes, but it became apparent real soon that we would not be able to keep on expanding and deepening the cascades without any automatic gain control

Anderson continued to say to my father that he would solve the problem and Dad just said, 'Well I am putting the money into this deal and we are going to have to go out and find some way to really stop this now. We don't want this company to get a bad reputation for poor or marginal quality in its early days." Then he let me go out and see Ameco, Jerrold, and Entron and buy some intermediate stations which had AGC. AGC until very recently was probably not put in every station. I recall in those days AGC was put in every third trunk station. So I was allowed to go out and buy commercially built AGC trunk amplifiers to interweave into our existing trunk just to stabilize our homemade distribution amplifiers. Other disagreements about quality and professionalism led to Anderson's leaving. He had some stock in the company which we bought. He also knew by 1961 that we were headed directly into a public company situation, which he didn't want any part of. So, about the time we went public in '61, Anderson had been with us three years and was on the way out. By the time we went public, he had left.

ALLEN: You put your first subscriber on the air in '58 then?

GUNTER: Yes.

ALLEN: And how rapidly did the system grow?

GUNTER: As rapidly as we could build homemade amplifiers in Anderson's shop, buy cable, and contract with moonlighting utility employees, power company employees and a few telephone employees to string the cable.

ALLEN: So, sales was not a problem?

GUNTER: No. There was a lot of clamor in town for the four channels that we had to offer. That was not a problem. In those days I think we correctly headed for the affluent side of town first. Cable had a reputation in all of these towns for being so desirable because it was worth $5 a month. I don't think that most cable operators really went to a generalized distribution plan in their franchised areas until maybe the mid '60s or later. We always thought the place to go was "silk-stocking row," and it really was in terms of default sales. Those people just called you up and said, 'Whenever it gets here just hook me up." We didn't even send a salesman out there to knock on the door. Yet we found out in not too many years that the blue collars in the town were just as eager for good television.

ALLEN: Did you have a fairly substantial hook up fee?

GUNTER: In those days we did. In Texas in the mid '50s many cable operators were charging anywhere from $100 to $150 to hook up to cable. That was a lot of money in 1960 dollars. Part of that idea, of course, was to amortize quickly the capital cost of getting the cable distribution plant in that town because the risk factor of cable was unknown. A lot of this was at the behest of the bankers themselves who wanted to get some of that money up front. Later when that seemed to be such a worrisome factor in the financial side of cable, I think Texas cable operators I knew, and to some extent our operation, began to realize that it was best to keep the connection fee high because it was a trading chip. We were prepared to give it up by the early '60s and we later reduced our hook up fee to around $35, but we were charging $50 to $75 in the early years and used that trading chip to trade the rooftop antennas for the hookup fee.

Some people had spent a lot of money for an antenna and they wanted to see something come back. Part of the impasse you would find in talking with some of the more careful buyers was that "Gee, I just put up this 50 foot mast and a rotator to try to get some pictures from Midland and Abilene over the horizon when they come in and maybe a little Dallas on a cloudy day. I just put this up and I am just going to use this for awhile and see how it does. Then maybe when it's worn out or breaks, I will buy a cable hookup." So we would use the high hookup fee to go and say we will take your entire antenna and tear it down for you and we will take it on trade so that it will cost you zero to hook up. So, I believe long after high cable hookup fees were justifiable, they persisted largely as a means of trading out those antennas and getting them down. We just took them to the scrap heap.

ALLEN: Were there quite a few other cable systems in operation by the time you started in Texas?

GUNTER: I'm betting that there were not more than half a dozen towns the size of San Angelo or Tyler with cable systems by '57 or '58. The smaller and more remote the town, the more necessary it was to get some over-the-horizon TV. So the smaller town systems, let's say 2,000 to 10,000 in that range, were proliferating rapidly. In 1958 there were not more than four dozen total cable systems operating in all of Texas.

ALLEN: Was there a Texas association at that time or was it formed after you began building San Angelo?

GUNTER: Yes. I went to the first Texas Cable Television Association meeting, the formative meeting, at the Sheraton Hotel in Dallas, Texas. I believe the year was 1960.

ALLEN: Did you have any trouble with the telephone company or the power company on getting pole rights?

GUNTER: In the early days, the joint-use agreements really came pretty easy to cable operators. I don't think we had any disputes with the power companies. General Telephone was becoming active in San Angelo in those days. They were really not difficult to deal with, nor was the price high. I think it was around $1.50 a pole in those days and stayed there for many years. Power companies have never really been aggressive in dealing with cable companies. The telcos began to realize that we were a fledgling industry that was headed towards a much more general telecommunications role in the world than just distributing some over-the-horizon fringe area TV. In the late '60s, I was approached several times by General Telephone of the Southwest, whose headquarters had coincidentally been located in San Angelo. Their corporate group wanted to get into the cable business. We were approached several times to let them come in. They were old San Angelo people and their big corporate headquarters were there. We were the cable company and it would be great if we had some kind of joint venture. Of course, when they began to put a pencil to it and quote us unit costs of lease-back prices that would take the top of your head off, nothing ever came of it.

ALLEN: Would you want to explain what they were talking about in terms of lease-back?

GUNTER: What they wanted to do was to mainly gain control and keep control of anything that carried pictures or voice down a piece of wire. I think the telephone companies since their inception have felt that if anything that transmitted information was getting into their nest, and it wasn't controlled or operated by them in some way, it was a potential problem. They didn't seem to be too self-assured about getting directly into cable television. They simply felt that if they built the distribution plant for us, maintained it for us, and leased its capacity and let us operate the retail sales, marketing side and billing collection side of the cable business, they would always have possession and ultimate control of that piece of wire for other purposes. I think that that instinct was insightful and I don't disagree with it.

ALLEN: If you had been a telephone man, you would have had the same idea?

GUNTER: If I had a telephone background and I had been sitting where they were, I think I would have begun to have the same fear that this is an embryonic business that is going to eventually pull up alongside and maybe pass us if we are not careful. We ought to find a way to get into it. Obviously, of course, that is correct. We are eventually going to either pull up alongside or pass them and certainly the rivers are going to merge in the '90s or in the first part of the next century. That argument and debate is still going on today as to how those rivers - what that confluence will look like when those rivers do merge. I predict now that some of the fellows in San Angelo that were friends of mine at General Telephone - had well-founded fears that the cable industry would be a major competitor some day. I really don't think that that has been the ambition of most cable operators. I think we wanted to run our own business separately and to tend our own store and not be aggressive. But, I think we will ultimately have to be that aggressive to protect our own turf. We will have to get into telecommunications in a broader sense to keep the telephone company out of our business.

ALLEN: You went on in '58. When did General approach you about this type of a partnership?

GUNTER: Mid to late '60s.

ALLEN: They were prepared to buy out your physical plant.

GUNTER: Oh, yes. They wanted to buy it and then upgrade it to whatever status we gave them for a contract spec and then quote us a lease-back per month price.

ALLEN: Do you know of any cable operators who entered into that kind of an agreement with the phone company?

GUNTER: I know of some. I am not sure that I can name them for you this afternoon, but yes, there were a couple or three that were undercapitalized and entered into such an agreement. I don't personally know anyone, but I read or heard about some that did a deal with the telcos.

ALLEN: Do you have any idea how it came out?

GUNTER: Most of them fell apart. And even the telcos were glad to get out of the business is my recollection.

ALLEN: How long did it take you to build from San Angelo to where you considered it pretty well built up?

GUNTER: I would say that we didn't catch up with the town as it was when we got the franchise grant until l963.

ALLEN: That's about five years.

GUNTER: It was five years just catching up with the town. It probably had 150 miles of plant and we only built about 40 miles a year on the average for the first four or five years. At that time, in the early '60s, we had been building with the jacketed, braided World War II cables that I mentioned earlier. In the early '60s, Phelps-Dodge brought out a CATV grade cable called "FoamFlex" and it was a revelation to all of us because we really didn't need jacketed cables in most of the cable systems except along the Gulf Coast of Texas or Florida where it was needed to retard any kind of salt corrosion damage to the plant. But, we saw the bare aluminum cable that Phelps-Dodge was building and the generation of fittings that had been developed for it, and immediately began to switch over to it. That resulted in a little delay in the mid '60s when that process began.

There was another thing that retarded the growth of plant in San Angelo and a little neighboring town 35 miles away named Ballinger, Texas, where we had a franchise. It was apparent to me in 1963 that we were about to see a major shift in the entire philosophy of line amplifier design. That was from tube to transistor. There was a lot of debate going on in those days at the trade shows. A lot of us that were in those days spending night and day trying to solve the engineering and technical questions of the industry really began to wonder if its time had not come. One of the things about cable television plant, when it is tube type, is the power consumption is rather high. So high in the early days, we didn't even remote power in the cable as we do now. We actually had a power company meter loop - a meter can and a meter set at each of our amplifier locations. Each one was read and we got a stack of power bills that would fill three or four cigar boxes in San Angelo for a long time. So when we began to see that the growth of the transistor in consumer electronics and in the military and space programs was accelerating rapidly, it was apparent it had to spill over into cable at some point. It looked to me like the crossover point was going to be around the mid '60s. I estimated '65 or later because Jerrold was vehemently against transistorization. In fact, they predicted that it could not be done - that the noise, the inherent noise factor of transistor stages, was too great to work at the levels that we normally ran cable amplifiers. They felt that reliability would be intolerable to the poor resistance of solid state devices to transient damage out in the elements. They had a jillion arguments why their tube line would never be obsolete.

Ameco, the Phoenix Company headed by Bruce Merrill, is the company that said, "'We don't give a damn about any of those arguments, we are going to design some solid state cable television line amplifiers." And they did. I believe I had already planned to build Ballinger, Texas, and build it with Entron tube amplifiers. I had the franchise and was stringing cable when this decision point came. In late 1963, Ameco sold its first generation and first bill of materials of all solid state amplifiers, to a system in Great Falls, Montana. The entire industry was watching it and wondering what was going to happen.

Well, of course, it is one thing to build it, turn it on and set the levels and put pictures through the system. No cable engineer would call that a fair test until he has seen the system endure four seasons of temperature swings and of lightning and power company transient damages. Then he would say the equipment is something we might want to put in our system because it has been there at least a year and we have seen it operate. It's stable thermally. It's stable electronically from a standpoint of environmental damage. I did not wait that year.

I went to Ameco in Phoenix and went through the factory and talked to two or three of the engineers out there who had designed this amplifier, and decided that it was worth the risk because I only had 18 miles of plant in Ballinger, Texas, a little Texas city of perhaps 5,000 people. I just decided that it was worth the risk to get our feet wet then. So I bought a complete bill of materials of Ameco solid state amplifiers and put them in Ballinger and it was probably the number two solid state cable system in the industry.

ALLEN: And did you have any start up problems with it, being that new?

GUNTER: Actually it was surprising how little we suffered from that early experience with all solid state amplifiers. I should say in fairness that Great Falls, Montana had problems that we never experienced because they had bought the 12 channel version. In those days, most of the manufacturers were still making all kinds of five channel low band equipment and Ameco made a low band version of that same amplifier that went to Great Falls. I didn't have enough channels to carry. I was just barely starting to engineer the Dallas microwave link. To me it seemed that a five channel system would be the way to start. I made that decision and put in the five channel version of those amplifiers and they were quite stable thermally. We didn't even have that much transient interstage damage problems in Ballinger, Texas. We used those amplifiers probably four years. The only reason that we took them out of Ballinger was because we found we needed more spectrum when we brought Dallas through in 1964, the first year of the Ballinger system turn-on. Those amplifiers were still working the day we took them out four years later and doing a good job. I now believe it was only because they were low band. That seemed to be easier to ensure engineering control in those days.

ALLEN: You also had a little bit of difference between Great Falls and your area in terms of climate.

GUNTER: Absolutely. The temperature swings in Great Falls must have been extremely difficult for an engineer to handle. We have seasonal swings from 100º F down to midwinter temperatures in the teens for a couple of months, but I would imagine that in Great Falls the temperatures were even tougher.

ALLEN: Teens are a spring day in Great Falls.

GUNTER: Oh, sure. There were only two seasons in Montana. I have a ranching friend up there. "There are only two seasons,' he says, 'there is winter and then there is August."

ALLEN: What were the major climate problems that you had, or nature problems

you had? West Texas is famous for wind.

GUNTER: Strangely enough we never had a lot of wind problems in our cable systems. We had more thermal problems. In the old copper braided cables - and those were soldered as I told you - and later compression (applied with compression tools) - those early systems had practically no thermal characteristics of expansion contraction that I could tell. We only began to get into thermal problems with cable and connectors when we went to aluminum. For some reason when we introduced a new cable and generation of fittings we weren't prepared to deal with them. For one thing, we had never put expansion loops in the systems using braided cables. We had to learn to put in expansion loops at least at each amplifier location, and later we learned that we really needed to put expansion-contraction slack at poles along the line. We gradually just cut it down through trial and error really, from each amplifier to every fifth pole, then to every second pole, and finally it just became standard practice to put loops at each pole. The hilarious part about that was we couldn't find any bending tools to form those expansion loops with aluminum cables.

A fellow named Dick Jackson, a contractor from Ohio, actually had some tooled, and we bought those later on. But in the early days I went down and bought wagon wheels. I mean like off of Red Rider kiddie wagons and took the little rubber tires off and we used the "V" shaped or the "U" shaped wheel with no rubber tire on it to form proper loops with aluminum cable. You cannot hand-form aluminum cable because if you do it will usually crinkle inside the radius of the turn. So you have to have something smooth and we tried several configurations. We tried to nail them up to 3/4 inch plywood and bend "U" shaped loops. Then we built some with a wider base. If you drive to San Angelo, Texas today you will see those that were put up in 1974 and '75 with the wagon wheels. I decided that it didn't matter whether they had 4 90º bends as we use today. I thought just a smoothly formed 360 was all you needed.

In fact, they did work, but not very practical. I will tell you why. I got these wagon wheels, and of course we had to have a different size for 3/4 inch cable and another size for the .412 cable because they bent on a minimum radius of the diameter of the cable. We would bend those on this 360 circle which just had a bolt through the hub of the wagon wheel or the wagon wheel was bolted to a piece of strap iron which had a hook that the lineman would hook on the strand just for bracing or support while he bent the cable. Aluminum cable would be cut by the construction crew when they lashed the cable into place and just left crisscrossed at the pole ready for the lineman to bend. We thought this was great for a long time, but in those days we weren't being pressed by the power company too much to observe the National Safety Code clearances between their conductors and ours.

We had a lineman out there one day bending this bare aluminum cable. As he came around and made the 270 point and came back up to finish the top of the loop - the cable was of course pointed vertically at that time - he contacted some of the secondary power on that pole. Fortunately, it did not electrocute him, but fried about two or three pole spans of cable. He had just workman's gloves on, not even rubber gloves. It taught us a big lesson. We hadn't really thought about that being a problem. So, we then began to warn the lineman to just bend the loops at a 45º. Then after that we decided that we really should go to the Jackson Communications die cast tool that he was building. That was quite a period in the history of cable. I have never heard so many arguments at conventions among cable engineers that would gather at various functions about how to properly bend expansion loops on cable.

ALLEN: Who were some of the leading voices in the engineering of cable at that particular time?

GUNTER: Oh, to tell you the truth, at that time I didn't know very many other cable operators that were advancing rapidly and becoming highly professional in cable engineering. Most of the engineering advice and counseling I received in those days and the fellows that I respected most were simply engineers that worked for vendors that we traded with. In those days, of course, the vendor was always happy to make his engineers from the factory or the field offices available to you to come out and see you and argue these points with them

ALLEN: Who were some of the people that come to mind - vendor engineers recognizing that they may jump from company to company?

GUNTER: You know what? This is going to be ridiculous, but I could probably name all three or four, and I will probably go back and check and find out that I am in error.

ALLEN: Do it as best you can now. You are going to get an edit shot at it anyway.

GUNTER: Yeah. I'll have to get an edit shot at it anyway. I'll take a quick crack at it. There was a fellow with Ameco in those days that I loved a lot named Milford Richey, but later he left Ameco and went to Collins Radio. There was another fellow named Rudy Riley who was with Entron that called on us a lot. Hank Diambra, the President of Entron himself was a very bright engineer, a real innovator in the cable industry. He had a chief engineer at Entron in those days names Isadore Lieberman, a darned good design man, although not very strong in field engineering. And Jerrold - I must really work on Jerrold to be accurate.

ALLEN: I gather you didn't buy much from Jerrold at all.

GUNTER: I didn't much in those days. In the later years I did buy a good bit from Jerrold, but at that particular time I was not buying much hardware from Jerrold.

ALLEN: As you were building San Angelo did you go outside the city limits much at all?

GUNTER: No. We came in from the city limits 15 miles north of town and passed houses up and down the lanes that we had chosen for pole routes, but we had our work cut out for us in the city limits in the franchise area. There was no pressure from the franchisor. We didn't even hear from the franchisor for years about anything. But we just went - as I said earlier - to the most affluent sectors first and then began to learn in two or three years that the other sectors were clamoring for it too, but we did very little sales effort. To be accurate about this, I would have to tell you that I don't think the cable operators that I knew, including me, knew enough about cable system economics to play with rarified areas until the late '60s or early '70s. And even now you will see articles in our trade press that still discuss and debate what the minimum homes per mile is that is economical for cable systems.

We are talking about that a lot more and trying to become more innovative as you see while the other systems heat up and compete with us. That was not a big deal in 1958-1965, but it has become one since then. There is pressure from regulators today to wire all areas because they are catching political heat. The problem is that the regulators catch heat when we don't wire certain areas because they are "uneconomical"

ALLEN: So at that point you weren't counting houses?

GUNTER: No. We didn't care. We didn't even think about that. We just knew that we were going to go for the most affluent areas of town first and then trickle downwards from there.

ALLEN: Were you still building San Angelo when you got the second franchise in the small town?

GUNTER: Ballinger?

ALLEN: Yes.

GUNTER: We got the franchise in Ballinger in early '64 and were just getting up to speed in San Angelo in '63 and '64, catching up with construction goals when the franchise was granted and we built Ballinger. Of course, by this time we had already made the deal in 1961 and merged with Florida Cablevision, our sister company, and had gone public under the parent called International Cablevision. I was going over to International in Florida to help with their engineering.

ALLEN: How did that merger come about?

GUNTER: Well, Hank Diambra from Entron was the fellow that came into San Angelo and talked to my Dad and me for a good six months about the merits of raising capital in the public market and getting some visibility where New York banks would recognize what and who we were. At the same time he was doing a turnkey construction job for the Fort Pierce and Vero Beach, Florida group. That was a simultaneous turnkey contract that those businessmen and those franchisees had given to Entron to build.

ALLEN: How far apart were those two cities?

GUNTER: Fort Pierce and Vero Beach at the centers of town are probably 15 to 16 miles apart. They have now met in the middle, of course. Hank was down there building those and I think that he was running into problems as their contractor with prompt payment, which stemmed from their under-capitalization. I think it was in his best interest, and he followed his natural incentive, to promote the marriage of that company, which became our sister company, into the Texas group to form something big enough, something with enough visibility, that could be taken public. At the same time that he was doing that - and the reason for the name, International Cablevision - he had another guy in the Virgin Islands, who was at St. Thomas, interested in joining this consortium and also going public. The idea was of raising money through public stock offerings to improve his baling-wire system - and this was indeed the plan. The only reason that the Virgin Islands system didn't join us in July of '61 in that public offering was because at the last minute the accountants and our SEC lawyer in New York said the guy was so hopelessly overleveraged and his books were so disorderly, that they just didn't want to risk putting it into the offering. It did not read well and the footnotes were getting a little bit dismal, so I think that we jettisoned that one system that gave us the right to call the company International Cablevision.

ALLEN: How did he pick you out of the various cable companies that he must have been working with at the time in addition to the two Florida franchises?

GUNTER: Well, we were one of the first Texas companies that ever bought much hardware from Entron and he also recognized that we had the threat of the then applied for Channel 3 NBC satellite station coming around. It would probably be granted in a year or so and built. We needed to raise some capital to bring in the microwave signals from Dallas to beef up our signal package. My Dad had the money to do this. So in retrospect, I could say subjectively that it was a mistake to have ever gone public. I would rather just own my home San Angelo system today privately. Of course, I wouldn't have met all of the terrific people that I have met and done all of the things that I have done in this business if I would have stayed home, but selfishly speaking, I would still like to own that system. But, Dad would never - he was a conservative businessman - would never have coughed up that much capital to build that microwave system. In fact, we were arguing at the time that Diambra was making his presentations about joining Florida and going public. Dad and I were arguing about should we or should we not put the $300,000 that it was going to take to just buy the towers and five sites and the down payment on the Collins microwave for the Dallas link.

Dad did not like the exposure of that because he still was not that comfortable with the business and wasn't sure of how much impact that NBC channel might have that would put a second network in town. Diambra sensed that. He knew that Dad was flinching at that kind of exposure and cash outlay for the Dallas microwave and he jumped at the chance to tell us that this is the way to keep your stock, go public, and get liquidity with your shares. "We are going to give you guys' shares of the public company for your equity in this Texas group. We are going to give the boys on the East Coast of Florida shares for their equity. We are going to pull all of this and go public and we are going to raise public money and then go to New York banks and borrow the rest, and finish developing Vero Beach-Fort Pierce and start acquiring companies with common stock for currency." That was Hank's game plan. It wasn't too crazy.

ALLEN: So your Dad was really caught in between. He didn't want to go public and he didn't want to invest.

GUNTER: He was really in a dilemma. He did not want the complexity in his life and the intrusion into his private business style that he knew the public company would bring, but also didn't want to take on his own two shoulders the exposure of going forward.

ALLEN: And his brother was still involved at this time?

GUNTER: No. His brother was never involved in the cable company. He was still totally in the appliance business partnership with my father, and my father was still active in that appliance partnership all during these years.

ALLEN: Which side of the issue did you come on in terms of going public or building a microwave link?

GUNTER: I came down heavily on the Diambra side. I liked his arguments that we would grow and become more professional and immediately began to buy equipment that Dad was hedging on such as the microwave and even upgraded trunks and feeders. In those days Dad was feeling his way into the business. I, as a much younger man, thought he was going at a snail's pace and I wanted to speed up, so I was on the side of the public planning company from the beginning.

ALLEN: So this was in the early '60s. You were still in your 20s?

GUNTER: 1960, '61. I was 27 years old.

ALLEN: And the impatience of youth was on your side?

GUNTER: Yes. It was.

ALLEN: Working hard. Did you have models to look at of other cable companies that had gone public?

GUNTER: There were none.

ALLEN: You were the first?

GUNTER: As far as I know. We were told by the investment banking community in New York that they had never heard of any other public cable company or offering. There were companies like Gulf and Western and TelePrompTer and some others that did many other things. Some were even conglomerates that got into the business in the early days, but they were already public, and they just happened to own cable systems. As far as I know, International Cablevision in 1961 was the first public cable offering. So we had no molds or patterns to follow.

ALLEN: How did you finally convince your Dad that that was the route to go?

GUNTER: I don't know if I ever convinced him. I don't know if Hank Diambra ever convinced him. I think he decided it was the path of least resistance and the lesser of two evils. He realized he simply was at the point of no return in the cable investment and he was really not prepared to put up several hundred thousand dollars that it would take to go it alone. He wanted to just take his equity and convert it to the shares in the new company and roll the dice. He was not an uninitiated investor. My Dad was always a heavy stock and bond market participant. He was conservative, but he also loved the risk and the romance of public company investment. That was not new to him at that stage.

ALLEN: How far from completion was Fort Pierce and Vero Beach when you went public?

GUNTER: Well, they were mostly built at this time. They were not totally finished, but the original phases were built in both cities and we had a lot of growth. The East Coast of Florida north of West Palm Beach - that's about halfway between West Palm and Cape Canaveral- that East Coast was growing in jumps in those days and we never really caught up with construction down there. It was always growing.

ALLEN: And who were the officers of the new company?

GUNTER: Hank Diambra was the first President. There were some investors that Hank had met through a common investment banking contact in New York. They were mostly from Ohio. The leader of that group was a fellow named Ralph M LaPorte from Uhrichsville, Ohio. He was a furniture retailer and he put up several hundred thousand dollars of his own money in cash at the advice of this investment banker who knew Diambra. He was advised to buy early insider shares, priced as shares in International Cablevision, before it actually went to the street and went public. I think it is fair to say that LaPorte was another reason my Dad became comfortable with the International deal because he was another relatively small, family-oriented retailer that just had a personality that Dad liked and trusted.

ALLEN: And you were Vice President of Engineering?

GUNTER: Yes.

End of Tape 1, Side B

ALLEN: As we closed off last night, Ken, we were just talking about the organization of Columbia Cable.

GUNTER: I was first Director of Engineering and later Vice President of Engineering of International prior to the merger with Columbia.

ALLEN: So you were responsible for the engineering activities in San Angelo and also in Florida?

GUNTER: Yes. I spent a lot of time with Ralph LaPorte, who became our President after Diambra.

ALLEN: When did the change take place there?

GUNTER: We should probably talk about that. Hank Diambra, President of Entron, who encouraged the organization of International through his connections with us in Texas and his customers with the turnkey in East Coastal Florida - Vero Beach-Fort Pierce -, became our first President as just a matter of simplicity and ease. The other investor group from Ohio that Mr. LaPorte headed was not fully active in the company at that time.

It turned out that although Diambra was a very bright engineer, a good promoter, and a good corporate planner in many ways, it was sensed from within the International investor group that Diambra had ulterior motives. That probably meant that he would have a conflict of interest, in effect, between his own company, Entron, and the management of the new public cable company that we called International. So he was President for probably only a period of four to six months. Then the board elected Ralph M. LaPorte President and my father Vice-President. At that time, they were consumed with just the financial, marketing and day-to-day operating problems that were related to the company. Neither of them had any real engineering interest or knowledge so the technical and engineering planning fell on my shoulders.

I recall making a lot of trips with them to New York. This is one of the things we skipped over last night that I wanted to be sure to put in. I think it was very interesting. In 1960-62, both just before and just after the public offering - which was, by the way, four to one over-subscribed when sold. It was much easier to sell that issue than we had believed. I'm not sure yet whether it was due to the merits of the issue or the prospects of the company or the fact that we had just run into a pretty good crowd of people in New York. Both the SEC attorney and the investment banker that took the issue did a good job.

I remember very distinctly going to New York City from Texas in the 1960-61 era where Mr. LaPorte, my father and I walked into at least three major New York banks, Chase, Morgan, Chemical - I recall those three. I was astounded that New York bankers really had heard little or nothing about cable television. We weren't talking to fledgling bankers. We were talking to senior loan officers at those banks. They would ask us to explain what our business was all about and what we intended to do. "Well, all we do is put up big towers on the outskirts of population centers, pick up some over-the-horizon signals that can't be picked up with home size antennas, run those cables through the streets and byways of those towns, and hook them up very much like a telephone connection so that they can receive extra pictures. We charge $5 a month typically, in most communities, at this time, for about as many channels - five channels." The reactions were almost uniform, and they had not even heard each other's reaction. It was, "Well, we don't think that business is going to be here very long because, for instance, I live in New Jersey across the Hudson River. I get nine channels over there for nothing. We just don't understand how that business would be much more than a flash in the pan."

So we were turned down, courteously, but emphatically by at least three of the major New York banks during the '60s after repeated visits for explanations of our plans, the marketplaces we had, how we thought they would grow and persevere. I believe the first time I ever heard a banker say anything positive about his willingness to finance a cable venture was probably in the late '60s.

ALLEN: Did one of the New York banks finally become involved in the financing?

GUNTER: Not one of the larger, legitimate banks. We had to go into some much less legitimate sources for money. In fact, I recall that there was a company called National Theater Supply in White Plains, New York that we had some connection with through the investment banking crowd we knew in New York that led us to this fellow. They were primarily in the business of financing theater exhibitors. Mostly small chains or even family owned motion picture exhibition theaters. They didn't finance the production of motion pictures, but the theater business itself - the hardware, the projectors, the screen, and the buildings. They did this on a rather rapacious basis. They would take 40 percent of your equity for the privilege of loaning you money at a high interest rate.

I recall in 1964 and '65, we cut a couple of deals with them and ultimately gave them warrants for 40 percent of our shares in Texas Cablevision - now the old San Angelo-Ballinger Group - just so they would loan us enough money to build the Dallas microwave and about fifty more miles of cable plant. That's how tough it was. We raised only about $1,200,000 net to us in that original, small public offering that the underwriters placed for us.

At the time, however, we had the Tallahassee, Florida franchise. We ran into real severe local financial and political opposition from a broadcaster there named Phipps, who came from a very wealthy family. We ultimately sold to him after building about eighty-five miles of Spencer-Kennedy plant in Tallahassee. But a lot of our money had gone into that and we still had rampant growth on the East coast of Florida to follow with some of these proceeds from the public sale of our stock and what money we could borrow.

ALLEN: So you didn't take any of the money from the public sale to build the Dallas microwave link?

GUNTER: We took some of it. Some of it was earmarked for the Texas microwave and for the extra miles we already needed in San Angelo. But the rest of it went into Florida Cablevision, mostly in Vero Beach-Fort Pierce, and then into our fledgling Tallahassee franchise we had picked up along the way.

ALLEN: If you were having so much opposition from the bankers as far as lending was concerned, how did the investment banking house view the venture as a capital offering? Were they less skeptical of it?

GUNTER: The investment banking company that took us public was called James Anthony and Company at the time. They, of course, had several other investment banking houses lined up to blue-sky the stock with them They all had a very positive view of this. Between Hank Diambra and a fellow named Alfred W. Green, our SEC attorney in New York, I believe they did a hell of a job of explaining the industry and its prospects to these investment bankers. There was never any question of their enthusiasm for the cable venture. That's one reason why, I believe, it was four times over-subscribed.

ALLEN: The difference in the two bankers was one was going to have to put money into it and they were more skeptical than one who was promoting it?

GUNTER: Oh, sure, let's distinguish between that. When I say investment banker, these are not guys who loan you money. These are people who make a living by taking companies public with the public's money. They make a commission off of this. They probably kept 10 percent of the proceeds for just taking us public. Whereas a commercial banker is actually putting his cash on the line based on his faith in your venture.

ALLEN: What kind of people became stockholders? If it was four times over- subscribed, what kinds of people were attracted to the cable industry as a public investment in 1960-61?

GUNTER: I believe I have some early shareholder lists. But I can tell you this from recalling that the list had a few - not very many - institutional investors. They weren't large. I recall the board of International mulling over why any institution would put that kind of money into anything involving something as new as cable. When I say institutional, I'm sure some of these went into street name portfolios for clients. We know that some of those clients later came out of the street name into their own personal name. We even met some of them at the annual shareholders meetings and knew that they had begun into this strange investment on the advice of a portfolio manager at their brokerage house who put them in a street name portfolio and then later, for whatever reason - maybe they moved - they would convert it to their name. They became a personal name on our shareholders lists and came to meetings. Other investors along the way were just people, then as now, who looked for pink sheet, over-the-counter type of opportunities that they thought had some wild, off-the-wall growth opportunity. I think we were perceived as that sort of opportunity in those days.

ALLEN: What percentage of the total stock went public? What percentage was retained?

GUNTER: International was heavily held from inside. Obviously, my family got a pretty big share of stock, a minority holding, but a large minority share for our equity in the Texas properties. The Florida crowd that got the franchises and initially put financing up for the Vero Beach-Fort Pierce systems were given ICC shares in exchange for their equity. The group of investors in Ohio headed by Ralph LaPorte, who was wooed into the investment with cold cash, bought stock directly but at a discounted price prior to public offering. So when you add up all of those factions, International Cablevision was probably 60 percent internally held from day one. In a year or two I would estimate that even grew to maybe as high as 70 percent and the average public float in that company was no more than 30 percent during its existence from 1961 until 1969 when it was merged into Columbia Cable.

ALLEN: Corporate headquarters were in San Angelo?

GUNTER: It was a divided headquarters. My father and Ralph LaPorte were charged by the board with the day-to-day management. Ralph LaPorte, however, was President and he was now also running the Vero Beach-Fort Pierce systems with his wife, Margo. They had a home for many years in Ft. Lauderdale, Florida. They were very accustomed to being in Florida for most of the year. Their son and daughter, I believe, at that time were beginning to run the furniture stores that the family owned back in Ohio. So they lived there and ran the Vero Beach-Fort Pierce systems and doubled as part of the top corporate management. My dad was in San Angelo with me. We were really the other half.

ALLEN: You were moving back and forth between the two?

GUNTER: I was starting to burn up the airlines between Texas and Florida, going back and forth, because we were starting to have technical problems in Vero Beach- Fort Pierce that the local technicians could not handle.

ALLEN: What kind of problems?

GUNTER: The interesting part was Hank Diambra, a bright engineer as I've said before, was always on the forward edge of trying new technology that he thought held promise. His was probably the first system I ever saw built with extruded aluminum cable, of course jacketed in the case of Florida because of salt corrosion problems. He didn't even use the foam filled electric cables which became very popular in our area. He decided because there was a little bit of a gain in the area of cable loss, to use air-filled Phelps Dodge cable called Phelps Dodge Spirafil. I never will forget how it looked when you opened it up. It was just like our modern aluminum cable except you just had a spiral of a polyethylene dielectric and it was necessary to pressurize that cable with several pounds of dry air. That was his second rationale for picking it in Florida. He reasoned that the connectors, in those days, were probably not as reliable as he would like to see. We didn't really have that many good heat- shrink boots in those days. You either taped something with Bishop Bi-seal and then doped it with some kind of gasket goo or you just couldn't waterproof the connector. His reasoning was simply that if he used an air filled cable he would have less loss per foot and would, therefore, result in greater amplifier spacing to assist in the design economy. Also, if and when leaks did develop, there would be positive pressure flowing out of the leak until a technician could get there and investigate why the pressure alarm went off, find the leak, and repair it before salt water intruded and mined the cable. Not crazy at all. But what happened was it took a very careful technician to apply those fittings and waterproofing tapes and sealant compound in the field. It was not being done and we were losing large sections of cable in Florida. Large sections.

ALLEN: Were you still using power and telephone company people who were working on the side to do the installation or by that time, did you have your own crew?

GUNTER: No. I should make it clear that the power and telco moonlighters were confined almost wholly to Texas. We did use a few moonlighters in Florida in the early days for hookups or work overloads after a special would result in an avalanche of orders. We would have to resort to some outside help to get back to equilibrium because in-house guys couldn't keep up. But we never constructed outside plant in the sense that we built feeder and trunk in Florida with moonlight contract labor. We always hired full-fledged contractors there. Primarily, because I wasn't always there to supervise. I knew all of those moonlighters in San Angelo and Ballinger, Texas personally. I went to high school with a bunch of them. The ones in Florida were just not people that we knew or trusted to do that.

ALLEN: What kind of people did you hire then? What kind of experience did they have? Probably not cable installation experience.

GUNTER: Well, as a matter of fact, we did. There were a couple of companies in the Southeast, one in Atlanta, I believe, and one out of Miami that did send power line and telco construction people. As you know, power and telco plant construction is somewhat similar to cable. I think, really, all of us in cable - although in the early days we've put cable on poles with solid messenger that looked more like clothesline than telephone strand - in the early to mid '60s; most of the cable operators began to emulate telco practices in construction.

ALLEN: The big differences were the connections and there were different kinds of connections?

GUNTER: The connections were different. The physical framing of the poles - the three bolt suspension clamps, the quarter inch strand, the stainless steel lashing wire - all of that looks identical to telephone plant when it's first going up on the pole. The only distinction is that you have to be a little bit more careful with observing the tensile strength of a coaxial cable when it's being spun up to strand than you might with telephone cable. Of course, when you begin the splicing process, it's entirely different. Other than that, the clearances, the mounting, leveling and framing of the pole hardware on the strand is identical to telephone construction.

ALLEN: You were hiring a contractor to come in and build. You weren't hiring your own crew who worked under the supervision of management?

GUNTER: No, we did not have our own internal crews. For small add-ons we had our own lashing machines. If we had six blocks of cable to run into a new subdivision we often did that in-house in lots of our systems. But major construction involving several miles or more at a time was, nearly always, farmed out. That was not always so in the early days of our system. It persisted up through the time that we had become a top ten MSO. There is a certain inefficiency in trying to run in-house labor. It was tried by other MSOs and I think most of them gave it up along the way and began to farm out all their major construction because of the start-stop nature of it. Cable construction, for a lot of reasons - somewhat related to budgetary constraints and also climate or weather - tends to bunch. If you start buying your own construction trucks, and they are different from the ones that you maintain cable with, and as you start hiring construction crews, you're going to find people standing around with their hands in their pockets about a third of the time. The logistics of shipping those men and materials and trucks several states away is not efficient for a cable operator as it would be in the case of a regional or national contractor. I think all of us learned along the way that contracting was the most efficient way to build TV cable systems.

ALLEN: So in Vero Beach-Fort Pierce you hired somebody out of Atlanta who came in?

GUNTER: They were out of Miami at the time. Burnham and Sims, I believe. They were actually a fairly large contractor then and probably still are today - that we adapted over to cable construction.

ALLEN: You said you were having a lot of technical problems. Do you want to get back to that?

GUNTER: We moved away from that for a moment. The major technical problem in the Florida group was due to the perennial problem of isolating the plant from the destructive effects of saltwater spray and corrosion. That applied not just to the electronic connectors and cables, but to the sheet metal housings for the amplifiers and the standard telephone grade suspension clamps and the strand. Even the stainless steel lashing wire had half a life in Florida of what it would have had in an application in my part of Texas.

ALLEN: Did that system get built with tube amplifiers or transistors?

GUNTER: That was being built in '59-'60 up through the time we went public and it was all tube type. Of course, Entron supplied those amplifiers. They were, at that time, building what became typical in the '50s and '60s – cross arm mounted sheet metal boxes. Strand mounted housings had not been heard of in those days. You couldn't strand mount something with a solar power transformer in it with the weight that those transformers had, and the size of them. The box would have looked like a suitcase on the pole. So we all mounted them down about halfway between the ground and the strand, if we were allowed to by the utilities that were on the poles. Most of them preferred that we keep them up nearer the strand level. In the early days when we mounted those cross-arm, sheet metal boxes and put all the electronics in there, we tried to mount them down as low as the utility would allow us to because we didn't have that many technicians who wanted to put a set of spurs on and climb a pole. We wanted them to just take a short extension ladder out of their truck or van, lay it up against the cross-arm, open the top of that big sheet metal housing, and do their work right there six or eight feet off of the ground. That was done, in most cases, I would say until the mid to late '60s.

We did not turn the corner to strand mounting our electronics until the advent of transistors. That was about 1964 or '65 when that began to really proliferate. The cross-arm housings began to disappear.

ALLEN: When you built the second system outside of San Angelo in Ballinger, you did transistorize that one. Did you strand mount that one?

GUNTER: Yes, we did. However, they were primitive. There were no die-cast or sand-cast strand metal housings at that time. When I built Ballinger in late 1963, early 1964, and bought the Ameco transistor series that first came out, that transistor amplifier was a chassis strip amplifier-very elongated and with open transistors on top of the chassis and hand wired. We did not have any printed circuit wiring in that amplifier. The only way you could efficiently strand mount it was to use upside down sheet metal cans, which had strand clamps on the back and the housings were open on the bottom facing the ground. You mounted the transistor strip amplifier up inside of that sheet metal housing facing down with its fittings toward the ground and you just looped the cable from the strand down and then up into that housing. It was the first time I recall remote powering a system. Most of the systems we had built were meter powered right at each cross-arm mounted housing.

There was a little bit of a transition period in the remote powering. In San Angelo in the mid '60s we were able to remote power some SKL transistor amps. But only one feeder or two from each of the cross-arm mounted trunk-bridgers. Then in Ballinger, that low current drain in the Ameco design enabled us to remote power as many as two trunk amplifiers in either direction from the power station and all of the associated line extenders.

ALLEN: As you were getting ready to build Ballinger, did you go up to Montana and take a look at the Great Falls system to see how they had done it?

GUNTER: I never did go up there. I had firsthand information from people who had gone there and by this time I had developed a lot of confidence in a couple or three of the fellows that called on me from Ameco and, for some reason, it just didn't seem necessary for me to go up there and see it. I think I mentioned earlier that we bought a different version of that amplifier. I wasn't sure how relevant a visit would be. In fact, the factory engineers in Phoenix openly told me at the time that they thought they would have more trouble with the twelve-channel version of that amplifier up in Montana and that they did not think I would have any cause for alarm in buying the five-channel version in Ballinger. For some reason I was either too confident in Ameco or just plain dumb. I didn't choose to go to Montana and check.

ALLEN: How did you solve the problems in Vero Beach-Fort Pierce with that air pressure system?

GUNTER: Ultimately, we replaced all that half inch spiral filled trunk system. The feeders were double shielded foam RG-11. We didn't have nearly the moisture intrusion problem there because we had conventional, well developed fittings to apply to that RG-11 cable. We ultimately began a constant program of changing out the half inch Spirafil and we also, along the way, improved our technique of applying the fittings and waterproofing them. A lot of the leakage was not the fault of the cable itself, and it was not the fault of Entron for recommending it. It was the fact that, at that time, there were not enough competent field personnel to really maintain something that advanced in its day. So we did both. We replaced it gradually with foam filled cable with a better generation of fittings to apply to them that were more resistant to salt corrosion and to water intrusion and we improved the technique of maintaining the air filled cables along the way as we operated that system.

I remember going to Florida several times and getting off the airplane in Miami and driving one hundred thirty miles north up to Vero Beach. The first thing the chief engineer there would tell me was, "You've got to come out and see this. I just had two of the technicians go out and find one or two spans of the air filled trunk filled with water." I said, "What did you do about it?" He said, "Well, they went out to mid-span at the point of maximum sag and drilled an eighth-inch hole in the cable and let it all drain out." So there were things like that that were tragic and hilarious at the same time.

ALLEN: Were you pioneering seacoast building at that point? Were there many others who were having the salt and corrosion problems?

GUNTER: I don't think I would say that we pioneered coastal region cables. But, I think we were among the first to learn about the peculiarities of building cable plant in a saltwater environment. I don't know of any more, at that time, on the East Coast. I do think there was some cable on the West Coast of Florida. In Texas on our Gulf Coast, there was probably a couple or three that had begun to learn these same lessons that we had learned in Florida.

The manufacturers were picking up information about how to protect the housings better in those days. They tried some zinc chromate dipping processes and, ultimately, settled when those materials finally appeared on the epoxies. Probably the most effective ones were epoxy dipped housings that really had a candy glare covering, or rather any kind of dips or anodized platings.

I recall that Vikoa was the first to come up with an either electroplated or zinc chromate dip that at least halved the corrosion rate in salt environments. My recollection is that it was Kaiser or Thetacom who began to epoxy the outside. Those seemed to work quite well.

We learned a lesson in later days in inland areas in finding that the saltwater corrosion problem was only one form of potential damage to cable if it wasn't properly protected. I believe in the Midwest somewhere, there was a plant that put out some form of sulfur dioxide fumes that was three or four miles away from some of the cable plant but upwind of the prevailing direction of the flow of air. We saw some fairly severe chemical corrosion problems later in the business. This was after the merger with Columbia when we began to operate in sixteen states. So there was, to be fair about it, more than the saltwater corrosion lesson to be learned. There were chemical corrosion problems inland, as well.

ALLEN: But, pretty much, you had to work with the manufacturers and find solutions?

GUNTER: Sure.

ALLEN: You didn't have a communications network with other cable operators that were building in a saltwater environment except through the manufacturers?

GUNTER: Let me describe that for you. In the '50s and until maybe '63 or '64, around the time of this transition from tube to transistor amplifiers, I would describe the flow of information and experience as interoperator. We used to share a lot, particularly among the Texas operators. There was more than my company home brewing their own amplifiers. We shared a lot of experiences and ideas with them. And yet, in the early '60s and certainly by the mid-'60s, this flow of information and experience began to be between the operator and the manufacturer, much more so than interoperator. It's not that we didn't continue to go to conventions and talk with the operators, but when we were there, manufacturers were coming up to speed rapidly by that time. They were right in the middle of those discussions and trying to take these experiences home to their R&D people, learn by them, and modify their product line to suit us and our needs. I would say after 1964, I spent a lot more time going to the factory and to the labs of the manufacturers in the cable business than I did talking to the people, like myself, in the business.

ALLEN: Who were some of the early operators in Texas as you were putting San Angelo on the air?

GUNTER: Well, John Campbell, who is the originator of what is now TOCOM.

ALLEN: Where was he?

GUNTER: Mineral Wells, Texas. I mentioned Johnny first because he was a true pioneer in manufacturing electronics in his garage and then later became not only a cable operator, but a manufacturer of amplifiers in the Dallas area. He knew a guy by the name of Louis Bone in Gatesville, Texas, down in the Southeast part of the state, I believe. Louis Bone was aping the Johnny Campbell chassis layout and the circuitry and building his own amplifiers. Anderson was a kindred spirit - the Wilbur Anderson I mentioned yesterday - who was kind of running the shop where we were building ours. So he interfaced a lot with Johnny Campbell and Louis Bone and they, I think, exchanged a lot of information that improved the amplifiers they were building up through 1961 or 1962.

This was a time when it was becoming apparent to even the cheapskates like Wilbur Anderson - and Campbell himself was a little bit of a chiseler who loved to save money - that this was the stuff that you didn't build in your ham radio shack or in your garage. This was something that needed to be mass produced. There were economies of scale not only in the cost of building if done properly, but the result was better. I mean you had better quality control of what you had built. You just couldn't expect uniform results and alignments to come off of a bench where one man was building two a day with his own hands. We're only looking at an eight to ten year window - from early '50s to early '60s at the latest, - where the era of the homebrew equipment was in any way dominant. This all evaporated rapidly after 1962 and 1963.

ALLEN: When did Tallahassee come into play? When did you go after that franchise? After International had been formed?

GUNTER: Oh, yes. It was shortly after International was formed. We had an attorney contact in Florida who had, in turn, political contacts in Tallahassee. My recollection was that this attorney - I believe his name was J. Kenneth Ballinger- coincidentally spelled the same way as Ballinger, Texas. He was the one who was originally part of the group who franchised and put the early money up for Vero Beach-Fort Pierce. He and other members of that Vero Beach- Fort Pierce group went to Tallahassee and got the franchise. In those days, we were still in the era where you could almost walk into city council and say, "Hey, we're in the cable TV business and we want to bring cable TV to your town." They would say, "Okay, where do we sign?" It was almost that easy.

At the time, however, we did not know that there was a sleeping giant in town named Phipps, who owned the local broadcasting station. He had not really felt that there would be a cable threat in Tallahassee any time soon. When we began to show signs of activity and construct a plant, we had a lot of trouble with him. Let me define what the trouble was. He first tried to buy us out to get control of the cable system, and then later got another franchise and began to build his own plant. That was the first overbuild in cable I had any experience with.

ALLEN: When did you get the franchise?

GUNTER: In 1962.

ALLEN: How long before he started to overbuild you?

GUNTER: Not more than about a year.

ALLEN: Did he overbuild in the community or in the exact same area?

GUNTER: I wouldn't say he tracked us just like a shadow where we built plant. He built some other areas but I would say the majority of his construction effort was to overbuild us where we were. He probably knew, with his connections, that we had somewhat limited financial resources and that if he could dilute our sales by duplicating our plant alongside of us that he would weaken us and take us out sooner and with less effort. So I would say that 80 percent of his plant was to parallel ours.

ALLEN: What signals were you pulling in at Tallahassee?

GUNTER: I would have to think about that one. It was all off the air, at the time, I know that.

ALLEN: Jacksonville?

GUNTER: Jacksonville and there was one Southern Georgia market that we pulled in from across the border and it seems to me that there may have been one or two stations to the west down in the Panhandle of Florida.

ALLEN: Pensacola or Mobile?

GUNTER: Maybe Mobile or Pensacola. I would have to check that. I do recall we built it with Spencer-Kennedy Model 222, twelve-channel tube amplifiers. It was all SKL passives and electronics. At the time, that was the first twelve-channel amplifier I had ever worked with. I had not gone to twelve-channel in Vero Beach-Fort Pierce or in San Angelo or Ballinger.

ALLEN: How many stations were you pulling in?

GUNTER: I think there were about eight, seven or eight. We were certainly beyond the five-channel limit. The first day we opened we had more than just low band.

ALLEN: What did you fill the remaining four or five channels with? Did you use a clock or any of those imaginative and creative programs?

GUNTER: We didn't ever really fill at all. There were two reasons for that. First of all, we didn't have that many off-the-air available to us. There was no microwave plan. As I recall, there was no microwave really economically feasible to bring in much. Atlanta was far too distant to hold up the microwave at that end as was Tampa-St. Petersburg. It is my recollection; we just didn't even envision micro relay of broadcast stations so we simply had what was off-the-air on about a five-hundred foot tower. We did have one of the older, cruder weatherscans, which was nothing more than eight-inch live weather instruments with a black and white camera scanning those on a motor driven turntable. We didn't have any alpha numeric character generators in those days.

In the early '60s there were not that many systems that had twelve-channel capacity and bandwidth that had yet begun to transmit adjacent channel high band. I don't think it was because we had any fear that we could transmit in good condition through our delivery system. Because I spent so many years working on television receivers in my father's store in the '50s, I had a lot of experience with the receiver itself. In those days, we didn't have varactor tuned tuners. We had turret tuners. I can tell you that the selectivity of a 1960 television set was not very good in the high band. Selectivity suffers, of course, as a percentage of frequency increases. When you jump from say, Channel 6 to Channel 7, you've leapfrogged about 90 MHz. The minute you go from Channel 7 to Channel 13, you're working with the same separation between the 6 MHz allocations as you are on the low band. The selectivity of the front end of a TV receiver, in that era, was nothing like as good as it was in the low band. Perhaps we were overcautious. Later, by the mid '60s, certainly a lot of people were running some adjacent high band channels. But I would say in the late '50s and by as late as 1961 and 1962, most of us would use only alternate high-band channels. We'd spend the money for the 50-220 bandwidth in an amplifier and we filled the low band and we'd stick in some FM signals and permeate the 108 range. But then we'd go seven, nine, eleven, thirteen in the high band to be sure that we didn't have subscribers who would have adjacent channel reception problems.

ALLEN: Were there any other significant differences in constructing with the twelve- channel amplifier over the five that you had worked with?

GUNTER: Looking back on those days, I understood the mathematics of cable attenuation very well. But I recall how startled I was at how much more electronics it took me to build the twelve-channel systems because now we were laying out amplifier spacings on 220 MHZ rather than...

End of Tape 2, Side A

GUNTER: We were saying that I was surprised as we began to layout the twelve-channel systems at the smaller spacing between amplifier stations it required when you laid the system out at 220 rather than at 88 MHz which was the upper operating frequency of our old five-channel system. I was about to say at that point, that one reason that it was startling and costly to add the seven to thirteen channel range was that in those days we could only envision the use of four of those channels. So we were spending a lot more money for amplifiers and had to buy bigger and more expensive cable and more carefully design the plant just to buy Channels 7, 9, 11, and 13. That may have been one of the things that retarded the early expansion of cable operators who had cut their teeth on five-channel low band systems. That probably was a retardant that made them think a long time before they spent the money to go to 220.

The other thing was, in those days, we were just seeing the early generation of aluminum cables emerge. The signal losses of the jacketed military style cables we had used until the early '60s were really pretty horrendous when applied at 220 MHz rather than at 88. There was a period of two or three years, maybe from '61 through '65, where people stuttered a little bit before they just plunked down the money before a vendor who had a fancy, new twelve-channel amplifier, tube or transistor. It's the reason in Ballinger that I - even in '64 - only bought five-channel amplifiers. Actually, I bought for two reasons. We didn't envision the day that we wanted the other four channels at the cost of buying twelve-channel equipment. The other reason was that I didn't have the confidence factor yet in solid state amplifiers and I wanted to hedge my bet by buying the low band, safer, more stable design. I would say it was somewhere around '65 or '66 before I and the operators I knew began to really talk enthusiastically about twelve-channel systems.

ALLEN: Were you kind of an onsite manager of the Tallahassee construction? Did you spend a lot of time there?

GUNTER: Yes, I was in and out of there a lot during the design phase but we had picked up a pretty bright boy in Vero Beach-Fort Pierce. His name was Ed Stark. I've lost track of him now, but in those days he was aggressive and alert. He could learn and knew quite a bit of electronics. Ed spent a lot of time driving back and forth from Vero Beach to Tallahassee. It saved me a lot of flying in and out of there. But I was there - during a two year period - every two or three months.

ALLEN: At this time you were still flying commercial? You hadn't started flying your own plane?

GUNTER: Yes, I was flying commercial. It wasn't because I wouldn't have liked to have flown my own airplane, but my dad and Ralph LaPorte were much too conservative to ever let me have a corporate airplane to fly around. I've been flying since I was a senior in high school. In 1951 I got my private license. My dad didn't like private airplanes. It was like moving mountains to even get him to let me take flying lessons in high school.

ALLEN: What attracted you to flying?

GUNTER: Well, again, it's related to my old love of science and mechanics. My bedroom was filled with chemistry sets, microscopes, radio controlled airplanes and ham radio equipment from the time I was eight or nine years old till the time I left for college.

ALLEN: Were you able to keep up your flying pretty continually then?

GUNTER: I flew quite a bit through my college years. Then when I came home and got busy in the cable business, I really didn't have time to fly. It was not until the late '70s that I even permitted the company to buy any kind of corporate airplanes.

The engineering headquarters of UA-Columbia was in San Angelo and we had three of the four divisions of the company headquartered there with management and accounting teams. We were sending engineers and managers from San Angelo, Texas to places as remote and as hard to reach by commercial air as Beatrice, Nebraska; Pittsburg, Kansas; Pulaski, Tennessee; McAlester, Oklahoma; Jonesboro, Arkansas; and Alamogordo, New Mexico. These were places you couldn't even get to by commercial air. Of course, they were too far away to go there by car. It happened that a couple of our division engineers were good pilots. One of them was a very experienced Alaskan bush pilot from years back. So, we bought some Cessna aircraft and based them in San Angelo and let them fly those. Even then it was years before I began to show an interest in flying them. I was very busy building the company with Rosencrans and our management team. We were in sixteen states of operation at that time. It was probably early '80s before I really began to fly again.

ALLEN: That was a digression for which I apologize. I got you off on that tangent there. How long did you stay in Tallahassee before you allowed Phipps to buy you out?

GUNTER: I'll have to get the history books out for that one. But, I believe it was around 1964 or 1965 when we finally sold to Phipps.

ALLEN: You said you had built about seventy or eighty miles?

GUNTER: I would estimate about eighty miles. My recollection is that it was less than a hundred.

ALLEN: At that point, had you started looking for other franchises?

GUNTER: No, as a matter of fact, the Tallahassee experience had pretty well drained the company. We were starting to add subscribers rapidly in Texas and Florida but not rapidly enough to replenish the money we had been spending in Tallahassee and in expanding those. The capital costs of expanding the Texas, Florida and Tallahassee systems simultaneously had been enough that the growing revenues of the company still had not been able to catch up with it. So International began to run into some more cash difficulties in the late 60s because of that. Therefore, we had no horsepower to go out shopping for new deals.

ALLEN: When you dumped Tallahassee in the mid '60s, was the company in a little bit better shape, as far as cash flow was concerned?

GUNTER: Well, it removed that drain which was costing us a good bit of capital investment and also because of the Phipps overbuild, resulting in half the expected per-mile sales. So, yes, that did help. But the board was a good bunch of men that still knew very little about cable television. Even LaPorte and my father were not keeping really abreast of the trends in the industry. I found myself in the mid to late '60s, cajoling and even arguing with them some about things that I thought we should be doing. I believe that it was 1966 or 1967 when I began to argue openly with them and the board about things we were doing, and that we could not run the company the way we were with the rapidly evolving technology that was becoming apparent. We could not run the company without adequate financing to keep the plant properly maintained and up to the state-of-the-art. It was changing more rapidly than they would accept. That is probably what led us into the merger with Columbia.

ALLEN: When you merged with Columbia, which I guess was in the late '60s, were you still operating just the two properties in Florida and the two properties in Texas?

GUNTER: Yes.

ALLEN: How big was Columbia at that point?

GUNTER: Columbia was formed in the Connecticut area by Bob Rosencrans and David Strassler and some fellow investors. They had gone out in 1962 and decided to get into the cable business because Bob Rosencrans had started with Irving Kahn at TelePrompTer selling closed-circuit prize fights. He had become interested in the opportunity of community antenna television because he sold to some of them as well as the theaters. They had acquired Pasco-Kennewick, Washington and Pendleton, Oregon in one acquisition in the Northwest and shortly thereafter, bought from Bruce Merrill, the owner of Ameco, who was also a cable operator in Arizona and California, El Centro, California and some surrounding towns and Yuma, Arizona. That was their first opening salvo into the business.

ALLEN: That was the early '60s?

GUNTER: 1962. They operated those systems through the years and decided to go public in 1968. We had gone public in 1961 and stumbled along in the business through those years and learned a lot of the things to do and not to do. They had been a little more professional about it. Their approach was a little more enlightened than ours because they had some good partners; very knowledgeable, very businesslike Eastern businessmen that had been in the world of high finance and larger corporate deals unrelated to cable. They didn't make as many mistakes in the financial and management organization of the company as we had

When they decided to go public in '68, it happened that Columbia Cable Systems was using the same Washington counsel that we had always used - a fellow named Jack Cole. The current name of the firm is Cole, Raywid, and Braverman. I was in Washington meeting with Jack Cole in late 1968 or early 1969 - I can't remember which - but it was right around the turn of the year between 1968 and 1969. Jack said, "I have a client named Bob Rosencrans that I think you ought to meet sometime. I just have a feeling you two would get along." I said, "Well, yeah, where is he from?" Jack said, "Well, he lives in Harrison, New York and he has offices in Westport, Connecticut. He's another young and emerging cable operator that has a style somewhat similar to yours. So you just ought to meet Bob. Why don't you just go to National Airport and get on an airplane and go to La Guardia and let me have Bob pick you up?" In those days, of course, I was traveling a good bit to Florida but I was still a Texas home boy and I was dying to get home to Texas after three days in Washington, D.C. So I told Cole that I just didn't want to go to New York City at all. I would go back to Texas and maybe I'd see Bob and him at a convention sometime. Cole just laughed it off and said, "Go home to Texas and I'll set something else up."

I think it was not but a couple of months from that date that we either had a convention in Atlanta or maybe the National was up East that next year. At any rate, in a couple or three months, Cole had set up a meeting with Rosencrans. We met and liked each other almost immediately. The chemistry was quite good between us. I don't think Rosencrans was surprised but it surprised me because I didn't think I would make a rapid business association with an Easterner. I was just simply too Texan and distrustful of Easterners. From that point on, immediately, there was some very serious talk about how we could come together and bring the companies under one umbrella.

ALLEN: By this time they had gone public?

GUNTER: They had just gone public. Like six months before this first meeting took place. My father and LaPorte were getting a little despondent about how they were going to run the board and infuse money into International. They were ready to talk about this sort of thing. Through a couple of investment bankers and some lawyers we began to have conversations about what sort of arrangement we would make, what the exchange ratio between the shares would be. That always takes a lot of bickering between companies when you start to determine relative values. And who would emerge as the successor company and how it would be structured?

ALLEN: Was Rosencrans the President of Columbia?

GUNTER: Yes, he was President of Columbia. David Strassler was Chairman of Columbia. The exchange ratio was a lot more important to the International crowd and to LaPorte and my father. They really didn't have ambitions to stay on in a much larger and public company. They were already weary, I think, of SEC reporting requirements in such a small environment. Both of them were basically family retailers who didn't like the scrutiny of shareholders at public meetings. SEC requirements were just not their bag.

ALLEN: Did your father share your suspicion of the Easterners as well?

GUNTER: Yes, I think he did. My family came from the Deep South to Texas and probably had an innate distrust of Easterners. I think he did. However, because of his age and experience, he was more flexible than even I was at the time and surer of himself that he wasn't going to be run over or cheated in any way by Eastern deal makers. So I think he was quicker to pick up on the opportunity here than I was. I was a little more worried about that loss of control because I saw my father and LaPorte leaving the company if it merged and I saw myself in a business I loved already. I was wanting to go on with cable as a career and an investment, so I wanted to be sure we had the right mix of people. Whereas they just wanted to be sure the exchange ratio was beneficial to them

ALLEN: Everybody has their own motivation.

GUNTER: Absolutely. There was a definite generation gap between LaPorte, ICC and me.

ALLEN: At this point you indicated that Columbia had started with four West Coast systems. What else had they acquired or built in the intervening years?

GUNTER: Not much. They were busy building and managing those properties. They were high growth areas and they were going to be good systems, so they had not gone out and acquired anything else. They probably had somewhere around forty-five thousand subscribers and we were probably at thirty thousand subscribers in those days. The result of the mix was around seventy-five thousand in round numbers. At any rate, an exchange ratio was worked out between the two boards and ratified in early 1969. The deal was consummated by June of 1969. We then became Columbia Cable Systems.

ALLEN: Was this all Rosencrans was doing - running the cable systems in Westport, although all of the properties were on the West Coast?

GUNTER: Yes. David Strassler was a full-time Board Chairman in those days. He had other family investments, but Rosencrans was full-time and the lead dog in those days at Columbia. Strassler was monitoring the financial performance and reporting to the several families of our investors at that time and then of course, their own public group. That was mid '69 and we ran the properties and developed them.

Florida, at this point, was due for a rebuild. So was Texas. We were starting to upgrade Texas in the late '60s to twelve channel. We had a lot to say grace over and capital investment to make. Along the way Columbia had bought somewhat antiquated systems in the Northwest, and Bruce Merrill's systems needed work. Although Bruce was a manufacturer, he was not known for building the most choice cable plant. He was a businessman first and foremost, and he always cut corners where he could.

ALLEN: What was your role in Columbia?

GUNTER: My father stayed on as a consultant for about a year, as did LaPorte in the transition period just before and after the consummation of the merger. Rosencrans encouraged me immediately to become active at the corporate level with him in identifying and locating acquisition opportunities. He picked up quickly that our styles meshed in that he was an MBA with a business management/financial background and that, coupled with my love of the physical side of this business, and my instincts about deals that I picked up along the way from my father and LaPorte would be an efficient combination. I was still clamoring in those days to be left alone to run my Texas and Florida subsidiaries. We still ran ICC as a subsidiary of Columbia and I was President of that subsidiary and I wanted to do the management and engineering of Florida and Texas and be left alone. Rosencrans wouldn't hear of it. He said, "You've got to start bringing in some people now to form a division of the company and bring in some engineering and management talent that will let you travel with me. Let's go out and find some deals." Ultimately, he coaxed me into that.

ALLEN: You did not oversee, directly, then the rebuild of the Florida system and San Angelo?

GUNTER: No, I did. I still had that to do. But he did not want me to limit myself to that. No, I did oversee the rebuilds of the Texas and Florida plants after the merger of ICC into Columbia.

ALLEN: And also the Columbia properties?

GUNTER: And I began to take engineering responsibility for the Columbia properties. I became a Vice President of the company at that time with no particular designation. But later, I asked for it to be more engineering related than it had been. That was only a temporary wish that they granted.

In late 1972 through other investment banking friends, we stumbled across an opportunity to merge Columbia with what was known as UA Cable Systems. It was a separate public company but closely held by the UA Theater people of San Francisco. They had put together an interesting complex of systems in my area. UA Theaters had always had a large office in Dallas which stemmed from the acquisition of a Texas theater group known as Rob and Rowley, or by that time probably just known as Rowley United Theaters. The Rowley's were headquartered in Dallas. They had properties in Oklahoma, Nebraska, Kansas, Tennessee, Arkansas, and New Mexico.

ALLEN: When you say properties, are you talking about cable properties?

GUNTER: Well, yes. Theater properties, first. I'm coming to that point. Theater properties scattered in those states. Their local management and their Dallas corporate people decided in the late '50s, early '60s, that this cable television monster might be something that could consume the theater business. It had already begun to impact drive-ins. Broadcast television and cable were probably the combination - the one-two punch - that did in the drive-in theater business. They thought this might even enlarge to the point that it might threaten the movie theater business itself and movie houses. So they had reasoned that they were in place in these cities with their theaters and they had been there a long time in most cases. They knew they had a presence. They knew the city fathers. It was one of those things that was still easy in the early '60s to walk in and say, "Hey, we own the Texas Theater down here and we think we know a lot about this sort of thing, the entertainment business, and we want a cable franchise. We're going to have a theater but we're also going to have a cable system in town." In most of the cases they got franchises just for asking with no competition as we had in earlier instances.

So they, in effect, had built up a cable company in their theater towns and gone public with it and had maybe sixty - sixty-five thousand subscribers in those days, and yet they realized after a few years of operation that they really had made a mistake in assuming that the theater and cable businesses were very much alike. They weren't alike at all. The engineering and technology questions that arose through cable management was more than any of their management had been prepared to tackle. They were used to buying film projectors, movie screens, and stereo sound systems, but not RF distribution systems and microwave. So they were beginning to sniff around and look for a deal

So through investment banking circles that we were both familiar with, we were brought together at a meeting in Chicago in 1972 that David Strassler and Rosencrans and I attended with the two Naify brothers from United Artists and Salah Hassanein, their Executive Vice President. From those meetings, we quickly began to talk about numbers again, about relative values and exchange ratios. Indeed, through the fall of '72, enough work was done that we had a deal struck by December 72 and the merger was actually complete January 1, 1973. We had decided that because of the UA name - even though they were only given 27 percent of our shares to pull them into our company and five board seats - we wanted the UA name in front of Columbia. So we made it UA-Columbia because it had an entertainment mystique and value that we felt should be retained. At that point, they had five board seats and no one who joined our management - Rosencrans, David Strassler, and I continued with the company from that point forward

ALLEN: In that period between 1969 and 1972, had Columbia put any more systems on?

GUNTER: I think we had not. We had added some small satellite systems in towns around major systems we had.

ALLEN: Such as?

GUNTER: In the case of San Angelo there was a city known as Winters that we had added which was fifteen miles from Ballinger. Probably a city of four thousand people maybe. I think in Southern California - in El Centro when we bought that - it had two or three towns that Bruce Merrill had already begun to wire but we added one more area.

ALLEN: So growth was still very modest?

GUNTER: We were growing but the growth was modest. We did not go out and begin to grow by digesting a town or a system at a time after the merger of Columbia and ICC. We got on the map by making first the deal between us, ICC, and Columbia - which was the beginning of a very good relationship between two companies struggling to grow. We really couldn't have had a happier marriage between people. From June of '69 until December of '72, very little was done except to develop what we had put together. There wasn't that much of an interval when you get to really thinking about it. There wasn't that much time to get on an acquisition wave. We had a lot of fine tuning between the styles of the two parties and the properties and integrating practices and ideas so that we really hadn't had much time. Therefore, the next big quantum leap was the UA merger into Columbia.

ALLEN: How many properties did UA have, at that point?

GUNTER: UA is where we picked up the Nebraska, Kansas, Tennessee, Arkansas, Oklahoma, New Mexico and other Texas properties. We had added one significant acquisition by buying Jonesboro, Arkansas, and Gainesville, Texas from Carter Publications in Fort Worth. That's the Amon Carter group that owned WBAP AM/FM, and TV, and the Fort Worth Star-Telegram. They decided, like a lot of newspaper and broadcast people, that they wanted into cable and then that they didn't want into cable. I saw the Dallas Morning News and the Belo Corporation in Dallas go through this same curve of schizophrenia. "Do we belong in cable or don't we belong in cable. We're broadcasters, we're newspaper publishers, should we be cable operators also?" In the early days, I even did some consulting as a hired gun for the A.H. Belo Corporation and the Dallas Morning News to assist them in a decision. That's another story all by itself. But we did make a deal to acquire those two from Carter, and they probably didn't have more than eight or ten thousand subscribers between the two systems. But that was between the time we did the deal with Rosencrans and Columbia, and the UA acquisition. That's the only thing of any consequence we did.

But after we had done the UA merger by January of '73, we were really on the map and starting to roll.

ALLEN: Were you one of the larger MSOs by that point in time?

GUNTER: Well, I'm going to have to get the charts out on that one. At that time, we were probably, easily, in the top twenty. But I don't think we were top ten by then. After the UA deal, the real growth of the company in the early '70s came from Rosencrans emphasizing growth in the Northeast.

With the UA deal we also picked up Brookhaven, Long Island. That's out in Suffolk County. That was really a very fortuitous acquisition because Rosencrans had already begun to pick up some properties in Northern New Jersey. But we had picked up three or four townships in Northern New Jersey just before the UA deal. When we added Brookhaven, Long Island along with the UA acquisition we had some presence in the Northeast that excited Rosencrans. He put together a real franchising and management team to really take advantage of that opportunity. I would say we grew from the early '70s to the late '70s. He built Brookhaven, Long Island, the original UA system; got franchises in Westchester County, New York; expanded the Northern New Jersey group from four or five townships to forty or fifty townships; and got into a real slugging contest there with Charlie Dolan and John Tatta. We were competing head-to-head with them on nearly every one of these Jersey townships in Bergen and Passaic County.

ALLEN: Competing for the franchises?

GUNTER: You bet. Head-to-head with Dolan. Dolan and John Tatta were tough competitors. However, we probably were batting about a seven or eight hundred average. We did very well.

ALLEN: What did you have going for you that they didn't that allowed you to get that much more than your fair share?

GUNTER: I can't say we were any better competitors in the franchising area than they were except that we had a little bit of a head start. We were in the Northern Jersey area where we were beginning to rapidly build a reputation for quality systems. We were the ones who brought Madison Square Garden live into Northern New Jersey across the Hudson in the early '70s because we began to learn as we acquired those New Jersey systems that off-the-air wasn't going to cut it. People were used to getting some pretty good signals from Manhattan and from Philadelphia directions, and even as far away as Hartford sometimes. Except for the shadow areas caused by the hills of Northern New Jersey we were having a little trouble selling basic cable.

Bob is a long-time sports fan who loves anything that has to do with sports promotion. That probably is the very reason that when he left Columbia with his MBA he got involved with Irving Kahn selling closed-circuit prize fights. The idea of taking about 110 events a year live out of the Garden over to Jersey and putting them on was something he was dying to do and we needed to do. So he went to work on that.

I went to work on the engineering problem of getting it across the river. There was no way then to really do it in the time frame we had selected except to run a Bell microwave video circuit. We got a two-hop Bell relay built from Manhattan over to our headend in Northern New Jersey and used it over there for probably a year. This was somewhere around 1971 or '72. Then we got the idea, as we began to pick up more and more of the Jersey franchises, that we wanted to spin-off some of the costs and share with other operators up and down the Hudson. So we put together a private CARS microwave network to take it from the Bell terminal after two hops, and put it on our own microwave and dump it out up and down the Hudson to other cable operators, including our own headends, and distribute from there. That was the beginning of USA Network.

Getting back to the question of how did we bat so good an average against Dolan in Northern Jersey. Around this time in the early '70s we had the opportunity to bring in a woman named Kay Koplovitz and her husband Bill. Kay had just gotten out of the University of Wisconsin with a degree in communications. Bill was an attorney by education. We brought Kay in to manage that little network and we brought Bill in to help with the franchising effort. We couldn't have picked two finer people to help in both of those isolated departments. Kay rapidly began to help us build the Madison Square Garden networking idea, ultimately, taking it on to what became USA after we sold to Paramount. Bill Koplovitz became the backbone of our franchising activities in the Northern Jersey and Westchester County area.

We had hired a young man named Steve Sinn as our division manager of the East. A very bright fellow that worked in close harmony with Rosencrans and Bill Koplovitz to orchestrate and strategize all of the Eastern franchise activity. Those three people were the reason that we had that high batting average. I had very little to do with the Eastern franchising activities. I appeared a few times to testify on technical matters and I was responsible from San Angelo for the engineering planning, but those three people were the ones who swept the table clean up there. That's where our growth came from in the early to late '70s, the Northeast. Our other systems were good systems in the other states in the West, South, and Southwest.

ALLEN: But you weren't adding any?

GUNTER: They were normal growth systems. They weren't rampant growth in the class that the Long Island/Westchester County/New Jersey properties were.

ALLEN: The UA properties that you acquired, were they technically in pretty good shape?

GUNTER: Not bad. It happens that UA was run, at that time, by three ex-Jerrold people. Their chief engineer was a fellow named Jack Stone who had once called on me, in the early days, from Ameco. Ameco used to call on its customers with a Salesmobile - a converted bus that had all of its hardware and goods wired down on plywood display cabinets and they would actually get out in front of your place and say, "Come on out and walk through the bus and let me show you the new amplifiers, connectors, line splitters, match sets, and all that stuff." Jack Stone was one of those guys who then later went to Jerrold and came out of Jerrold with Pat and David Rutherford who were hired by United Artists Cable Systems several years before our merger to run that company. Therefore, they did not have any experienced theater people running UA. They had gone out and found some management and technical side people who knew what they were doing. Therefore, the answer to that question is that the UA properties weren't in such bad shape.

ALLEN: They were twelve channel?

GUNTER: They were mostly up to twelve-channel capacity. They had not been stingy with them in terms of capital dollars to be spent for developing the plant. These three people that ran UA at the time of our acquisition had done a pretty darn good job of managing and developing those properties.

ALLEN: Anywhere along up to this time, did you get involved in any marketing activities starting with San Angelo?

GUNTER: I guess I've worn more hats in our companies than anyone other person. Rosencrans has never tried to second-guess me about engineering questions. I'm sure I've second-guessed him many times about management and financial decisions. I've even kibitzed with our marketing people. I remember one that I had a lot of fun with.

In the early '70s I stopped by Vero Beach, Florida. We were brainstorming

about some new kick-off for a couple of channels we were adding down

there- I think West Palm Beach or Miami. At the time, up the beach not

too far was a lot of space activity and "countdowns" at Cape Kennedy. It was just one of those things - my brain jumps around and I love to get involved in a room full of people in arguing points like that - and I said, "You know, what we ought to do here is use--- " Part of this came from my retailing background in my family and hearing my uncle's retail promotional schemes. One of the things you do with customers is don't give them a lot of time to decide. Make it costly to delay. In those days we were used to space countdowns up the beach at the launch pad "So, why don't we use a reverse "countdown." Let's start off- we've got a $35 connection rate here - let's just start back at $1 on the day that we splash the announcement in the papers and on the radio stations. Let's say if you hook up today, it's a dollar. Every day you delay, it goes up a dollar until it goes back up to $35 in about a month." It was a very successful promotion. They've always laughed about that reverse countdown that I cooked up that day. But things like that I guess I've participated in but I've never considered myself a cable marketing genius.

End of Tape 2, Side B

ALLEN: So at this point, the discussion for the earth station in Florida must have begun. You had completed the merger with UA in 1973. How does that earth station fit in?

GUNTER: January, 1973 was the merger date of the UA acquisition. We were very busy building up the Northeastern group, which I just described. I think this leads us, now, to talk about the transmission difficulties all of us were beginning to experience in going for closed-circuit or pay-per-view type of events. I've said that we had beefed up our dial to improve sales in Jersey by microwaving live those 110 or so events out at the Garden over into Jersey.

ALLEN: Were you actually doing the production work with the Garden?

GUNTER: No, it was farmed out. We just took a video feed. The Garden handled that. We didn't get into any production. They gave us a video spigot from the contract video production people.

ALLEN: You weren't the only company that was receiving the video feed from the Garden, then?

GUNTER: I do believe that Rosencrans was the guy that cooked up the deal, but later they were working out some way to feed other systems so that, eventually, we took it over to Long Island and, I think, Manhattan Cable finally got some way to carry it there. There was a problem with that because of gate. There was some fear all along that widespread cable coverage might impact the gate. I think that I'm probably not as qualified to say that much about that as Bob because he handled most of those negotiations directly with the Garden. Bob was talking to a fellow named Joe Cohen at the Garden. Those were the two fellows who cooked up that first deal.

Simultaneous to solving the Garden feeds into Jersey, we were also heating up a crude but growing pay television business. HBO was formed by Dolan originally to furnish some pay television for the Manhattan cable systems. A guy named Geoff Nathanson from Los Angeles was the promoter we met along the way. I think he's Marc Nathanson's uncle or cousin. He was really revving up a pay television service in those days called Channel 100. I think he had visions of being what HBO is today. He was a very likeable and affable fellow, who was a good deal maker. We latched onto him and put Channel 100 in New Jersey thinking that too - since you had to buy basic to get to pay - we thought that having a pay service in New Jersey would also help basic penetration, which was lagging still even with the Garden. It was lagging behind what we had hoped and projected. So we put it in there.

In those days, the security to lock out those who didn't wish to buy was crude at best. Nathanson had gotten Oak Communications to build a converter box that just had a little jumper plug in it. You put the plug in it and it would convert the channel to a usable signal for the subscriber. You pull the hidden jumper out and it wouldn't decode. But if someone just knew a little bit about the technology and knew that all you did was plug in that jumper, they had a box that would tune the service. That's all we had at the time and we used it. That was the security end of the difficulty with pay television in 1972.

The other problem was transmission. Where do you get the signal from? There wasn't any satellite, obviously. There wasn't even any way to get it real time or microwaved. It was too expensive to use AT&T long lines to be firing twenty-four hour television service around. So we bicycled three quarter inch video cassettes just like movie houses bicycle movie reels. Expensive, cumbersome, and a lot of times the flight didn't make it. We used to hire college kids just to feed these three quarter inch cassettes to playback machines at each system

Shortly after we started the New Jersey system, I wanted to get some hands-on experience with the same problem at the San Angelo headquarters where we still owned and operated my old system. We put in the Channel 100 down there. One of the first things I saw was the inconvenience and expense of three quarter inch movie dubs being mailed out to all of the affiliates of Channel 100. Bicycled around with a list of... by the way, I should comment on that. When you finished with it in three nights, you put it on the airplane to the next system. It was just round-robined around the horn that way and then it was returned, finally, at the end of the trail to Channel l00 for maybe erasure and reuse.

That was a worrisome aspect of the pay business to me in the early '70s, but as a technologist the thing that I began to zoom in on earliest was security. I knew that if we didn't perfect something better than what we were using in Jersey and San Angelo, then the better the product got and the clearer the picture became, the more susceptible it would be to theft.

ALLEN: How well did it sell in San Angelo?

GUNTER: Oh, in Jersey and in San Angelo in the early '70s I would say we were hitting 20, 25, 30 percent levels.

ALLEN: Of your basic subscribers?

GUNTER: Yes. It was a year or so until it became better known as to what it was. And a lot of this is word of mouth. You can tell people just so much about why they should pay for a commercial-free movie channel in the advertising media. You can just say so much about that. They get the picture and the zealous few will try it. But then it begins to be word of mouth. It takes a while. I think in the early days, we may not have had more than 10 or 15 percent for a year or so. But I think we hit 20 rather rapidly.

At this time my San Angelo group and I were talking about what we would do to secure these pictures. We talked to all the major manufacturers including Scientific-Atlanta, Oak, and Jerrold, I'm probably leaving one out. I don't think Hamlin was that prominent in those days. There were at least three, maybe four, major set-top device manufacturers that we were talking to and none of them had any answers for this. There was no real scrambling, but there was some beginning. As a matter of fact, Jerrold did lead the way in some of the early scrambling, but it was very crude. As a tinkerer, I went down to our labs and defeated it with one forty-five cent Radio Shack part.

ALLEN: That didn't give you a lot of confidence!

GUNTER: Didn't give me a lot of confidence. They had built a device that had a so-called four-channel capacity. It was a standard converter. If you needed conversion of your basic cable down to your television set, it had that, but it also had up to four pre-selectable pay channels in case you were to run more than one pay service some day. You could run up to four simultaneously if and when that happened. That sounded pretty racy and that was one of their big marketing pushes. But the security wasn't worth a hoot.

There was a nice fellow that came down from Jerrold then that was promoting this particular generation of security. His name was John Sie. He is now Senior Vice President of TCI in Denver. He was once the Marketing Vice President of Showtime, the movie channel. He is a very bright guy, a doctorate level Chinese fellow that really knows how to meet people and sell. I liked John from the beginning. He was almost sure that he had a device that he would begin to sell to us as we opened more and more of the pay outlets. He knew of our discontent with the Oak box in New Jersey and some in Texas. So he came down all primed to get a purchase order and it was at a time when I had just finished that experiment on the bench and defeated it with some scrap box parts. I showed him the results of that and told him that we could not buy that box. That we were very likely not going to buy anyone's so-called scrambling, and that I didn't trust any of it. I thought it might be as much as five years before we would see real encrypting that could be trusted, and that UA-Columbia was now heading towards negative traps for security. Well, Jerrold didn't make negative traps in those days. I'm not sure who did. I had to go out and scrounge out someone to make them. I was convinced that the negative trap filter was the only way that we would properly secure the pay product until good electronic encrypting came along. That was just a closed issue with us in those days.

John Sie was very disappointed and said he would keep me apprised of all the latest developments and that they had more things on the drawing board. I said, "That's just great. You come back and see me any time. But in the meantime, I've got New Jersey and San Angelo and other systems where we want to put three quarter inch playback machines. I've got to secure those signal channel pay services and for now it's going to be done with low band negative traps."

Well, I shot my mouth off about the low band negative traps but nobody was building them. I think it was an obvious answer in those days to securing single-channel pay. So I had to go scrounge up some guys that would build them. Viking or later Vikoa - they changed their name - had people who were agile enough to attempt to build them, but we had had some other corporate disputes with Vikoa and I didn't want to fool with them. At the time, they had gone through growing pains which had resulted in the exodus of some key people. Two of these people that I knew formed a little company called Pro-Comm in Poughkeepsie. They didn't know what they were going to build except they thought they would get into the subscriber passive sort of business. Just build subscriber two, three, and four port line splitters, match sets - whatever they could scrounge up to build in their small shop in Poughkeepsie. I ran into them in the East on a trip to Westport, Connecticut one time, had supper with both of them and talked with them about my trap idea. They said, "That's exactly what we're set up to build, subscriber passive devices. Tell us what it is you want and we'll build it."

The sales manager and partner of that company was a fellow named Tom Stockton. The partners' name was Eli. He was the EE and technical thinker that had left Vikoa with Tom months earlier. Tom is a bright fellow that picked up the idea very quickly and even suggested other circuitry for the trap when some of my crew in San Angelo and I suggested other ideas. They had a prototype ready in a couple of months. We went up and looked at it and it was nothing more than a small vector board prototype of an LC trap circuit. They wanted to see if we just approved of it. Physically, it had to be miniaturized. It had to be eventually put into a small, metal container and even potted with epoxy to weatherproof it and to give it some temperature stability because it had toroidal coils on it. We worked with that for a month or two and even ran it through some environmental chamber testing to see how stable or unstable it might be or what temperature compensation might be required. Finally, we decided we had one that was acceptable. I believe in late 1972, early 1973. We ordered enough for New Jersey to start putting them in, for Texas, and then we were ready to crank up Florida at Vero Beach-Fort Pierce. We ordered one type down there with a special epoxy coating on it to protect it from the salt spray because it was nothing more than a nickel plated sheet metal can about the size of a small match box.

Those traps worked as well as we expected, but we knew that there could be some security problems due to aging of components. We hadn't seen enough seasons to know how rapid the aging curve might be. We estimated those traps might hold their notch depth and frequency stability with time and temperature for at least eight seasons. We found that most of them developed external and connector physical problems due to just humidity and corrosion of the fittings, as much as they developed internal component problems. By the time we had done this and deployed them in Jersey, Texas and Florida and had already started to order a few more to go out west to Yuma and Pasco-Kennewick, we had interested several of the manufacturers in building them

Ultimately, within a two or three year period following the 1972 introduction of the Pro-Comm trap, there were at least four manufacturers building a lump constant trap such as we built. A company known as Vitech emerged and they built a transmission line or a coaxial trap. We bought some of those and liked those as well. They were just a coiled up piece of cable, which was cut to a trap configuration rather than using capacitors and inductors.

The prediction I made about the five years of development needed to give birth to good encryption security was not far off We began to see some forms of electronic encryption that would at least offer medium to high level security by late '70s. This leads into another big decision we made involving security.

Around late 1977, I was visiting San Antonio, Texas. That was just a favorite place I used to go to from San Angelo a lot. I was in a hotel down there one time in the fall of '77. They had three networks and a PBS station there but it really struck me as peculiar that a town the size of San Antonio had no cable system. We had been so busy looking into other places that I hadn't thought much about inquiring. But the next morning I got up and went down to city hall and said, "What's happening? What's the history of cable here? It seems to me that GE Cablevision had a franchise here one time." One of the assistant city managers came out to talk about it and said, "Yes, you're right. I was here then. GE did have that." About the time of the HemisFair here in San Antonio, there was a lot of activity and city council, without much discussion or competition, handed it to GE. GE fiddled with it for a year or two and decided to lay it back on the table about 1971.

This was concurrent with all of the upheaval that went on in Washington with FCC and NCTA about major markets. This was before the time we had made the deal to be allowed to import as many as three independents into a large market. That came in the rule making of 1972.

GE had pitched the franchise back on the table at city hall in San Antonio and said, "Count us out," a couple of years before that. For some reason, that whole issue of a franchise for San Antonio, Texas had laid dormant for all those years until late '77 when I just happened to walk in there and became curious about why there was no activity. There was nothing in our trade press. Nothing in the San Antonio papers about cable there.

I happened to like this assistant city manager, a fellow named Cipriano Guerra, a retired Air Force officer who left one of the San Antonio air bases there at the end of his career and decided to get into city government. I said I wanted to pursue a franchise in San Antonio and I would need legal counsel immediately to help us. I wanted to know whom GE had used because I didn't want to educate another law firm along cable franchising questions. It seemed like that would be like inventing the wheel all over again. So he turned me over to someone who remembered that history and gave me the name of Arthur Troilo. We made a deal with Arthur Troilo and later Cipriano Guerra would leave city government and join the franchising team, and we did, ultimately, get that franchise. That's another story, of course, that we may want to get into later.

But that leads me to a discussion of finishing my observations about cable security and how long it took to get something that was meaningful to really build multi-channel pay-per-view security systems. This is 1977 when we began the franchise fight for San Antonio. It was fall of '78 before we completed that process. After competing with Storer Broadcasting, we won San Antonio and approximately sixteen contiguous but separately incorporated cities around San Antonio. We let a contract to RCA Cable Systems for the turnkey construction of 2500 miles of thirty- five channel cable plant for San Antonio as required by the franchise agreement that we had negotiated.

As late as 1978 there was still no significant or new generation of security that I was encouraged to buy. I hit the ground running with two channels of pay television in the new San Antonio System in 1978 and with two trapped pay services, HBO and Showtime. It worked quite well As a matter of fact, large pay penetrators always worked well with my trap system. Indeed, to my knowledge they still trap HBO and Showtime in San Antonio to this day. Obviously, the larger the pay penetration of a channel, the fewer negative traps you need. You only negate them where someone doesn't buy them. So if you have a pay channel like we had in the early days of San Antonio where we had HBO and Showtime penetrations up as high as 170 percent of basic combined. HBO was usually the leader at say 95 percent and then maybe Showtime would be 65 or 70 percent. Those, of course, tapered down with the introduction of other pay channels. They have been further fragmented in their audience as well as by the impact of video cassette rentals. So I imagine the entire San Antonio pay penetration today of five maxis, not two, is not more than 90, maybe 95 percent, of basic. But when we had two maxis penetrating at 170 percent levels of basic, it was an obvious decision to make.

By this time we had manufacturers building some pretty worthwhile trap devices for $5 apiece. So we didn't have a set top decision to make then. It was fortunate that we didn't have one to make because there really wasn't that much that I trusted. In 1978, 1979, and 1980 we deployed only traps and converters.

We did have one additional security problem there that we trusted to Hamlin because they had a fairly good encryption system. Bob Rosencrans realized along with the franchise negotiations that we had to agree to carry the San Antonio Spurs and the Associated Basketball games on a special sports channel which was to be sold over and above basic. We used Hamlin electronic encryption for that because we didn't figure that it "was something that was going to be stolen to a high degree and we didn't worry too much about it.

But the first time we made a major security decision involving a technology that I thought had some promise of high security was in 1983. This is after the Rogers Cable Systems merger when Ted Rogers was pressuring us to add more maxis to San Antonio and all of our systems he had just bought half of. We made the Zenith Z-Tech decision in San Antonio. It turned out to be not such a bad one. I tell that story in that way to illustrate the decade that it took from the time that I refused to buy Jerrold crude encryption and switched our company to the trap decision in 1972. It was ten or eleven years of growth. I had estimated five years in an explosive industry before it had developed a good electronic encoding. That's the truth.

ALLEN: I started talking about one aspect of the problems related to pay and you have dealt with the issues of security, but what about the three quarter inch cassettes and the bicycling which you said was risky at best? How did you approach solving that?

GUNTER: In the early days of pay television, beginning in the early '70s, there were two parallel problems. One we've discussed pretty thoroughly and that was the security against theft of the signals we were transmitting. The other one was the source of the movie product itself. The three quarter inch cassette was not only cumbersome and expensive to ship around to be shown and run on the machinery, but we had to pay someone to attend to those machines and run them.

I've got to tell you that the early dubs were very poor. The houses that were taking the movie product and putting them on the magnetic media were not doing very good jobs. They were either grainy or just low resolution pictures that were being produced by those houses in that day.

Somewhere around late 1974, HBO had been acquired by Time-Life. We were already trying to find a way to emulate the Madison Square Garden feed over to New Jersey and go real-time to HBO's Manhattan playback studio where at the time, believe it or not, they were using two-inch quadraplex broadcast playback equipment. But the dubs were very good. They were using those to feed the New York system and we wanted to bring them across the river. That's where the relationship with HBO began. That's where we realized that our relationship with Geoff Nathanson's Channel 100 was going to be of limited duration because of the logistics of signal transmission. We could not continue to grow and countenance the expense, inconvenience and unreliability of the physical transmission of cassettes around our systems as we expanded.

Somewhere in late '74, along with the discussions of microwaving to just our New Jersey group, we had to face the fact that we had Florida, Texas, Yuma, Arizona, El Centro, California, Pasco-Kennewick, Washington, and others where we wanted to bring in pay television services and start the marketing process.

There had been early work for military and government purposes involving satellite transmission and there had been some discussion in cable circles about the potential for video signal relay through the satellites. The first time it was being discussed, it was Marty Malarkey. The other guy who delivered a paper at our national convention was "Hub" Schlafly. Both around 1972. The first time I saw anything that looked like a serious effort to alert the cable industry to the idea that satellite transmission might be in our future was a trailer-mounted dish at the Anaheim Show in 1973. I believe it was a Scientific-Atlanta dish mounted on a trailer and they had some temporary satellite link set up just to show video transmission through the space medium No one really took it seriously, even at that convention. There was some excitement about it, but no one really knew what the economics would be, or how well it might fold into the world of cable.

The first time I ever really heard any serious discussion was when the HBO movie distribution question arose between our company and HBO. It was originated probably between Gerry Levin, then of HBO, now of Time-Warner, and Bob Rosencrans. They were stewing about how this dubbing and tape bicycling question would be solved. Someone at HBO was beginning to say, "Why don't we at least look at the idea of satellite transmission? We've priced out AT&T long lines. That's prohibitive. Let's at least look into it." Someone, probably at the HBO level, went over to see people at Western Union at the time because they were in possession of some satellite transmission facilities. RCA had formed a subsidiary called Americom. There were also discussions with them. Ultimately, a deal was struck with them for a transponder in 1974.

But when the feasibility of this began to sound more interesting and it looked like the economics and engineering would be digestible by us for cable applications, a phone call came to me in Texas from Bob Rosencrans, who said, "You know about these discussions we've been having with HBO. We're kind of stymied on pay growth in the company because we don't know whether to go ahead and buy another truckload of three quarter inch playback machines for all of these systems we're trying to open up with HBO or Channel l00 pay services. We've got a decision to make and I can't and won't make it alone. The financial side of it looks like it will play. But before we stick our neck out, is this technology going to work? Are you willing to bet your bottom dollar on it?" I said, "You bet I am. I've seen enough of it to know that it's got to be a good bet and it's a gamble I won't even think about. Let's take it." So he hung up the phone and called Levin back at HBO and said, "Count us in. We'll work the receive end, you work the transmit end, let's get to the FCC and the lawyers and apply." That was probably after the first of the year in January or February of 1975.

The national convention was in New Orleans in 1975. In February and March, I was up East several times to talk to the HBO people and to go over the final commitment we had made with HBO with our board and with Bob Rosencrans and Dave Strassler. It was probably no more than a month before the New Orleans show that Jerry Levin, Bob and I made a decision to announce at the New Orleans show what we had decided to do. We did indeed do that. It was kind of a bomb. Some people were startled by it. I don't think it was a total secret, but it hadn't been discussed around the industry much before that announcement. There were people that were excited about it. I would say the majority were excited about it. There were some naysayers at the time that said it would never work or it wouldn't be economical, but overall I think the impression was optimistic.

The timetable that we announced at that show was that UA-Columbia would apply for seven earth station sites around its company for openers. HBO would acquire the space segment, that is, lease the transponder. HBO would be fully responsible for the acquisition of the Hollywood product and the transfer to the playback medium. The uplink would be somewhere in New Jersey - probably at RCA's uplink. The first launch was expected to be in Vero Beach-Fort Pierce, Florida in late September of that year. I believe we knew then and announced at that time that the target event was the Ali-Fraser fight to be fought in the Philippines, Manila, September 30, 1975. The so-called "Thrilla from Manila." That was our target date and both HBO and our company would begin immediately to secure the consent from FCC. That we did.

HBO began all their work with RCA and Americom We went to work with our Washington counsel, Cole, Raywid, and Braverman. It was my job to get the application filed. We knew already from having talked with Chairman Richard Wiley at the FCC and a couple of the commissioners that there would be sympathy for the idea at the Commission. After the announcement they said, "Come on in and let's talk about it." We did so and found out that there was considerable precedent for, and even FCC forms for military and commercial applications but none for CATV. There was no form to fill out. The first time in my long history with FCC they didn't push a form at me that was an application for a construction permit. It became my job along with a fellow named Robert James at the law firm of Cole, Raywid, and Braverman to handwrite the application. The Commission just said, "You tell us what your legal, technical, and financial qualifications for that station are in your own words." That's what we did.

ALLEN: How long did that take you?

GUNTER: Well, it took James and me from April when the announcement was made at the New Orleans show until about late June to put all of that in shape. That included frequency coordination which we knew would be required as an engineering exhibit. We had it filed and in the Commission's hands, I believe, sometime by mid to late June. But the Commission was aware of this and alerted to it and even saw early drafts of what we were writing. The Chairman, James Quello and others who were Commissioners were very supportive of that idea and were instructing the staff to accelerate the process because they knew what our self-imposed deadline had been in September and they would like to see us meet it. But it was a photo finish to the last because squeezing something like that through the bureaucracy with something as unconventional as a home-brewed earth station application was a pretty good trick in those days.

ALLEN: How did you choose the Florida location as your test site?

GUNTER: It suspect there were other reasons. I think we wanted to do an East Coast opening. I think HBO liked that. For some reason they didn't seem to think there was anything romantic about opening in Yuma, Arizona or San Angelo, Texas. I'm sure that had to be one of the reasons. But it was also the next place that we wanted to open pay television and we were holding the PO for the three-quarter inch playback machines. It was the next launch. We said, "Let's just put it there. Let's don't buy the three-quarter inch machines. If we're going to put it anywhere, let's start it there. If it works there as expected, then we'll replace San Angelo next because Jersey, by that time, had a microwave feed across the Hudson River for HBO. If it works in San Angelo and in Florida, we'll just cut loose the rest of the orders with the supplier, who was Scientific-Atlanta, and let's get them put all around the country in our bigger systems and replace anything that we've been planning there in the form of cassette playback"

ALLEN: Was Scientific-Atlanta your sole source? Nobody else built those?

GUNTER: I don't know if they were the sole source, but they were the logical source. We had background with Scientific-Atlanta in the cable hardware business. We were pretty close to them already and we knew them, liked them, and trusted them. I knew Sid Topol and Jay Levergood very well personally. It was my job to go in there and hammer out a deal for the first ten-meter dish order, which was for seven stations. The first one had to be ready and delivered for the contractor to install and have talking by mid-September for real-time testing. They were the sole source at the time. We cut the deal for the seven stations and got the commitment to have that Florida station on the ground in time to make our announcement come true in late September. Later, we ran into a few glitches with the equipment along the way. Shortly after the first station was seen as a success, Scientific Atlanta was avalanched with orders. It clogged up the delivery channel to the point that I ended up buying an Andrew earth station for our San Angelo system because I was getting a little disgusted with a couple of mechanical problems we had with the dishes and with some of the missed delivery dates. To answer the question, they were, in the beginning, the sole source. Even before the order for seven earth stations was delivered I was already buying Andrew out of Chicago. We then switched between the two depending upon when and where it was.

End Tape 3, Side A

ALLEN: Ken, did you have any particular problems in doing the installation of the earth dish in Florida in so much as nobody had ever done it before?

GUNTER: Well, they had put in other dishes like ours for other industries, perhaps even military. There was experience in that and, of course, the wind loading of a dish that size was no secret to calculate. I would say that the only thing we did down there was advise the contractor, Jackson Communications, to round off high on the concrete base. That, as you know, was a ten meter diameter dish. It was required by the FCC, at the time we filed our application for the construction permit, that a dish aperture be no smaller than nine meters. It just happened that S-A built one that was one meter larger than that and that was, of course, due to the Commission's concern then about orbital spacing of satellites. They later relaxed that to smaller apertures - four and a half or five meters. We were mostly concerned about the large size of that dish. Being in a hurricane zone, we did go to great lengths to be sure that the superstructure and concrete basing were even bigger than calculated. That's the only thing that I would say was unusual or extraordinary about the Florida installation. We probably were not that cautious inland when I look back to Texas, Arizona, California and Washington State. We didn't have any such anxiety about it, but I think I was most nervous about hurricane damage.

ALLEN: Did the fact that the Florida pay was by satellite assist in the sales of it?

GUNTER: What do you mean, just the idea that it was being delivered through a satellite?

ALLEN: And you were getting better signals when subscribing?

GUNTER: Well, I was going to correct it to that. You've added it. That is what really sold. There was an immediate leap in picture quality. The satellite quality was excellent from the first time the people saw it. There were many dignitaries from FCC and government, HBO, our company, and a lot of trade press. AP was even at the opening that night. All remarked at how they were startled by the crispness and clarity of the picture. I think the subscribers immediately after it was turned on in late September began to respond to the improvement in quality. I'm quite certain that without satellites the pay television industry as we know it would not have developed to its present state. I'm not saying that it wouldn't have gotten there, but it would have taken much longer, years and years longer to bring it to the present penetration levels we have now if we had not used real-time satellite transmission from high quality studios such as HBO's in that day and time. If we were still relying on playback in the field, I'm certain that the quality would be higher, but it still wouldn't be as good and it would still be much more clumsy, a lot more expensive, and we wouldn't have as many simultaneous channels.

ALLEN: Who else went up on the satellite besides HBO, once it had been proven?

GUNTER: After that HBO opening, I think that the next thing that was done that had any consequences at all was Ted Turner putting WTBS, his superstation on. That was really where Turner showed more ingenuity than anyone. He was a guy that really conceived what a superstation could be. Of course, it got a UHF station that wasn't paying him that much return on his investment out of, probably, a pretty deep hole. I think Ted and his father before him had never had that much profitability in running the UHF independent. That's really what put him on the map. And, of course, it is what spawned CNN later. Or at least the transmission medium enabled Ted to spawn the idea. I'm certain that Ted is the kind of guy who could sit around and leap from one possibility, and then catalyze the next idea from just his experience of going nationwide with WTBS. I can almost see him saying that the next logical thing would be a twenty-four hour news service. But I believe that it's in that order. I believe that WTBS going superstation was really the next thing. Then CNN followed quickly thereafter. But at about the same time we were starting to see simultaneous plans emerge from people like Showtime and others.

ALLEN: Did you take WTBS as soon as Turner put it up?

GUNTER: Oh, sure. I think that was a quick, easy sell.

ALLEN: That was not a pay channel, right?

GUNTER: No, that was a broadcast station simply relayed by satellite to the national footprint.

ALLEN: What was the next major event in the development of UA-Columbia?

GUNTER: I think San Antonio was our grand finale. We were still very busy developing that large system in San Antonio. You know, San Antonio was the largest we had done. However, in terms of subscribers, New Jersey, Westchester County, and Brookhaven, Long Island has pulled up alongside. They were as high as 175,000 subscribers in our Northeastern group at that time and we didn't reach 200,000 subscribers in San Antonio for several years. But San Antonio was different because it was really kind of a windfall. It was something that hadn't been done in the big markets until then.

You think back on the large cable markets. They were mostly chopped up. Houston was cut up into six different franchises. Dallas-Fort Worth was cut up in little pieces. Even the little incorporated cities on the outskirts of Dallas-Fort Worth were being fanned out to different entities. Chicago, as you know, is highly segmented. Even New York City was two franchises. The boroughs were later in different hands. If you look around the large markets in the United States, very few of them were swept off the table in one fell swoop by a single franchisee. As a matter of fact, I used that in the franchising arguments with the city and the cities surrounding San Antonio. "Don't go out and splinter off into small groups. Houston made that mistake. Dallas made that mistake. The same mistake was made in El Paso and Chicago. Don't do it here. Let's build you an integrated communications system" For some reason, they bought that.

ALLEN: Did you have much competition for the franchise?

GUNTER: We had almost an instructed verdict in San Antonio in the early days. The team I assembled there was well-known and well-entrenched politically and knew the right people. We went to the city government and actually said, "We're a top ten MSO. Our engineering headquarters and our major operating center is in San Angelo two hundred miles away. GE came in here from Schenectady and didn't do anything. Check us out. We've got the credentials and we've got the financing in place. Why go through the expense and delay and agony of comparative hearing?" In all honesty, we believe that was the best for the company and we were prepared to put our best foot forward and get that franchise. We wanted it. The city government, with the help of our local representatives, believed that was the best. That was in late '77 and early '78, when I made the first presentation to the city council and even added to it the statement that to put our money where our mouth is, we want to open up with a good rate structure here and we want to guarantee that rate for five years. That was just a demonstration of our intentions and our good will.

I think things like that, in those days, were taken seriously by a city government. There was not nearly as much cynicism in the late '70s. All of the franchising excesses, the misrepresentations, lies and suspicions of the city governments that they weren't getting the best deal didn't start until the last phase of franchising in the early '80s. That's when all of that really happened. It was tragic, in a way.

ALLEN: So, in fact, you didn't have any competition?

GUNTER: We did, ultimately, have competition. In the spring of 1978 ironically, in New Orleans where we had announced the HBO UA-Columbia satellite venture three years earlier at the New Orleans show, Storer Broadcasting made an announcement that they had just earmarked $100,000,000 for cable television expansion into larger markets because the rules had been limbered up and made the larger markets feasible. It also so happens that a fellow by the name of Bill Michaels, who was Chairman of Storer, lived in San Antonio at one time. He understood from friends and former acquaintances in San Antonio that there was a major franchising effort underway there. They didn't take a week after that announcement in New Orleans before they showed up in San Antonio and eventually asked for a hearing in front of city council. They said, "Look, this is silly. You have one company in here and nobody else is even second guessing them. Now, UA-Columbia is a fine company and we agree to that. But we're a fine company. We know something about cable. We think we ought to be heard. We think it's really not in the public interest here not to let us at least come in and show you what we would propose and what we would charge." Of course, following our proposal it was easy to snipe and second guess at what we had already said and the rate structure we had already proposed and guaranteed for five years. So Storer did, indeed, do that. I don't blame them for trying. They came damn close to upending us. The city council of San Antonio and the surrounding towns require three readings to finally approve and adopt a franchise ordinance. The city government, politically speaking, was really hard pressed to tell Storer that they didn't want to hear their pitch. So they allowed them to come in. We had already been voted on for two consecutive rounds and approved and then Storer came in and they were voted on for two rounds and approved. I think they came for political reasons. The council then had to make that third reading and that was the deciding reading. So in early September after several appearances by both our company and theirs, the council agreed to have its third reading and we won eight to three. Once we got the city council of San Antonio to approve us, it was really rather easy to sweep the table on the others.

ALLEN: The others were just sitting back waiting to see what happened?

GUNTER: The others were sitting back waiting except for seven cities out near Randolph Air Force Base. Seven of those small, incorporated cities I had managed to franchise. The rest were waiting to see what happened in downtown San Antonio. We had attended to all of those, made full presentations and they were in various stages of approval, but I do believe they all held off until San Antonio acted.

ALLEN: Did you run into any different kinds of problems because it was a city the size of San Antonio than some of the other systems that you had built?

GUNTER: Oh, yes. Let's go back to my statement earlier where I said that the other major markets had been highly segmented, mostly for political reasons. To appease various factions in town that had political clout the city governments would often, Houston is a prime example of that, where they have several applicants that had political prowess, they didn't want to give it to one. They didn't want to face the others and say, "No." So they just chopped the pie up into four, five or six pieces and gave it to the strongest of the applicants. Well, that was more than a political decision. That's an engineering decision. You take something as broad and flat and laid out as Houston, Texas and try to wire that with the technology available to us in the mid to late '70s or even early '80s, you had a real challenge on your hands.

We had the same challenge on a somewhat reduced basis and scale in San Antonio. They didn't segment that. We not only got the seventeen cities surrounding and downtown San Antonio, we got Bexar County. That presented an engineering challenge to my San Angelo group. There was, as you know then only early discussion of application of fiber optics in our industry. Irving Kahn was running around talking about the future of fiber but there weren't that many engineers that I knew buying that. It just really wasn't ready. It was a little early.

So we then had to decide how we would take something involving so many square miles of territory such as San Antonio and feed it with common signals because we had made the representations about the integrated telecommunications systems to all of these cities. To live up to that we had to gather these signals with an earth station location outside of San Antonio or at the edge of San Antonio. One of our cities was named Universal City, very close to Randolph Air Force Base. It happened that the frequency coordination for the downlink frequencies for the earth station narrowed out kind of in that area so we chose that as our downlink location. We had to microwave those down to a downtown bank building in San Antonio and from there we had to spoke out in eight cardinal headings to have sub-headends for the distribution. There was no way with the technology of 1978 that we could have had a thirty-five channel system with trunk links emanating from downtown and feeding distribution in ten-mile radiuses.

So we decided to build as far as the cascade depths would safely take us. Around twenty trunk stations, by the way, out from the downtown bank building where we chose the headend location. Then on the top of that bank building, I elected to use local distribution microwave, Hughes AML, to send out our entire package of signals, off-the-air combined with satellite reception plus the locally inserted alpha-numeric access channels and our local studio. We sent those out by seven spokes of this AML multi-channel microwave to sub-headends around the main loop surrounding the town. From that point we directed our trunk design back towards town to meet the tips of the trunks coming outward at about the same cascade depth and then left in the opposite direction going out from the center of town with twenty more amplifiers.

In that particular time, that covered almost everything that we could see that could be covered in the next five to eight years. If technology had not changed somewhat and if we had retained ownership, we would have had the problem of establishing new headends and earth stations out in the county. It just happened that fiber optics, in that next decade, turned the corner and became a realistic technology for this sort of leapfrogging. We could have used that for the arterial growth routes. That was something that we had not done and even the present owner has not done. If he has to do it at least now he has fiber optics, which we didn't have to work with.

ALLEN: How long did it take you to build San Antonio?

GUNTER: We built San Antonio at an amazing clip. We were completing eighty and ninety miles of plant a month. It was a twenty-five hundred mile plus project and we had represented to the city governments that we would be through within thirty-six months. We made the target.

ALLEN: I imagine there was some competition from some of the smaller towns saying, "Me next. Me first. Me first."

GUNTER: Yes, there really was. However, most of them understood. It had been presented to the city governments that in the policy of the system, the architecture required certain sequential building to get from one place to the next in time; therefore, there was a lot of clamoring for it. However, that's a good problem to have. One of the greatest things in the world in being a cable operator is having to put out the fires of enthusiasm of prospective business. People stop you in coffee shops and even stop you in the street when you're standing by one of your trucks and say, "When are you going to be here? Just write my name down and hook it up when you get behind my house, will you?" I like to go to those kinds of meetings, even at city halls, and take that kind of heat. Of course, we will respond to it. But of all of the problems that are discussed, the best one is, "When can you get to my house?"

ALLEN: Eighty to ninety miles a month is quite a different rate from when you built San Angelo.

GUNTER: Oh, Lord. We could have built San Angelo in two months at that rate. Very few companies have obtained that kind of construction and it was not thrown together. It was a good quality plant.

ALLEN: Did it sell pretty well?

GUNTER: Yes. We hit the 50 percent mark on basic penetration rather easily, almost by default. It went on up to the mid-'60s rather rapidly. As I said earlier, the pay penetration there was just two channels, HBO and Showtime, peaked at 170 percent. I would say that San Antonio was a tailor-made market. Probably a market that was more receptive to cable in view of five local stations than any other market I've ever seen. One of those five stations was an ethnic station. It was a Mexican language station. The other three were networks and PBS. But I don't really count it as a full five station market for that reason, since one was ethnic, but, nevertheless, half of San Antonio, roughly, is Mexican surname.

ALLEN: Any idea why San Antonio was so cable ready?

GUNTER: I don't know. I don't think I can really answer that with certainty. I possibly may have to eat my words when I said earlier how we all felt in the early days of cable that making a beeline for the affluent sections of town was the thing to do. We learned, not too many years after I began in this business, the more of a middle or lower-middle to blue-collar class of people you have in a town, the better cable will do. Actually, cable is not something for the rich man. It's just something he wants when he wants it. But it really is the greatest bargain in the household of a person with a limited income. San Antonio tends to have a higher percentage of that because of the higher Mexican population. It's a nice town. It also has its own blue-noses. But still, probably, it jumped out at the cable opportunity of entertainment as a good buy because they had that higher percentage of the lower income people. As I said earlier, we guaranteed lower rates there for five years as a gesture of thanks and trust to the city government that would have considered giving us a franchise without a comparative hearing. They would have done so had Storer not forced them into it politically. They still gave us the franchise. So we had low rates there. HBO and Showtime were $7 apiece under that plan. Basic cable was $8.50 for thirty-five channels, guaranteed.

ALLEN: Was that the first thirty-five channel system that you had built?

GUNTER: No, we had others approaching that bandwidth. I don't think that was the first. See, the New Jersey stuff was being built to that spec even before we began San Antonio. About this time, we were also applying in the so-called Area 9 of Connecticut for a region around Stamford, Westport and Greenwich, Southern Connecticut along both sides of 1-95. Along that area. We did pretty well in that competition. I think we came pretty close to winning it. But I think ultimately Charles Dolan won that one with Cablevision Systems.

One of the reasons I think we came out second best in that contest is because I was conservative in engineering. I did not want to promise that we would build a full 400 MHz system. 400 MHz bandwidth had just become available. It really hadn't been field tested. We could extrapolate from the old and predict a lot of its behavior, but I wasn't prepared to stake my reputation on it, working as they expected it to when they granted the franchise. I tended to hedge my bet on that. I think that the PUCA sensed that we were tentative about 400 MHz. They wanted it. It had been sold to them as the wave of the future. So they granted it to whomever they thought was the best applicant who would promise it.

The same thing was happening in San Antonio and New Jersey. We were reaching out to the 300 and 330 MHz level with existing hardware and doing it with great confidence. But we did not build 400 even in 1978, 1979 or 1980 in San Antonio or New Jersey. But we did have other things approaching the thirty-five channel capacity.

ALLEN: Was your concern well founded?

GUNTER: I believe it was. I believe, in retrospect, I was justified in being conservative. I'm happy I was. We had some lessons to learn with the four hundred. As a matter of fact, look at the economics of buying it. We were spending, in the late '70s through '82, money for 300 MHz amplifiers that really were giving us all the channel capacity that we needed and had channels to place on those systems. Those amplifiers had a useful life of fifteen plus years. Most cable equipment that I've had experience with had that kind of a useful life, except some amplifiers I built in my shop. But, if I had waited until mid-'80s to buy 400 MHz when it was safe and fully tested and developed, you would have been buying a technology that, even then, was on the way to functional obsolescence way before its time. We passed from 330 MHz bandwidths in our cable hardware, through 400 on the way to 500 and 550 MHz like it was standing still. Therefore, the MHz crowd never ever realized the intended useful life of that hardware before they were already outclassed by the 550 crowd which we have today.

I had an emotional reason in New Jersey, San Antonio and in the franchise competition for Connecticut Area 9 for hedging my bet on the four hundred. I truly believed that we were sticking our neck out where it didn't belong. Those were the early days of the franchising lies and promises we all told to see who could out-lie who and get the franchise. I just didn't want to be a party to that. We really didn't need that kind of channel capacity. I would have much rather put in the tried and proven three hundred thirty capacity of its day, spend less money doing it, and waited for the 5 or 550 MHz days, which we found ourselves in less than a decade later. And then put in the 5 or 550, and, maybe even at this point, waited until we had fiber.

In other words, I'm saying, my company to begin with, and this industry at large, would have fared just as well if it hadn't told all the lies and promised all the channel capacities and proceeded along at a more orderly pace on both programming and distribution channel capacity and let these things happen in a more natural course. It was all accelerated and forced down our throats by the kick-sprint finish of the last few franchises that were available in the '80s. That did things to programming and technology in this business that I think were injurious and that were not sensible and orderly.

ALLEN: You served as a director-at-large on the NCTA Board. When was this?

GUNTER: I shied away from NCTA Board for many years in my early days. I thought that the NCTA Board was, and indeed it's true, that the NCTA tended to be kind of a club in the early days. It was a bunch of the earlier fellows, some of whom started before me, and some who may have started after. But they tended to be cliquish to me and I was still not only busy working with Rosencrans doing what we were doing, but I had my head down and my elbows up and I didn't have a lot of time to play political games. I didn't cultivate that crowd. Most of them were very productive and good leaders in this industry. I don't mean to say that they didn't do a good job for the industry. I just mean to say that I didn't relate to their habits and patterns of the time. So it was not until late '77 that I felt that we were big enough and paid enough dues that we needed representation on the NCTA Board. I ran and was elected and I think I served six or seven consecutive years from 1977 to 1983.

The first year I was on the Board there was more than just the "good old boy" faction on the Board that I didn't identify with in the earlier years. There was little or no engineering representation on the board of directors. It was entirely management, financial, political personalities. I was probably the first recognized technical person that was on the Board. As such, they were rather quick to single me out and ask me to chair the Engineering Committee, which I did. I served a really unprecedented three consecutive years. At that time each board Chairman appointed his own Committee Chairmen for his one year term. So the next three asked me to do it. I was happy to do it and I learned a lot. I think it was in an important time in the industry when that happened. It was fun.

ALLEN: What were some of the kinds of issues that you wrestled with on the Engineering Committee?

GUNTER: The issues, in those days, of course, were bandwidth, reliability, and the plant protection. Jim Stilwell, I recall, was one of the [most] vociferous spokesmen at that time, about grounding and about national safety code issues. Our industry was suddenly getting big enough and visible enough that it needed to look more professional. The cable industry grew up in a lot of TV and two-way radio shops like mine. We strung a lot of clothesline and baling wire up and down the streets and alleyways of hundreds of American towns before we began to really come out of the amateurish mold and start to look like we were going to do things that would deserve the respect of engineering and financial professionals. I believe it was around the late '70s when those issues were beginning to be brought into focus. The NCTA wanted to see those things identified, sorted out, and dealt with. There was a conscious drive within the NCTA from the staff and the Board to make this industry look more like a utility, like a baby Bell, is a fair way to describe it. I think my Committee, for three years and thereafter, did then and has continued to put the professional pants on the technology side of this business.

ALLEN: Who else was serving on the Committee with you at that time?

GUNTER: Frank Bias, Jim Stilwell. There were probably only about fifteen of us at that time. It's very large now, by the way. Someone, maybe Robert Schmidt, the then President of NCTA, or maybe Daniel Aaron, the Chairman the first year I was on the Board, decided that all the NCTA Committees were out of hand with too many back-slappers and good old boys instead of working groups. The Committees had grown too large and ponderous. So he invoked a rule that said, "No NCTA Committee could have more than 12 members plus its' Chairman." But they were the heavyweights in the business, names you'll hear over and over today.

NCTA was also a little bit of a turning point in that that's where, as Chairman of the Engineering Committee; I spent a lot of time down the street at the FCC.

When I was in town I was talking to the Chairman and the staff there about cable matters. I met a fellow who was Chairman Richard Wiley's engineering advisor. He was the EE at the FCC who came in and sat down with Wiley and explained all the new technologies to him so that when it was discussed at the Commission level, Wiley was fully conversant with it. And indeed, this person would even go to some of those meetings and explain it to the full Commission at times.

This was a guy named Robert Luff. At the time I was chairing the Engineering Committee, almost the first of the three years I did that. We had a turnover of engineering staff in NCTA that resulted in some weaknesses that we wanted to bridge. The Board encouraged me to go out and find a new VP of engineering for NCTA. Luff and I had become friends and had immediate good chemistry for each other back during my visits to the Commission. I encouraged Bob Luff to come over and become a Vice President of engineering of NCTA. We had a very good relationship there. As happens quite often in trade associations after a few years there, they tend to migrate out of the trade association into the industry. That's what happened with Luff. After about three years, I brought him early in 1980 to San Angelo to become our VP engineering at UA-Columbia. Luff has gone on to do great things since then. He has been a very strong and able spokesman and, I believe, President several times of SCTE. He, too, has been Chairman of the Engineering Committee. He has won the outstanding engineers award given annually by NCTA. I won that one year in 1980. That was a great honor. Luff is now, I would say, one of the top leaders of the engineering community in our business. He worked as the VP of science and technology for Jones Intercable, and is now at Scientific-Atlanta.

So through that Chairmanship I made associations like that that I believe changed the course of my company and my personal life.

ALLEN: Was the role of the Committee to make recommendations to the board about technical standards?

GUNTER: Yes.

ALLEN: What were some of the recommendations that were made during the three years that you were the Chairman?

GUNTER: We were charged with helping the industry develop standards. I mean things as everyday as symbology for construction maps. They were in a state of disarray in the '60s and up through the mid-'70s. We brought our standard symbology so that all CATV maps that you pick up anywhere in the country read the same. The amplifier symbol and the power supply symbol are the same. They were just whatever somebody thought up before that. We also drafted, wrote and published cable system maintenance practices, safety practices, headend and earth station practices for the membership of NCTA. Rather than recommending a lot of things to the Board directly, the Board usually asked the Committee itself to enunciate for it something of perhaps a political nature, but having a technological basis or background. We would develop those arguments with the NCTA board and staff and get it ratified by the Board to carry it to the Hill or the FCC.

ALLEN: Have you got a couple of examples?

GUNTER: Well some of those things involved the pole attachment formulas. We also got involved in the small aperture earth station arguments, which finally led to reducing those big aperture dishes that first went in in 1975 down to the four and a half meter limit where they now are. They evolved in several forms, but I think during the late '70s, early '80s, the best set of technical standards which the Board adopted and eventually recommended to the FCC to be incorporated into rules for the industry, came from the Committee. A lot of that was fed to the FCC through the pipeline of the NCTA and by the Engineering Committee and its members talking to the FCC. I believe the Engineering Committee along with the Board had certain influence on some of the lawmakers on the Hill where there was an engineering topic at stake.

It may be somewhat arrogant of me, but I like to think that in the late '70s and early '80s, with my help and that of Bob Luff as VP of engineering of NCTA, the staff and the Board really began to take the engineering camp in this industry seriously. Engineers tend to be ignored in all industries, not just cable, but in the early years of all industries, certainly in power and telco. I'm aware of that because I read some of that history. Engineers tend to be treated as vassals. You just trot them out when you need them and then send them back to the back room to play with their soldering irons and drafting tools when you don't want them around bothering the managers. You certainly don't bring them into the board room very often. That's been changed. Engineers have come into their own in this business, and I believe that Bob Luff and NCTA, SCTE and I, to some extent, had a lot to do with bringing the respectability and acceptance of engineers right up alongside managers in this business. It all happened in the late '70s early '80s. I think that because the Engineering Committee and Bob Luff and I were able to do a lot about building that awareness at the board level and at the highest level of the staff at NCTA, the business is far more than financial and market driven. It is a high-tech business that has to be operated as such and the personalities that make those technical decisions and policies have to be a part of top management.

End of Tape 3, Side B

ALLEN: Now let's return, Ken, to the development of UA-Columbia. At the time you were building San Antonio at such a rate, were you also building anywhere else, or was San Antonio pretty much the focus?

GUNTER: Concurrently with San Antonio, the Northeastern group was still advancing rapidly. They were almost the same size for a long time. They were the two high growth areas of the company. We had normal expansion in most of our other markets. Everything besides San Antonio and New Jersey was really below the top one hundred market size. Their growths were maybe in the 2 percent a year range.

ALLEN: It was about this time, then, when you moved back into another merger?

GUNTER: Yes. As you recall, the major milestones in the company were the merger of International and Columbia in 1969 and the stock merger of UA and Columbia Cable Systems in January of 1973. Then with the internal growth of the company we had become a success story financially and there were Board members, principally from the Northeast, but especially our Chairman David Strassler, who had begun to believe that by 1980 the industry could be peaking. This was due to several factors that were afoot in the industry and the world at the time. It was as much a view of the world as it was the industry. But these people were experienced and sophisticated financial managers and investment oriented people who began to think that this thing could be reaching a plateau. It had something to do with just coming out of the Nixon years and 22 percent prime rate experiences and other frights that we had had. In any event, there was momentum building on the UA-Columbia board to look for a buyer and to cash in chips for those of the public who might want to sell. It wasn't said that we would sell all or nothing. It was just said that there were significant numbers of the anxious insiders, and remember that the insiders were still the predominant shareholders. Even as late as 1980 the public float in UA-Columbia was probably not more than 30 percent. So Strassler, with the consent of the board, retained an investment banker to at least assist in the search for potential buyers of all or part of the company. They rather quickly located a high degree of interest in Knight-Ridder Broadcasting and Dow Jones Publishing.

ALLEN: These are two separate entities?

GUNTER: They were at the time. Dow Jones and Knight-Ridder, however, had friendly top brass who liked each other's styles. Dow Jones, as the publisher of The Wall Street Journal and Barron's, doesn't need much introduction here. Knight-Ridder really doesn't, either. They are a newspaper and broadcasting chain. They both, in visits with each other, had decided that they had similar reasons for needing to be in the cable business. This is, again, a somewhat later resurgence of that question that I saw as early as 1965 and '70 of newspapermen and broadcasters wondering if they shouldn't be getting into cable. Much as United Artists had wondered, as theater operators, if they shouldn't be in cable to cover their flanks. Not just as an opportunity for growth but as a possible offset of intrusion into their classical businesses by cable.

So Knight-Ridder and Dow Jones had heard about this opportunity and had talked about some others but just never had gotten serious. They wanted to go fifty-fifty and form a third company that would be invested only in cable properties. They really became inflamed about the UA-Columbia opportunity very rapidly and came in with an offer of $75 a share for shares that had been selling, in the last few months in our company on open market, at probably $30, $32 a share. Our board's ears got extremely pointed, of course. They had not really expected that anyone would come in and place that kind of value on the company, although it was not a big surprise that the offered price was that much larger than our trading price. This was, indeed, part of the pessimism of the Board and its Chairman, Strassler. Public cable companies, then and traditionally up to date, have traded at rather severe discounts off their private market value. We didn't like that either. We didn't understand fully that we would have cash flows and other indices of value that when applied to the private market system sale formula would make us have a per share value, including debt, of maybe $60 a share. And the market is buying us and trading us every day on Wall Street at $35, for whatever reasons. Maybe because we didn't look like the right kind of company to be on a broker's desk. They liked ten to one PE ratios to recommend to their clients and didn't understand the cash flow nature and capital intensity of our business. So for whatever reason, for many years we had seen that kind of public company discounting of our shares. We expected to be bid for at a much higher than Wall Street market price, but we weren't prepared for $75 a share. So the Board was moving rather quickly to negotiate on this offer and close it. It became clear that, at that price, we would even have fiduciary problems as board members if we didn't approve it because the public would have every right to criticize us and ask, "Why?" There were insiders who wanted to take their chips off the table at that kind of full liquidation value.

The bug in the rug was United Artists. The five United Artists directors representing 27 percent of our common stock said, "We don't like to pay capital gains tax. We love entertainment and the cable television business. We don't want to sell. You people sell. We want to stay in." We said, "Well, then, we'll talk to Knight-Ridder and Dow Jones. If they'll leave you in for your shares, swell. We'll just cash the rest of us out and you stay." We went to Knight-Ridder and Dow Jones knowing before we went that it probably wouldn't work but we asked the question. They said, "No, we don't have anything particularly against UA, but, this is our deal. We've agreed to a fifty-fifty consortium and we don't want others in the deal." When we announced it to UA they promptly filed a lawsuit to block the sale. Knight-Ridder and Dow Jones didn't know exactly what to do but said, "Well, we'll wait this out. We'll see if this storm blows itself out and you people deal with them any way you have to because we, of course, intend to fight that. We felt that they should not be allowed, as 27 percent, to block a lucrative sale of the company's shares at that price and we intend to fight."

At the same time there were still negotiations for peace and we were talking to the UA people about, "If they won't let you do this and join their consortium, what do you have in mind? We can't spend the next six months to a year in lawsuits with internal factions of the board because we may even get sued by a group of external public shareholders." They said, "Well, we just may get our own investment banker to go hunt for another buyer. We may buy up to a higher level and meet someone else mid-way and we'll just take all of you out. We'll stay." They did, indeed, do that. They then retained an investment banker who did a lot of shopping for them. They finally located a guy named Ted Rogers from Toronto, who was the largest Canadian cable operator at the time, I believe still would be the largest Canadian cable operator, and Rogers, through several weeks of discussion with UA and the investment banker, decided that he would come in for an even-Steven deal on voting control if UA would buy from 27 to 49 percent. He insisted he had to buy 51 percent, even though they would balance voting controls. He had to do that so he could borrow the money from the Toronto Dominion to do the deal. Only by owning 51 percent could he consolidate all of the American company's numbers into his Canadian numbers and justify the line of credit. UA agreed to that.

ALLEN: Was this at $75 a share?

GUNTER: Well yes, they wanted to do it at $75 a share. But the minute this deal was hatched, we realized we had a bidding war. Knight-Ridder Dow Jones raised their offer to, I believe, $80. The UA-Rogers consortium raised theirs to $85. It quickly ratcheted up to the $80, $85 level and then Knight-Ridder Dow Jones said, "Hey, this looks like this could go on forever, count us out." Because Rogers-UA, then, had tendered a $90 offer for stock that was selling for $32 on the marketplace. We knew what we had to do. The Board knew what it had to do. Of course, the insiders who were clamoring for us to liquidate or make possible a liquidation for those who wanted to sell were thrilled, Strassler included.

Now, in the meantime, UA had approached Rosencrans and me and said, "Look, we've done what we wanted to do in the sense that we struck what we believe is a good business deal, but we don't know anything about the cable business. We know Ted Rogers is a well-known Canadian cable man but we want you to stick around and help us run the company." So we signed a five-year contract, Rosencrans and I, to stay on. This was all taking place in 1980 and into mid-1981. It started about the fall of '80, really, and came to a head and culminated in the Rogers-UA deal in the summer of '81. It was consummated and the checks were written to the public shareholders in November of '81.

Immediately thereafter, meetings were held between UA and the Rogers boards. We formed our new board of directors and, at least lip service was paid in those days, to leaving the American management in place. But I think that it was apparent to Bob Rosencrans and me that the Canadians would soon become heavy-handed. They were very bright businessmen. Ted Rogers is a lawyer by education who, I believe, never practiced law but thinks as a lawyer. He is a very bright man intellectually and a consummate dealmaker. But he could not, and time proved, would not keep his fingers out of day-to-day management of the company and leave in place the American management that had brought the company to where it was.

Arguments erupted almost immediately between Rosencrans and me, and Rogers and the Canadian top management. In the early days, this did not really include the United Artists owners and directors at the board level. They were a little amazed that there was friction so early and tried to encourage both sides to calm down but it just didn't work. There was just too much interference with the Canadian style in matters. We knew that things were not going to work if we did not use the tried and true methods that we had used to build the company.

ALLEN: What were some of the issues?

GUNTER: One of the things that came up was that I'm sure Rogers would have been aggressive in multiplying services too rapidly. He was an aggressive marketer. However, he had borrowed a lot of money. In fact, he was sloshing to his eyebrows in leverage when he got through doing the UA-Columbia deal. He had his own debt to assimilate related to his Canadian properties and acquisitions along with this one. But after the Rogers-UA deal was done he was leveraged to the hilt. I think he really had pressure to generate cash flow and generate it quickly. Rosencrans and I believed that he was driving us in our bigger properties into a multi-tiering of pay and decisions on hardware which I didn't like. I had told you earlier that I was not happy with set-top security hardware until about this time, early '80s. We did not really want to get away from our negative traps in a lot of our big markets. They were secure, they were manageable, and they were easily audited. We trusted them. We just weren't ready to spend millions of dollars replacing that technology with electronic set-top security just because it could be addressed and would manage several more channels than the two or three pays we had been running. Rogers wanted to get immediately into as many maxis, as many offerings, and as many mixes and combinations to use in marketing schemes as he could. He needed to really build up basic and pay penetration rapidly and start milking that cash flow to service his debt.

There were other disputes. Some of them stylistic, some of them even personal, about the way he browbeat, and, in my view, abused our top people. We had over the years assembled some wonderful cable managers and engineers. We had adopted a decentralized management style that trusted and even drew from the system level of the company up through the divisions for policy making. It was run like one big, happy family with a lot of people in shirt sleeves who loved what they did and were very company-oriented, loyal employees. The Rogers Company, on the other hand, was somewhat of a snake pit in terms of people. There was a lot of jockeying for position in the ranks of their management. I think they were somewhat distrustful of the ease with which our people spoke and exchanged ideas. They were, I think the word I use is correct, simply heavy-handed with good people who did not need heavy hands. And to us it was restrictive and constrictive. It didn't let our people fly and operate at the levels that they were capable of operating the company. It had a suffocating effect on us, I think. Maybe that's a better word than restrictive even. Rosencrans and I debated that issue with Ted Rogers many times and tried to get him to relent, ease off. Indeed, let us report to him and let us handle our own troops. It just didn't work.

ALLEN: He was in Toronto, Rosencrans was in Connecticut...

GUNTER: ...and I'm in San Angelo. I had moved to San Antonio by that time. It was such a big project, such a big chip, that I sold my home in San Angelo and moved there. I didn't close the offices. We kept our divisional and corporate people in San Angelo with that system. But we all commuted back and forth a lot. I had a company apartment in San Antonio and finally bought a home there. This was all about the time that the mushroom cloud was building around the Rogers-UA and Rosencrans-GUNTER: arguments.

It wasn't more than about a year that the arguments began between Rogers, Rosencrans and me that UA itself began to argue with the Canadian board members and with Rogers about business issues, policy issues, and financial strategy. They were soon at each other's throats. In the merger agreement, there was a divorce clause which called for either Rogers or UA to be allowed, as the dissenting party, to call for a bust up. Then that would force the dissident party who had called for the bust to divide the company's assets into two balanced lists and let the non-dissident pick the half he wanted. Like two kids and one apple, you let one kid cut the apple, but the other one gets to pick his half. That keeps everyone real honest. That's exactly what Rosencrans and I had to do. UA called for the divorce. Bob Rosencrans and I had to divide the company into two balanced lists, not only financially and from the standpoint of value, but to some extent respecting geography. We were scattered from Washington to Florida and Brookhaven, Long Island to El Centro, California on the Mexican border. It's a pretty big challenge. Because we had the management contracts and because we knew that UA had already spoken to us and said, "When this bust occurs, please stay with us because now we don't have anyone that knows cable anymore. But we've got immense value and will you and Gunter stay?" We said, "Yeah, we'll stay. We love the company. We want to stay here." That encouraged them to proceed with the bust-up.

Bob and I took the list and decided that it had to be broken along the large market systems. We put in New Jersey, Westchester, and Brookhaven at the top of one list. We put then San Antonio at the top of the other list and began to gerrymander the company between the two, balancing subscribers and values and geography the best we could. But there was a prejudice that crept into that. It was an interesting one.

Rosencrans was always very proud of San Antonio and loved it, but it was basically my brainchild and something that I developed from San Angelo two hundred miles away. But rightfully so, New Jersey and Westchester County, New York was his brainchild and baby. He developed it from Westport, Connecticut. It was clear that I wanted to keep the San Antonio list. Rosencrans would have certainly taken the San Antonio list but he would have preferred to have kept the New Jersey list. So in filling out and flushing out those two lists beneath those two properties, which we both had conflicting geographical and emotional reactions to, we ended up kind of along the Mason-Dixon Line. We rationalized that division, not because of Bob's Eastern connections with New Jersey or my Texas connections with San Antonio, but because the best value and our brightest, shining star was really San Antonio. Even Bob was gravitating towards the idea of putting the systems we really wanted with the San Antonio list and putting New Jersey at the other side and the Northwest and Aspen, and anything else that we could put in there that worked with the North, although we did leave the East Coast alone. We put the Midwest, the Tennessee group, Ft. Smith Arkansas and others, mostly the ones we thought would appeal to a man from Toronto who already owned Syracuse and half of Minneapolis and half of Portland, Oregon.

Obviously, a man from Canada who owns those northern properties is going to want our New Jersey group. Well, he had a month or two to make his mind up. He sent all the troops out and did his due diligence and immediately did a doubling back and picked the San Antonio list. Shocked us all. So there went my old San Angelo system, San Antonio, Laredo, Alamogordo, New Mexico, Yuma, Arizona, EI Centro, California, some of Bob's oldest systems and some of my oldest systems. As LBJ used to say, "Well, there goes the neighborhood!" So UA then inherited the Jersey group: Westchester, Brookhaven, some of their old systems, Aspen, Colorado, my old Vero Beach- Fort Pierce system, which we had to use to balance the country over on the East Side, even though it was on the southern side of the country. Bob and I were once more running those. The date of the consummation of the Rogers-UA deal was November of 1981. This divorce was called for and done by mid-late '83.

ALLEN: Didn't last long.

GUNTER: Didn't last long. We then, as we said, joined the UA group with a management contract. We loved the business and we loved some of our old properties we had brought along and developed but we also talked, in those days, that we didn't have the same feeling for the company. We were just "hired guns" now. They paid us well, they let us alone because they respected our cable knowledge, but we were just hired guns. Our equity was gone. It changes your whole view. Your whole entrepreneurial view is modified by that. I didn't believe it until it happened but it's changed forever when you are no longer a shareholder. We did a good job and we loved what we did, but there is something missing. But still we were out fishing for deals and UA was encouraging us to look for deals. They even had us out looking for land mobile radio deals and thinking that we might get into something involving land mobile like cellular. In fact, we located a deal like that but we just never did it because it was too wormy and complicated.

In the meantime, Rosencrans and I were looking for other things. Something comes up with a guy named Bob Wright, who used to be at Cox Cable and is now at General Electric Corporate. He heads up the cable operations for GE Cab1evision, the old franchise holder in San Antonio whom I thought I would never meet again.

ALLEN: What goes around comes around.

GUNTER: That's right. That it does. They wanted to do a deal and focus on some other things. I think at the time Bob Wright was headed for bigger and better things at GE Corporate and was moving along. He may have been their guiding light in cable, as they saw it. For several reasons they wanted to either sell out or sell most of their systems and keep some stock. That they did. We engineered a deal with them. We were both big companies. I mean, it was really a chance to do a classy deal. We did, indeed, negotiate and put that deal to bed about the time Bob Wright moved on to GE Credit Corp. Another guy from the executive suite took over his authority in the cable area.

Then one of the most unexpected things in my career happened. Bob Rosencrans was at a resort somewhere in the Northeast and got a phone call from Marshall Naify, the Chairman of the board of United Artists and he fired Bob. This was just shortly after we had announced and put to bed the GE deal. There was no relationship. UA loved the GE deal. It was one of the things that enabled them to sell later to the Danie1s-TCI-United crowd and their current combo at the value level that they were able to command. No one really knows why that happened. Why they called Rosencrans, one of the nicest men in the industry, certainly one of the classiest and genteel fellows you'll ever meet. Why that phone call was made no one knows. I suspect it was made because the cable arm of the theater company was suddenly outgrowing its master.

Even the investment bankers would write research papers about UA in those days and note that the cable arm was suddenly approaching or exceeding the theater, the traditional theater side of the company, in revenues and in profits and in cash flow. I think there was to some extent, an unspoken battle of egos, and perhaps even a fear at some point that Rosencrans and I would be the tail wagging the dog and do some other kind of deal which would force their hand at something they didn't want to do. Maybe even leading up to our making a deal which would cause them to find themselves in a sell position like the UA Columbia/Knight-Ridder-Dow Jones event wherein they almost were forced to sell their 27 percent of the company into a deal they didn't want to acknowledge. I think there was some of that. This is industry history that we're talking about and you're free to use it or not, but I'm saying to what extent we edit this, I don't know. It was an exciting, tumultuous period in everyone's career and a sad time because there was a mass exodus of the people who stayed with the Rogers half. Our people and the style of the Rogers people, once they were in full command of that half of the company, didn't fit. That exodus didn't last a year. Ninety percent of our good people were flushed out and gone like a covey of quail in all directions.

ALLEN: When did Rosencrans get the telephone call?

GUNTER: April of '84.

ALLEN: So there was still another year, year and a half, in your five year management agreement?

GUNTER: Yes. September, 1985 is when that contract expired. They paid Rosencrans off, but they wouldn't pay me and run me off. I resigned from their board I was so incensed by what they had done to Bob Rosencrans. I think, at the time, they had not consummated the GE merger. It was a done deal in terms of letters of intent and the numbers were put to bed but it wasn't done. I truly believe, and they took a great chance in firing Bob Rosencrans two or three months before that consummation. That they thought they could get away and squeak through the deal and indulge their emotional need to fire Bob and still not blow the GE deal out of the tub by keeping me around. I think that if they had gone for both Bob and me at the same time, that GE would have walked away because they would have said, for one thing, "What could be going on in this wonderful company we're buying?" They were staying in bed with the deal. They didn't get paid off. They kept some stock in the company which UA had to payoff over a period with a formula of puts that GE had. They could put the stock to UA after a period of time and force them to buy them down. But for a period of time they had to rely on the UA management team to run UA and their old GE cable system group properly or there would be a diminution of value. That's my theory at least. I think if they had just swept out our top management in one drastic action it would have been the end of the GE deal. They didn't want to kill that deal but they also wanted Rosencrans gone.

So I stayed around. They wouldn't pay me off or let me go. Well, I could have gone; I could have just voided the contract and gone. But they wouldn't have finished paying me what they owed me. So I stayed until September of 1985. Even then I resigned from the Board and told them of my displeasure with the treatment of Bob Rosencrans, and therefore, I was a lame duck that did little or nothing except stay in my company-paid office with my company-paid secretary and cash my pay checks. I had time to think of other things and I already knew I would be joining up with Bob Rosencrans in another venture later. Indeed, in early '85 Bob and I and our old financial VP from Chase Manhattan, a young fellow named Scott Ledbetter, formed our present partnership called Columbia International. I don't know how much detail you want on that. Do you want anything else?

ALLEN: Yes, sure. Keep going.

GUNTER: Columbia International is a limited partnership that was formed as a result of the series of blow-ups between Rogers and UA and our ultimate expulsions from those companies, or our decision to leave, and to stay in the business we knew and loved and thought we could do well in. The name is silly. The name came from merging back the old names of the Rosencrans and Gunter corporations, Columbia and International There is nothing international about our partnership. It operates in five or six states and has no ambition to go off-shore. However, the word Columbia never came from a Hollywood connection of any kind. The word Columbia came from Bob Rosencrans' original acquisitions on both sides of the Columbia River between Washington and Oregon, between Pend1eton, Oregon and Pasco-Kennewick, Washington. That's why it was named that and it was as good a reason as any to keep it.

So Columbia International started out and we, fortunately, had built through the years a lot of good connections and I think a high degree of respect with the New York lenders, insurance and bank lenders. We were pretty well known names in cable by this time. Fortunately we were able to go in and structure debt and equity deals to formulate a limited partnership in which we were general partners. We went out and began to look for acquisitions and we found several just in the nick of time before the cable market momentarily peaked.

We bought some systems, not at fire sale prices, but at good values. We bought Vancouver, Washington. One of our old division managers, Homer Harmon from the old company, had acquired some smaller systems in the South Tahoe area of Nevada, which he had bought personally. He traded those in for a limited partnership stake in the new partnership and is now one of our junior partners on the GP side of the deal. The first deal we actually did was Ann Arbor, Ypsilanti, and Brighton, Michigan, which was a group that we bought from TCI and Daniels. Then came Vancouver, and about the same time, the Nevada group. Then we bought three different acquisitions, a group of systems south of Washington. D.C. and Prince William County, Virginia starting around Quantico Marine Base and arcing around north towards Manassas. Probably, as we acquired those from '85 through '87 or '88, we had some beginning subscriber counts down around 130,000. Those have now grown to 200,000 basics in the five years we've owned them.

Columbia International has really kept some of the principals of the old company together. Bob Rosencrans and I, Scott Ledbetter, Ron Harmon, Homer Harmon's brother, who was the manager of Vero Beach-Fort Pierce for many years and later became the general manager of San Antonio. He and his brother have been division managers of UA-Columbia and then Rogers-UA properties for many years. A fellow named Cal Broussard who came to us from TelePrompTer years ago, managed our Aspen, Colorado system for many years, then moved to our Ft. Smith, Arkansas system, and then came to the assistant manager's position in San Antonio. Now he is the group manager of about half of our present partnership subscribers in Vancouver, Washington and Portland, Oregon. We don't own any of the Portland franchise. That is primarily TCI and Rogers. Of course Rogers sold most of that recently. We have fifteen systems that were built originally by Storer Broadcasting on the west edge of Portland that are centered in Beaverton, Oregon. Those systems and the ones centered around Vancouver just across the Columbia River, represent about half of our 200,000 subscribers. I find it ironic that the Columbia River has always figured into this company. There was no way of knowing when we formed this partnership and called it Columbia International that we would then own systems straddling the Columbia River in Washington and Oregon. That's spooky.

ALLEN: When did you move from San Antonio back to San Angelo?

GUNTER: I moved in September of '87. I was commuting some and starting to fly again with my own airplane in '84 and '85. Ironically, I bought my first airplane from Ted Rogers. We put the airplanes based in San Angelo into the southern list that he picked and he didn't want the airplanes. So I bought one of them back from him personally just to get back and forth to San Angelo. My father passed away at age eighty-four in March of 1985. I had to get back and become active in the management of his estate with my sister, who was then still alive. Then in '87, due to the '86 roll-off and the profitability of oil operations in Texas, the fellow I had sold my home to near San Angelo went broke in the oil business and moved to Kansas and left me with it because I owner financed it. So, happily – it's a home I like - I took it back and still live there and I like it very much. Since September of '87 I've lived there.

ALLEN: What is your major role now in Columbia International?

GUNTER: I have the same title I had with most of the years with UA-Columbia and Rogers-UA, Executive Vice President in charge of a little bit of everything. I still head the engineering department. We have a director of engineering there much like Bob Luff, who was my VP engineering in the old days. They're the day-to-day guys but they report to me and clear engineering policy and directions through me. I guess that might be my greatest strength in some ways because of my family background from retail experience in the early days and the exposure to my father and uncles in Texas. I grew up with a pretty good business acumen that was tempered by that exposure to the family businessmen that I knew on both sides of my family. My mother's kinfolk have some entrepreneurial people that I'm sure influenced me. But having grown up with that background and the engineering and technology background I think maybe what I've done best of all is to translate engineering and technology goals into the language of management. I've been able to take engineering policy and principal into the board room and argue and debate it and even go to bat for it when necessary in terms that financial and management and marketing people understood and accepted. I still do that.

ALLEN: Does Rogers still own San Angelo?

GUNTER: No, no. My old San Angelo system has been sold three times since we owned it last. Four times, really. San Angelo was bought, of course, or acquired by International when my father and I traded our equity in for International stock. International was later acquired with stock which we exchanged when Columbia and Bob Rosencrans came around. Columbia gave UA stock. That wasn't involved in San Angelo. But, then came the Rogers-UA deal where Rogers-UA, an entirely new parent, acquired it. Then came the divorce between Rogers and UA where Rogers acquired it. Then Rogers traded San Angelo for properties belonging to Scott Communications who had, in the interim around '83 during all this upheaval in the company, come in to Bexar County around San Antonio and begun to build scab systems.

End of Tape 4, Side A

GUNTER: You recall that we talked about the aggressive construction schedule that we had promised the city governments there a three year schedule which required an eighty-ninety mile a month build rate. We also had the Bexar County territory surrounding the San Antonio and sixteen other cities. But we had not promised them nor could we in good conscience go to the more rarified areas around these cities and build cable when there was such clamor for the service in the dense areas.

So an opportunist named Scott out of Da1las, Texas came to Bexar County and began to cherry-pick. Build what I just referred to as scab systems, which to us is just an interloper, and build in these territories. We knew they were there. We thought, "Well we'll either buy them out later or we'll overbuild them or we'll do something. But we've got to finish our commitment in San Antonio." So not much was said. Then suddenly we began to finish those commitments and leap out into the county. Then Scott sent one of his lieutenants down to see me. We had lunch and he asked what our intentions were. I said, "Well, my intentions are the same intentions that you've been reading in the newspapers ever since you've been down here. They've been the same for about five years now. We're going to build everything in these cities we have franchises in and we're going to build all of Bexar County." He said, "'Well what about these systems we're building." I said, "Well, name a price or whatever, but we're going to come out into the county as promised. We already have said we would and we now have the franchise to do it. It's also part of my first early commitment that we would build an integrated telecommunications system for the cities and the county and that's what we intend to do." He said, "Well, we've got this investment out here." I said, "Well, you knew we were coming and had franchises when you came in so I presume you expected we would be here some day."

When he first said we had so much power in the bigger cities and why do we want to come out there and interfere with their little, small pickings in the county, I said, "Well you've heard the reasons why and we're coming." He wanted to make a deal. In short, we never made a deal. I just said, "Look, if you'll build to my specifications-because you're building cable facilities out there that are far beneath my physical and electronic specifications- all I can tell you is when I get there we'll pay you a fair market value for them if you want to sell. Otherwise, we'll overbuild you." Well, that never happened

But they filed an anti-trust lawsuit for several million dollars against the company. Of course, Rogers fell heir to that. I think there was little or no merit to the anti-trust suit because they came in there much after the fact. We couldn't have been accused of predatory pricing because we were still, at that time, within the five year voluntary freeze of rates that I had promised the council five years before. Anyway, they filed a suit for whatever nuisance value it had and this is how the deal was made with San Angelo. They wanted San Angelo and Alamogordo. Rogers wanted to clean up the anti-trust action and get them out of the Bexar County territory and integrate it into his San Antonio system he had just inherited. So they made a swap. Scott Cable ended up with San Angelo and Alamogordo, and I think something else that Rogers had. Later, Steve Simmons was forming a private MSO which is now headquartered in Stamford. He was out shopping around and finally made a deal with Scott Cable to take Scott clear out of the cable business and so Simmons owns Scott and San Angelo. It's a long, serpentine story, but that's the way it happened.

ALLEN: You're also involved as a member of the board of directors with TCA Cable?

GUNTER: Yes. I think I joined the TCA board in 1984. That's about three years after they went public in '81. Bob Rogers, the Chairman and principal shareholder of TCA, is an old friend of mine. I probably met Bob around late '59 or early '60, and it's an interesting circle that you repeat over and over in this industry. You recall I said I was buying principally from Jerrold, Entron, and Ameco in the late '50s when my dad finally let me begin to buy a few things besides the homemade amplifiers. It also so happened that Bob Rogers was just starting in the East Texas cable area, acquiring a few little, wide spots in the road. Bob is a very conservative man financially. He always buys everything as cheap as he can and he thought that the cheapest way to buy Entron amplifiers, pressure taps and line splitters was to become an Entron dealer or distributor. So he did, indeed, do that. He went to Hank Diambra and said, "I want to be one of your dealers. Of course, I want to buy for my systems, but also go out and stir you up some business around the state." This is really the first place that I began to hear of Entron. Bob Rogers was knocking on my door wanting to know if I wanted to buy some Entron goods through him. That's how we met about 1959 or '60. We've been friends ever since. Bob, in those days, was just beginning to become a big factor in acquiring some East Texas properties. In the early to mid-'50s, he was a drive-in theater operator who just bought and operated some little outdoor movie screens. He also began to quake in his boots a little bit about this new idea called cable television that might get into the outdoor screen theater business. And, indeed, it did. So to hedge his bet, he was able to pick up a few little cable systems and learn something about the business. He ultimately sold out of his outdoor theater business and concentrated solely on cable. As you probably know, or could find out easily, Bob Rogers has done quite well in cable and now has a public company as respected as any in its size class. I've been on that board since 1984 and enjoyed that association very much, not only because Rogers and I are old friends and I respect his record in the industry very much, but because that company runs a lot like the old UA-Columbia ran. It's got the same kind of homey people and careful managers, but informal, shirt-sleeve decision makers that characterized my old company.

ALLEN: And Television Enterprises, Inc.?

GUNTER: Television Enterprises, Inc. is another kind of crazy deal. In 1965 there was a dentist who practiced in Brady, Texas for a while. Brady is about seventy-five miles from my home in San Angelo. He left a general practice in dentistry to specialize in orthodontics and came to San Angelo where there was more of a market for that kind of a specialty service. He was, just by accident, a limited partner in the original system in Brady, Texas in 1954, one of the earlier systems in the state. This system was operated by a fellow named John Threadgill, who is now dead, but whose son, Jack Threadgill, is still an active Texas cable operator.

Along the way Threadgill and his seven limited partners, who were local area businessmen around Brady, - ranchers, farmers, lawyers, dentists, as in my partners' case - became disenchanted with the way the company was being run. They thought that Threadgill was spending money that belonged to the company on personal things like aircraft or cars. Arguments ensued and the partnership broke up. One of those partners, the orthodontist I have mentioned, a fellow named James Francks, knew my father and me and knew that we had been in the cable business a long time and that we were in San Angelo. He kept slightly more than a majority of the company for himself, but offered about 30 percent more of it to a couple of other Brady personalities, one an MD, and one a fellow that used to run a butane gas business there. But he felt that their local presence was needed which is why he offered them the other 30 percent. He had about sixteen percent left and he came to see my dad and me and said, "Do you all want to buy this? It's not a very big deal. It's only about thirteen hundred subscribers. But you can buy the whole thing for a reasonable price and we'd like to have you in because we know you're cable experts. That's all I've got left, so do you want it or don't you?" Dad said, "Yeah, we'l1 take it." That was in 1965.

Eleven years after that company was formed and the system was built is when the bust-up occurred. Francks happened to get an option to buy it from the rest of the partnership and exercised that option and split it up as I just described. Along the way I was able to add other little franchises that cluster around Brady. We've got now nine total headends and systems averaging about a thousand or twelve hundred subscribers. Brady is the biggest system we own in that little company. It's twenty-three hundred subscribers. The little MSO is still run by Dr. Francks and me and his son James Francks, and totals now about nine thousand subscribers.

ALLEN: That brings us pretty well up to date as far as where you are. Now what I'd like to do to wrap this up is to ask you to take a look at the future using the knowledge you've built up over the years. Where you think some of the trends are going to take the cable industry? One of those things is the role that Congress is playing. They came very close to passing some new regulation legislation in the last session. Do you think that they are going to add some additional regulations and, if so, what impact do you see the proposed regulations having on the industry?

GUNTER: Well, as we speak, Senators Gore, Danforth and Hollings are already introducing a new de-regulation bill for 1991. There is no question that there is going to be some momentum in the first Congress to revisit last year's bill, which failed to pass. I do believe that the hotheads that are leading that charge are not going to succeed in bringing about punitive re-regulation. I believe that the moderates are going to win the day with the view that competition is really the answer for cable television's public relations problem The FCC is already hard at work on developing new definitions of effective competition and must-carry. The copyright issue will be revisited before this is all done. When the rules are changed, I think copyright will have to be modified in accordance with those rule changes. Compulsory copyright is bound to be modified with anything that is going to upend our present FCC rules. But I believe that Congress will finally recognize, and even the White House will agree. I think that the FCC is probably the best place to foster and launch competition. I do not think it is going to come about in the form of re-regulation or repeal of the Cable Act of' '84 or something that tumultuous. I just don't think that's going to happen. I think that maybe the time has come for this industry to face the reality of competition. It has been almost, not quite, an unregulated monopoly.

I think since the '84 Act has been handed to us there have been abuses. Among the old-timers that started this business with me, we grew up the hard way in the business, and I must say I've met very few cable pioneers that were real money-grabbers in the sense that they would ever gouge on rates. Rate gouging has started since the Cable Act was passed. The Cable Act, as you know, was passed right in mid-stream with the final kicks that went on to land those last few franchises on the beach and when the excesses of the industry were peaking. Congress may have made a mistake in handing us that much liberty. I think it has been, to some degree, abused. But, primarily, by the new entries into this business. When cable became a fair-haired boy in financial circles during the late '70s, maybe as far back as the satellite era in 1975 and '76, I think that it became immediately apparent that cable was going to be a real success story and a money machine. Wall Street, the insurance company lenders, and the commercial banks began to agree and recognize that it was a real skyrocket.

In the late '70s, or by 1980, I began to notice dozens of new faces, the MBA type manager and investor who came in from the sidelines in this business, and began to acquire properties. There is nothing that says they can't or shouldn't. This is a free country. But that is the very crowd that began to take the most advantage of the de-regulation of the Act of '84. The crank on rates has gotten us into this terrible cross wind. I do think we have been abusive. Not everyone, but enough to attract the attention of regulators at all levels, local, state, and federal, and that attention has brought the house of cards down around our ears. We really had it made if we had been less greedy and less aggressive about how we went on to develop this industry and the concomitant rate increases, which would have come. You can't continue to add channels and services in an escalating consumer price index environment and never raise the rate. No one ever said that. But we've gone far beyond that point and enraged people such as Albert Gore and made them enemies of our industry. We're paying the price now. But I don't think it's going to be paid in terms of a brand new, iron-clad bill from Congress. It's going to be paid in whatever the federal government can do to foster competition.

ALLEN: Do you think the FCC will remain a major player in cable rather than the industry being treated like a public utility under the PUC?

GUNTER: Absolutely. I have my reasons for believing that. The Commission is the logical vehicle to bring all of this new defacto re-regulation about in the form of competition because the competition is high-tech. The competition is direct broadcast to the home. The competition could even be, if Judge Green and the Commission relent, telco competition, which the Commission already regulates. The Congress, to some extent, every now and then passes a bill that modifies the Communications Act or something. But, essentially, wireless cable, DBS, telcos, all of these competitors that could be launched against the cable industry are already understood and in-house as far as the FCC is concerned. Why shouldn't they then be the ones to stir all of these technologies together as best as they can see the industry in the next decade?

ALLEN: What do you see as the role of the telephone company in this business?

GUNTER: We talked earlier in this interview about the telcos having a mentality that really pervades their companies back into the '20s where "anything that comes down a pair of copper wires belongs to us." I think that same mentality certainly pervades the post-divestiture Bell operating companies. They come by it honestly. They inherit it from the Ma Bell days. I don't resent that nor do I fear it. It's an honest enough business instinct. However, it's monopolistic and I don't think they're going to be permitted to remain a telecommunications monopoly any more than we are. The days of the defacto telephone communications monopoly, really, are gone for all practical purposes. I think the telephone company will be permitted ultimately, to render some video services, first dial tone, or perhaps lease channels. I think that there will be First Amendment and other political issues involving their being direct program sources. So I suspect that you'll see the emergence of video services through the telephone medium, first of all in maybe some dial tone selections of pay- per-view events.

I really believe that you're going to see movement in this country towards an electronic white and yellow pages, very much like the French have developed. I've seen that work. It's quite impressive. Not every instrument is equipped with this little five inch or seven inch CRT screen in France, certainly no more than every phone in America is touch-tone yet. But they're well on the way to converting to a system that has a tremendous information capacity other than looking up a phone number for a friend, or even going to the yellow pages and shopping for completely current vendor information. As you know, that's one of the things about the yellow pages that none of us like, it's only printed once a year. If you start your business or stop your business in mid-year, you've got a problem with the yellow pages. This one is updated daily.

ALLEN: Is that done on twisted pair or does that require fiber?

GUNTER: It's slow scan. It's data rate. It does not require fiber. Rapid scan, or full motion video as you'd expect over broadcast or cable system, is going to require a lot more bandwidth than you can cram down a pair of copper wires, even with compression techniques. So the phone company has two problems before they're really going to get in here and slug it out with the cable industry. They are going to have to solve the politics involving the consent decree with Judge Green and the FCC management on the cross-subsidy issues and things that all of us fear could happen if they're allowed into video. But they've got a massive plant problem. They are, for other reasons, moving into the direction of broadband and away from copper pairs. But to move at a rate fast enough to put them into the broadband video business at the same time they're just starting to build fiber pipelines for voice and data is really a project that, if done in time to compete with us this decade, would take more money than God's got. I don't see it happening. As well-heeled as the Bell operating companies are, I don't see it happening at the rate they are propagandizing that it will happen.

I think a lot of their plans to wire this and wire that and we're going fiber into the home, or at least to the curb, all this stuff is a lot of their usual, very adept, lobbying effort to get some of the constraints and manacles off of their industry by Congress and FCC, and even by the PUCs. I don't think we're going to see that much of the telephone company into our nest this decade. But I do think they're on the way, and conversely, I think we're on the way to a head-on collision with them. I think you're going to see the cable industry demanding a level playing field if the telcos are turned loose to get into cable as we know it, and perhaps even more primitive video as we just discussed. It's only logical that our industry is going to be clamoring for a right to get into data and voice.

ALLEN: Is this going to require any major new technologies?

GUNTER: Yes. First of all, our architecture in the cable industry is not any better suited to telephone data two-way duplex transmission than the telcos architecture, which is suited for that, is suited to the bandwidth requirement of video. We're incompatible for related but separate reasons. We have the bandwidth but the wrong architecture to get into voice and data and they've got the architecture to get into voice and data but they don't have the bandwidth to get into video. It's an interesting dilemma. But as we both move towards fiber, the bandwidth question tends to equalize itself between the industries. As we both move towards fiber, the bi-directional problem of topology in our system of architecture tends to become less onerous for us. That's one distribution technology. Then we have terminal technology to consider. We would have to modify our thinking as radically in the home terminal as the telephone company will have to modify their home terminal thinking to get into video services. They don't know any more about video home terminals, which we've learned about the hard way as you know, than we know about voice and data home terminals. It's encouraging to see the experiments that have just been announced this past year with some of our MSOs willing to go in and test some of the new personal communication devices, which are really the mini-cellular telephones that work in the ultra small cells.

We have an almost natural network to couple into a PC network and to get into the personal communications business in a big way on the neighborhood level. On the system-wide level we still have to interface somewhere with bi-directional plant with the public telephone utility itself to make those telephones worth holding in your hand and using. That problem has yet to be solved, but I think it's on the way because interconnect is a problem that was solved long ago with the Carterphone decision. So, on the matter of do we have the right to interconnect with the public telephone system. We do. It's how and on what tariff basis will we be allowed to do it. So I see those two rivers merging in the household.

ALLEN: What impact is the enhanced television signal going to have on this, assuming that this controversy is settled?

GUNTER: Well, I can give you an answer to that one both as an old television set retailer and as a cable man. You're not going to see the people in this country make the radical transition to HDTV from the present generation of color TV that they made from black and white to color. That was a little different and the chasm wasn't as wide. You're going to see HDTV of the Japanese type into the marketplace at $3,000 and up for a decent receiver. I don't see that happening in a large enough quantity to encourage the broadcaster or the cable operator to distribute those signals in rapidly evolving numbers that would cause this thing to reach a critical mass and then grow suddenly. It's just too esoteric for that right now. You're going to see a stepping stone in the form of advanced NTSC, which is compatible with current NTSC. Another of the stumbling blocks which true HDTV does violate, and that is compatibility with existing receivers. That's the other thing that will hold it back drastically, besides the additional cost of the receiver and the transmission capability of the broadcaster and cable man. So you're going to see in the next year or two, I think, some very encouraging experiments and enhanced NTSC American Standard which will be quickly adopted by broadcasters and cable companies by the middle of this decade. That will carry us as a stepping stone into true HDTV by the end of the century and into the next century. That's my estimate of the timetable now. I don't see how that could happen much faster than that.

ALLEN: Do you see that being analog or digital signals?

GUNTER: You're asking if I see improved television in analog or digital. Let's start first with the enhanced NTSC which must remain analog to be compatible with the millions and millions of analog receivers out there. So, that's for openers. The HDTV is almost certain to be digitized so it lends itself to compression techniques that are going to be required to control the bandwidth appetite of that medium. If you sent out true HDTV analog signals in a normal uncompressed analog format, it would take at least three times the bandwidth of an American TV channel-18 megahertz, roughly. There's hope to get that down to eight or ten, maybe even lower, with advanced compression techniques. But only if they're digitized.

ALLEN: The last item, then, is on the programming side. The satellite made it possible to put a lot more programming into the home. Do you see any other things on the horizon that are going to have a significant impact on programming?

GUNTER: Well, programming certainly put us where we are in this business, I don't deny that. But I'm a little cynical about the gluttony that has gone on in our programming industry. I don't blame people for taking opportunities and shoe-horning in new ideas where they can, but I'm afraid we've already over reached in programming. We're narrow casting now. We've already seen in the last year or two several cable networks emerge and go broke. Some of them weren't bad ideas. They were not that ill-conceived. They just simply came into a market place that wasn't ready and into a viewer's home where confusion already reigns.

I still talk to a lot of viewers. I still believe in keeping my ear to the ground and listening to the grass roots. The consumer of cable services is already confused with thirty-five, forty, fifty channels and we're going to confuse him even more with another thirty channels and yet we're heading towards 600, 700, 800 megahertz distribution systems. I don't deny that we've got to continue to develop our bandwidth capacity but to me it's not for more satellite and broadcast channels. It's for all these other services that we can probably think up that are value-added on top of traditional cable as we know it. Fifty channels of television is almost mind-boggling if you get to thinking about it. You talk to the average person at a coffee shop and ask them what channels they watch; they'll all tell you around six to seven channels. Now, they'll be a slightly differing six or seven channels. And the first string, as I call it, of cable channels off the satellite networks encompasses no more than fifteen channels. It depends on whom you talk to. Some will say sixteen or eighteen. Some will say twelve or thirteen. I say about fifteen is what I call the first string channel of satellite. The rest are tapered drastically or rapidly from that point downward in viewership and value to us. But they're there. Once they're put on, they're hard to take off. So, in programming, I would say that we may have maxed out for a while. There is certainly more to come, but it's going to be much slower than the last ten years of growth.

I guess I'm reminded of a thesis that belongs to Alvin Toffler who wrote, Future Shock, years ago. I read a chapter in Future Shock that is burned into my memory about over choice and how he remarked that the typical American automobile in 1975 or '76 - whenever he wrote Future Shock - had thirty-.five hundred possible combinations of optional features that you could order if combined in all permutations. He said that he felt like this is part of the future shock of our civilization, and especially in this country. It really had a numbing effect on the buyer. The ultimate consumer of our businesses and services is being numbed-out by over-choice, and I think that the cable TV industry is headed in that same direction. We need to diversify our broadband telecommunications services, not just keep piling more of same on top of the same.

ALLEN: What are some of the diversification things that you see coming down the line?

GUNTER: I don't think that there's much question but that we're going to be into the Nintendo type business and the interactive business, both video and data, in the next few years. I was one of the early detractors of some of the silly blue-sky ideas like reading water, gas and electric meters by cable and burglar and fire alarms and things like that. I never really believed that that was something that we should do. Not that we couldn't do it, but because I knew enough about telephony to know that the telephone company can always take those kinds of narrowband, short-term bursts of information and kill us on efficiency and price. But when it grows in sophistication and becomes a picture or interchange of broadband data, for the moment at least, we have the inside track.

Now we've already said that the rivers are merging and the time will come that I will not be able to tell you that the phone company is outclassed by cable in broad or even medium band services such as interactive data or home terminals, videotex, and interactive games. I don't know. I don't know at what point those curves will cross, but I predict that it will be mid to late '90s that we'll begin to see the early warning signs of telco being able to compete where we once thought they couldn't compete with us in special services. They will probably also be shocked to learn that we can now compete over here on their turf where they once thought we were totally incapable.

Other than that, I don't know what is going to be flowing up and down glass fibers and coaxial cables. I think the imagination is the only limitation on what we can transmit to and from a home. We do live, after all, in the information age. If it's information and if it's got to be perceived by the senses, if it can be seen by eyes or heard by ears or keyed in on a keyboard by the fingers, I guess we can transmit it both to and from a home and charge money for doing so.

ALLEN: So it's been an interesting period of time to have been in the cable business since you started after graduating from Rice University and from what you're saying is that there is no diminution in that interest.

GUNTER: Oh, no. I love this industry. It's been good to me. Of all of the things I'd like to go back and change, that I would prefer now to have done differently, I never look back on my decision to enter the cable industry. I'm only amazed by the good fortune that led me to that decision. You've heard the old saying, "You don't have to be smart, but you'd better be lucky." Well, you need to be a little bit of both, but I'll tell you this, there's is no way I or 90 percent of the cable pioneers I know can say they intentionally, by design, entered the cable television industry knowing where it was headed. I didn't anymore know where it was headed than the man in the moon in 1958. We thought we were going to sell more television sets, and I just began to love the technology and the excitement of it. There's never been a dull moment in this industry, but I can never go back and say that I did this with full awareness of where I was headed. Also, it's the only major decision I've ever made that I've never regretted, and would encourage anyone to get into.

ALLEN: So you think it is a business that you would encourage young people to look at as a potential, long-term career?

GUNTER: Sure. I'm just like any old goat in any business. I'm sure that I've seen the best years in this industry, and I truly believe I have, at least the most exciting and the most dynamic years. But this business or any information and telecommunications related technology today is going to be exciting the rest of my life and probably well into the next century. We are living in an age of information flow and the people here in the middle of that flow and the purveyors of the ideas and developers of the companies and systems that transfer all that information and charge for its exchange are going to be on the cutting edge of our society for the foreseeable future.

ALLEN: Well, on behalf of everybody associated with the National Cable Television Center and Museum, thank you. It's been a most interesting couple of sessions and we'll look forward to continue working with you.

GUNTER: I'll be interested in seeing all this gibberish on hard copy so I can start scratching on it with my marks-a-lot.

ALLEN: You'll have the chance.

End of Tape 4, Side B

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Bill Griffeth

Bill Griffeth

Interview Date: Tuesday September 14, 2004
Interview Location: New York, NY
Interviewer: Steve Nelson
Collection: Legacy Collection

NELSON: Bill, let's just get started. Tell us a little bit about where you came from.

GRIFFETH: I grew up in southern California. I'm part of the baby boomer generation, the California generation that benefited from the boom in the aerospace industry. My father was an engineer and I grew up obsessed with television. I'm also part of the television generation. Sunday's would come along, the Los Angeles Times would hit our doorstep and the first thing I would go for was the TV Times, the TV Guide and I would memorize it for the coming week. What was going to be on the episode of this show or that show and I knew everything that was coming for the week. I was obsessed with television. Did I read a whole lot? A little bit, but I watched an awful lot of television.

NELSON: What did you watch? What were some of your favorite shows in those days?

GRIFFETH: Sitcoms. My dad tells a funny story – he's no longer with us, but he would tell a story about a marketing survey that called one evening at the dinner hour as they always seem to do and the man on the other line wanted to know if there were any children in the home and my he said, "Yes," and they said, "Well, can you tell us what their favorite television program is?" And he simply said, "Meet the Press," and he hung up on them. He had a sense of humor. I loved the sitcoms and I grew up watching the Dick Van Dykes and the Lucille Balls and all the greats along those lines. Interestingly enough, I didn't like watching news; I thought it was boring. Watching people sit in front of a television camera and read the news to me was not the height of entertainment. Who knew?

NELSON: Who knew? But at that point did you have any thoughts about yourself being involved in television?

GRIFFETH: You bet!

NELSON: As a comedian?

GRIFFETH: I'll tell you what. I've wanted to work in television for as long as I can remember. The goal was a bit nebulous. I would take whatever came along. I can remember in college getting an interview with one of the anchors at that time there in the Channel 4 newsroom in Los Angeles and I'll never forget that experience when I walked into the newsroom for the very first time. I physically shook because I was so excited to be there and I wanted to work at an operation like that so badly that I'd have done anything. So, the interest has always been there, let me say that.

NELSON: Now you mentioned college. You went to Cal State Northridge.

GRIFFETH: Yes. I had planned to go to UCLA. I grew up my whole youth expecting to go to UCLA. My basketball coach in high school had played for John Wooden and his son was on the Walton gang – Greg Lee, who was the point guard for Bill Walton – so I was steeped in the tradition of UCLA basketball and I was going to go to UCLA until I went to apply and I found that they didn't offer a journalism degree, and they still don't. It's called a communications degree. Well, I wanted a journalism degree and I went to my own backyard and I'm glad I did. Nothing against UCLA but I found that Cal State Northridge had a wonderful journalism department and I obviously made some very good friends there as well.

NELSON: It's remarkable that Ron went there, Sue went there, I think Sue's sister went there.

GRIFFETH: Sue's sister, who's a production manager here at CNBC, she also went there.

NELSON: Now what's going on there? What was it about that program? It was obviously very good – look at the people that it produced.

GRIFFETH: The fact that we're all still working together to me is the most remarkable thing. Sue and I knew each other in college. Ron was a few years behind us. He was in the radio, TV, film department; Sue and I were in journalism and we worked at the campus radio station and if you had told me 25 years ago when we were there that we would be still working together today anchoring together living in the same state 3,000 miles away – it is a remarkable coincidence! There was no effort on the part of Financial News Network to hire anybody as a group from Cal State Northridge. We all came at it individually; ended up in the same shop and here we are still together today. It's unbelievable!

NELSON: Working three feet apart.

GRIFFETH: Exactly – still after all these years.

NELSON: Now, when you got out of school, where did you look to first break into the TV business? You mentioned the local NBC affiliate in LA.

GRIFFETH: My first stop was applying in various... the local magazine shows at that time were hot and there was a show in Los Angeles called Two on the Town. You had the home magazine show, some other iterations, but there was a show called Two on the Town that was hosted by Connie Chung and a local fellow in Los Angeles, who's still out there by the way, named Steve Edwards. It was a great show and I tried to either be a local correspondent for them or a field producer or whatever openings they had – they had some openings – and I was interviewed by their executive producer, a man by the name of Joel Tater, and I didn't get the job, but he never called me back. I never got a call back and for weeks – I was working still at the campus bookstore at Cal State Northridge even after I'd graduated, and everyday anytime there would be a phone call for me the whole bookstore would light up – "Did he get the job? Did he get the job?" I never got the job and I never got a call back. Fast forward many years later, Joel Tater came to work for CNBC and was directing a show I was doing for awhile and I finally, after we'd worked together for a few months and gotten to know each other I called him on it. I said, "Joel, do you remember years ago when you were the executive producer at Two on the Town I interviewed for a job there and you never called me back." Well, he was mortified, obviously. We became pretty good friends, but...

NELSON: You got over it.

GRIFFETH: I got over it. I finally got a job working in publishing for a year for a small book company, a book publisher out there that did sports books and sports medicine and martial arts, and I thought all right, maybe this is where I'm supposed to go in my career, but I knew that I still didn't have television out of my system because anytime somebody asked me, "What do you do for a living?" it would be, "Well, I used to work in television but now I'm in book publishing." So after a year I quit, didn't have any job prospects but I had to get out of that and clear my head and get back to television. August of 1981 a friend calls me one day and says, "I just read in the trade papers," Variety, Hollywood Reporter, I don't know which one it was, "that they're starting something called Financial News Network on cable and it'll be in Los Angeles and they're looking for people to hire there, both in front of the camera and behind the camera." Well, I didn't know anything about business. My degree was in journalism, remember? So I went and applied anyway. At that time CNN had just started, the Disney Channel was on cable, ESPN had been around for a few years, HBO was there and that was about it. But cable was the next great thing in television.

NELSON: And did you feel that at the time? We know that in retrospect, but at the time did you say, "Wow! Cable! This is really hot!"

GRIFFETH: You bet. It was out there and cable channels were starting all the time, not just FNN. The number of channels that have come and gone from those early years, I would go to these cable conventions those first few years and collect the pins of cable channels that are nowhere, or anywhere around these days. So I went and applied at the studios there in Santa Monica and I applied for an on-air job and they didn't think I looked old enough to be a credible business reporter, so I was made a producer. I got the job.

NELSON: In the door, anyway.

GRIFFETH: I had my foot in the door. I had my first television job, finally. About six months later, one of the anchors called in sick and they put me on the air and I never left. I never stopped being on the air.

NELSON: I guess you didn't do too badly that first time around.

GRIFFETH: It worked out after a fashion.

NELSON: But how did you handle the financial information because you mentioned that you were a journalism major, didn't have any background. I think it was a similar case with Ron when I spoke with him. What did you do to get up to speed on that stuff?

GRIFFETH: At FNN we brought together people who knew television and people who knew business and we taught each other what we knew. Remember, this is 1981. There was no outlet to speak of on television for business news. Lou Keyser had been doing it on ABC briefly in the '60s and he did it for a long time on PBS. That was it. You had Ray Brady at CBS, you had Mike Jensen at NBC and a few others at the network level, but on a local basis the extent of business news on television was a quick mention of the Dow Jones industrial average if there was time and that was it. So you didn't have a generation of reporters, broadcast reporters, who knew anything about business so we had to teach each other about business. I had to learn about business, I had to teach those people who came from business about television, and that was a pretty good creative environment to work in at that time. Very heady times.

NELSON: Of course you didn't have the audience that later developed for this kind of information.

GRIFFETH: Thank heaven we didn't!

NELSON: Right, you sort of got away with it in a way.

GRIFFETH: I didn't say it was good television but we did business television starting November 30, 1981. It was a Monday morning and we went on the air with Financial News Network. We had four anchors that we had assigned to different tasks – one stock market, one futures market, one international news, and the other was our main anchor. We did seven hours live for I don't know how many months before we expanded beyond that, but essentially we went on the air when the market opened and we went off the air an hour after the market closed every day. At that time the market only traded six hours, now it trades seven hours. It expanded a few years after we went on the air, and I think we fed a handful of UHF stations at that time in addition to some of the few cable systems that we fed. Now, let's remember, when we went on the air in 1981, cable programmers paid the cable systems to carry our feed. It wasn't the other way around. God bless Ted Turner when a few years later he said it's going to be the other way around and we were able to go to the cable systems and say, "Okay, now you're going to pay us." It was a very expensive proposition to start a cable channel at that time because we were the ones paying to be put on those cable systems.

NELSON: So essentially your only revenue stream is advertising and in those days the advertising community would look at something like FNN and probably half of them would say, "What are you, kidding?" They even dissed CNN – the chicken noodle network, etc, a couple of nicknames.

GRIFFETH: That's exactly why Turner turned the tables eventually. He had the chutzpah to do that and we're all grateful to him for that, but you're right – the advertisers looked askance at us wondering what this was all about. So the solution for Financial News Network was not lost on the founders of the network. They decided they would try to go public and sell shares. If we were covering the stock market we should be in the stock market. So July of 1982 we went public, we IPO'd at that time, and as fate would have it, the founder of the network was forced out by the venture capitalist who had been providing us with some bridge money before we were able to go public and he left the network that day when we went public.

NELSON: Now there were some other problems there with the upper management at FNN...

GRIFFETH: So I hear.

NELSON: ...that came along shortly thereafter, and of course the '80s was a very go-go time, but there were also a lot of bankruptcies, a lot of M&As, a lot of things going on in the financial world, as you know because you were covering it, but it was ironic that FNN itself became number one, embroiled in a bankruptcy, and number two, involved in securities fraud – or I guess the head CEO at the time.

GRIFFETH: The leadership was convicted of that. While it may seem ironic that that would be the case, I would remind anybody that our job was covering the stock market on a day-to-day basis. We didn't have investigative reporters per se. I've always said I'm not an investigative reporter. That's not my job. I'm an interpretive reporter. My job of necessity is as the news comes in... I'm sitting at the anchor desk as news is happening during the day and as the news comes in my job is to interpret it for the viewing audience, to put it in perspective, to make something of it, to make it understandable. So we didn't have anybody looking at the books at FNN from the news staff. Trust me, we were busy trying to put this stuff on the air. The old line is "the beast must be fed every day" and we were busy shoveling it out there trying to help the best be fed. So sure, there was a little embarrassment about that, but it was what it was.

NELSON: But from your perspective was it just keep plowing ahead? We've got to do this seven hours a day, and let somebody else deal with that.

GRIFFETH: Looking back today, there are two times when I still marvel that we hung in there and stayed with it, me included. One time when we found ourselves – this is before the network went public – and we were strapped for cash and there were two different Fridays that were supposed to be paydays when mysteriously the checks hadn't arrived yet from the bank. They were en route, "in the air" we were told, but in the meantime they had us line up in the newsroom – I am not making this up – the anchors, the producers, the camera operators, the graphics people, we would line up in the newsroom as somebody stood there with a stack of cash and we were given what we might need for the weekend.

NELSON: To get you through, right?

GRIFFETH: "How much do you think you'll need for the weekend until the checks get here on Monday?"

NELSON: Right, just to make sure you were back on Monday.

GRIFFETH: That happened twice. I marvel that we even stayed with it. The second time was with all the legal problems and when the network went into bankruptcy. I had plenty of people say through the years, "Why did you stay with this? Why didn't you go work for a broadcast outlet?" A couple times I wondered that myself, but I stayed with it and it worked out.

NELSON: Do you think if you had attempted to leave or jump ship that you would have had the credibility, say in the broadcast side of the business, to walk in there and say, "Well, hi, I'm an experienced anchor," and would they take you seriously at the time because that was the problem, I think, that you and other cable networks were having is getting taken seriously.

GRIFFETH: I think so. It's the problem that actors faced in the '50s when television was coming in. You wanted to avoid television if you were a motion picture actor. There would be a stigma attached to you, right? When Lucille Ball started her own television program, I mean this was the queen of the B movies in the 1940s, and when she started her own television program people in Hollywood knew that her career was over, right? The same could be said for broadcast talent. Cable? Why would you want to do that? And it worked the other way. There was something of a glass ceiling or whatever you want to call it if we wanted to get a job at the broadcast networks. Now I never tried – I'll be frank with you. I never put the feelers out. A couple of times there were rumors that I was being considered for a couple of broadcast jobs but nothing ever came of that, and I'll be frank with you, I was still very happy doing what I was doing. It was, after all, exactly what I had hoped for. I sat in a studio and I was on television and I was also providing a service. Now this is going to sound very Pollyanna-ish, but this is the honest to God truth – I loved meeting with viewers through the years. I'd go to various investment conferences and I would meet with viewers and often the feedback was "Thank you. You have taught me to empower myself about my own money, to watch over my portfolio, to make my own investment decisions. I discovered I can do that for myself." And I'll tell you, that is very satisfying and knowing that those people were out there basing investment decisions on what we were reporting was pretty heady stuff, and to a great degree that's what kept me there as well, not only at FNN but certainly at CNBC.

NELSON: Not only were you satisfying your own career interest and ambitions, but you were actually performing a "public service".

GRIFFETH: A public service, absolutely. And I'll tell you, the early days of FNN, what was also exciting about that since I was also a producer in the very early days was we were creating something and I felt a sense of ownership for that product. I had been there the day it started and this was kind of my baby and I wanted to stay with it and see it try and flourish as much as I could. We were trying to decide something as mundane as the color of the ticker. Should there be a ticker? How should we display these futures prices and how often? All of these things that we now take for granted.

NELSON: Because this is totally brand new.

GRIFFETH: You bet! I'll tell you a story – this was late 1981, early 1982, the very first formal daytime news conference that Ronald Reagan held in his first term in office and we carried it live like all the other networks. Let me tell you, that was very exciting for us just to be carrying a news conference live from the White House. However, the moment we put that on the air the phones started to light up. Remember, there's no email so we don't get the kind of feedback we get today from viewers who can email us instantly and let us know if we're doing something right or wrong. The phones lit up and people took umbrage with the fact that we kept that ticker running on the screen below the President of the United States. They felt that we were not showing the kind of honor that we could be showing for the President. It was disrespectful to the President. Now, 20 years later what do you think would happen if each time we went to a news conference by the President we took that ticker down? A totally different environment now. People have come to accept all of the busyness of the television screen that we fought with. We broke all the rules of television presentation to that time when we were at FNN simply because we had so much information that needed to be imparted simultaneously – stock quotes, news, whatever it was – and now it's just very much a part... Every time I see a channel that carries a ticker, whether it's for news or sports quotes or prices I'm proud. We were the first to do that and I'm very proud of that.

NELSON: And that's just become a staple of a television presentation.

GRIFFETH: Absolutely!

NELSON: Now we had been talking about this whole mess with what was going on at FNN, if we can characterize it that way...

GRIFFETH: It was a mess.

NELSON: And then you became the target of two attempted takeover bids. You had Dow Jones on the one hand, you had NBC...

GRIFFETH: Well, we had a few in the very early days. Westinghouse was said to be interested. Remember, they were part of CBS at the time. Paramount Studios, Barry Diller was said to be interested in us at the time. There were even rumors for a time that Ted Turner might want to buy us and make us part of his cable empire at that time. But it came down essentially to NBC and Dow Jones, and how odd was it that while we cover business news we were the object of what became a very big business story for a time and a very ironic business story. A bankrupt cable network that other entities were willing to pony up hundreds of millions of dollars to buy.

NELSON: And what were you kind of thinking in being in the middle of this when you weren't on air and busy doing what you were doing. The irony of it, at a quiet moment, thinking what is going on here?

GRIFFETH: You bet. I won't lie to you. There were moments when after work we'd head to the local watering hole and try and make sense of it all. Sometimes you couldn't make sense of it, but I'll tell you what. We tried simply to keep the product on the air, to keep it as professional as we could and to make sure that the asset that these other properties, these other companies, saw such a value in maintained that value. I mean we could have just walked away. When we went bankrupt the executives, the good guys, if you will, at FNN who were responsible for keeping that network on the air did all the right things and they made sure that we were taken care of and that we had all the resources that we still needed to be able to put that product on the air. I give them a lot of credit for that.

NELSON: Because that was the asset of the network – the audience.

GRIFFETH: They were buying the distribution that we had. We had a tremendous distribution thing, and you know what that's all about? I'll tell you what that's about. I'll let you in on a little secret. We were not geniuses when it came to programming but there was an appetite for business news that to that point had gone largely untapped. People discovered that people were going to be interested in news about the stock market, about retirement planning, about saving for college, all of those things that we do at CNBC and that we did at FNN, and it was simply that the demand was strong. It was there. Now, I will say that we have to take some credit for providing a product that people were willing to watch. If we just threw up some numbers – we had joked about that once in awhile, if we just threw up numbers and made it a text service would they still watch? Who knows? But the demand was there and I think that was what NBC realized, it's what Dow Jones certainly realized when they were willing to spend as much money as they were in a bidding war for a bankrupt cable network.

NELSON: So essentially using a southern California metaphor, you caught a wave, in surfing terms. Let's transition now because you talked about NBC ultimately, of course, became the winner in the FNN sweepstakes, CNBC. Tell us about that transition, how that went.

GRIFFETH: From a professional standpoint, NBC did everything right. They sent people out to get to know us, to make us feel at home. Now, let's not forget. I don't want to gloss over this too much because an awful lot of people did lose their jobs at FNN in Los Angeles. The vast majority of the people who came to work for CNBC from FNN were from our New York office. Only a handful of us from the Los Angeles bureau, which was the main studio at FNN, went to work for CNBC, maybe five or six of us. That was it.

NELSON: You, Sue, Ron...

GRIFFETH: Ron Insana. Sue had already come to CNBC.

NELSON: She had already gone there, yeah, yeah, right, right.

GRIFFETH: She had left us in '88 in actually helped start CNBC. Joe Kernan was a writer for us at the time and then he ended up on the air as well with CNBC, but that was about it. So I pay tribute to the people at FNN in those final days who still kept us on the air even though they knew that come D day they were out of a job. NBC comes along, though, and they made sure that the operation was going to be properly taken care of. They're a class television organization and we had always known that anyway. So it was a Tuesday in May of 1991 that FNN went off the air. From my timeframe, I signed off at 2:00 in the afternoon. John Bollinger, who was our technical analyst at the time also went back and worked briefly for CNBC, it was part of his deal – he and I ran to the airport, we hopped on a 4:00 flight, we arrived in New York that night, we met Ron Insana, we met the late Ed Hart, who was our great credit market reporter at that time, and one of our production managers, Keith Manasco. We all met at a local bar across the street from the hotel where we were staying that night.

NELSON: This is pretty late at night.

GRIFFETH: Very late at night, but we needed that and we sat there and decompressed for a couple of hours before we went back to the hotel. The next morning Ron and I were on the air at 8:00 AM. I'll tell you – I was in total denial at that time because this meant uprooting my family. My wife and I grew up in southern California; we were never going to leave Los Angeles. Why would we want to leave LA? Perfect weather, a great market to work in out there...

NELSON: To go to New Jersey?

GRIFFETH: To move to New Jersey, which by the way I love now, as a sidelight. And my kids have grown up here and they don't know any different. It was a very, very gut-wrenching time, but you know what? It was the right move professionally and it worked out personally as well.

NELSON: So how are things different? You go on the air there. How did it feel different, what was going on differently?

GRIFFETH: You know, I've always said that FNN was a business news service that happened to be on television. CNBC was a television network that just happened to cover business news. There's a big difference. CNBC had the huge backing of a very deep pocketed parent, not only in NBC but in General Electric. Let's not forget that this became a pet project not only of Bob Wright, whom we still consider the patron saint of CNBC, but also Jack Welch, the CEO of General Electric. When you consider the size of GE and the size of the portfolio that Jack Welch had to oversee we got an inordinate amount of attention at CNBC from that man and we've always thanked him for that. He wanted to make sure that this was going to be a success. He saw the opportunity that existed at that time. So, we get to CNBC and this was like moving to a country club. We've been "movin' on up" as they used to say on The Jeffersons years ago. It was heaven. And I even went to our VP about two months into my tenure at CNBC and I said, "You know, you've got to give me more to do here," because I had been used to working my fingers to the bone for hours on end during the day and here a lot was done for me. I was "talent" and we had producers doing an awful lot for us. So, the environment was a lot better professionally at CNBC and the product, I'll be frank with you – it was a better product as well just because we had the resources to do what we always dreamed we could do at FNN. You give us those resources at FNN we could have done the same thing, but here was an opportunity to finally finish what we had started at FNN ten years before.

NELSON: Now picking up at your point about this is a television network about business rather than a business network being on television. How did it effect you as talent and also as an on-air personality because that's one of the things that in a way does characterize CNBC – some of the people who are on-air, they're personalities, and yet in this world of objective facts and figures and dollars and cents?

GRIFFETH: I will say that being at CNBC made me better on television because when we got here there were an awful lot of very good people on the air and there still are today, obviously, but we had tremendous competition to be on the air. So you moved it up a notch. At FNN we could get away with being more folksy. Let's face it, Sue and I by ourselves for five years were on eight hours a day straight, so there was no way we could hide our personalities. We got very comfortable being on the air all those hours during the day so that was wonderful training. You mentioned earlier, we had a very small audience – thank goodness we did, but as it grew we got better. By the time we got to CNBC and the sized distribution audience that we had at that time, that was time for Bill to take it up to the next step, to not just be a business anchor but now I could be a television anchor and I've got to tell you, I relished the opportunity, I really did, when I got here.

NELSON: And did it help that you didn't have to just crank through seven hours a day on the air, that you could really focus on the time you were on and really do that well?

GRIFFETH: You bet! There was a time here at CNBC when I was doing three and four hours a day only because I'm that kind of masochistic guy – more work, more work! – but early on I did an hour a day and then I worked up to two hours and that's when I said I went to the VP and I said, "Please give me more to do!" I had been so used to going home exhausted every day that I felt like I was stealing the money that they were paying me at the time. It was though a very satisfying period there. There was still the feel of a start-up as we were merging these two news operations and we were starting to get attention for it as well.

NELSON: You know, even with NBC/GE's deep pockets, it was by no means a sure thing that this network was going to work. There were still questions out there as to whether there really was an audience for this, whether there was enough advertising, how much the operators would pay in terms of licensing fees.

GRIFFETH: And some of those questions came from our colleagues across the river in New York City at NBC News without naming names, but as I said Bob Wright was our patron saint but there were plenty of people within NBC who didn't understand what this CNBC was all about. This was NBC's first foray into cable and we were like this white elephant that a lot of people didn't know what to do with. Jack Welch and Bob Wright preached boundary-less behavior, not just at NBC but at GE throughout the company. There needed to be synergies that would reduce costs that would add value, that would provide growth and they were hoping there would be these synergies between NBC and CNBC and early on there wasn't because quite simply it goes back to what we talked about before, the stigma of cable versus broadcast, the stigma of television versus motion pictures in the 1950s, that was very evident when I got here at CNBC. The people at NBC News weren't sure they wanted to be working with the folks at CNBC. That's changed a lot now but back then it was a very different working environment.

NELSON: Now you talked about Bob Wright encouraging an open environment in the company, but nonetheless, people are territorial, people guard their prerogatives and you guys are really upstarts and you're in New Jersey on top of that. So I guess there was nonetheless a little bit of friction there. We don't have to get into names, but you weren't exactly embraced.

GRIFFETH: And you know what? I understand that. People worked very hard to achieve the status of working at NBC News and the fear was that if we were going to get into cable that that would dilute the talent pool, it would promote going after the lowest common denominator, it would reduce costs to the point where... you know, broadcast television notorious for spending money. The solution for years to fixing a problem in broadcast television was to throw more money at it. I'm not saying that's good or bad, that was the solution.

NELSON: And they had the money.

GRIFFETH: And they had the money, right? Cable came along and for awhile... I don't know, I never saw it officially, but I always heard that CNBC throughout the GE family, not just NBC, throughout the GE family had the highest per capita income of any unit in General Electric. No secret why – we were pulling in the money, we were a cash machine and the overhead was very low relative to our broadcast brethren at NBC.

NELSON: Now when did it become a cash machine? When did it hit profitability and more importantly than that, when did it really get recognized that this is really an important media outlet as opposed to what the heck are these guys doing? Is there a moment that sort of solidified that in your mind?

GRIFFETH: I have been asked that many times and for the life of me there is no... I wish there were a single moment that I could identify when I could say we have arrived now. There isn't from my perspective that I can remember, but it was a series of events – the quality of the people willing to come to work at CNBC, that was one thing. The number of newspapers willing to do stories about us, not the stories about the financial difficulties that used to exist, not the stories about the questions surrounding cable and the future, but stories truly about the interest that had been generated in the stock market by CNBC. I can't tell you the number of times we would hear from brokers who would say they were calling us to find out about a story that a client of theirs had called about because they had seen it on CNBC. It was very much a grassroots growth that occurred for CNBC. I can't pinpoint a single moment where we can look back and say that's when we realized that we had become a social phenomenon but I can point to a series of incidents that showed that the growth was very organic in this relationship between the people who were watching us and the programmers at CNBC who were responding to what those viewers wanted. You know, Jack Welch's great mantra was for years "the customer is first". You give the customer what they want and you will be successful and I think we were a great example of that. The interactivity that existed between the viewers and the programmers at CNBC – we would take phone calls on the air and when email came in we would take email, now we're online and we have websites that people can gain access to, but that kind of interactivity promotes an ownership of sorts to the viewers. They feel like they have a stake in what they're watching and at CNBC that was been a main part of our programming technique for years is that interactivity and that relationship with our viewers.

NELSON: But talk about your viewers, the customer. In a sense you have two really different kinds of viewers. You have the public and their increased interest in the market and things financial, but you also have, and you alluded to this a little while ago, you have the professionals. How do you bridge that gap and deliver a program that satisfies both of those audiences simultaneously without dumbing it down too much and yet without making it too complicated for the public?

GRIFFETH: I always say we had two parts of our audience – those who had to watch us: the professionals, whether it's the broker or even the CEO wanting to know what the competition's up to or wanting to be up to speed on the news, those are the people who had to watch us. The people who wanted to watch us were the people managing their own money, people who had an interest in managing their own money, the people who appealed by the way to Charles Schwab when he was getting started, right? The discount broker who said, we don't give you any advice we just let you do your own thing. Those are the people that we appeal to at the same time. How do we appeal to both of them simultaneously though? I'll tell you how we do that. The Wall Street Journal is very good, if you read their stories in one line somewhere in a paragraph, at explaining some of the arcana of business news. If they're talking about the bond market at some point they'll explain in one line how a bond is priced and its relative value to the yield of that bond.

NELSON: Yeah, moving opposite direction, you see that thrown in there a lot.

GRIFFETH: We don't have the luxury of print where you can go back and rediscover or re-read for yourself. We have to keep moving on. So we do it periodically. But you know what we discovered? If we talked mainly to the professional, the person who had to watch us, the person who wanted to watch us would start to pick up the jargon, start to understand what we were talking about and they liked knowing this. It made them feel intelligent about what they were hearing about, and I think that was a great appeal for us as well. There would be a mystique about business news. Is Wall Street only for the rich, is it only for people who really understand the mysteries of the economy? We demystified that, I think, to a great degree. We leveled that playing field, as they say, and as we brought those people into the tent I think they felt better about themselves knowing that they could do this themselves. So as long as we kept it on a professional level and spoke to that pro, the people around them, the amateurs if you will, they felt good that they could be part of that game as well.

NELSON: The environment you're working in, and this has brought a lot more of the amateurs into the game, was this incredible bull market of the 1990s. So whether or not there was a moment when it seemed to be working, you were probably were just busy, again to use this metaphor, riding this wave of this incredible bull market which was just turning everybody into fans of the stock market.

GRIFFETH: I'm going to say something that will sound highly blasphemous, but it's something I sincerely believe – at the height of that bull market, at the height of our ratings peek in the 1990s, we had people watching CNBC who had no business watching CNBC, and I'll tell you why. I'll use as an example somebody who called us one day under the pretense that they're looking for advice in personal finance issues and they let it be known that they had cashed out their credit card, they had maxed out that credit card and taken it as cash, put it into a brokerage account and they leveraged themselves to the hilt investing in highly risky investments, whether it was penny stocks or options or the futures markets or whatever it was, and they were looking to get rich and they were looking for advice on how to use this money best in order to get rich. I saw you flinch as I was describing that.

NELSON: Of course!

GRIFFETH: I did too! Those people were under the impression that all they had to do was throw money into the market and they would get rich. Boy, was that wrong, and while there were stories about us being cheerleaders of the market that just still makes the hair on my neck stand up. We were there trying to convince those people that they had it wrong, that this is not how you make money in the markets, this is not investing by any means. You look up the word "investment" and that's not it. But be that as it may, we were in the midst of a classic financial mania and there had been financial manias well before there was ever a CNBC, well before there was ever television or radio, there were manias – the South Sea bubble of the 1600s.

NELSON: I was going to say... going back centuries!

GRIFFETH: Financial panics here in the United States in the 1800s, they are a part of human nature when too many people are chasing too few goods with too little knowledge, too little information, and it had to burst at some point. It was inevitable. So we were there when all of that was going on as it was going up and we were there as it was going down. Will we see that kind of mania again in this generation? I don't think so. It just runs in cycles, multi-decade cycles. Our viewer ship is what it is. We still have people who watch for the right reasons and we will still be there to meet their needs.

NELSON: I will say in your defense, I think a lot of that mania was fed not so much by you as by general consumer press where people would read this incredible rags to riches stories every day – so-and-so bought this stock, it went up so much, they cashed out, etc., etc., – so I think that...

GRIFFETH: But you know, it works both ways on that though. It takes two to tango, right? There was obviously an itch for an awful lot of people that needed to be scratched, which, again, it happens generationally. The period of time when there is a perception that you can get something for nothing, that you could make an awful lot of money just simply by buying a stock based on a tip from an uncle or a dentist or a cab driver or whatever it was. There are still plenty of people who read those articles you just talked about that didn't invest, who had a better understanding of how the stock market worked and they stayed away. It was the people who didn't understand that I felt badly for, but what were you going to do? Even when I would question the CEO of a start-up company that had just IPO'd that made him a multi-hundred millionaire, maybe even a billionaire, who had been paying his early employees with pizza and I asked the "p" word – "When will you be profitable? Shouldn't you be profitable in order for the markets to assign you the value it has just assigned you? You're a hundred million dollar company now and you haven't ever turned a profit. Shouldn't you?" Well! The people who would write in or email or call saying, "How dare you! This is sour grapes on your part, Bill. You're just feeling bad because you're not in that stock making all that money. That's why you're trying to pick on this CEO." It goes with the territory.

NELSON: Speaking of CEOs, you have a tremendous track record as a network and yourself of getting CEOs to come on the air, talk about what they're doing – not really the guys who have just gone from nothing to the moon and are about to go back to nothing in a couple of months, but you know, major figures. How do you do that? Why do they come on because sometimes your questions aren't necessarily softballs?" I mean they're asked nicely but not necessarily softballs.

GRIFFETH: Somebody once called me the cable version of Dick Emberg and I've always considered that a compliment. Mr. Emberg, a very nice man, nary a bad word out of his mouth and I've always tried to pattern myself in the same way. Sure you can ask the tough questions but you can do it in a very nice way. My style is not to be in your face and yell, but on the bigger picture, yes, the distribution, the audience, the quality of the audience that CNBC has is not lost on any business leader in this country or around the world.

NELSON: Or on their PR people, I presume.

GRIFFETH: The PR people know it very well, as well, and it's no secret that most of the time that they will want to come on our network is when they have a positive story to tell. There are some exceptions. I can think of a Phil Condit when he was about to leave Boeing who was gracious enough to come on the air and talk about why he was having to leave that company. That's an exception to the rule, but for the most part they will want to come on. My job is to try and get both sides of the story. Now, having said that, I acknowledge that there won't always be two sides to a story. Sometimes a company is on fire. They're doing very well and that story needs to be told just as much as a story where they're not doing so well, and I always am happy when a CEO is willing to come on and talk about the problems that he or she is facing. My job is to try and get them to tell their story as concisely as possible and when there is a problem that needs to be addressed to give me a candid answer about that. What I don't like, what I detest is when a CEO comes on and wants to read the party line, as we say. They don't stray far from the talking points that their PR people gave them, and I know I'm in for trouble when my first question is not answered and the first words out of their mouth are, "Before I get to that, Bill, let me just say..." and on they go reading the party line.

NELSON: Maybe they should run for public office or something.

GRIFFETH: I learned a lesson many, many, many years ago when I interviewed Boon Pickens and he and I have talked about this since then, he taught me a great lesson. I was interviewing this corporate raider as we called him in the 1980s and I was still learning the ropes, I was still learning the jargon and a corporate raider was somebody that was kind of new on Wall Street at that time. They'd been around for centuries but this was the latest iteration and I was handed – while I'm on the air with Boon Pickens doing this interview over the satellite – a note by our managing editor at that time to ask him about green mail. Now, green mail was a technique used by corporate raiders. They would buy the company's stock, they would make an offer for the company at a higher price – they'd buy it at 10, make an offer at 20, the stock goes up to 15 or 18, the company rejects it so the corporate raider sells their stock at a profit. It's great work if you can get it and there had been a feeling that maybe Boon Pickens had been involved in this in some of the takeover attempts he had made. The problem was I didn't know which stories those were. I simply asked, "Mr. Pickens, what about these charges that you're a green mailer?" Well, Boon turned it back to me and said, "You give me a single instance where I have been a green mailer," and I didn't have one and it was the very last time I ever asked a question that I didn't think I knew the answer to to begin with. It was a great lesson and it's something to always remember when I'm interviewing a CEO or a politician or anybody of that stature. I've got to do the homework.

NELSON: Be prepared.

GRIFFETH: Absolutely. It's a disservice to our viewers if I walk into an interview blindly, unprepared. Unprofessional on my part and a disservice to our viewers.

NELSON: Now obviously these CEOs kind of expect they're going to make an appearance, tell their story and their stock's going to get a bounce. It doesn't always work that way.

GRIFFETH: Right.

NELSON: Can you remember an instance where maybe somebody got themselves tangled up and left the studio and maybe their stock went in the other direction?

GRIFFETH: I'm sure it's happened. I can guarantee you it has happened, but offhand I can't think of that. Now let me just say about stock movements in the wake of CEO interviews that even if a stock moves for a half hour or an hour or even a day based on something a CEO has said, the laws of supply and demand will not have been repealed in the longer run. It will not change the value of that company's stock which should be and usually is based on the fundamentals of that company – what it's earning and its growth prospects. That sounds arcane, but my point is that at various stages in the cycle of a stock market people become upset if a CEO comes on to promote their company and it means a pop in the stock and the shorts – people who are short that stock – become upset that that has happened. By the same token, if they come on and something bad has happened and the stock goes down, the shareholders become very upset. But I would remind them that in the long run if you hang on to that stock it's the long term fundamentals of that company that will dictate the direction of that stock. Lesson over.

NELSON: Yeah, and that's of course to a great degree what happened in the '90s is that people forgot all about that stuff, thought the laws of supply and demand had been repealed and thought that you could go on and on, up and up forever. That obviously came to an end.

GRIFFETH: March 10, 2000 was when the market...

NELSON: You know the date well. Well, I was going to get to that. What was the sense here when that happened and did it effect the way – maybe not – but did it effect the way you approached your job because now you're not delivering such wonderful news anymore?

GRIFFETH: Were people upset when we started having to tell the bad news? I mean we never stopped reporting the bad news, let me just say that. If there was bad news to report we reported. If there was good news to report, we reported that. People heard what they wanted to. When the market was going up they were usually only listening to the good news, ignoring the bad news. That's human nature. And then as the market's going down they're focusing on the bad and ignoring whatever good news may be out there. Did we change our reporting style? No. Did anybody from the executive wing come out and say, "Okay, it's time to stop reporting only good news and time to now start focusing on the bad news"? Of course not. I've always liked to say that we put a mirror up to our audience. That's our job. That's what the stock market does. That Dow Jones Industrial Average is a barometer of public sentiment at any given moment in time and as the public becomes more optimistic about the future, the Dow goes up. Pessimistic, the Dow goes down. And we report that. When the market was going higher, we were constantly trying to remind people, this is unusual activity, this is aberrant behavior, this is not normal historically, but it was all lost for the most part.

NELSON: A lot of people didn't want to hear it.

GRIFFETH: Of course they didn't. And you know what? I don't blame them. When I'm watching my 401K go up as much as it did, I'm a genius too, you know? And I don't want it to go down, and if it's going down I've got to blame somebody for that. Well, you shoot the messenger in many cases and sure, we took our licks as the market was going down, but we were simply doing our job in telling the story of what was going on in the market at that time and I'll tell you – at the height of that bull run I questioned my own understanding of the markets. Maybe I'd lost it. They thought that Warren Buffet had lost it at that time, too, because he never invested in a technology during that whole mania. He just didn't understand the business models and he didn't think that the valuations were compelling enough to invest in them. Now, I'm not comparing myself to a Warren Buffet but as a business reporter I had been through my share of cycles, bull and bear, and this was a doozy. I didn't understand it after awhile. I started to understand it again when the market started going lower in 2000 and all that went after that. It was yet another example of the cycles that have come and gone throughout history in the stock market and in the economy and we just happened to be there reporting it at that time.

NELSON: Now you had talked earlier about your relationship with the NBC folks when you got started. Talk about that today, though. It's a very different world nowadays.

GRIFFETH: Very different, very different. The synergies, I can't begin to tell you how much that has improved. It helps to some degree that some of the people who used to work here are now at NBC News and some of the people who used to work at NBC News are here. It's that cross-fertilization that I'm sure Bob Wright knew would happen someday and has happened, but if there is a business story to be reported most times NBC is calling us to tell that story, whether it's about Martha Stewart – you know, some of the high profile stories that have happened in the last few years here – the Martha Stewart story, the Frank Quattrone story and so forth. But sure, we had for the most part become the business news wing of NBC News and it also goes for the local stations around the country. Some of the higher profile owned and operated stations around the United States will call us periodically when there's a glaring business news story that needs some sort of a treatment and they'll call and we'll sit in front of a camera and tell that story, and I've got to tell you how exciting it was the first time I sat in a chair and talked to the folks at KNBC Channel 4 in Los Angeles. I finally met that dream that I was on the air there on Channel 4 in LA.

NELSON: Now we're sort of getting to the end of our interview here, talk about CNBC's legacy in the cable business, the television business, and for that matter, the world of business. What mark has it made from a big picture perspective?

GRIFFETH: History is always best when viewed from a distance and to try and write a legacy as it's still happening is rather difficult. Having said that, though...

NELSON: And I know it's not a fair question.

GRIFFETH: That's my caveat, though, for whatever is to come after that...

NELSON: And that's a fair one, too.

GRIFFETH: I can look back with a great deal of pride on what this network has achieved with the kind of programming that we provided, but when all is said and done what it came down to was we were simply there to meet a need that existed. We live and die, as any business does, based on the demand for the product or the service, and the demand has been there and will continue to be there for credible business news to help people make their own decisions about the companies they run, about the portfolios that they manage, about the customers that they serve, whatever it is. We have long been touted in this country as a capitalist system. That has been the hallmark of the U.S. economy, but I don't think we really understood what it meant to be a free market, capitalist system until the last 20 years with what we've been through where people become empowered by information, either as a consumer or as a business person or whatever it is, and to be a part of the process – I'm not saying we started it, I'm not saying we were the first, in some cases we were in some areas – but to be a part of the process of the maturation of the U.S. economy to come into its own as a true free market, capitalist society that, I think, is part of the legacy that will exist not only for CNBC but for Financial News Network as well. We were there, I was there, when people truly understood what it meant to live in a capitalist society.

NELSON: Now I know that's probably part of – if I don't mind putting you really on the spot in terms of legacies – your legacy. Let's put it this way, your sense of accomplishment of where you've come from and where you are now. I know there are obviously still many miles to go, but in terms of your feeling of what you've been able to accomplish in terms of serving that audience.

GRIFFETH: I've said it before, I'll say it again. It sounds very idealistic, I sound like Pollyanna when I say it, but I get a tremendous amount of satisfaction when I meet somebody on the street – I never get tired of it – and they come up and they simply say, "Thank you." It's nice to hear when they say, "I enjoy watching you. I feel as if I know you" but what I get most satisfaction from is when somebody simply says thank you. I'll give you one quick example that epitomizes it all. A woman I met in Florida at an investment conference who came up and said, "You got me through the toughest part of my life." She was going through a divorce, she then became a mother left to her own devices to try to raise a child without a husband or breadwinner, she was on her own. The personal finance segments that we were doing at CNBC and at FNN through the years she learned that she could do this herself and every day a little more information, a little more knowledge, she started with baby steps. A long story short – her kid was starting college, she had a career of her own and they all lived happily ever after, and that's the kind of story I love and that's really what has kept me going in this business all these years.

NELSON: So, one more question. There was the little kid, Bill, I don't know, Billy maybe you were called at the time, obsessed with TV, loved watching TV. What do you like to watch today when you get home, you kick back, and I'm sure you watch a lot of news and all that to keep up, but just for pure entertainment.

GRIFFETH: You know what I love is the fact that DVDs now allow me to watch those shows that I watched all those years ago. I will admit I'm in something of a time warp. I will watch some of the television that's on the air today. My son and I are huge fans of CSI. What I love is the sophistication of the technology of the special effects that are on television today that we didn't have back then. I love something that tells a good story in a compelling fashion, visually or otherwise, and I've never lost that love of television. I'll tell you, I still once in a while I'll sit back and say, "I did it!" And I pinch myself and it's a very satisfying feeling.

NELSON: Well, I couldn't ask another question after that, so let's wrap it up and thanks very much. We really appreciate it.

GRIFFETH: You bet. Thanks.

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  BACK TO ORAL HISTORIES

Gayle Greer

Gayle Greer

Interview Date: 1999
Collection: WICT 20th Anniversary Collection Project

INTERVIEWER: Could you tell me how you initially became involved in the cable industry?

GREER: I was hired by a predecessor company called ATC is really how I first came into the industry. I was living in Fort Wayne, Indiana, I was executive director of a community organization, I was an MSW and was operating pretty much in that aena and I met the ATC people and over time we thought that there may be a fit for me to come in and work with franchising, so that's how I initially got into the industry.

INTERVIEWER: When your cable career began, what did you find the most striking about the industry as a whole?

GREER: The absence of people of color and I think that was accented by the fact my career prior to that had been in organizations that were primarily focused on urban and inner city issues, minority community issues, so, I had come from kind of one world to another world when I joined the cable industry, I was quite frankly shocked by the absence of people of color.

INTERVIEWER: What was the most challenging aspect of your transition from then from this world where there are more people of color to a world were there were few people of color?

GREER: Well, I think that my transition really was handled through work, as I indicated earlier, that how surprised I was that there were so few people of color in the industry, that it was a very foreign kind of experience, because my entire life had been just the opposite, with the short period time of spending some time in college, but, the community I grew up in and the whole thing. I think I adjusted by working. I also adjusted by getting involved in the community. I lived out south of Denver, which was primarily a non-minority, non-ethnic community, but, I spent quite a bit of time working with the Urban League and number of organizations, The United Way, to really get more diversity in my experience.

INTERVIEWER: I know that you do have a remarkable record for community service. Do you think you're unique in this, or do you think corporate America as a whole has a role in promoting a better society?

GREER: Yes, I believe that the corporation has a role, or should have a role in making a better society. When you look at the influence the corporations have on our lives, they have a large role. Quite frankly, I don't necessarily think that I'm that unique, one of the things that I have found that there are a number of organizations, for instance, in the industry which kind of lends itself to working in the community, like the National Association of Minorities in Communications, while it was an industry organization, they had a number of programs that worked with the community, like the scholarship programs, and the mentoring programs and those kind of things, so, I don't think I'm necessarily unique. It's just something that I needed while I was in the industry.

INTERVIEWER: I understand you had a role in founding NAMIC. Could you tell me what inspired you initially to found NAMIC in 1980?

GREER: I think it was perhaps another part of that adjustment as to why I was a part of the co-founding of NAMIC. It was trying to develop a community of people who were sharing and experiencing things that similar to what you were experiencing, both prior to coming into the industry as well as while being in the industry, I think there was a sense, there was an absence of community among the few minorities that were in the industry and that probably had a large part of motivating me and others in putting the organization together.

INTERVIEWER: How was NAMIC initially greeted by the industry? Did the industry welcome NAMIC at first?

GREER: You know, I think that, the industry was a little concerned about NAMIC and perhaps a lot of it had to do with the fact that there was a predecessor company to the National Association of Minorities in Cable, that had been very active in the industry working with trying to get more minorities in the industry and perhaps did not have, it was more kind of seen as an outsider group, and it was not necessarily perhaps seen as being kind of a part of a solution. When NAMIC came around, I think that the industry was puzzled by why do you need NAMIC, and what is NAMIC going to do? I think NAMIC made the industry a bit uncomfortable, but, it was companies like mine... there would not be a NAMIC, I do not believe, if ATC and HBO had not played the role that they played in funding the organization because in many instances the members often in the early years could not get membership through their companies. So, they needed to be at a certain level, in order to pay their own membership, and there were few of us at a certain level, so, ATC and HBO played a major role in kind of underwriting the activities of NAMIC in the early years.

INTERVIEWER: Do you remember a point where the industry became more accepting of NAMIC, or was it gradual evolution for acceptance?

GREER: I think the acceptance of NAMIC was evolutionary. I think it's still going on quite frankly. I think that when NAMIC started having specific kinds of programs, like the Urban Marketing Seminar in New York that was always held at the same time, the same week of the Gates Foundation Dinner, doing things like that, having a membership that was more diverse than it had been in the early years. Again, I've talked about ATC and HBO, but there was an executive at ATC, Kevin Rourke, who was the first non-minority to join NAMIC and that was significant for the organization to get other people who embrace the values and goals of NAMIC to become a member and more and more that happened.

INTERVIEWER: Could I turn the conversation and talk about you and your personal success? I was wondering what are the key elements of your personal success in the industry?

GREER: The key elements of my personal success survival? I don't know, I guess I learned very early in life that when you embark upon something, be that your career, a volunteer project, or whatever, that you should do your very best, and so I've always been driven to do my very best. Working hard, trying to work smarter, certainly were some of the qualities, having some good friends and supporters were also. I had a good support network both in the industry and my family and outside the industry, and I think my social work training played a major role too, because I have very little difficulty working with people, communicating with people, understanding them and vice versa, so, I think all of that perhaps contributed to my success, whatever that was.

INTERVIEWER: During your career did you have any mentors or peers that you viewed as role models?

GREER: Yes, I did. There were several peers and role models, people like Stan Thomas was certainly a good friend and role model. Kevin Rourke was certainly a good friend and role model. You know, interestingly enough the three people who I think I spent with more personal time discussing those things that concerned me have died, which was a big adjustment for me, for such young people... and then there were others, you know, people like Ann Carlsen who has been a very, very dear friend for a number of years, and I could go on and on, and name people, a lot of peers especially, and a few mentors.

INTERVIEWER: What advice would you give to women or people of color entering the industry today if you were to serve as a mentor, what are the important lessons that you would emphasize?

GREER: You know, first I would certainly recognize that coming into the industry today is very different from coming into the industry 20 years when I came into the industry, and I'm not so sure it's unlike going into a number of other industries. Just to kind of compare the differences, when I came into the industry it was very young and was growing, it was very successful early on, all of that works to the advantage of people of color and women. Today, while it continues to grow, it is growing differently, there is a need for more specific kinds of skills, there is a different kind of person I think who would be successful going forward, there's certainly need to be able to adjust to all the changes that are being made in the industry. So I would tell the person coming into the industry, make sure that you are comfortable with change, do your very best, and I think I would also advise what I really didn't do very well, was not take it to seriously. It's just a job, and that there are other things that are just as important, if not more so, I think that would be kind of the message.

INTERVIEWER: Do you think the rapid changes within the industry are going to have a positive or negative effect on women and people of color?

GREER: I think it depends. I think it's going to take first an effort on the part of women and minorities, people of color to understand that things are changing, that there is an emphasis toward becoming more competitive in an arena that this industry has not been operating in and the digital Internet kind of arena. I think that strong skills, being smart, is much more important today, I think that there is going to be perhaps, there is an opportunity for women and people of color to really do better, because more than ever, this industry cannot afford to exclude people based on gender or race. They need as many smart bright young people coming into this industry as they can get, so, that says that there is a possibility that opportunities will be better.

INTERVIEWER: Are you satisfied with the advances that women and minorities have made since you began your career in the industry?

GREER: No. I am not satisfied with the progress that has been made, it certainly has been progress, I think I first will certainly acknowledge that, I'm not satisfied with the pace in which it has happened, but, I see it as something that is going to happen, there is no way that anything can stop it. So, I think if we were having this interview, five, six years from now, it would look, this industry will look a lot different than it looks today.

INTERVIEWER: So you think parity is possible within the next 10 or 15 years?

GREER: Yes, I think parity is possible, I think it's going to take a lot of hard work. I think it's going to take a lot of focus, and I think it's going to take an understanding on the part of people of color and older people and women that it is that they have a huge responsibility for their own careers in being successful. The days of companies kind of taking care of their employees and being concerned about their careers, if it ever was really there, it certainly not there today, and I think that would become less and less. And so I think number one it's very important to get your own act together, and I think organizations like NAMIC and WICT continuing to raise the consciousness, continuing to raise the issues of the kind of industry that is needed to attract people of color and women, I think all of that coming together certainly puts a big possibility for parity.

INTERVIEWER: What inspired you to start your own company?

GREER: I'm not sure, I think it was just a combination of things, because when I left Time Warner, almost a year ago now, I really had no plans to start a company, and certainly not a company on the Internet space, but, just a number of things came together, and I like what these people I met were doing. I saw a lot of possibility to kind of bring together my corporate experience with my non-profit community experience and the Internet certainly has given me that opportunity. I think that had a lot to do with why I am involved with this company.

INTERVIEWER: Could you tell me what your company does?

GREER: We are an Internet agency, we work with small and medium sized companies primarily helping them to develop their Internet strategy, and we also develop their presence, like a website. We will help them market, and monitor and maintain their site, help them to be better positioned and we take them from all the way from development and deployment through positioning and promoting them on the Internet and it really is all kinds of companies. It's really just helping companies take the next step.

INTERVIEWER: Do you see a larger trend of women starting their own companies?

GREER: Yes, there is a larger trend of women starting their own companies, and especially here in Colorado, Colorado has a very high number of percentage of women starting their own companies, but I think that is the result of a lot of things, I think the economy and the just the way the world is today certainly is playing a part in it, I think women today more so perhaps than when I was a young mother in the industry, are really seeking more balance, and wanting to spend more time with their children, so, their developing businesses that will allow them to have a lot more flexibility and I found out that even though I'm working as hard if not harder, and making no money at this point, there's something about being in control of your own destiny, being able to sit down and in a meeting and talk around the table with your partners, make a decision and move forward, there is probably nothing more rewarding than that, and creating the kind of work environment, that's another reason that I think that women are creating their own business, they're not finding the right kind of working environments, whether they are mothers or not quite frankly in many corporations, so their starting their own companies to create their own working environments.

INTERVIEWER: You said a lot of things I want to follow up on, try to get my thought in order. Well, you mentioned balance, and I know a lot of young folks, are interested in maintaining balance between their professional and their personal life, do you have any advise for them?

GREER: Well, I'm probably not the best person in the world to be advising people on how to create balance. I'm better at it today, then I was several years ago, but, I think number one is just to recognize the importance of it, I just find out from people who are younger, it?s important to them, they talk about it, they talk about their weekends, they talk about spending time with their families and doing things in their churches, and when I was coming up in this industry years ago, you didn't hear much about that, we were very intense, at least I was and really just felt the need to, cause there was so much dynamics going on, that you were so focused on your career, at least those who I was around that seem to be the case. But, I think that it is critical, and I think that when you recognize, as I said earlier, that it's a job, and it's not the end of the world and you shouldn't take it so seriously, I think that acceptance will help bring about balance.

INTERVIEWER: Why do you think the conversations about balance have changed from say 1980 to the present?

GREER: You know, that's an excellent question. I'm not sure I understand really why the whole issue around balance has taken on a different look. I was a single mom when I came into this industry with a teenager, and when I came in I had very little understanding of how much traveling I really was going to be doing, and I was traveling practically all of the time. However, it did not seem appropriate for me to complain about that, I did not feel that people around me were concerned about it, I didn't hear anybody else talk about it, and keep in mind, when I was traveling, there were very few women traveling, during these days, the early '80s. So, I traveled primarily with men, who had wives at home, so, I just had to do it. It was just not conducive to talking about balance, at least that's the way I felt. I could remember when I was in the national division at Time Warner Cable, hiring general managers and people, and you know, for men to say to me that they were planning on taking maternity leave when their wives had babies was just something very new and different, something happened, I guess. Maybe it's kind of my son's generation, perhaps we demonstrated to them and how our lives went just how important it was to bring balance into life because we were not real balanced.

INTERVIEWER: What would you say is your greatest professional achievement?

GREER: My greatest professional achievement? You know, I'm not so sure. I guess, going into this, as I said earlier, I had no real aspirations to be in this industry. My plans had always been to be a social worker, and I guess the greatest achievement is that without much planning and without much thinking, I did pretty good in this industry, and just lasting for 20 years, making a difference in some people's lives, watching people who I managed and mentored now in executive positions, I think those are things that I find the most pleasurable.

INTERVIEWER: Could you talk about your management style, has it evolved over the last 20 years?

GREER: My management style for the most part I think has also been influenced by my training, and that is beginning with a basic respect for the people that I work with. My management style also recognizes that there's very little I could get accomplished by myself, and that when you hire people to work with you and around you who are smart and energetic, that all makes a huge difference.

INTERVIEWER: There was a lot of talk in the early '90s about a glass ceiling. Do you think there ever was a glass ceiling preventing women from achieving professional success? If so, does it still exist?

GREER: The glass ceiling... I've always been pretty intrigued by that. I think when you talk about it from a symbolic perspective of whether or not women have just as much opportunity and access to the upper positions of this industry - I think there's still a way to go - I think a lot of it has to do with how this industry started, the history of this industry. But, more and more I think that the ceiling is getting higher and higher, but, there's still a way to go before I think women truly have the same opportunity and are viewed on the basis of their skills and abilities and not on the fact that they are women and therefore that means this and does it mean that. I think that's still with us for a while, I think a lot of us old folks have to die off before you will really see parity as it relates to moving up in this industry, but, it's going to happen. It's inevitable.

INTERVIEWER: You mentioned the history of this industry, and how it sort of set a tone. Did you find in your own career its entrepreneurial and almost fraternal nature was a detriment to you, or did that somehow give you more opportunity?

GREER: Well, I think initially the entrepreneurial part of it certainly gave me more opportunity. I just think that when things are moving as fast as they were in this industry in the early '80s there was a people issue during those days. You didn't have 100 people for every position to make a decision from in the early '80s and people weren't real sure about whether or not this was for real, because when I came into the industry, I didn't look at it as any long-term career. So, I think the early part of the years it was entrepreneurial. I think it became less entrepreneurial though as the companies got bigger. For instance in my own personal experience, I felt that ATC was a lot more entrepreneurial than Time Warner, and I think that it became a lot more structured. When I joined the industry very few of your major companies even had human resources departments. Now, I'm not suggesting that that's a bad thing or that's a good thing, but, I think that the entrepreneurialism about the industry had a lot to do with how well some of us did.

INTERVIEWER: So, do you think the industry loses something as it sort of consolidates and becomes less entrepreneurial and more structured?

GREER: Well, that's certainly the trend, as you look at other industries that have consolidated. I was beginning to sense that before leaving Time Warner. The emphasis during a period of consolidation is just so different and so a lot of the things that you perhaps may have paid attention to 10 years ago, just weren't really issues because you're not sure... someone said to me in Chicago, at NCTA earlier that, you know, I never know from year to year, or month to month, what company I'm going to be with, or who I'm going to be working with, or who I'm going to be working for, that kind of thing. So, it changes and I think that as companies become bigger they become less entrepreneurial, and that could be a good or bad thing. But, I think that they evolved companies centralize and they decentralize and they consolidate and so all of these changes bring about differences in terms of how one should perhaps navigate their career.

INTERVIEWER: How did you become involved with Women in Cable?

GREER: I think I became involved with Women in Cable in large part because June Travis was ATC and was very instrumental in the founding of the WICT organization. Shortly after the founding, there was a very active chapter here in Denver that I got involved with, and it also brought me in contact with more women. That was something that I really missed a lot in my company and in my travels in my job, women that you could view as peers and share experiences with, so, that's how I became involved.

INTERVIEWER: Did WICT contribute to your professional growth?

GREER: I think so, I remember early on coming into an industry that was so business- oriented, performance-oriented, cash-flow focused, some of the earlier courses that I took in some of the WICT programs were just excellent and I think they helped a lot in my ability to really get through complicated issues within my own cable systems that I was managing. So, I think it did. Also the network that it provided, you always had someone that you could call on and ask a question, or get involved in some way, so, yes, it did, both NAMIC and Women in Cable played a role.

INTERVIEWER: How do you see NAMIC and Women and Cable influencing the industry at large? Do you think they're effective in getting their message across?

GREER: Yes, I happen to believe that people who take on issues, issues of gender or issues of race, especially in an industry like this industry, are really taking on a lot, and I admire people who are willing to kind of stand up for what they believe and there are certainly a number of people who are in WICT who are doing that and in NAMIC who are doing that. It's just not a comfortable role for the industry, to kind of understand and so, it's going to be hard. I think it's going to be difficult as the industry continues to consolidate. Its focus is on getting bigger, its focus is on competition, and organizations like Women in Cable and NAMIC will just have to continue to reinvent themselves over and over to continue to be effective in an industry that is changing so rapidly.

INTERVIEWER: Have you seen Women in Cable and NAMIC changing in any significant way since their inception in the early '80s?

GREER: Yeah, I have, both organizations have changed. Well of course, they've matured and are certainly a lot more sophisticated in their programs. In both organizations, I think they have become a lot more savvy, especially in the part of NAMIC on really how you get things done when you are talking about issues around employment of women and minorities. So yes, they've both changed, and they've both grown up and I think they are much better and bigger successful organizations today as a result of it.

INTERVIEWER: Do you foresee a point when these types of organizations aren't necessary in the industry? Would we ever reach their level of parity where WICT and NAMIC won't be needed?

GREER: Well, it depends on how you look at these organizations. If you look at them as only for the purpose of helping one achieve parity, then as I indicated earlier, there will be a day that that will happen. That's just going to happen, but, I think there are other benefits of being a part of organizations like NAMIC and Women in Cable. It's being around people that you share a lot of experiences with; it's being in a network where you can continue to grow and develop. I'm a real big fan of affinity groups, that's another reason why I like the Internet. There are all kinds of affinity groups that are coming together on the Internet. So, I think that being a part and belonging to an organization of people who share experiences and like interests, will suggest that there will always be a role for organizations like Women in Cable and NAMIC.

INTERVIEWER: Is there anything that I haven't asked you that you want to bring up about your new company, about WICT or NAMIC or about the industry as a whole?

GREER: Well, I think that perhaps a good way to end the interview would be to say that I feel very blessed to have been involved in this industry and to have been an active member in Women in Cable and Telecommunications as well as the National Association of Minorities in Communications. I have learned a lot, I have grown a lot, I have become a lot more prosperous, and I am able to do a lot of things today as a result of all those relationships and associations. It's been a wonderful career. It's been a hard at times, but when I look back on it, I'd do it again.

INTERVIEWER: Well, thank you.

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Gayle Greer

greerGayle19995

Interview Date: Tuesday June 15, 1999
Interview Location: Chicago, IL
Interviewer: Jim Keller
Collection: Hauser Collection

KELLER: This is the video history of Gayle L. Greer, a twenty year veteran of the cable television industry, and in my experience, a human dynamo. This interview is a part of the video and oral history project of The Gustave Hauser Foundation of The National Cable Television Center and Museum. The date is June 15, 1999, the scene is Chicago's McCormick Convention Center, and the interviewer is Jim Keller. Gayle, let's start by giving us a little bit of your personal history from day one through the time you got into the cable business.

GREER: Well, I grew up in Tulsa, Oklahoma. I was the fourth of one of four daughters of a principal. My high school principal was my father and graduated from high school in Tulsa, Oklahoma. I went to school in Nashville, Tennessee when I left Tulsa and went to Oklahoma State University and then graduated from the University of Houston with an undergraduate degree as well as a master's degree in social work and really went and pursued my passion of being a social worker and spent thirteen years doing social work. I ended up in a community called Fort Wayne, Indiana, where a guy who you should know, David Kinley, was franchising. I met David in Fort Wayne and I think one of the reasons that he later came back and asked me to join the company was that I gave him good advice that he did not take when he was in Fort Wayne. I told him that ATC probably would not be winning that franchise and they did not and he later came back and asked me to join the company. I went on an interview and decided on my way from the airport driving down Monaco in Denver that if they offered me a job I was going to take it.

KELLER: So you got out of social work and went into the communications business at that time?

GREER: I did. It wasn't a deliberate plan to get out of social work. It really was I wanted to move and I had very little understanding at that time of the cable television industry, but Denver sounded like a great place to be and I said, "Well, if this doesn't work, I'll go back to social work." As you know, I stayed for twenty years.

KELLER: Now, you said you advised Dave Kinley, who was also part of the franchise team at ATC, as I was, and from what perspective had you advised him?

GREER: Well, I was executive director of a community agency there and had been there for a while and was pretty much familiar with the local situation and most definitely the city council politics and another company, which I don't even think exists today, had been very active in that community, had gotten several key people committed and after seeing that, it was pretty clear to most of us who understood Fort Wayne, that that was the company who was going to win because of the connections that they had with some very powerful local people.

KELLER: Then when you came to ATC, what did you do there?

GREER: I was hired as, I think it was called Manager of Franchise Development, or something like that, and my boss at that time, David Kinley, was just beginning to develop a department in franchising. I think that he and a couple other people had been doing most of it and so he decided to expand because they were moving into the urban markets and one of the things that attracted David to me was my network in the urban market, by being with the urban league for so many years. In most of the markets that ATC was interested in, I knew somebody through the organization that I had been working with.

KELLER: What year was this?

GREER: This was 1978. I started out working very closely with David, Bill Brown, you, and a number of other people, going around the country primarily in communities like New Orleans and Cincinnati and Indianapolis and Houston, Texas.

KELLER: None of which we won.

GREER: None of which we won, but you know, they all came back.

Laughter

KELLER: Yeah, in one way or another.

GREER: But it was quite a big experience. I really had no idea how much my prior experience as a social worker, and primarily in community work, would really lend itself to helping me out in my career at ATC. Franchising really just seemed like a natural; being able to go into communities, put groups together, make presentations, propose an appeal to politicians in the community, that just felt very natural for me and I very much enjoyed those years.

KELLER: Now, ATC is American Television and Communications Corporation, which then was purchased by Time, Inc. in the late '70's and then you went with Time, Inc. after the purchase, did you not?

GREER: I did.

KELLER: What did you do there?

GREER: Well, after franchising, I helped Trygve Myhren at that time, he was the CEO, and it was just prior to the changing of the name . He got me involved in developing a process for renewals because about that time, many of the acquisitions that had been made by ATC were up for renewal. It was the first round of renewals. So I worked on renewals for a few years and then I knew that I wanted to get into operations. Franchising really kind of showed that to me, that operations was really where I wanted to be and I talked to a number of people around the company, Jimmy Doolittle and others, who said, "Why would you want to be in operations, Gayle? You're in franchising." So I said, "I just think that's where I want to go." Luckily for me, I ended up in the national division after the name was changed from ATC to Time Warner Cable, or Time, Inc. first, and then I had responsibility for medium, small cable systems in the national division, working for Jim Cottingham, initially. I was in the national division for about thirteen years and after the national divisions, I went over to a new area called Time Warner Telecomm, which was the project and joint venture between Time Warner and US West to develop telephony and to integrate it in the cable plant. My job was to aid in that integration.

KELLER: Did you ever start some pilot projects?

GREER: We did. I came in right about the time that the Rochester project was beginning and was very much instrumental in getting a lot of the systems in place for that operation to work. It was quite a learning experience. I think that was the beginning of all the changes that have been made in this industry and there were a lot of challenges with telephony, a lot of technical challenges as well as the over all kind of operational challenges. The Rochester project did very well and the company decided at that point that we would learn more in doing that in terms of residential telephony and then really started pursuing business telephone, where they are today.

KELLER: Did you ever go into the home market with telephony or telephone?

GREER: Well, we went to Rochester. Rochester was a residential service and that was Time Warner's only residential service, but there were a number of commercial and business telephone customers, and today a very successful company that just went public and doing very well.

KELLER: How did you handle the switching and the interface and the interface with the long distance carriers?

GREER: We had a contract with a company called Frontier, which was also headquartered in Rochester, who handled most of the long distance for the company and we had arrangements in the switching with AT&T. One of the things about that job is it had a lot to do with establishing networks, relationships, joint ventures. It was really the name of the game for that venture because it was a matter of putting together a number of technologies and converging them. At one time Time Warner, US West, Frontier Communications and AT&T were all very much involved in that project.

KELLER: Did US West actually do the telephony portion of the system or was it all a Time system?

GREER: US West was an owner in Time Warner Telecomm. It was a 50/50 joint venture. Many of the people in Time Warner Telecomm were from US West. I would say that the majority of the people were from US West. The president was from US West and a number of the people; I was one of the few people, along with Graham Power, that came out of the cable business.

KELLER: Is the system in Rochester still going today?

GREER: I heard yesterday that as a result of the pending venture with AT&T to use Time Warner's cable plant to provide local and residential telephone that there has been some pullback on the Rochester project into rolling it out further, waiting on the closure of that arrangement with AT&T.

KELLER: So you were one of the cable people very early on involved in the telephony aspect of the business.

GREER: Very much so.

KELLER: As you see it developing today, many of the things coming out of this conference are going to be aimed toward that. What did you think of Mr. Armstrong's speech yesterday?

GREER: I thought it was really interesting. It's amazing to me – it reminded me of when...

KELLER: Mr. Armstrong is the chairman and CEO of American Telephone and Telegraph.

GREER: Yes, AT&T. Number one, I thought it was very impressive. He certainly has a great vision for this industry. I think that they're going to bring a lot to the table. One of the things that's interesting to me is how the telephone people for so many years were the enemy, and now they are into the cable industry in a big way. I think the message of his speech was that I'm here to help, I'm here to really take the industry to the next step. I believe that that's exactly what's going to happen.

KELLER: While you were at Time Warner and ATC before that, you were involved in a number of organizations including Women in Cable, I assume, and the National Association of Minorities in Cable. Tell me about that organization, please.

GREER: Well, The National Association of Minorities in Cable was really...

KELLER: You were a co-founder of that organization.

GREER: I was a co-founder of the organization and ATC was very instrumental in that organization being what it is today and then later, Time Inc. also played a major role. They were very, very supportive. At that time there were very few people of color in the industry and there was a sense that a network and a support system should be organized. Women in Cable, I believe, had just been organized shortly before then and therefore, I group of us, Gail Williams, who was with HBO and Sabari Sumami who was with Cox Cable and a number of other people... Barry Washington... we all got together and decided that we would start minorities in cable. I went to Time Warner, at that time Monte Rifkin when we first started, and then later, Trygve and others, and asked for their support and they were very, very supportive. We organized that organization back in, I think, around 1980, '81, something like that, and this morning they had their breakfast and I was given an award, which was a real honor. But I said this morning when I looked out at in that audience, where it looked like hundreds and hundreds of people, that I remember at the first breakfast back in 1982, I think it was, when we had an FCC commissioner as our speaker and we were so pleased to see one hundred people buy seats to the breakfast and this morning there had to be five, six, seven hundred people.

KELLER: That's a great tribute to you. But awards are not new to you; you've had many of them over your career, including some within Time Inc., the Andrew Haskill Community Services Award. You were also, as I believe, awarded the National Cable Television Association's Vanguard Award for leadership. What year was that?

GREER: That was 1986, I believe, '85, '86. That was a real honor. It was a real shock, quite frankly. That was during the days when the Vanguard Awards were given at night and it was a big huge...

KELLER: It was a dinner.

GREER: It was a dinner, a big gala, and whenever I think about it, I think about my mom, who came from Tulsa to see me get that award and how awed she was with all the people she saw and how proud she was that her daughter was getting this award. That was quite an honor. Also the Andrew Haskill Award was really kind of a recognition of my avocation, I guess, and certainly a hobby, and that is of working in community groups. I guess the social work experience, which was my training and what I was doing at the time that I joined ATC. My community work was a way of bringing balance to my life. The Andrew Haskill Award is given to someone within the Time Inc. family, and Time Warner now, who has done things in the community. .

KELLER: You also worked in conjunction with the Walter Kaitz Foundation, did you not, whose purpose is to bring minorities and women into the cable industry. How successful have you found these programs to be?

GREER: Well, I think that Women in Cable, NAMIC and the Walter Kaitz Foundation have played a significant role in this industry. It has, number one, aided the industry in its recruitment efforts. I think that in a number of ways, I remember fifteen years ago or more when we used to have conversations about the absence of minorities and the absence of women in key positions, but it was after these organizations came along, and then when the Walter Kaitz Foundation was established where companies were hiring interns, fellowships, to come into the industry. Today, in fact I just left a woman who was one of the original Walter Kaitz fellows, who owned her own telephone company and recently sold it.

KELLER: Ruth?

GREER: Ruth Brumfield. I see Tracy Jenkins in Denver often, who's now with Fox Family and who has been very successful. So I would say that Walter Kaitz and the support that it receives from Women and Cable and NAMIC has been instrumental in achieving more diversity in the business..

KELLER: What percentage of the executive positions throughout the industry do you feel are really now occupied by women or by women of color?

GREER: It's a very small percentage in terms of leadership positions. There are few women and even fewer women of color in the executive and senior level positions. I think what the organizations like Women in Cable, NAMIC and the Walter Kaitz Foundation did was bring people into the pipeline. They brought in a lot of people and really made a diverse work force at the middle and below levels. There's still a way to go in this industry as it relates to senior positions and executive positions.

KELLER: How would you place the cable television industry vis-à-vis the telephone companies or the broadcasting operations as far as the advancement of both women and women of color?

GREER: One of the things that I've always said about the cable industry, especially around the time I came in, for women and minorities, it's always been good to go into entrepreneur, start up kinds of industries and companies. I use myself as an example; I came in with an MSW having done social work in 1978 and by 1980 I was a vice president and moved on to senior vice president. So I doubt that I would have had that kind of experience in a more matured industry like broadcasting, or telephone, and even today I would say that while there may be a few more women in senior positions like AT&T, I know of a woman who's in a very senior position, and in some of the other companies, but in relative terms, cable is doing just as well, if not better.

KELLER: Well, that's good to hear and I think, as you say, there's been a concerted effort to bring both minorities and also women into the business and I'm glad to see that you, at least, feel that we're making some headway along those lines.

GREER: We are definitely making headway.

KELLER: You have also, in this connection, been involved with companies outside of the cable industry as members of the board and so on, such as the public service company which is now, what do they call it?

GREER: New Century Energies.

KELLER: New Century Energies. You're still on the board of that company?

GREER: I am.

KELLER: When did you first go on that?

GREER: I went on the board of Public Service Company of Colorado in about 1986 and the board experience had a lot to do, I think also, with my overall career. That was another thing that I just was not expecting. I remember when Trygve Myhren called me into his office one day and said, "I've got a call from a guy by the name of Dale Hock, who has said that they would like to talk to you about joining the board of the public service company and he wanted to make sure that it was okay and how do you feel about that?" I said, "That's great." But I had no idea of the responsibility that came along with being a director of a major publicly traded company and it's been a real learning experience and has aided me, I think, in a lot of my business work as it relates to the cable business. I've been through mergers and acquisitions. I went from Public Service Company, Public Service Company then did a joint venture with a company out of Amarillo, which created New Century Energies and just a few months ago New Century Energies announced a merger with Minnesota Power and Light. The headquarters will be moving to Minneapolis.

KELLER: Now there has been some speculation over the years that the electric utilities are looking at getting into the cable television industry. Have you...?

GREER: Well, some of them are. In fact, Minnesota Power and Light has a cable television system which they call an experiment, but it's quite sizable over in St. Paul, I believe, in St. Paul, Minnesota. Utilities are getting into the business. We had a very interesting experience, we being Time Warner Cable, down in Orlando, Florida, where Florida Power and Light was very, very active, and Houston Light and Power, that's where Paragon was an offshoot from. So utilities have played a major role in the business. I think you're seeing now, with competition coming into the utility business, a more "attending to the knitting" because of the upstarts in the utility industry.

KELLER: You're talking about the electric utilities?

GREER: yes.

KELLER: Now, you've also been on other boards, haven't you? What is North American Financial Services?

GREER: Yes, that's ING, which is an international financial services company in the Netherlands. I sit on the North American Board, which is headquartered in Atlanta. It has been a great experience. Number one, it's given me some international experience and many of the people I interface with at the board level are from the Netherlands. People ask me, "If you had to do it over again, knowing how your career went from social work to business, would you have gone for an MBA?" I say, "No, I think I would have still gone for the MSW, especially considering the fact that the real life experience that I got in serving on a number of boards – at one time I was on a couple of bank boards, a Bank One board, I've been on Blue Cross/Blue Shield – so a lot of board experience and not to mention lots of community boards. I've chaired the United Way in Denver at a very crucial time. So the board work is very much a part of who I am today.

KELLER: Where do you go from here?

GREER: Well, I'm doing some really exciting things. I can't really believe that I'm doing what I'm doing today, quite frankly. I really retired from Time Warner July 1st of 1998.

KELLER: Oh, almost a year ago.

GREER: Yes, and my plan really was to be retired quite frankly. I was going to continue doing community work and volunteer work, but really wasn't interested in getting involved in any kind of job. I was approached by a man who wanted me to join his project in the Internet business. I knew very little about the internet business. What he was really interested in is very similar to why ATC hired me, was the network, introducing him to various companies, getting him involved in the business community in Denver. I was involved with him for a short period of time, long enough for me to recognize that this was really something, this Internet business My partner, Steve Stokesbury, formed a company at the end of last year, which is called GS2.net. The GS2 stands for Gayle GREER: and Steve Stokesberry – two G's, two S's.

KELLER: Before we get into that in any great detail, and I do want to get into it, we have to change tapes right now.

BREAK IN VIDEO TAPE

KELLER: We are now into the second tape of the interview with Gayle L. GREER:. Gayle, we just started talking about your new venture, GS2.net, which is an Internet company, is that correct?

GREER: Yes

KELLER: Give us a little bit of background on it and what you intend to do with this company.

GREER: Well, I met some people just by accident who talked to me about the Internet business, and as I said, I was really interested in being retired, so I considered investing. So I did make a small investment and later someone said to me, "You might want to pay some attention to this investment. There are really some opportunities here." That's when I met my partner, Steve Stokesberry, who comes out of the building and material business and is a native of Denver. We talked for awhile and the third person who's a member of the organization is a guy by the name of Bill Marino, who has the Internet experience. We consider ourselves an Internet agency and we're working with small and medium size businesses, helping them to develop their Internet strategy, not unlike an advertising agency or a PR agency. We just operate in the Internet medium and we develop websites. We host them, we develop the databases, Intranets, Extranets; today we have an online community up and running. It's an e-commerce site for non-profit organizations. We are now looking at a couple of other online communities. One of the things that kind of intrigues me also, about the Internet, is so much of the web applications that are so applicable across industries and we're currently looking at an idea, concept, of developing an online application in the customer service area that some small and medium size cable companies, in fact I've done some talking to people since I've been here at the show.

KELLER: Are you talking about training?

GREER: No, I'm talking about actual customer service.

KELLER: Actually taking over the customer service of these companies?

GREER: Yes, exactly. Where people can go online and order their services, disconnect their services, pay their bills, order pay per view, file a complaint. The cable system can survey, do marketing, you have everybody's email address so instead of the postage, you can send out emails and your customers can email you back. It's a 24-hour, 7 day a week customer service effort.

KELLER: How has it been received?

GREER: Well, it's still very much in the concept stage.

KELLER: How about here at the convention?

GREER: I've been talking to people about it and people are interested in hearing more about it and we will be talking to cable operators. We hope to be able to have a prototype ready at the Western Show.

KELLER: How does your cable experience relate to what you're doing now?

GREER: Well, I think number one, it prepared me to be involved in a very entrepreneurial kind of environment because the early days of cable and the early days at ATC was certainly very entrepreneurial, so that's one of the things. The other thing, I think, is the kind of discipline I developed working in the cable division which allow me to bring a kind of e structure in this whole Internet effort. I don't know if you've noticed, but when you go around most Internet companies what you find are people who look like they're only about fifteen or sixteen years old and who are extremely talented, very, very talented. They're artists in a lot of ways and they're bright technically but have very little interest in governance and organizational principles.

KELLER: And managing people.

GREER: And managing people, exactly. So I've really kind of helped put the company together and developed the corporation, got us incorporated, found our attorneys and I'm kind of more the, what would you say, the manager of the manager in terms of making sure we've got our financials in place, that we are doing our reporting and those kinds of things. It's been a fun project. I really had no intentions of working very much in it and I'm now working almost as hard as I was working back at ATC, with not much money, I must say we're not able to pay ourselves yet, but it's been a fun project.

KELLER: As this thing develops, you're planning obviously to go public at one point or another the way things are going now.

GREER: That certainly is a likelihood, but I think in talking to so many investment bankers, in fact I attended a conference of investment bankers about a week or so ago and I would much prefer being acquired, I think. One of the things that everybody tells you is that going public is so much brain damage. It is so hard and I'm not looking forward to doing that, but that's certainly a possibility. As I said, most of my partners and the people who I work with are a lot younger and a lot more energetic, so they may want to take it that way, but I think there's probably a better likelihood of being acquired.

KELLER: As you look back on your twenty years in the cable television business, what are the things that you remember most vividly? I know it's a difficult question.

GREER: What do I remember most vividly? Well, one of the things I remember most vividly was that when I joined the company as a manager and knew very little about cable television, I was so impressed with the fact that I was only a few feet from the CEO of the company, and the access that I had to the leadership and the senior management of the company. That is something that I remember because I talk to my friends who are in other industries, who were in the lower ranks as I was when I went into the industry, who never saw their CEO. So I remember that. I remember feeling very much a part of the team as a very junior person.

KELLER: Monte Rifkin was ubiquitous, we know that.

GREER: He was exactly that. So that's one of the things I remember. Certainly there are a lot of franchising stories. The one that I think I am the most proud of, though, involves David Kinley. We were involved in a franchising project in a Southern city and the local partner was not very excited about my involvement and I remember one morning, there was a meeting called and of course David and I showed up for the meeting. The partners were very cordial, drinking coffee, having doughnuts, etc., and then when the partner decided to open the meeting, he asked me to leave. So I left and went back to my hotel. Shortly thereafter, David came and said, "That's not going to work. We are going back there and I will tell the partner that if he can't work with you, he won't work with the company." He did that. I always wondered what would have happened if the partner had called Monte, if the outcome would have been the same. I believe it would have, but David took some risk there and I will always remember that. That partner, by the way, who has since died, we became good friends and in fact we exchanged Christmas cards over the years. That was in my early years of franchising, but that was a proud moment. That was a very competitive, as you know, kind of experience and to take that position that David took was very powerful to me and was something that will always be on my mind. I will not forget it.

KELLER: Well, ATC was that kind of company, there's no question about that. Anything else?

GREER: Well, I think it's just the many, many people. All the efforts around the country and all the energy that went into this. I always call it the "fun time" in the industry. One of the things that was required was teamwork. There were so many departments and people required to get a proposal together and to make a presentation and I ran into Gene Linder here not too long ago, and he and I were talking about this very same thing. Those were, as we say, the "good old days" when you knew everybody. As I walk through this show today, it's just amazing that there are so few people I know and I can remember a few years ago, I knew everybody. If I didn't know them I certainly knew their faces or they were very familiar. Now I feel like the stranger. I think my first convention there were about four or five thousand people, or something like that. It was not very big, it was in Las Vegas, but this has really grown to be something. So that's another thing, just to be a part of something that has just grown right before your eyes has also been quite an experience.

KELLER: Are you a bit saddened about getting out of the industry?

GREER: No, not really. I can't imagine, even if I was going back, I would never have thought that I would have stayed on that job for twenty years with that company, or any company. My history before then was three years here, five years there and I had no intentions of staying with ATC that long. I was going to go back to social work. So, it was a wonderful twenty years, but it got to the place where I really wanted to do some other things. I wanted to run my own shop. The company certainly was going to give me an opportunity to do that, but I had to leave Denver.

KELLER: How would that have worked? Where would that have been?

GREER: Well, who knows? We talked about Austin, Texas, we talked about a number of places, but that was what would have had to have happened because as you know, the company really moved all of its cable operations out of Denver and after I left the national division there were very few operating jobs left in Denver. In order to be able to take an operating job, I was going to have to leave Denver. But on top of that, I wanted to do something else, I really did. Twenty years, I think, is enough to be doing what I was doing. As I said, it was a wonderful experience and I'm certainly the better for it, but I think it was time.

KELLER: What would you have done differently than what you did? Although you've been very successful with what you've done.

GREER: I'm not so sure there would be a lot of things that I would have done differently. I really don't think so. I think that I would have probably been about the same. I may have been a little bit more outgoing. I lot of people find that, when I said that to someone here not too long ago, they found that to be interesting. I hear so many people who I meet now in various places who have said, "You know, I never really got to know you." I think that had a lot to do with the fact that I did my job and always felt that I should have been a social worker. Here's a social worker in this cable industry. So I always kind of felt like I had on two left shoes, but as I look back I may would have been a little bit more outgoing, but I don't think that I would have changed very much. It's been a wonderful career and I've made very wonderful friends and it has enable me to do what I'm doing today.

KELLER: Did you make any mistakes?

GREER: Oh, of course I did!

KELLER: Tell me about some.

GREER: Oh, I made lots of mistakes and certainly in putting together that organization. That's where we really initially started making some mistakes in just how to go about putting together an organization. We were all very busy people and knew very little about that kind of stuff, so we did a lot of things wrong.

KELLER: You're talking about you present situation?

GREER: No, NAMIC. I'm talking about the National Association of Minorities in Cable. We did some things there. And then when I look back on my operating days, which were probably my favorite, I enjoyed working with cable systems, some of the mistakes I made – I made some not so good hires...

KELLER: We all have!

GREER: Yes, those were some, but I also made some very great hires and I really spent thirteen wonderful years with some cable systems. I really miss that. I really miss the cable operations, I must admit. That was a very exciting time. I also was very instrumental in bringing a number of the Kaitz fellows into the industry and being in that position. So that certainly was something I did right. I'm one of those kinds of people, I reflect very briefly on mistakes, only to make sure I get the lesson from it and go on.

KELLER: Did you have any idea what you were getting into when you first joined ATC?

GREER: Absolutely not. Absolutely not. I just, as I said, I was leaving a place. That really was how I ended up in Denver. I was a single mom at that time and I just wanted to raise my son in a much larger, metropolitan kind of community. So I was really leaving a place, but I was not leaving social work, really in my mind and in my heart I wasn't leaving social work. I was going to take a job and find another social work job, quite frankly, so I really had no idea what was going to take place and the kind of opportunities that opened up at that time. It was just a great time to be in the industry and I sat this morning and listened to some of the things that are going on now, and I was thinking, we promised that about twenty years ago in our franchising proposals.

KELLER: Before that.

GREER: But it has turned into an unbelievable career with absolutely no expectations. I remember when I was promoted to vice-president. I was in Indianapolis, had been working that day on the franchise and got a phone call from Michael McCrutton. He told me that we were going to do my evaluation over the phone because I wasn't going to be able to get back and he had to get it in to Human Resources, and so I had spent most of the night writing down all of my accomplishments to be ready to at least say I'd done a good job and expect this raise. He said to me, "Well, I've got news for you." And I said, "What is that." He said, "You've been promoted to vice-president." I thought he was joking. I didn't believe him at all, and those were the days. That's how it happened, shortly thereafter you move right on, but I had no idea.

KELLER: This was in Time, Inc. at the time?

GREER: This is pre-Time, Inc. This was ATC.

KELLER: Did you find that you were the first woman of color in an executive position – I know you were at ATC – but how about Time, Inc.?

GREER: I pretty much think in the industry at that time. There was a woman, in Time, Inc., there was a woman at one of the magazines or something, so there were a couple of women at Time, Inc. As you know, there weren't any at ATC, but there were very, very few in the industry. Thank goodness that's changed some, but I think that's why I was so surprised when I got promoted because so often you look around. That's why diversity is so important because if you don't see people who look like you and have your experiences, you don't aspire. You feel, no I don't have a chance of doing that, you have to be this or you have to be that, but as people of all colors and all sizes and both genders come along, that's so important because it gives people coming behind you hope.

KELLER: How would you advise a young woman of color getting into the industry today? What advice would you give?

GREER: Well, I would certainly say to her, whatever it is you're doing, do it to your absolute best because of the fact that I have always felt that I happened to be black, and I happened to be a female, but I was selected for this job by David Kinley because of what I could do for the company. That to me is what is important and that's what I would say to a young woman of color coming into the industry. You just happen to be who you are, but you will be successful on what you do and you need to stay up on things, get involved, be a part of the organizations, do your absolute best. I think I would advise something that I didn't do very well in my early years, and that would be to have a little balance in your life and have fun. You've got to have some fun is what I would probably advise someone.

KELLER: You say you took it too seriously?

GREER: I took it way too seriously. I think a lot of the reason I took it seriously was because I was so afraid. I always felt like this is just not the place for me to be.

KELLER: You never showed it.

GREER: I know. That's what everyone says to me. I have a way of hiding that kind of stuff very well. I think that I just felt like I really had to just do this right and I think it's being my father's daughter, who was also a very serious person and who always told his daughters, do it right the first time. So having this career was extremely important to me and I think I was a bit too serious.

END OF TAPE 1, SIDE A

START OF TAPE 1, SIDE B

KELLER: When you retired from Time Warner, I bet they hated to see you go.

GREER: Yes, they did and gave me a huge send off and that was kind of a sad occasion, I remember because I was in New York my last days in the company, and had gone up to Stamford and spent some time with people there at the headquarters office. Everybody was so kind and to this day everybody seems to be so interested in what I am doing now. I am still in touch with a lot of people at Time Warner who have been so supportive. I talk to people in Denver who are with Time Warner who always are so willing to sit down and talk to me about some things, so it was difficult for us to part on both sides, but it was a wonderful send off. It's always good to be able, I think, to leave an experience that has taken so much of your life and have a good feeling about it. That doesn't happen to everybody and I feel very lucky that it happened to me.

KELLER: Recalling some of your franchise efforts, what do you consider to be your greatest achievement in the franchising effort and what do you thing was the worst loss?

GREER: The worst loss was Cincinnati, let's start there. I'll never forget that loss. I remember Joe Collins, who was with me at that time when that vote was taken, and I had alerted Joe the night before. Much to our surprise, we thought that that was one that we were really going to win and I found out late the night before the vote that we were short one vote. I called Joe and told him that I did not think that we were going to win and he said, "How can that be?" I said, "We're not going to win that vote." We lost by one vote and that was about as low as I've been. I don't think that I've had a bigger loss than that and he did everything he could to make me feel good about what I had done. The interesting thing about it was we had to get on a plane and go to New Orleans for another franchising thing. So that was the biggest disappointment, the biggest loss. I guess the biggest success, I feel, was Indianapolis, because we did win that one. I think that really where I was most successful though, was in the operating and working with my general managers. I was given a group of cable systems and these guys at Time Warner probably won't admit this, but I think that they gave me cable systems that were what we used to call the "cash cows". Not a whole lot going on in them, no one expected much from them and my biggest success was really demonstrating that there was a lot more life in those cable systems and many of them are still operating today. So being able to go in without using a lot of resources, capital, of developing a team in local markets, improving our customer service, which was not as difficult as it is in bigger cities because you had the face to face contact so often in these communities. I think my biggest success, I feel, was really in the operating side of the house and then to see a number of the people who I managed and who worked for me who are now themselves division presidents, like Dick Johnson, and vice-presidents in major divisions, like Leslie Grayson, so that makes you feel good as well.

KELLER: It's always a great part of the business to see that happen.

GREER: In fact, yesterday I was on a panel with one of the guys who was in local programming, Tom Kinney, was in local programming in Council Bluffs, Iowa when I took over that area in the national division, and is now division president in Portland, Maine. So it's really good to see people who you worked with so closely and who have now gone on and are doing very well themselves.

KELLER: You've mentioned some of the people who were very instrumental in your career, David Kinley's one of them, Monte Rifkin, Joe Collins, Trygve Myhren. Anyone else in that group?

GREER: Oh, yes. There are a lot of them. Just a lot, Tom Benning, June Travis... people were just always available when I needed to talk about something. They always listened. I always tell people about, people say it's difficult to Joe Collins, I used to hear that all the time, but I never had any difficulty in talking to Joe Collins and he was always available to talk to me. Trygve was also always available. They listened; I was one of those people when I didn't like the way things were going and I felt there should be things to improve, I could talk about that and I could feel that they cared and some things would improve. So I hate to even start naming because there were so many. Bill Brown, who I also worked for and there were just so many and in other industries too. I developed relationships in other companies, in HBO, so I just have a great network of friends and supporters, even today as a result of that.

KELLER: Do you feel that this network will assist you in developing your new company and your new products?

GREER: Oh, without a doubt. Without a doubt. One of the things that we're trying to do in our company is develop verticals and of course my vertical will be all in this whole communications and broadband, if we can consider some things in another vertical being non-profits because that's really we're I started from and as I was talking about this application that we're talking about putting together, the opportunity to be able to go in and talk to people and say give me your advice about this idea and that idea, that's a result of that network. It has paid off very well.

KELLER: Gail, we're just about out of tape and we said we would close this in about an hour and we've gone just a little bit over. We greatly appreciate you taking your time and be able to sit down. Thank you.

GREER: Thank you, Jim. It was good seeing you, too.

KELLER: This interview was part of the Gus Hauser Foundation Oral and Video History Program of The National Cable Television Center and Museum. It's good to see you again Gayle.

GREER: Good seeing you, too.

KELLER: Thank you.

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Ross Greenburg

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Interview Date: Thursday May 15, 2003
Interview Location: New York, NY
Interviewer: Tom Umstead
Collection: Hauser Collection

UMSTEAD: My name is Tom Umstead from The Cable Center and we're here talking to Ross Greenburg, president of HBO Sports, talking a little bit about HBO's past, present and future in the sports realm. Mr. Greenburg, HBO has become over the years the most recognizable brand in the cable industry, and that's been based on original programming from The Sopranos to Sex and the City, but before there was any of those things there was HBO Sports, and that was sort of the heart and soul of HBO. You started at HBO in 1978. When you started there did you ever consider that HBO would become such a powerful force in the sports industry?

GREENBURG: It's funny because when I started at HBO in 1978, we did many, many sports events all over the country. We were about 500,000 subscribers at the time in all 50 states, but when I traveled to the different states and I'd say who we were working for as we were doing these athletic events, I would always get a quizzical look when I would say HBO. It just didn't have the name recognition that it has today, and in those days – I remember my father, when I first got the job, he said, "Oh, cable. That's a good place to be. There's a future there." All I knew is that I was getting involved in sports television and I landed a job as a production assistant. So, I really didn't envision this kind of growth and powerful kind of dominance in television, but what I did know is that it was something special, that it had a philosophy that was a little bit different than the networks at the time. And in those days, the three networks were the powerful kings of television and to break through you had to be dynamic. But HBO had this non-commercial format and it had this bravado and this unique way of telling stories on television. In those days, the bulk of it was sports, but I knew there was a seeping in of live concerts and comedy presentations and films right out of the theater and I knew that people were hooking on to the network early, even in those days, and I knew that one day it would be a force.

UMSTEAD: Sort of take us back there... you started at ABC, and again, there was really, as you mentioned, nothing out there on the cable end that compared to what the broadcast networks were. Did you take all of your experience at ABC and bring it over to HBO, and how did you infuse that into what you did over there?

GREENBURG: I was at ABC during the Roone Arledge era in the mid-70s, and at that time ABC Sports really dominated the entire world, and he set up a philosophy there of telling it like it is, story-telling, getting inside the game, not just covering between the white lines, hiring very prolific talent that spoke their minds, and basically journalistically went right for the jugular. So, that's how I was taught. I was getting a master's degree in sports television. So when I came over to HBO in 1978, that's how I knew to present sports, that's the blueprint I had, and I was a production assistant but there were only two of us. A gentleman named Tim Braine was the executive producer at the time, and I was the first hire in production. So, the two of us kind of set out to do a vast array of sports, whether it be boxing, which we had done for a few years but started to see a growth pattern there, and we were doing college basketball, we were doing gymnastics, figure skating, every type of sport you can think of, but I was taking the philosophy from ABC Sports and bringing it to HBO even then in my own small way, and I was producing within a year because at the age of 24 there was no one else to produce all this product. So I had the opportunities that I wouldn't have had at ABC and I just followed the lead and set out to present sports differently.

UMSTEAD: Now, a lot of people don't realize this, but in the early '70s HBO actually carried NBA games, NHL games, they were really into developing these sports programming. When did HBO realize that it would be boxing and the sort of documentary area where they would have their greatest strength?

GREENBURG: What happened was in the early '70s – and this is very important – a man named Marty Glickman, who was here with Jerry Levin and Chuck Dolan as they started up HBO, they decided that they could get a marketplace together for professional sports on HBO because at the time the national packages were a little helter skelter for the NHL and the NBA, so Marty used to travel around. He went up to his friend, Red Auerbach, up in Boston and says, "Hey, Red, I can give you a little more money if you want to broadcast some of your Celtic games on HBO." So he would go to individual owners and package games through them, rather than going directly to the league. At the time, there weren't any safeguards for the league to protect the league from that kind of a sale, so HBO would get this influx of professional sports at the time. Actually, HBO broadcast the last playoff series of the ABA, which is a little known fact. The ABA had a healthy menu of games on HBO as well, so in the mid-70s, when HBO was launched, it became this feeding ground for trial and error. In those days, boxing was primarily a closed circuit event, but that same Marty Glickman and Jerry Levin would go to a Don King or Bob Arum and say, "Hey, how'd you guys like to test out this new little world we have called HBO? We'll take your closed circuit signal and send it to the homes that we have on HBO around the country. We're very small so we're not going to impact your closed circuit sales as people go to arenas, but here's some extra money," I think to the tune of 30-40 grand to get something like Ali/Frazier or Ali/Foreman into HBO homes, and lo and behold King bought it, bought into the project and we were starting to do our boxing coverage. But that was the seed of boxing at this company. What happened in the later '70s, when I got there in '78, was that Michael Fuchs and Jerry Levin started to realize that we could claim some ownership in this sport. This was the one sport that you could do as one offs, and if you could plug into the sport and take some premiere primetime events away from the networks – ABC and CBS were very strong in those days in covering primetime boxing – but if you could start to pick and choose some fights and spend some money aggressively, that you could start to generate stars. So that the Gerry Cooneys, the early days of Sugar Ray Leonard in his pro career, Larry Holmes, and others started to migrate to HBO in the late '70s, and in 1979 the Holmes versus Weaver fight in Madison Square Garden marked the first major heavyweight championship fight that actually was veered into our lap at HBO. Red Smith, the famed columnist, the next day wrote about the fact that HBO was broadcasting that heavyweight championship fight and took it away from ABC. So that was the real beginnings of notice here in New York. Two years later I found myself in the truck for Leonard/Hearns, and this was the first major event for HBO Sports, which we were in control of the entire event from a television perspective because the worldwide audience was getting our feed, and at that time, Michael Fuchs, then the chairman, walked into the truck afterwards and he folded his arms and he said, "Gentlemen, we have arrived." And I knew exactly what he meant. It was a statement that this was our sport now and we were going to try and create a dominance in the sport, much the way that Roone had his dominance in football and the Olympics and Wide World of Sports in the '70s. So we honed in on boxing.

UMSTEAD: Now, you talk about boxing... at the time it was on broadcast, but eventually broadcasters got out of it because boxing, for better or worse, developed this stigma about it. Over the years, HBO has been able to sort of stay above the fray and maintain its integrity while the boxing industry has gone up and down. Now, you seem to be a very mild-mannered man. How do you deal day in, day out with the characters in the boxing industry?

GREENBURG: Well, the characters in the boxing industry go back to Tex Rickard at the turn of the century. So the reality is that boxing will never change. The cast of characters will change names but it draws the entrepreneurs and the money hungry maniacs into it, and that's just a fact of life. I think over the years we've been able to professionally handle this sport, conduct business the right way, and really create big events for television and kind of stay above the fray. In many ways, on the broadcast if we see wrong we'll talk about it. In the back rooms and the board rooms when we're having our meetings, if we see something going in a peculiar direction, we'll confront those promoters and managers head on, and I think just there's a certain responsibility that comes with HBO boxing and to carry on that legacy you have to stay on the straight and narrow, so that's always been our kind of way of doing business here. So Don King, Bob Arum, the Duvas, they all respect the fact that they can maneuver in a certain way outside of these walls, but once they come into our building and conduct business with us, they'd better be right on course and stay within the white lines, and that's how we've been able to maneuver our way through the crazy world of boxing. The funny thing about the networks is that they chose the wrong time to get out because the '80s were probably the greatest decade in boxing history. You had Sugar Ray Leonard, Duran, Hagler and Hearns fighting in their many memorable fights, and you had the emergence of Mike Tyson, you had a very strong Larry Holmes at the time, you had Arguello and Pryor and Chavez and Taylor – you just had a lot of great talent in the '80s. It's a time where we were kind of putting our stamp on the sport. Technologically doing a lot of things production wise behind the scenes to create a different viewing experience for the sport, whether it's overhead cameras, microphones in the corners, Spanish translations – we were just coming up with a lot of different innovative ways to make the broadcast feel like you were sitting ringside, and then on top of that had this dynamite programming with these powerful names and more tension in the sport than ever. So we kind of used the '80s as our launching pad, and then the '90s and now into 2003 era we're hoping to just carry the ball and see cyclically the sport come back because we've lost quite a few of the major stars in bulk. We have our Oscar De La Hoyas, Lennox Lewises, Roy Jones, but we don't have this feeding frenzy of great talent that create massive events that we had in the '80s.

UMSTEAD: What was the most difficult negotiation that you had to go through in terms of developing a fight? I'm assuming it might have been Lewis-Tyson because you had to deal with Showtime as well.

GREENBURG: There were a couple that come to mind. In the mid-80s Seth Abraham and Don King jointly had the idea that we would create a world heavyweight series in which we would unify the world heavyweight title. At that time there were three heavyweight champions and Mike Tyson was this emerging star in the making, and so we developed this series and injected Tyson into it, and subsequently most of the champions were afraid of that Tyson character, didn't necessarily want to step in the ring so we had to create this series and would have these long day and night meetings for many, many months to try to make sure that all the sanctioning organizations and all the promoters and all the fighters were actually going to stay in this series. Ultimately Michael Spinks wandered out of the series at the very end having been stripped of his title, but he was still the people's champion having beaten Larry Holmes so in the end after our series was over and Tyson had all three belts wrapped around him, then he had to go fight Michael Spinks in a closed circuit event at the time to kind of really wrap the heavyweight championship around him. But that was the most difficult until Lennox Lewis came in my office one day and said, "You know, I really want to make this Mike Tyson fight." And Mike Tyson had been, once he was out of prison, for years fighting on Showtime and had a long-term deal with Showtime. So it was the first time that the two networks had to deal with each other, and had to try and figure out a way to create Lewis-Tyson. It was a very difficult negotiation – a lot of details, a lot of concessions on both sides, and a very difficult negotiation to get done. And so that one... certainly I was more involved in that than the heavyweight series even though I was involved in that, but that one will go down as the toughest negotiation in HBO history.

UMSTEAD: And actually that negotiation, if I understand it correctly, still has a second fight on it. Are we going to see that anytime soon?

GREENBURG: I don't know. I mean, you know what? This is an historic piece of videotape. Hopefully at some point in time either that fight will have happened or many other memorable fights will take its place, but you can never predict in this sport.

UMSTEAD: Outside of boxing HBO also made a name through the acquisition of the Wimbledon Tennis Tournament. Talk a little bit about that and how important that was to set HBO up back in the '80s.

GREENBURG: Yeah, great story, and very, very, very monumental story for all of cable television. Marty Glickman, again – his name comes up all the time – he was a very experienced, well-known New York broadcaster, never got any credit for being a negotiator, but in fact, in the very early days of HBO Marty was kind of given the go ahead by Jerry Levin to kind of get some sports properties. So, Marty Glickman wandered over to England because he had this idea. He said, "You know, all the networks do is cover the weekends. They cover Saturday and Sunday of Wimbledon. What if we tried for HBO to get the mid-week, early round coverage of this tennis tournament?" Now, everyone now today looks at sports and looks right to cable to cover all of the early week coverage of golf tournaments, tennis tournaments, every major tournament you can think of, the early rounds of the NCAAs in basketball, but I am telling you that this negotiation between Marty Glickman representing HBO and the All England Club in Wimbledon was the first time that any company had ever gone for any early round coverage of any athletic event that didn't happen to be on a Saturday or Sunday. So when he made that deal and all of the sudden we were going Monday through Friday five days a week with early round coverage of Wimbledon it was a monumental deal that changed the face of sports and television as we know it today. I was lucky enough to do 21 Wimbledon championships at HBO, to go over there and produce, and I will tell you there is something about that event that's special. I've been to all the major sporting events the world over, but the feeling of stepping on those hallowed grounds at the All England Club, and I hope we transferred that to the American public through our coverage for all those years, was something very special, and I cried like a baby the last year of our coverage. The entire tournament I was just crying knowing I would have to go back as a spectator. It's a tournament that none of us will ever forget being associated with, and it's a very special place.

UMSTEAD: With HBO being so strong in the sports business with its history of Wimbledon, with its history of boxing, why haven't we seen the network sort of go after some of the major sports packages, say it's an NBA package, or an NHL package? Is there a reason why that hasn't happened?

GREENBURG: Yeah, I think the reality is we've had to carve out different niches in the sports television environment, whether it be a sports magazine show like Real Sports, On the Record with Bob Costas, our wonderful list of historic documentaries that we've done for 20 years. We realize that we can't pay 500-600 million dollars a year to bring our subscribers NFL football, or NHL, or NBA basketball, major league baseball packages because frankly we don't have advertising and there's no way for us to make that money back, and as our subscribers plunk down their fee every month for their Sopranos and Sex and the City, and our healthy menu of sports specials and what not and all those movies, the fact is that our company cannot bear the brunt of hundreds of millions of dollars in sports rights. It just doesn't have any justification. So we had to look for different ways to take our sports menu and kind of penetrate the American mind and we've done that through those wonderful lists of documentaries and Bob Costas and Bryant Gumbel's Real Sports in order to kind of sociologically look at our country through the eyes of sports, and I think it's worked. I don't think anyone on the dial can measure up to the kind of work that we've done in all of those areas across the board in just telling stories.

UMSTEAD: You mentioned the documentaries and the impact it's had both on society and how it looks at society. What drives you to develop an O.J. Simpson series or an Arthur Ashe show which has such implications within society? A lot of people sort of walk away from that because they're afraid to touch certain issues, but you've dealt with race relations, you've dealt with women in sports. What drives you to develop that?

GREENBURG: I think for me it's really my upbringing in the '60s, always curiously looking at the other side of the world because we were all taught to, for the first time, question the Vietnam War or racial injustice, social equality. So I think, at the core, we have to realize who we are as people and then look for the stories in American history in sports that can penetrate that wall and bring it down, and that all goes back also to the philosophy of HBO from the very beginning, when I got here in 1978, and that was to be different. You could in those days, and still today, go across the television dial and see the same old stuff. Today's reality television was yesterday's soap opera at night. That kind of television is fine for people that want to sit back and waste their minds away, but here at HBO we want to kind of go a little deeper. We don't have any commercial sponsorship over our shoulder looking at everything we do and we realize that there's a truth in America that isn't always translated on television, and we're going to do it. And so when we go after significant social stories, whether it's O.J. Simpson, the early days of baseball in When It Was A Game, the story of the American Basketball Association, the beginnings of the AFL, Joe DiMaggio, we're going to tell each individual story as it happened, checking our facts, making sure we're dead on in our portrayal of that person or that event, and rekindle the memories of the American public like we did with the '80 hockey team in Do You Believe in Miracles. So, there are so many moments in sports that transcended the actual event on the field. The Soviet-U.S. hockey game in 1980 was not about two hockey teams on the ice playing one another. It was about an insecure America at the time who looked at the Soviet Union for 20 years as their hated enemy and finally had a game to symbolize the struggle that was going on in the late '70s and into 1980 here at home, and could use that game and that team as a metaphor for making a statement that we're okay, we're going to win, and then we're going to proceed into the next 20 years as a powerhouse again. And that, I mean, if you can tell those kinds of stories you're going to bring people to tears, they're going to get emotional as they watch the television show and it's going to be powerful. That's what we've been trying to do since I've been here in 1978, and HBO, time and again, makes you remember the kind of programming that we put on the air, and I don't think any other network can say that.

UMSTEAD: No, very few can. Was there one documentary in particular that touched you, that got you emotionally?

GREENBURG: Well, I'll be at screenings for all of our documentaries and I'll be crying like a baby having seen the documentary ten times. They all kind of emotionally get to me.

UMSTEAD: Was there one that was difficult for you to produce?

GREENBURG: Yeah, the most difficult one for me to produce was Arthur Ashe because he was a very close friend and was an analyst on Wimbledon for twelve years and we were golfing buddies and very, very close friends. I felt the weight of trying to put together a program with Julie Anderson, who was the producer at the time, that really would portray Arthur Ashe, the man, and that one was difficult. I spent a lot of time crying in the makings of that film because that was my buddy, and he was such a powerful figure – so dynamic and such a great crusader for what was wrong in this world, and he did it in such a peaceful, quiet way in the system that I think his legacy will live on forever, and no, he's not Reverend Martin Luther King, but boy, he must be as close as you can get to that. So, when you're going after the story of a friend who happens to be that important of a figure, you feel the burden of telling that story. The other most emotional moment was in the makings of When It Was a Game, I remember in the first show that we did, because that was very much a mind blowing experience because for the first time, in 1990, I think we realized how to put together a sports documentary and we were influenced by some great documentary filmmakers in the '70s and '80s, but I think that's where we developed our style. You know, in the old days, in the '80s, we would do documentaries and we'd just throw some interviews against a wall with some footage and intercut it, and in those days no one took sports very seriously, including sports television, and so there was no real depth to what we were doing, and for the first time in the making of that film we knew we had something special and we had taken 6 to 8 months to figure out how we wanted to shape it. We had all this wonderful color home movie footage of major league baseball in the '30s, '40s and '50s, but we really needed to shape the documentary. I remember being in the final mix and all of us were basically crying because we had this beautiful music wrapped around this great storytelling, and I said to the three producers with me, George Roy, Steve Stern and Dave Harmon, I said, "Gentlemen, you will never, ever have a moment like this in making a documentary for the rest of your life." I said that not knowing how the public was going to perceive When It Was a Game. It became a tremendous success and I think it spawned a whole generation of documentary filmmaking out of HBO Sports, which 50 years from now, when everyone has our collection of documentaries, they're going to say, "Wow! These guys were spectacular." We pick the right subjects time and again, and we tell the story as no one has done before us. We know it because everyone tells us that, but we do it for ourselves and for many of the subjects and the relatives of the subjects that participate in the telling of the story. Some of the greatest moments we have is when we're at these huge screenings and all the participants and those that have been involved in the story are sitting there and we're able to present it for them, and it's not just about... we know that it's going to translate from those people because of the passion we have to the rest of the American public as they watch it on HBO later. It's been a special experience.

UMSTEAD: You mentioned Arthur Ashe and a number of other major sports figures who have come on HBO and worked as part of the network. How are you able to draw an Arthur Ashe or a Bob Costas or Bryant Gumbel, who basically have stayed on the broadcast side, to cable? How is it HBO has been able to do that?

GREENBURG: It's been mystifying. I mean in the early days if you had told me in 1978 that our roster of talent would include names like Frank Deford, Armand Keteyian, Bryant Gumbel, Bob Costas, George Foreman, I would have laughed, but the fact is that over many years what happened was talent gets drawn to great work, and so I think time and time again, and Costas is probably the best example, we would have numerous, numerous phone calls between each other from the mid-80s on comparing notes, looking at the different product. He would call me when he would see something outstanding on HBO. I would call him when I'd see his work in the NFL or the Olympic Games, later on in the '90s, and we would basically applaud each other's great work, and I knew that Bob Costas was a perfect fit for HBO because of his intellect and his ability and skill as a broadcaster. He wasn't able to flourish, he was like Michael Jordan without having a basketball court or maybe Dan Marino without an offensive pass in his offensive scheme as a football player, and I felt that there were certain things that we could bring to the table for Bob Costas to kind of utilize all of his talent, and put a show together around his skill as a broadcaster that would draw him to HBO, and in fact that's what happened with On the Record. The timing was right. And I think Bryant Gumbel – he told us early on when I had lunch with him about the fact that we were doing this sports magazine show, and he was out of sports for over a decade at The Today Show at NBC at the time, and had no care or will to do any kind of a sports show, but he trusted HBO Sports with this product, and he knew that we would develop the first sports magazine show that would get it right, that would actually be a sister to a 60 Minutes in news, and there's a certain faith because he knew the kind of product that we were churning out here, that we could develop that show, and he signed on saying this is the only sports show and the only network I would affiliate myself to, other than my other work in news. So that is why you get that kind of talent. I remember going down to Houston and sitting with George Foreman prior to the Holyfield fight, and I sat with him in his office – and took the trip down there – and I said, "George, I don't care if you win this fight or lose it, I think you're going to be a great broadcaster, and I think you have all the tools – the candor, the sense of humor, the understanding of boxing – to be a great broadcaster." And I appealed to that. He must have seen the quality of the HBO product, even though he wasn't a big watcher of sports television, and boxing in particular, when he was ten years a preacher in Houston, but he knew enough about HBO's product when he came back that he knew what we'd done right and he'd get the freedom to express himself on the air that he coveted. So, it was an easy conversation and I was always very confident that he'd come on board, and he did. He decided to come on board before he fought the Holyfield fight, lost the 12 rounds, but in glorious fashion, and has been a broadcaster here ever since. So, I think it's the ability to really intellectualize and to make smart television that attracts all this wonderful talent. These are the greatest minds in one place talking sports, maybe since the days of Roone Arledge, in the history of the business. He was a great eye for talent, Roone Arledge, and he understood that if he could marry his philosophy of sports television with the right talent to kind of be his communicators, whether it's Howard Cosell or Jim McKay, Frank Gifford, that he could put out a great product, and I think HBO Sports mirrors that philosophy in the '80s, '90s, and now into this century – that if you have the kind of intellectual product that is Real Sports or On the Record, or documentaries, or the way we cover boxing, that we can attract the best talent to communicate that philosophy.

UMSTEAD: We've talked a lot about HBO's triumphs, but there have been a few missteps along the way. Arliss, for example, although it did very well was cancelled last year. KO Nation, which was a start-up afternoon boxing show didn't perform as well, and I guess a couple weeks ago we learned that Hard Knocks was going to be set aside for at least a year, or put on hiatus. When projects don't work the way that you would like them to, do you take that personally?

GREENBURG: No. Television is about risk. You never know what's going to be a big hit down the road. You have to kind of hope and feel that it's going to work. It's fingertip kind of decision making. KO Nation, a boxing show that was going to appeal to younger audiences, in hindsight, would have never worked because it would be like a bunch of grown men putting together a kids' show, but never really getting it. A sports event is a sports event. You don't create sports events for a new generation just by merely dressing it up. You're better off putting on broadcasts of skateboarding and "X" generation kinds of athletic events then to try to dress up boxing into an "X" generation sporting event. So we learn from our mistakes, and the key to any success is to learn from mistakes and not commit them again. God, you make a lot of mistakes in television because it's a catch as catch can medium. I mean, you're really trying to appeal to the American audience and every step of the way you're going to make little mistakes. You may make a little mistake on an individual program, you know, a documentary that you might not have dug deep enough. I can think of... in the Bill Russell documentary we didn't dig deep enough into his private life so that we didn't really get the benefits of the full story, and in retrospect that documentary could have been 20% better. You look back at individual fights – I remember walking out of the truck and just thinking of the mistakes we made.

UMSTEAD: Such as?

GREENBURG: Well, it's hard... whether it be a bad graphic on a Leonard/Hearns fight or not interviewing someone that we should have interviewed during the fight because of the stoppage that was suspect, or... nothing that really hits home in a big way, but there have been a lot of instances over many, many years that you're second guessing the decision you made, and I think that you just have to kind of learn and just march on.

UMSTEAD: Were you ever in a position where you were very concerned about your wellbeing or the wellbeing of your staffers, whether it be a live event or taping something?

GREENBURG: Yeah, I mean when Fan Man hit the ring in Holyfield/Bowe and we knew we had hundreds and hundreds of pounds of electrical equipment and lighting hanging over that ring, I was worried for everyone that worked for me that was ringside. I was in the truck. And when the riot broke out at Bowe/Golota in Madison Square Garden and we had all those people in the Garden working, I was very, very nervous about what was going on. So, I mean we've had some bizarre events over the years and they turned into news events, those two in particular, but yes, there was a real concern over our staff that was in harm's way. Boxing tends to have those kinds of events that once or twice a decade... and you just hope that you don't get caught up in it.

UMSTEAD: On a personal note, are you a big sports fan?

GREENBURG: Yeah, see, I think it all goes back to growing up as a little kid I used to sit about this far from the television set and watch everything, and I was taken by ABC Sports in those days because I was the kind of kid that would in a Super Bowl... I remember I went actually to Super Bowl III, Namath's huge victory, and I was a huge New York Jets fan and Joe Willie Namath was my hero, and I remember crying like a baby and I remember many times at the Olympics – I wasn't at the Olympics – but watching the coverage on ABC, if Billy Mills was winning at the tape or Toomey was running in the dark of Mexico City and winning the decathlon and you're hearing Jim McKay's voice build the drama, I remember tears welling up in my eyes. I was that kind of passionate viewer. I think I got some sensitivity from my mom for the human spirit, and here was sports being captured that way. So, now I think that's the motto here – "Make'em laugh, make'em cry, make'em think" because you can use television as a medium to kind of draw out emotion in people, and that comes from my experience as a little boy, and even today at age 48 doing the same. I mean, I still will watch a certain event whether it's the finals of a NCAA championship game and Jim Boeheim coming out from the sidelines, never having won it, with shots of his wife and kids in the stands and I'll get all misty eyed. My son will tease me, "Dad, are you crying again?" I just think that sports brings out some drama that other television can't. People work their whole lives for a moment, and when the moment comes in sports it's so powerful because you can't just look at the individual accomplishment, you have to kind of interject that this human being worked their whole lives, five hours a day in their individual sport, for the moment and there it is, and you see it. You don't see just the moment etched on their face, you see the work of a lifetime wrapped up in what they're doing. We had a prize fight a month ago, James Toney. James Toney had the rockiest road of a professional prize fighter I've ever seen. He battled his laziness, his weight and yet, here we were, he was fighting Jirov and he won, and he won in a way – in the 12th round – where he was putting everything into it, right from his heart, and I wrote him a letter the next day and I said, "When I saw you slumped on the canvas in ecstasy, I knew it wasn't about that one moment of beating Jirov in 12 rounds, it was about finally you had taken everything, all of your passion and you had kind of put it into that ring, and for once you were doing it for James Toney. All the work that you had put into this sport, you had never really filled your potential because you were lazy, and here you had finally been at peace with yourself and you had put all this hard work into this fight and you won. When you were sprawled on the canvas, that's what I was thinking of." And that's why I got welled up with tears because athletes are very passionate, wonderful people to follow, and at its height in professional sports you really can appreciate the wonder of it all.

UMSTEAD: I tend to agree with you, and while that passion has always remained in sports over the decades, in your opinion, has the sports business changed in the last twenty years, and is it a positive change or a negative change?

GREENBURG: You know what? I think the change is that the media tends to just follow the numbers. My son knows how much Roger Clemens makes in a year. I don't remember ever caring or knowing what Willie Mays made in an individual year, or Mickey Mantle. I still don't know what Mickey Mantle was making. The only reason I knew what Joe Willie was making is it became big news that he was signing a $400,000 contract for a four-year deal, which was the first time that I can remember as a kid that fact hitting the sports pages in a headline, but I think that the media now covers sports as a business as much as an athletic event, but when it's stripped of that coverage and it's on television as the athletic event and you can get into that little dreamland and not focus in on how much money a tight end or a running back or a quarterback is making, and you can look at it strictly as a sporting event, they can never strip away the passion of sports. They can never take away Michael Jordan's passion about putting a ball through a basket when it's all on the line, or a Dan Marino touchdown. They can never take that away, and so I think sports will always live on. I think that certain events, whether it's the Olympic Games or a huge heavyweight championship fight in our case, can be kind of chipped away at with this continuous obsession with how much money is being generated, but as you're watching it, when the moment is happening, when Tyson is getting knocked out by Lennox Lewis, you're not thinking, oh, and Lennox Lewis is making 33 million dollars, you're thinking, my God, Lennox Lewis is actually fulfilling his dream of stamping his legacy on the heavyweight division and knocking out Mike Tyson, the mighty Mike Tyson.

UMSTEAD: Interesting. What about technology? Obviously we're on the cusp of HDTV, there's video on demand, will that change the face of sports and how we view sports going forward?

GREENBURG: I think technology is always changing the face of sports television. I remember in the mid and late '70s, graphic generators were first coming around and all of the sudden we were able to pop up a lot of statistical information about what was happening on the field, and I remember at the time people were feeling a little bit of an overload that maybe it was taking away from the purity of the event on the field, and now the screen is cluttered with scores of other games and stuff happening from all over the world of sports in the lower third of the screen, so we've lost a little chunk of our screen to facts and figures, and actually diverting the attention of the sports fan away from the game on the field at times. You're not as focused. So if technology is going to get in the way of your focus of a sports event I'm not for it. I want the viewer to be focused, and the only innovations that you see from this company, this division, at HBO Sports, all the technological innovation is geared toward getting you a new perspective and focusing on the game. Howard Letterman is there as an unofficial judge to give you another thing to think about as you're watching a fight because here's a veteran judge giving you his analysis of the fight so that it's not a complete surprise, maybe, when the judges hand in their scorecards at the end of the fight. That's all meant to focus you in on the fight, not distract you from the fight. Punch stats are used on boxing for us to be the first statistical analysis to give you some representation of who's winning, maybe, in an individual fight, to focus on it. I don't care what's happening in the Boston-Detroit game in major league baseball when I'm watching a Lennox Lewis heavyweight championship fight on HBO. I guess if I'm a Yankee fan I might, but it just seems like, you know, maybe once in awhile you should do that, but it just seems like there are too many people out there just looking to put together technological innovations for the sake of being fresh and new and not really focusing on whether those innovations actually help the viewer hone in on the sport they're watching.

UMSTEAD: Well, is that because unlike you and I, the sports viewer today is not focusing on the sports? In other words, they need all those technical innovations to keep them interested, to keep them watching because there are so many other different things that they could be doing that sports is no longer the icon or what we used to do all the time, you sat in front of the TV and I sat in front of the TV, we watched the game for nine innings and didn't care what kind of stats were up there. It's not the same for this next generation. Is that necessary to keep them there?

GREENBURG: This generation is so used to flicking 400 channels, and their attention span is the attention span of a gnat, so what happens is they're not willing to sit, watch, and let the sport play out on the television set. They're jumping. And I think a lot of television broadcasters try to figure out ways to keep them there. You know what, if it's not worthy, if the sports event that you're watching is not worthy, if we're doing a documentary and I haven't hooked you in in the first five, ten minutes of that documentary, you're going to go, but quality will rule out. If it's a great athletic event, if it's a great documentary, if it's a great story on Real Sports, if it's a great interview by Bob Costas, they will stay. So don't search for technological innovations to make them stay, search for the quality of the product you're giving them to make them stay, and that's HBO as well. That's the overall HBO philosophy. Give them the quality product, they will come. My friend produced Field of Dreams. Give them that quality of product, they will come.

UMSTEAD: Fifty awards – 25 Emmys, numerous accolades throughout your career – is there anything you haven't done yet that you would like to do?

GREENBURG: Yeah, I mean... by the way, the awards, those awards on my shelf belong to the whole division because that's not about me, that's about the HBO Sports division, but I will tell you that I'm making movies now, I've used sports in a lot of different mediums to tell a lot of stories and touch a lot of lives. I guess the Olympic Games, to be able to kind of coordinate the beauty of the sixteen days of the Olympic Games would be something that I'd always wonder how I would do in that setting. I've had a little mini-microcosm of that covering Wimbledon for twenty-one years where you had six courts going simultaneously, but the Olympic Games seems to be the only thing that Roone did that I never did. (LAUGHTER) But that's the one sports event that I always wondered, how would I do?

UMSTEAD: And if you were able to perform or be in front of the camera in any particular sport, was there something... I know that you're an avid golfer, would you like to hit the tour?

GREENBURG: That would be fun. Golf would be fun to broadcast. I'm a real passionate football fan and baseball fan, too. I never really wanted to go in front. Actually, I shouldn't say I never wanted to go in front because I actually did an audition tape when I was in college. I was writing for the local sports reporter and did an audition tape that I still have that's very embarrassing and was the reason I went behind the camera. So I never really modeled myself a broadcaster. I marvel at the broadcasters that work for us. I'll continually say to a Costas or a Lampley or a Gumbel, "How do you do that?" because from the seed of an idea they will just go off for a minute of beautiful communication to a camera without a script, right off the top of their head, and it's magical when you see the performance. It's like a great musician or a great comedian or a great artist. I just don't have that talent. I can work from behind and make you better and set you up as a talent to do that, and draw on your passion.

UMSTEAD: Where do you see HBO, say five years from now, and in that aspect, the sports industry?

GREENBURG: Hmm, I think HBO, we've carved out a niche of who we are, so we understand who we are as a company, not just a sports division, so we have to stay the course. We have to give you innovative programming that you won't see anywhere else. That motto goes back to 1978 when I got here. It has to be on the cutting edge, it has to be truthful, and it has to be direct, and it's uncensored and it's pay television and there are no commercials, and so we're given this wonderful palette in the first place. So all of HBO's product and all of HBO's sports product will have to fit that mold, and then the key for us in sports is to keep coming up with new documentary ideas, new series ideas, whether it's the next generation of Hard Knocks, or Hard Knocks comes back, by the way. Whether it's new stories to tell on Real Sports, a new Bob Costas show as it evolves over the years, or some other show that we haven't thought of yet that will pop onto our calendar. You know, Legendary Nights, we looked at our thirty years of boxing history and a PA in a meeting had an idea of why don't we look back at our fights and put them in documentary form, and so then I set up twelve half-hours and we picked as a group our twelve most memorable fights and put together a string of documentaries, from the seed of an idea, we'd spawned a whole television series. That's what it's all about. You have to have the resources to do that and HBO seems to create the resources so we can create the product, entertain the viewer, and the money flows back in the monthly cable bill. That's been the trick for many years and that's not going to end.

UMSTEAD: Anything that I might have missed that you may want to add about HBO or sports television?

GREENBURG: Let me think... you know, I've been here so long I remember all the catch phrases of HBO: "Simply the Best", "It's Not TV, It's HBO", "There's Only One HBO". I think every time we develop a catch phrase, at times they can sound a little arrogant. They're not meant to be. They're meant to define who we are, and I've seen so many people come and go in twenty-five years in this building. It's the greatest group of people I've ever been involved with. There's an intelligence and a closeness in the organization that's really, actually, increased over the years. But when you think of names like Levin and Fuchs and Jeff Bewkes, who went up town recently, and now Chris Albrecht taking over, these are minds and leaders that changed the face of television, and just to know that I'm in a building that's evolved from whence it started, when I got here, with it's 500,000 subscribers and people wondering what those letters stood for, into this giant of a television company that creates the most powerful programming in the medium, I mean, I sit here and wonder and just look back and firmly understand why it all happened. There were people in the building that knew, at the core, how to make this work, and so as we look ahead fifty years I just hope that that same legacy sticks with this building and no one strips it, because it would be a great loss to the American public, frankly, if they didn't have a place to go, not just for entertainment, but a place to go for really thoughtful, important television. It would be sad. So, I've seen a lot of networks get chipped away at their core. I've even seen ABC Sports lose its luster and lose the foundation that Roone Arledge built, and that's sad. So I hope that at HBO Sports in thirty years when I'm long gone and all the people that work with me are long gone, still has that same philosophy that somehow, someway we're able to carry it through.

UMSTEAD: HBO Sports has developed a great following due to the power and the quality of their original programming and their original sports. Time will tell whether that will continue, but given what we've talked about with Mr. Greenburg, it looks like they have a great future in front of them. I'm Tom Umstead with The Cable Center.

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Richard Green

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Interview Date: Thursday December 12, 2002
Interview Location: Denver, CO
Interviewer: Rex Porter
Collection: Hauser Collection

PORTER: I'm Rex Porter and we're at The Cable Center in Denver to interview cable pioneer Dr. Richard Green. Hi, Richard.

GREEN: Hi, Rex.

PORTER: Could we begin this interview by getting you to give us a little bit of your background as a young boy growing up and attending school and so forth?

GREEN: Well, I grew up in Colorado Springs. I was born in Colorado Springs and spent the first 18 years of my life there, so I'm a native Coloradoan. It's very heartening to see all of The Cable Center here and Cable Labs in Colorado, and so on, but anyway, I grew up in Colorado Springs, went to Colorado Springs high school. At the time, Colorado Springs only had one high school, now they have several, but it was THE high school. I had always been interested in electronics and kind of played around with amateur radio when I was in junior high. I never really got very good at it because I could never really find a mentor to help me through it.

PORTER: Nobody in your family had an engineering background?

GREEN: No, no. My dad worked for the Maytag Rocky Mountain Company, which was a distributor of Maytag appliances. He was a very technical guy and I learned an awful lot about appliances when I was growing up, including gasoline engines because Maytag had gasoline engine driven washers.

PORTER: I know about that. We used to take them and put them on bicycles to drive our bicycles.

GREEN: Good little engines, they are. We had those little engines around the house, or around the garage, because they were such good little pieces of machinery. My first real experience in telecommunications, I would say, came when I was in college and I went to college in Colorado as well, Colorado College, and I...

PORTER: Where is Colorado College?

GREEN: It's in Colorado Springs, and it's a small liberal arts college. I was very fortunate to get just an excellent liberal arts education there. What happened when I was in college, I decided I would like to work for a radio station. I always kind of had an ambition to do that, so I got an interview and the interview usually consisted of one of the announcers going in and ripping off news off of the Teleprinter, the AP wire, handing it to you and saying, "Make a newscast out of that." Well anyway, after I did this they said, "Well, gee, you know, you might have a future, but we don't think it's along these lines." (LAUGHTER) I was sort of irritated and so I decided, well, maybe the way to get into this kind of business was technical, so I got a hold of a book – I can't remember the name – it was THE bible on the FCC test and I read it cover to cover, learned the answers to the questions. I think it was called Questions and Answers on the FCC Exam, if I remember right. Then I went to Denver, took the test, went back to the radio station and said, "Hey, I got a nice new license here."

PORTER: Now, did you go all the way to first class?

GREEN: No, I thought that would be too hard so I did the second class and when I got the results back I said, "Well, that wasn't so bad," so I went back the next test period, which was a month later, I think, something like that, and took the first class exam. The radio station didn't really need any engineers, they said. Well, basically they ran the transmitter from the console. Anyway, they didn't really need anyone. So I figured well, television needs engineers and so I got a job at the television station in Colorado Springs, KRDL. So that's how I got started in the business.

PORTER: So now you're in Colorado Springs, you're working for the TV station. How long did you work for the TV station?

GREEN: I took the license exam in '57 and began work in '57, and then I graduated in '59, so I worked at the television station for two years.

PORTER: But now you're graduating with a liberal arts degree?

GREEN: Physics. I majored in physics.

PORTER: Okay, and so what came after that? You didn't stay at the TV station after that, did you?

GREEN: No, well, the academic path that I followed was kind of different too. When I started college I thought the most interesting topic to major in would be psychology, so I took, as was required, a lot of liberal arts kind of courses, which I liked a lot, but I particularly liked psychology and after I began to get into it I liked it a lot, but I thought, well, it's not an exact science. There are so many different opinions here and there doesn't seem to be any way to judge who's right or which is better. So, although it was fascinating, I had this queasy feeling that I need to be in a profession that's more definitive in some way, where you can really say things are primarily right or not right, you know. Some quantitative way to... And so at the end of my second year in college, when I was at the end of my sophomore year, I decided to go to summer school and I took physics in summer school and I loved it. It just was exactly what I felt comfortable doing and so then I became a physics major and so for the last two years I took a lot of technical courses – lots of math and chemistry, physics – and had some very good professors who had written the text books and so it was kind of a complete change, but one that I felt a lot more comfortable with. In the middle of that, I also got the job at the television station, so my last two years in college I worked at the television station early mornings and late at night.

PORTER: So now you've got your diploma and you're going out into the big cruel world.

GREEN: Well, what basically happened is that I also took ROTC during my last two years of college so I had a military tour to do at the end of 1959. Again, it was kind of interesting because I was working at the television station and the fellow who did the weather was a fellow named Stormy Rottman, who became quite a personality here in Denver, I think, at one time, but he started out in the station there, and he worked at NORAD, and he said, "Oh, you're going into the military? Let me see if I can get you a job at NORAD because you'd be right local and we need technical people."

PORTER: Were you in the Force?

GREEN: No, I was Army, but NORAD's multi, and so I went over and interviewed at NORAD and coming out of ROTC I was a second lieutenant and I discovered that at NORAD what a second lieutenant does is manage the coffee because everybody's a general. Even the colonels made copies. Nothing wrong with it except I thought in two years I'm not going to learn a lot probably, and certainly this is a very different part of the military environment.

PORTER: Now were they at Ent Airforce Base then?

GREEN: They were. As I recall, maybe they had moved out to Cheyenne Mountain – no, they hadn't moved out to Cheyenne Mountain, which is another story because they built... we put the first transmitter on the top of Cheyenne Mountain for our television station and the minute we put the tower up there the government came along and decided to hollow out the inside of the mountain. Transmitters sprung up like a porcupine on top of the mountain. But anyway, I decided to do a more regular military tour, and I was in the Signal Corps so I went to Ft. Monmouth and became a Signal officer. Again, a kind of technical education and background, which a lot of telecommunications in there, radio and telephony...

PORTER: Radar and the whole bit?

GREEN: Well, not so much. Radar was kind of a specialty. This was more a general education on how to set up communications systems and telephone systems and those kinds of things, which I enjoyed very much.

PORTER: So what was your tour?

GREEN: It was a two year tour. I was held in, I think it was a Berlin crisis. I can't remember, it was one of the crisis that occurred in the early '60s. But I stayed in another nine months or something like that, held in, and it was... the military experience was very interesting because when I went through Signals school it was my first experience on the East Cost. The furthest east I'd ever been was Chicago, so moving to the East Coast and going into New York and seeing the big city, it was quite an interesting experience, but the interesting part of it was that most of the other people that were at Ft. Monmouth were more or less local. They were from Boston or Washington or kind of East Coast, so they could go home on holidays. Well, it was too far for me to go home so I would sit, stay, on the base and read the manuals. So I came out number one in the Signals school because I knew the answers better than anybody else! I took it seriously.

LAUGHTER

PORTER: You set the precedent by getting the book on how to pass the FCC test.

GREEN: You just read the manuals and take the test. I think I took it very seriously, too. I really wanted to learn a lot about electronics and the net result of all that was that if you come out number one in the class at the Signals school then you get to pick your assignment, which is very fortunate because otherwise you'd just get assigned and that can be pretty traumatic. They gave me a list of five different assignments, all of which were very interesting: an assignment to the Signal Corps laboratories, assignments to the Pentagon, and there was one, they said basically this is one we can't tell you anything about. So I said, "Oh, okay. I'll take that one." Being an inherent risk taker I decided that's the one I want. Well, it turned out to be a very interesting assignment and it was based in a compound at Ft. Monmouth and it was intelligence work. So I traveled the world basically doing what was cutting-edge, technical kinds of intelligence, and so became part of that community. So I was signed there all the time that I was in the Army.

PORTER: But still Signal intelligence?

GREEN: Well, it's actually, again, multi-disciplinary because the intelligence services, although I was assigned to an Army unit, most of the time when I wasn't at work I wore civilian clothes, but at the base, at Ft. Monmouth, I was in uniform.

PORTER: Now was there any broadcast experience while you were in the service as far as television?

GREEN: No, not a lot. Ft. Monmouth has several laboratories. They're scattered around at different parts of the countryside in New Jersey, and I was assigned to the Evans area, which is historically a very interesting site. It was the site for the reception of the first trans-Atlantic radio communications, it was the site for the first radar that bounced off the moon, and so a lot of history. An older area, military buildings, but sort of a sense of history, a sense of being part of the cutting edge in technology, and of course a lot of the scientists that were assigned there were very senior, very, very capable people, so it was a very interesting and rewarding learning experience.

PORTER: So what year did you come out of the service?

GREEN: '62, '63, and then I stayed at the laboratory.

PORTER: As a civilian?

GREEN: As a civilian stayed on at the laboratory. Again, when I left the service I interviewed several places in the laboratory and I ran into the head of one of the divisions, his name was Dr. Merrill, and he was quite a figure, very tall and a very imposing figure both mentally and physically. He couldn't see very well so he kind of looked through his glasses at me and he said, "We're going to do some things here that are really new. We're going to work in lasers. Are you interested?" I knew vaguely what lasers were – this was '62 – and the laser had really just been invented. The original paper was in '61, as I recall, and there had been first implementations of ruby lasers and so on, so I thought that really is interesting. So I went to work for Dr. Merrill and my first assignment was to use laser, a pulse, ruby laser, as a radar device. So, a team of which I was fortunate to be a part, three of us, built the first laser range finder. There was a fellow named Fred Maimon, as I remember, I hope I have the name right, who had actually invented the ruby laser and had been able to make it work. It was at Hughes Aircraft and we worked with him and built the first one, and it was an exciting time. It was a laboratory device, an optical range finding device that used a light pulse as the laser pulse.

PORTER: Did they ever get into modulating while you were there?

GREEN: Well, there were other parts of the laboratory that were doing modulated communications, yeah, and we had gas lasers and things like that, too, but the kind of work that I was doing was purely on the pulse laser side.

PORTER: So you stayed there how long, as a civilian?

GREEN: Well, what happened to me, Rex, is that working in a laboratory... the two fellows I was working with were very competent engineers. One of them was from MIT, the other was from Georgia Tech and I realized in the process I needed more education, and so I decided that I needed to go back to school, and so I went back to school in '63.

PORTER: At?

GREEN: State University of New York in Albany. The State University had just been assembled in the last couple years, and there was a lot of money being invested by the State of New York in the university system, and it had the advantage that the tuition was free.

PORTER: Was it primarily an engineering school?

GREEN: No, the reason that I was attracted to it was that it had a very good physics department, and it was unique because the people that were teaching physics there were people who were actively involved in physical research – Knowles Atomic Power Laboratory, there was GE Research Laboratories and so in New York State – and the education that you received was from people who were really doing active research and teaching, as well. They were doing industrial research.

PORTER: So you could get involved in projects outside the university?

GREEN: Well, you know, these people were involved in industrial research for active companies, General Electric in a lot of cases, so it was really being taught by people that were really on the cutting edge of physical research. So I had some very interesting courses. One of the fellows, he was the chief theorist for the Knowles Atomic Power, and I always had an interest in nuclear physics, but he started out a course in theoretical physics, this is master's degree level now, theoretical physics with a pendulum and he's saying, "Okay, here's the equation that you learned in undergraduate school." To analyze a pendulum you simplify it, you make assumptions and you say, "Okay, let's see what happens if you don't make those assumptions." Well, six weeks later with the blackboard full of equations, you now. It's a wonderful way to learn theoretical physics and pretty soon you're defining all of the advanced functions of theoretical physics and so on. I really loved theoretical physics and I really loved the course. So, that's how I happened to get into more or less theoretical nuclear physics.

PORTER: Now, that was a four-year school?

GREEN: Well, it was a four-year school, but I just went for a master's degree.

PORTER: Okay, so you got your master's from...

GREEN: Yeah, and you needed a master's project, you had to write a thesis, and so what I proposed at the university is I would write a thesis about a laser, a pulse laser range finder. There was an organization called the Atmospheric Sciences and Research Center, which was also in Albany. They did pretty advanced work in atmospheric sciences, and in a discussion with them I figured that you can use this optical radar to develop atmospheric profiles. You shine the light out there and you can watch the back scatter from the light coming back and tell something about that optical path. So I proposed that and the university supported that and that was my master's thesis, so I drove down to Ft. Monmouth and got the Army to agree to loan me their range finder for six months, took it to Albany, went through an Albany winter with the range finder actually just probing the atmosphere. It was a very interesting master's thesis because how many people had access to a ruby laser?

PORTER: Did you find out that ultimately you could project weather that way?

GREEN: The net result of this was they classified my thesis, which made it hard to present. So I worked out an agreement with the university where I would do a verbal presentation and demonstrate the range finder, demonstrate the scientific method in there, but not really reveal all the results. Anyway, that was my master's work.

PORTER: Now about the time you're getting a master's degree are you thinking about going back to...?

GREEN: I was on leave from Ft. Monmouth, and I did. I went back for about six months. I applied for a title four national research fellowship, which was granted and then I went on for a Ph.D. and had a choice of universities in doing that. The master's work was more on the theoretical side except for the thesis which was very experimental, but I got interested in the biological side of physics, so I picked the University of Washington as a university to work on the biological effects of ionizing radiation, which is really nuclear effects.

PORTER: For your doctorate?

GREEN: Well, it didn't turn out that way, but I went to the university for that kind of background. The government was interested in sponsoring people who had a nuclear physics background and also was interested in biophysics. When I got to the University of Washington, I spent a year or so kind of specializing in that. I never really did finish up a master's degree in biophysics, which I could have, I just didn't do it. I went ahead for a Ph.D.

PORTER: Well, your interests changed.

GREEN: Well, yeah, and I got interested in geophysics and so it kind of shifted over to astro-geophysics at the University of Washington. It gets complicated.

PORTER: After you got your doctorate – and that was at the University of Washington?

GREEN: University of Washington in Seattle. I worked for a television station while I was there, a local station, KIRO.

PORTER: In Spokane?

GREEN: No, no, in Seattle. I worked nights and weekends mostly studio, audio, did a lot of audio work, audio engineering, a little production engineering. I also, while I was there, at the same time worked at Boeing, got a job at the Boeing Research Laboratory, which really pushed me into the geophysics specialty. I was in graduate school full-time, too.

PORTER: So you were doing three things at one time.

GREEN: Yeah, I was doing three things at one time. Well, I had a full fellowship a the university and then Boeing Research Lab was a wonderful place because they had a group of world renowned physicists or researchers. They had a mathematics department, they had geophysics and astrophysics departments, they had a materials science laboratory and so on. The real attraction to the laboratory was access to computers.

PORTER: The geophysics laboratory at Boeing, was it fairly new, had it been around for a long time?

GREEN: It was fairly new. It had been around for a few years. It was a wonderful environment and I eventually stayed on as a research scientist there, but the brought me in as a student with the idea that I would work on projects that could be used for a Ph.D. thesis, as well as useful for Boeing that had to do with the lunar landing and those kinds of things, and a lot of software and computer work, which I did there. In fact, this was back in the days when everything was batch processed, so you had a deck of cards and you submitted the deck and then you got the results back, you know? I did so many of those that I actually kept warm all winter long just burning the mistakes. But it was again, it was a combination of theoretical physics, geophysics – analyzing the moon and trying to pick lunar landing sites and so on.

PORTER: Now did you use that as part of your doctorate?

GREEN: Oh, yeah, that was my doctorate.

PORTER: That was your doctorate.

GREEN: My doctorate thesis, which I can't remember the exact title, had to do with an analysis of the anomalies, thermal anomalies on the moon. I guess, not to get into a long discussion, but together with some other Boeing scientists we scanned the moon during an eclipse in the infrared and it turns out that the moon is covered with a lot of bright spots which are anomalous, so the purpose of the Ph.D. thesis was to try to figure out what was the reason and why they were distributed the way they were.

PORTER: Did you keep an extra copy of the paper? Or is a classified document?

GREEN: (Laughter) I do, I have it. No, they didn't classify that one. When I finished up the doctorate I briefly went back to Ft. Monmouth to the laboratory for six months to finish up some projects there and then I took a job at the Boeing Research Laboratory. I went back to Seattle.

PORTER: So you went from East Coast back to the West Coast.

GREEN: Back to the West Coast and decided to become a research physicist as a career. I was also working weekends and nights at the television station doing remotes, mostly in a production capacity – did a lot of sports remotes...

PORTER: The stuff that you had done back at Monmouth, especially the laser, Boeing wasn't involved in anything like that, were they?

GREEN: Well, they were, but I was not involved with lasers at Boeing.

PORTER: Did you miss the mystery of what they were going to do with those lasers?

GREEN: No, I followed the development of those early range finders because I had job offers from companies that were building them, and Hughes Aircraft became one of the major manufacturers. Some of the early manufacturers – RCA built the laser range finders, productized it, made a military version of it because the versions we built were really laboratory experimental versions, but an interesting thing I guess I should mention is that one of the jobs that I got with the laser range finder was to take it around the country to various military installations to demonstrate the capability because this was totally new technology. Being able to determine distances to an accuracy of a few feet was completely unknown in military circles. Range finding was always done optically and it's not very accurate really. So I took it to the various decision levels in the Army – Ft. Benning for the infantry, and Ft. Sill for armor, and so forth.

PORTER: Sacramento, the airplane center?

GREEN: Well, you know, where the various commands were located. The really interesting response I got was from the artillery, of course, because they'd lob a shell out and it would produce a cloud of smoke and I could range to the smoke and tell them exactly where it was. You can instantly see the advantage to that. The other thing is of course they said, "Well, I wonder what we could do from the air?" So I took this development optical device and strapped it in an Army helicopter and we took off and flew around, so I'm probably the first person to ever fly a laser, and I could range to targets. One thing you discover in a helicopter is everything is vibrating and everything is very noisy and it's really hard with an optical device to target anything, but I could target large targets and give them ranges and so on, like that. So it was very interesting.

PORTER: So you're back to Seattle?

GREEN: I was back to Seattle.

PORTER: You've gone back to Seattle from New Jersey and you've gone to...

GREEN: I've gone to work in a Boeing research lab, and the kind of work I did there was mostly computer analysis and simulation, so it was really more theoretical than anything else, and again, to follow up looking at developing the landing perimeters, worked with NASA to develop the physical contacts for the moon landings. There were Boeing/NASA kinds of contracts that we worked on. I also did various kinds of work in geophysics; remote sensing, orbital evaluation of terrain, things like that, multi-sensor.

PORTER: So you're doing all this work in Seattle. This is what year?

GREEN: Well, by now it's '68? Yeah, I graduated in '68, so '68 through '72 I worked for Boeing Research Laboratory on these kinds of various projects. It was a great job, wonderful environment. It's the type of environment that we'd love to find today where the goal is you write six papers a year or five papers a year, or something like that, and basically they pay you to do that, and they don't tell you what to do or what to write, and the idea is to do significant work so that it will be referenced. So generally the evaluation was how many times did you get referenced by other researchers?

PORTER: Now did you have to get it published?

GREEN: Oh, yeah! In five or six publications, yeah, which wasn't a big problem because lunar research and so on was really burgeoning at the time. Probably, in terms of what happened to me later on, one of the most interesting things that I worked on there was image compression, and the task was how do you store images, still images and video images, in computers because the data in a picture or video is enormous and computers, especially in those days, didn't have the capacity to store them or to manipulate them and so on. So I worked on a series of analytical algorithms and weird functions, you could say. Wonderful functions! Probably I'm born in the wrong era because if somebody were just to pay me to do nothing but work with mathematical functions I would be perfectly happy. I could sit in a tower and just study the behavior of mathematical functions. Well, this was part of it and there were some digital functions called Walsh Functions, which are square wave functions that look a lot like sine wave and cosine, and they have the advantage of being, since they're square waves, they're binary, so they're particularly suited to computer analysis and so on. And it turns out that you can process pictures and compress them way down in terms of the actual storage space.

PORTER: Did you get them compressed to work?

GREEN: Oh, yeah, we did a lot of that.

PORTER: Wasn't video harder?

GREEN: Well, we didn't do a lot of video. We did mostly still pictures so I did a lot of black and white, you know, black and white still pictures, and the actual use of all that had a classified purpose, but I published papers on Walsh Functions, how to mark transforms and kind of esoteric, I guess you'd call it esoteric, mathematics, some probability theories, and you can use some of these functions for transmission, too. So there's a space transmission aspect of it. I did a bunch of work in that, too. So again, kind of analytical work. The reason I mention it is we looked at all kinds of ways to compress pictures and this was one that I was particularly interested in and that you could build real time streaming processors for in those days because you didn't have to multiply, all you had to do was add, and you could add much faster than you could multiply so it had real attraction for the current state of technology at the time. We also played with cosine transforms and did a lot of picture compression with cosine transforms. Well, that, over the years – now this was in the '60s, this was in the mid to late '60s – all that has developed into the compression system that we use today, the MPEG compression system, the discreet cosine transform. So I had the advantage of working on it very, very early in the game, and so later on when I got involved in cable it's something that I fortunately really understood.

PORTER: You had no touch with cable up to this point? Cable television.

GREEN: No, none whatever. My total relationship to television was broadcasting. I was really a broadcasting guy.

PORTER: Well, if this was such a wonderful atmosphere that you were working in and things were going well what drew you away?

GREEN: I got a call from a buddy of mine who I had worked with at Ft. Monmouth when I was a civilian and he had gone to work for Hughes Aircraft Company and he had called me on a particularly cloudy, rainy day in Seattle and he said, "You know, it's 70 degrees down here and the sun's shining brightly, and why don't you come down? We're looking for people to work on lasers." I hadn't been actively involved in it; I had been involved in a lot of theory but I hadn't done any experimental work in lasers in quite a while. Not exactly true – I can think of one project, which is very interesting which maybe we can go back to at some point that involved lasers, but anyway, so I went to southern California, to Los Angeles, and talked to this guy. It was a great opportunity. Hughes Research working in a kind of, again, merging topic, lasers and lasers primarily for military purposes.

PORTER: But similar to what you used in Monmouth?

GREEN: Um-hmm. Hughes had developed a strong reputation for laser research and we had worked with them when I was at Ft. Monmouth but I hadn't had any direct contact with them. Lots of really interesting things. By then very high powered lasers had been discovered and so there was significant work going on on very, very powerful kinds of lasers, so that was interesting as well.

PORTER: So you moved to California.

GREEN: Moved to southern California, yep, in '72 and my first son was born in '71 in Seattle, so I remember driving to southern California on I-5 when I-5 was first opened. There were stretches of I-5 where there weren't any gas stations or any support. You could go 100 miles and not see a gas station. Those days are gone forever, but I remember that and I remember taking David on his pack frame, he was less than a year old, of course, in a Volkswagen bug and driving from Seattle to LA, moving there. So then I started work at Hughes.

PORTER: And how long did you stay there?

GREEN: I was there '72 through about '77. Five years.

PORTER: And all the time doing research on lasers?

GREEN: Yeah, involved in lasers. A lot of hard work. I worked a lot of nights and weekends and lived very close to Hughes so I could walk back and forth to work, which is a nice thing to do in LA.

PORTER: This was all lab work?

GREEN: It was pure research. I did some analysis, intelligence analysis, too and things like that while I was there, but Hughes has a lot of activity, of course.

PORTER: What happened after Hughes? After you had your fill?

GREEN: I was going to go back to the lasers at Boeing. One of the people who worked in the research laboratories at Boeing – he was actually a professor at the University of Washington – he had an interest in gravity waves, which to a theoretical physicist is pretty interesting stuff, and the theory with a gravity wave is that if there was an explosion, a cosmic level explosion, it produces a blip in space time continuum so that what happens is a wave propagates out, almost like a seismic wave, but it's a gravity wave, and when that passes through a planet it squeezes it, squeezes it up.

PORTER: By affecting the gravitational field?

GREEN: Right, it actually distorts the metric so that it squeezes it. So it comes out as a general theory, so we got to talking and we decided it would be really interesting to build a laser seismograph. So we got an abandoned tunnel in the Cascade Mountains just north of Seattle, it's a long railroad tunnel, and we built a laser seismograph. What it really is is a long laser; it was a kilometer long in an aluminum tube with all the air pumped out, a vacuum in the tube so you don't have any kind of gaseous effects, and it very accurately measures the distance between the two terminals. We had granite piers on both ends anchored into the granite of the tunnel and we set up this tube and then we measured, very accurately, that distance as a function of time. And of course it changes, especially with the laser you can measure very accurately the changes. In fact, so accurately that you can put your finger down on this granite pier and push real hard and you can actually watch the granite pier sinking into the mountain. It's tiny, tiny amounts of movement, but you can measure it. So the theory is that you measure this distance very accurately and if a gravity wave goes by it will distort that and you should be able to see it, and you can make certain predictions about what size gravity wave it should be and what their period is and this sort of thing. Although, I was really an assistant on that – the individual professor really had the idea and did a lot of the design on the seismograph itself, and I really more or less helped him out because I was, at the time, a graduate student working with him, but it was really an opportunity. I noticed that somehow that's been lost in history. There are some people at Cal Tech who seem to get credit for the first laser range finder when it was actually this fellow in Seattle who thought of the idea. Now there are lots of laser seismographs built like this now throughout the world. It's interesting what finally happened. What happened is it turns out that there's a lot of things that distort the earth on all kinds of time scales from days to months to seconds. When the sun comes up and shines on the mountains, the mountains move and you see that, you see the movement, and what it does is produce what amounts to a very noisy background, so if you were to get a gravity wave passing through, it would be very hard to distinguish it from the noise, and you can analyze all kinds of spectro-analysis to try to separate it out, but in the end it's very difficult. So, what you really need is a laser seismograph on the moon and one on the earth, and then if a gravity wave goes by and you see them both squeeze up then you're pretty sure. Though they talked about doing that, I don't think anybody's actually done it. They have seismographs on the moon, but they're not of sufficient sensitivity. They're not laser seismographs that I'm aware of, and maybe they've done it by now. But you need to have several planets...

PORTER: Is it the only thing that causes that cosmic explosion, though?

GREEN: Well, any disruption...

PORTER: Would a volcano eruption do it?

GREEN: Well, that's so minor on the earth. A volcanic eruption would produce a seismic disturbance, which you can see on a seismograph, but a gravity wave is a longer period and should be higher amplitude to measure.

PORTER: So what happened to the guy's laser that's sitting in the hole in the mountain – of the Cascades?

GREEN: You know, I don't know what ever happened. It was there for years. I don't know that the University of Washington did an awful lot of work in seismic kinds of analysis, but this is pretty far out as far as ideas go, at the time. Now there are people looking for gravity waves this way. I don't know if anybody's found them. There are other ways to do it besides lasers, too, but it's a very interesting study because there should be gravity waves there, and cosmic explosions or binary star rotating produces a periodic gravity wave. It's a gravity disturbance. Think about it, you know, if you drop something here it sends out a wave – pretty small, in fact, so ridiculously small that you can't detect it.

PORTER: Let's go back to Hughes.

GREEN: Yes, we digressed.

PORTER: That's okay. And you've been at Hughes for...?

GREEN: I worked at Hughes from '72 to about '77.

PORTER: Then what pulled you away from that? It sounded like you were awfully happy there.

GREEN: Well, I was. Hughes, especially Hughes Aircraft Company, was a great place for a technical person to work. See, when I'd been at Boeing I was very much a research scientist. When it came to Hughes, they hired me as a research scientist, basically, but Hughes is managed, today as well, but back then was managed by technical people. So in some companies, being primarily technically oriented can be a disadvantage in management because upper management assumes that you're an ohms and watts guy, you probably don't know anything about money. So, Hughes encouraged people to enter in on the business side, in fact very much so. Part of the job was going out and getting contracts. So I spent a lot of time in Washington basically acquiring contracts for Hughes and for this research group. So you learn how to run a business and basically you bring a contract back, you have to pay the company so much, you take the rest of the money and hire people, and so it's a varied business. It was a way of learning business in a kind of protected environment, and on topics that you have a lot of knowledge about. It's a technical topic, so it's very interesting. Also, I'd never had the opportunity to learn how to run a business before. So in many ways, what happened is I rose up the ranks, and I became a department manager. A department manager at that time was about 300 people and I can't remember how much business, but I spent a lot of time out selling ideas and bringing home government contracts to keep the department going. So the real change at that time from being really a laboratory person – and I usually kept a half a day a week so I could go in the laboratory and play with circuits and things like that, just to be able to keep up with what was going on – but I became much more administrative and I think the truth is I looked up the ranks at Hughes and I thought, well, another few years I'm going to be a division manager. I'm going to have the same set of problems I've got know except I'm going to have a thousand people. I'll tell you what I think made the decision for me – we had a division manager and in order to bid a contract, of course, you had to approve it. So what you'd do is you'd write a proposal, you'd bid and RFP or whatever, and before the company would commit to it you had to send it to him and he would read it, and you could tell when you got it back from him how nervous he was about it because he'd read it and he would tear off the corners of the paper, and depending on his level of stress you could expect to have the whole corner torn off, or just a little piece of it, and I got to thinking one day, you know, is that what I really want in life? Do I want to live and be continuously under this kind of stress? It is stressful because you're worried about committing the company to performing on a contract. They're risky contracts because they're R&D and the Hughes reputation's at stake, there's a question about might the group get into trouble and not be able to perform, and all kinds of issues. So, I decided, you know, maybe I want to do something different, and so I went over one afternoon to ABC in Hollywood, and I had a friend who worked there who I'd known in Seattle, had worked for the television station in Seattle. So I went over to see him and I kind of walked around the sound stages at ABC Hollywood, and I thought, you know, this might be kind of interesting. So I applied for a job over there and they hired me.

PORTER: In audio?

GREEN: No, no, they hired me as management at the very lowest level. And the trouble with the lowest level was it was about half the salary that I was making at Hughes. So it was hard to explain to my wife and family why I would do this, but it just looked like an interesting, attractive thing to do, and I thought in the back of my mind, you know, I know an awful lot about video processing, and I know a lot about high level technology coming along that is going to be applicable to the broadcast and the production world, and it hasn't arrived here yet, so I can be in a role where I can really bring some new technology and bring some advantages to ABC. So I got hired, and I took a job as...

PORTER: Do you remember what your title was?

GREEN: Well, various networks had different titles. This was EIC – engineer in charge – and what it is is it's the lowest ranking management function. You're responsible for a program and you have a responsibility for all the engineering, all of the production engineers who are all unionized, and then you also have responsibility for the stage, all the stage hands and that sort of thing.

PORTER: When you say a program, you mean like, Everybody Loves Raymond, a program like that?

GREEN: Yes. The first show I did was Family Feud. I got assigned to do Family Feud. You're the company representative, so it's a tough thankless job because if anything goes wrong, and something always goes wrong, it's your fault because everybody blames the network. It's the network. It's never the production people's fault, right? It's a very interesting role. I'll just tell you this little vignette – I left an R&D organization where 30% of the people were Ph.D.s and wore a tie and sport coat or suit to work everyday, a very academic kind of atmosphere. Then I went over to ABC and within the first week the producer's throwing bottles at me – very emotional environment, and so a very different world, very different world, and logic doesn't have anything to do with it. It's an all people kind of world, whereas in an R&D environment there's a certain amount of people skills required, but it's a logical world, and the production world is not necessarily logical, but I felt good about it. And fortunately, within a year my salary had gotten back up, so it turned out to be a pretty good bet. When they interviewed me they took me on the set for the Captain & Tennil to show me what an engineer in charge does, and ABC was about the only network doing musical variety at that time. This was probably about '77, something like that I guess, and it really looked like kind of a fun, interesting environment, very different than anything I was doing at the time, but fitting in with my background of having done production in Seattle and Colorado Springs. So watching that production of Captain & Tennil I decided, yeah, I think I want to do this, and so when I went to work I got assigned Family Feud, which is a strip show, it's on every night and you shoot it all in one night and it's really a factory, but I learned a lot of very interesting things. Like on a game show you make the studio really cold because it makes the audience more active, and you make the audio really loud because that makes them more active, so I learned a lot of tricks of the trade. Tricks I will probably never use again. Then I worked on and was responsible for shows like Barney Miller, if you remember Soap, and Welcome Back Kotter. So that was that period of time when ABC moved to the number one network. I worked in the studios for awhile, but then I took over the post production part of ABC, which was responsible for net promotion and editing, that side of production. My ambition was to be the engineer in charge of the Academy Awards, and when I went to work for them I said that's what I want to do, and they said, "Well, it takes a couple of years to move there. It's a very, very complicated show. If everything works out, in a couple of years we'll let you do it." I didn't stay long enough, I guess, to get good enough to do the Academy Awards, and usually after the Academy Awards the person who did it is a basket case anyway. It's a terrible stress.

PORTER: Why did you want to do it?

GREEN: Challenge, because it's by far the most difficult program. The Super Bowl is complicated, but it's nothing like the Academy Awards. I'm not sure how it is these days.

PORTER: Did you ever do any sports?

GREEN: Oh, lots of sports. I worked for ABC Sports. Lots of sports. During that period of time there was a strike and so we actually had to do the production jobs.

PORTER: You're getting all that done and it's all strange and now you've got your salary back to where it was before you went there.

GREEN: Things are going well...

PORTER: What drew you away from ABC?

GREEN: Well, I had a call from CBS and it was kind of... let me, I guess, just tell you a little bit of the story here. One of the things that we did at ABC as an innovative technique -and it's complicated why you do this, but when you're shooting a sitcom the hard thing in video to do is to get reaction shots from the actors in a sitcom, and the traditional way of doing a television program is switched, you switch from one camera to another and somebody has to push a button. The timing to get a comedic reaction is very, very tight. You have to get the right frame . Ifyou're a little bit early or a little bit late, and that's a matter of two or three frames, it destroys the value ofthe joke. Little known, right? So we thought the smart way to do this is to record all the cameras and then we can go through afterward and we can pick the frame and we can add to the value of the program by doing that. So we started recording all the cameras and then editing afterward. Little different techniques for different shows because everybody had different ways of doing it, but nevertheless, that was the production technique. So I gave a paper on this at a big conference in LA and afterwards the CBS guys came up and they had been doing some similar things. All in the Family was done with multiple cameras, as I recall, too, for the same reasons I think. So the CBS people started talking to me about that. The attractive part of CBS was that they had a laboratory. ABC didn't really have a laboratory; it was all production and I was based in LA and did nothing but production. CBS had a laboratory on the East Coast and did a lot of development work as well as production work. CBS at the time probably had a really enviable track record in new developments in television. They invented the mini-cam, they had quite a patent portfolio that provided revenue but it also was very prestigious. They were doing work in digital television and things like that at the laboratory so I was kind of interested in it. The thing that I decided at the time was I knew a lot of secrets, production secrets, and to move from one network to another would certainly alienate ABC because as you can imagine it's a very competitive environment. Basically what happened is I was also approached by a company called Times Fiber who was building a new fiber division. The company at the time was the dominant provider of cable for cable television, but had formed a new group, had hired some people from Bell Labs, was doing some really interesting work in fiber optics, fiber optics for cable, making new kinds of fiber and cabling new kinds of fiber. So I thought, you know, it might be interesting to try that.

PORTER: Did they call you?

GREEN: They called me, and I can't remember exactly how that came about but I went to the Western Show, I met them at the Western Show because I was in LA and so I went down and I talked to people like Larry DeGeorge who was there, and as I remember the Times booth was the largest in the show.

PORTER: It probably was back then.

GREEN: It was the dominant provider.

PORTER: At one time we had two or three stories and then they made us stop doing it. We showed movies in one of them.

GREEN: Anyway, I think another factor was I really enjoyed Hollywood and I really enjoyed the production environment and my kids did, especially, too. My two boys were growing up in this environment and it's kind of a never-never land, you know? And one day I was walking across the ABC lot with my son who was probably about six or seven years old, and there's this guy in an ape suit that's coming towards us and passes us by and neither one of us bat an eye. I looked at this little kid and I thought, you know, he things the whole world is like this. I began to realize, while I think it's great for kids to grow up in a fantasy world ... the kids would come with me, he'd been on American Bandstand and as a little kid I just pushed him out on the floor and I think although it's a fascinating, wonderful world, I was worried about him growing up thinking the whole world was like that. So I thought, you know, it would be nice to move from a very urban environment like Los Angeles to a rural environment so they could see a little different side of life, and so that was a motivating factor, and I think I always knew that I wanted to move from LA when the kids got older just because it's a difficult environment for teenagers. And so rural Connecticut sounded like a real opportunity to do that. Plus you sell a house in LA and you can really buy a lot of house in Connecticut, so the combination of opportunity, kind of interesting new company emerging...

PORTER: Did they tell you they wanted you develop lasers?

GREEN: Well, they hired me as the Vice-President of Engineering, Director of Engineering, in the optical side and gave me a whole list of problems to try to solve, and so I took on the challenge. They basically asked me to build an engineering department and to look at a series of problems to solve. Among the problems were cabling fiber. And again, a long story but Times was making their own fiber rather than buy it from Corning or other sources. There were two sources -Corning and there was a Japanese fiber industry for providing fiber. And that fiber was very good but the idea was to develop a manufacturing capability for fiber which Times did and they'd hired, as I mentioned, two people from Bell Labs who knew how to do this and we were making fiber. The problem is the minute you tried to put it in a cable it didn't work so sell. In fact, it would become very loss-y. So got the job of trying to figure out how to put a fiber optic strand in a piece of cable that could be used in a cable plant, and it wasn't an easy problem and I didn't know anything about cabling or extruders or coax or how to make coax or anything. I learned.

PORTER: How to hang cable?

GREEN: (LAUGHTER) I learned all of this in a big hurry. In the end, the technique that we finally figure out on how to cable fiber was to put it in a tube so that the glass itself was never squeezed by the extruding process because when you do that it produces micro-breaks in the fiber and therefore loss, and therefore not a very good solution. So I got assigned something I didn't know anything about and I struggled with it, and we did, together as a group, solved that problem. Other things that we worked on were we were using lasers and we were using them in super trunks, basically. What we'd do was -and it was probably the beginning of the HFC kind of structure -but what we would do is FM modulate the channels on a fiber, and then transmit them out in the plant to kind of a sub-distribution point, turn them back into video and put them on the coax. So in a way, it was a very, very crude version of the HFC kind of plant, not very practical because we could only get about six or seven channels, as I remember, maybe not even that many, on one fiber at the time and the problem was because the lasers were so noisy that you needed FM modulation to gain signal against the noise.
PORTER: We couldn't even use 15-10...

GREEN: No, this was long before the ... I guess this was right in the .8 microns, something like that, and the lasers were infrared but they were just barely infrared -.85, I think, as I remember? And we tried in the laboratory at Times, we tried analog direct modulation on the lasers. In other words, using the NTSC signal to modulate the lasers directly and we could stack ten channels up or something like that, even more. We could get 20 channels but they were terribly, terribly noisy and the problem was the laser. Lasers were very expensive. As I remember, at the time -and this is 1977 -they were ten thousand dollars, so you'd take it out and be very, very careful with it. So we did try what eventually became the solution but the lasers weren't good enough and then subsequently over the years, I think Time Warner really solved that problem because what they did is put out sufficient R&D contract dollars that the laser manufacturers began to solve the problem of the noise and reduce the noise. The lasers that we had available then were really made for digital application because nobody was using them for analog modulation. They were non-linear in a lot of ways, so they had not been optimized for what we needed to do, and Time Warner, through a very well thought out R&D program, convinced manufacturers to look at these problems and develop lasers which are linear which would handle analog NTCS kind of modulation directly and solve the noise problem. One of the most interesting problems I had while I was Times, which you probably remember, Rex, I don't know -we would put these lasers out in the field and they would last about a year and then they'd develop what we called the green crud problem. They would grow mold and the mold would eventually get bad enough that it would block the light and the lasers would fail, and so when we'd sell these devices to a cable system we'd know that we had to go back in a year and replace the laser and they're expensive. Now probably the ones we were putting in the field were only two or three thousand dollars, so they weren't the really high-priced lasers. So we had to figure out a way to keep that from happening because there weren't lasers that were hermetically sealed at that point in time, and that's what you really want is a hermetically sealed laser but they hadn't been invented yet. So what we did is we took two little connection boxes, just the little blue construction boxes that you use in laboratories, and we put the laser in there and we'd pump dry nitrogen into the box and seal it up and it takes maybe two or three years for the dry nitrogen to leak out. So the lasers would last at least two or three years, so we vastly improved the product with the work around. There were a lot of fascinating problems and it was kind offun to be part of that first generation of...

PORTER: It was the start of fiber as far as the cable industry was concerned because this was back in...

GREEN: This was about '76, '77.

PORTER: And that's when it was introduced at the Western Show was in December of'76, so it had to be the '77 era.

GREEN: That's probably when I saw it, see, because I probably went to the Western Show in '76 and saw the Times booth.

PORTER: At the Disney Land convention center, the one in Anaheim is where we showed that.

GREEN: Yeah, right. That's exactly right. That's the first cable show I attended, I think. It was a technology ahead of its time. It took additional developments, better lasers, better cabling, better ways of cabling. Looking at it from a technical point of view these are great things.

PORTER: Now, you've spent some months at Times, I don't know exactly how much, but at some point you left to go somewhere else.

GREEN: I was there a little over a year, I think, something like that. All the time I was there I kept getting calls from CBS. So I went into New York...

PORTER: To work in their labs?

GREEN: Well, I kept saying no, I can't leave this job, I've only been here a year, and so I did go into New York to talk to them and they said, "Okay, we'd really like you to come to work for CBS," and they gave me a list of jobs. They said, "You can pick one of them." The one I liked best was running the research laboratory for CBS which was in Stamford, and since I had moved to Connecticut and lived north of Stamford at the time it wasn't a long commute, so that seemed to be attractive.

PORTER: And you didn't have to move your family.

GREEN: I didn't have to move my family and CBS Research Labs in my view is a very prestigious laboratory. It had some very capable people who'd made real contributions to the video world, and it was kind of like an academic environment. So I decided that that would be a good direction for me because it combined my production experience in Los Angeles together with my R&D background and it was running what they called the Advanced Television Research Laboratory at Stamford, so I decided to take the job. It was painful leaving Times and I hated to do that. On the other hand, it was an opportunity to work for what I considered to be a very ... I could do very promising research work for a laboratory that had a very successful record and there had been some previous directors of the laboratory that had been very famous contributors to video and broadcast technology. So, I took the job there.

PORTER: So, when you went to work there, was it just lab work or were you given the job of being in charge of the laboratories?

GREEN: I was in charge of the laboratories and we had various research projects. One was digital television. We built the first frame storers, which were a whole wall at the time. You can get them on a chip now, but literally they took a whole wall. We experimented with various kinds of digital video. We did work for CBS Records, too, because I tried to convince CBS Records that they should master in a digital form -a difficult sell because there are risks in changing your mastering technique. Steinway Pianos was one of CBS's companies so we would help them out with some research activity, but most of my work was on the television side. I got involved in international standards work there because we were doing work in digital television. The world was beginning now to look at standards for digital television so I, representing CBS, spent a lot of time in Europe working with Europeans developing what became the ITU 601 standard which is the digital television standard, and that was in the early ' 80s. So for the first time we had a unified television standard throughout the world. Still, I had the 50-60 hertz difference problem, but we agreed on a common sampling rate, colorimetry and other kinds of parameters, so it was really the first step in getting some uniformity of standards throughout the world for television. It was the digital television standard.

PORTER: Did you find that the international participation really were wanting to cooperate, especially with what we had had with the NTSC, the PAL, the CCAM, all the differences?

GREEN: Some of the people were the same people that had worked on PAL and CCAM and so on, and the real opportunity for me was working with these world class laboratories throughout the world -CCETT in France, a national research laboratory working on video and doing work in video technology; the BBC Laboratory in the UK -and so a lot of the R&D work that formed the basis was done by laboratories throughout the world -Rie Laboratory in Italy. We had some brilliant Russian scientists that contributed to this. I'll always remember, we're sitting down writing the detailed standards and there's this one fellow who didn't say much but an extraordinarily bright guy, and he'd just raise his hand and he said, "You know, what happens when the signal levels O?" We said, "Oh." It affected the whole standard. We just hadn't thought about a signal level of 0 and you have to have a digital level for that and you have to include that, and of course it changes things quite a bit. So a combination of really very, very capable scientists from throughout the world -I had a chance to work with them to develop the standard. It was painful, too because there are people who are dogmatic about particular positions.

PORTER: I just wondered if you found them a little more willing or looking forward to a little more cooperation in the digital world than they had possibly done in the analog world.

GREEN: Well, I think there was more cooperation at that particular point in time. In fact, it was considered quite a milestone that we could get agreement throughout the world. I came out of that experience thinking, "That wasn't so bad." It was hard work but we really achieved something. So then I, again working for Joe Flaherty at CBS, he had a strong interest in high definition so the thought was, well, let's get a standard worldwide for high definition television, and in fact, if we can do this it would be a real breakthrough for electronic distribution. You see, 35 mm film is the same everywhere. You can shoot it anywhere, you show it anywhere, you can process it anywhere -there's no different throughout the world. That's a huge advantage and it's one of the reasons that film is such a popular mastering medium. I mean, there are many, many others probably more important, but nevertheless it has universal portability. The thought was, well, we can do this with video too. Let's get a world standard so we can shoot the same format anywhere in the world and show it anywhere in the world and master in it, and have this portability. Seems like a great idea, right? Well, turned out that was a very, very difficult experience. There's first the 50-60 hertz problem, how can you solve that. One side or the other has to give up and nobody was really willing to do that. So 1 chaired a committee which went on for ten years trying to standardize high definition. The 601 which I chaired was much more successful, again, I think to your point there was a spirit of cooperation on that. On high definition television there were a lot of economic and national interests involved in that and fear of one nation or another using the standard to dominate the cultural production values of another. It's a very complex equation. We did achieve standardization on the aspect ratio, 16 x. 9, and the colorimetry, and that was a start. Now there is a standard. Over the years we now have a 1080 production standard. We started out at 11255 x 3 aspect, we went through many, many iterations and all kinds of history involved in that. Well, I worked at CBS until 1983 and at that time high definition was in its infancy kind of. In 1981, while I was working for CBS, because I had a technical engineering laboratory background and had production experience, I went to Los Angeles -about this time of year, it was early December -to experiment with high definition television. Japanese companies loaned us some cameras, high definition cameras and recorders that were really development units and I went to LA, put together a remote truck having had experience in doing remotes and so on, and I grabbed a guy from the CBS Labs names Mike Ricossa. He was kind of a young technician, he'd come on board there, and I said, "You and I are going to LA." We worked night and day, put together a remote van in an old CBS truck -the Charles Kurault "On the Road" vehicle, they'd loaned that to us. We did a series of productions in LA in high definition, the first ones done in the country, in December 1981. We did the first one ever in the U.S., and it was a football game -Rams v. Redskins, Anaheim Stadium.

PORTER: When was this?

GREEN: December 1981. We had two cameras and stereo audio, 5:3 aspect ratio, 1125 lines. We recorded this football game. I had CBS cameramen assigned to us and high definition cameras are very difficult to run because you have this little viewfinder and you can't tell whether it's in focus or not. So we discovered some things right off the bat that were difficult, but the first interesting thing about a football game is you have a lot of light and therefore if it's out of focus you're still within the depth of focus for range. Anyway, we did a football game. It was a "C" game for CBS. We had the rights so we did it in standard definition and we did it in high definition, we just recorded the high definition version. They were both at the bottom of the league so it wasn't a very interesting game and it was a pretty bad football game, but it turned out pretty nice in high definition. We discovered that doing sports, especially a football game, is huge value in high def and that stereo audio adds immensely to the feeling of being there. The wide aspect ratio fits a football game very well and so of course we learned probably what should have been obvious -that sports is really a big winner in high definition television.

PORTER: But you couldn't broadcast...

GREEN: No, we just recorded it. We did it just like a standard broadcast only we did it on two cameras and of course the CBS game that went over the air had six cameras but you couldn't intermix them, of course . Then, while we were in LA, with Francis Ford Coppola we did a couple of short movies. We used some sound stage at Zoetrope Studios, worked with him trying to explore high definition as a movie medium. We did a program called Six Shots with Terri Garr. Did another one called Double Suicide with an unknown named Gallagher. Do you remember Gallagher? The guy with the Sledge-0-Matic? We made an actor out of him and we did a short movie called Double Suicide which was about two people committing suicide at the same time meeting each other -very Japanese. Since we had a lot of Japanese crew members there, Francis wanted to do something that had some Japanese meaning. I guess there are a lot of Japanese stories that have double suicide as a theme. Anyway, that's why we did that. We did with Glen Larson a Fall Guy episode. I don't know if you remember the series Fall Guy, it was about a stuntman, and we shot side-by-side -Lee Majors agree to this, he was a co-owner of the show and it was a hard decision -but we shot side-by-side with a film camera and produced an episode of the Fall Guy in high definition in 1981. We did the Rose Parade which is spectacular, of course, in high definition television, all recorded. We did this over a period of about three weeks and then at the first of the year took over the basement of the CBS Television City, set up editing bays and edited all this into a production which we then took to New York and Washington to show people what high definition was really like.

PORTER: So it was really for demonstration purposes.

GREEN: Nobody had seen high definition ever.

PORTER: Right, interest gathering. Was that at the end of your stint with CBS?

GREEN: That experience plus Joe Flaherty's interest and CBS's interest in developing high definition television, they asked me to go to Washington to set up a standards committee, the ATSC. It was modeled after the NTSC but for advanced television, and so the idea was to set up a multi-industry committee to develop the specifications for a standard for the U.S. for high definition television. So I went to Washington. NAB gave us offices so we basically wrote the charter and set up this committee and I was there until '83. So I was there a couple of years getting it started. Bill Henry was our chairman and Bill Henry had been chairman of the FCC during the Kennedy era, and he was the guy who signed my original FCC license. So it was kind of interesting working with him.

PORTER: Now you're there in Washington. Are you on CBS's payroll?

GREEN: Initially I was on the CBS payroll when I first went there but then we set up a whole financial infrastructure. People paid dues into the committee and so we set up a self-sustaining organization and it included the cable industry. It was through ATSC that I met Wendell Bailey, got acquainted with NCTA, NAB, MSTV, and IEEE was also one of the charter members.

PORTER: Did you stay at NAB headquarters?

GREEN: Yeah, we had offices there. We were a separate organization but they donated the space. It was just one office, basically.

PORTER: How long did you stay there?

GREEN: A couple years, and then kind of interesting, I got a call from... well, to digress just a little bit, we did the productions in the U.S. for high definition television. The following year I went to Europe and we did a similar set of productions in Europe with European production organizations. So I'd gone to Leningrad, at the time Leningrad, to the Kirov Ballet, and so I got to do a ballet in high definition television, which is really interesting because the Russians just said basically, "What do you want? How do you want to do this?" And I thought, "Ho! Here's my opportunity to do the perfect program." And so I sent back a long Telex, "Here's what I need: I need the Leningrad Symphony recorded," and I needed all these kinds of things, and they did it, to the letter. Way too expensive to do in the U.S., but they digitally recorded the orchestra for the Sleeping Beauty ballet, they gave me five days to shoot, we took the Kirov Ballet Theater over -and the Kirov Ballet is just extraordinary, the dancers are unbelievable -and what we would do is play this tape of the recording, they would dance to it and I'd shoot close-ups one day, I'd shoot long-shots another day, and so I shot for four days to get the whole ballet, and then the fifth day we brought in an audience and I shot the whole thing like it was live and then edited it all together. Of course it's all synchronized because the dancers danced to the same music all the time and it's a very high quality digital audio recording. They recorded every instrument digitally and mixed it down.

PORTER: Singly?

GREEN: Yeah! It was fantastic in terms of production.

PORTER: How come the government can't get ... ?

GREEN: Well, it really got very strong support. We found various problems with it. Jn a theater, like the Kirov Theater, you can't get enough light. High definition required more light in order to have a sufficient depth of field, and so it was very hard to keep the cameras in focus and the cameramen were not, again, familiar with it. Leningrad is more an artsy community compared to Moscow. Ifyou shoot in Moscow you get really hard-line production people, you know, hard-driving production people. Leningrad is a much more artsy community so it was a little harder working with them because you had to convince them first of all that you weren't damaging the art one way or another. So we did that, we did a bunch of other programs. The Montreux Jazz Festival, which is another. .. Anyway, the long and short of it is that since I had done all of those productions, PBS had heard about it. So when I was with the ATSC, I got a call from PBS on a day where I'd come back from this experience of televising a ballet like it had never been televised before, it was very stimulating. You know, a new medium you can do new things with, you can really make a ballet come to life, it was just kind of a very strong, motivating experience. So when they called me they said, "How would you like to come and do that stuff for PBS," and I was vulnerable. Let's talk. So I did talk to them. The first time that I talked to them I decided not to take the job. They got a new president, he also called me and he said new environment, we'd really like to have you come. So I then agreed to go. And I was living in Washington so I moved over to PBS. Another very interesting experience -the president's name was Bruce Christianson, and I was interviewing kind of quietly so I went to see him about 5:00 in the afternoon. I told him at that time that I'd take the job, and it was basically Senior Vice-President of Engineering, it was responsible for all of the technical side of PBS. He said, "Do you want to come look at the technical center?" I said, "Oh, it's getting late. I'll do it later." And I went home and that night it burned down, and I had just taken the job. I mean, PBS, the technical facilities were located in the basement of the National Post Office building in D.C. and the Post Office had a fire up on the 9th floor in the executive office, and the building had been built before sprinklers were required, so the fire department just poured water in in huge volumes on the 9th floor and it all ran down in the basement where all of the technical facilities were, all the video tape machines, all the switchers, all the origination equipment for PBS -the national network for PBS. So it basically was a total loss and I inherited the next day. I was still working at A TSC but I called the chairman and said, "Look, I'm going to go over and help them." So I was over there the first day and we took some meeting space and I met the PBS people and having come from a kind of high pressure broadcast environment, I got on the phone and called all my friends at ABC and CBS, and they sent us tape machines, remote vans and everything, so we only lost about 10 minutes of air time all together. But we assembled this armada of trailers around the uplink at PBS and a lot of the staff had been able to carry out, to save the video tapes from the library at PBS. So we had the programs or we could get the programs from other sources, and so we only missed about I 0 minutes of air time and stayed on the air. But Julie Barnethon who was the President of Broadcast Operations and Engineering at ABC really helped me out. He sent trucks...

PORTER: Did you move to a different building?

GREEN: We had to abandon that building completely. We set up operations at the uplink which was in a different place out in Alexandria. We set up out there. Julie had tape machines flown from AMPEX in Redwood City in California, air shipped to us, and we put them online and stayed on the air. But through those friendships and support from the commercial networks and particularly ABC, we were able to do that. So I was very lucky to be there at that time because I could really help them out by using that friendship and that contact. I'll be forever grateful to Julie.

PORTER: How long did you stay with PBS?

GREEN: Until I went to work for CableLabs, which was in '88. So I was there about '84 to '88.

PORTER: Prior to CableLabs as we know it here in Colorado, was there something previous to that?

GREEN: That convinced me about cable?

PORTER: Yeah.

GREEN: Well, the experience at Times had a huge effect on me, I think, because meeting people like Larry DeGeorge ... it seemed to me at the time to be a very entrepreneurial kind of wildly developing industry, lots of opportunity, lots of technical challenges. I don't think I had a good grasp of the business side of cable.

PORTER: Who contacted you about CableLabs?

GREEN: While I was at PBS, a recruiting firm, Heidrick & Struggles, called me and asked me ifl had an interest in running a laboratory for cable. I was very happy in the PBS job and I knew a little bit about cable but I didn't know ... I would say I was skeptical at the time. Heidrick & Struggles did a recruiting plan for the original board that formed CableLabs and it was a very exhaustive process. There were many candidates. I also felt I don't have a chance at this anyway.

PORTER: What was the condition of CableLabs at that time? There was no building, was there?

GREEN: No, no, no, it was just an idea at the time. In fact, the way it started was as a committee of the NCT A board, a sub-committee called the R&D committee as I recall, and it was chaired by John Malone. They had looked at the question about whether the industry should have a research laboratory or not. Dick Leghorn had been promoting the idea for years, for four or five years before that. Coming from an aero-space background, coming from an industry that invested in research and development, he felt that this was really important for the cable industry, but it took several years for the idea to catch on. When it did, which is probably about 1988, the board formed a company, they formed CableLabs, and they began raising money. Dick Loftus got on the phone, called everybody up and said, "Here's what we're doing. We're putting this organization together." So the Lab was incorporated in probably early '88, I think April '88, or something like that. Heidrick & Struggles started talking to me about June, I think.

PORTER: But when they talked to you, what did you have to come to?

GREEN: There weren't any physical facilities. After the board started recruiting members, they set up a little office in Harvard Square in Boston and that's where Dick Loftus resided when he made the calls, but it was just one of these office parks where it's kind of a rent-a-space type of thing. That's basically where it started, and then they hired a secretary to answer the phones and so on. But there was no physical place to go to be interviewed. Heidrick & Struggles when they interviewed me came to the National Airport, the Red Carpet Club or something like that, that's where the interview took place. So it was basically an idea fleshed out as an incorporated company...

PORTER: Did they know where the location would be? Did they already know about Boulder?

GREEN: There had been some interest in having the company be in Boston because of Dick's presence there, and Dick Loftus lived there, and there was a fellow named John Rokowski who was with Continental who also lived there. So there was kind of a presumption, at least in the start phases, that Boston would be a good site. One of the first things that we did early on in CableLabs was do a study. There had been some previous work. .. I think the board had looked at six different locations, kind of high tech areas around the country -Silicon Valley, Boston, Research Triangle and so on -and the decision to locate in Boston was partly because of the high tech community and then also partly because some of the key developers of CableLabs all lived there. So, eventually of course I went up to Boston for an interview.

PORTER: Was the Boulder area the fact that it was Boulder and the Bureau of Standards was in Boulder, Colorado? Was that what put us in...?

GREEN: Well, again, kind of a long story but after I was lucky enough to be selected as the CEO, and again, I was really surprised because I expected that there were, and there were, people from the cable industry who were much better qualified in terms of their background in cable because I had a very limited background. But we did a study to try to determine what would be the best location and one ofthe first executive committee meetings which at the Western Show we went over all of that, we hired Pete Marwick to do the study, and Boulder/Denver came out higher than any of us expected. We just laid out the criteria. We wanted an area ... there were some distractions from being in the middle of the country because for a national organization access and .... and doing business in the Boston area was expensive, as well. It was hard to hire people into the Boston area simply because of the higher cost of living. So this area came about in part because the attractive living circumstances, the economic conditions at the time were at a nadir and therefore commercial property and residential property values were very attractive. So it made an attractive package to hire people. What was surprising, though, Rex, that we hadn't expected is that the third highest density of scientists and engineers per capita is in the Denver/Boulder area. There were a lot of telecommunications workers, there were a lot of aerospace workers, there's a lot of talent out here. So we looked at it from several different aspects and in the end the executive committee decided, well, yes, okay we should look for a location in Boulder. That was kind of interesting because we announced it at the time that the governor was giving the State of the State message, and some people who knew about the decision wanted to inject it into the governor's message that CableLabs is coming to Colorado. So it was kind of interesting, the actual decision got out before we could make an official announcement of it. It kind of leaked out because we sent out the background for the decision to all the board members and I'm told that somebody was standing at a fax machine and saw it come in -it wasn't any of our executives but it was coming in for one of them -called the governor and said you've got to put this in the State of the State. So we're getting calls from Colorado -the governor says you're moving! Oh, how did he find out? It was hot news, I guess.

PORTER: Why Louisville?

GREEN: One of the things that we discovered is if you're making this announcement in Washington you can say Boulder/Denver and everybody says, okay, well, we kind of know where that is. When you come out here and get off the plane they say now which is it, Boulder or Denver? That was a lot out here, right? So we said, well, Boulder. I think there was a certain part of this that was important that... there were a lot of cable headquarters located in Denver. We wanted to be sure that we weren't sending a message, well, we're a captive of the cable companies that are located in Denver. So being located an hour away in Boulder near one of the important research universities in the country sent a message that we represent the whole industry, we're not a captive of any one company or any group of companies located in Denver. We had to send a kind of national signal. So that's the reason for Boulder. We were in Boulder for a long time, five years in downtown Boulder in an office building. The problem with an office building is it's not a terribly attractive environment for a laboratory. You don't have freight elevators and we have heavy equipment which we need to move around. We were on the fifth floor which is very nice for views but in terms of operating a laboratory it wasn't optimum. So we obviously needed a building and we needed to have it designed in such a way that it would work well as a laboratory, so we began looking around for places to go. Louisville kind of welcomed us with open arms. We had trouble finding space in Boulder simply because there was a building moratorium, there's a bit of a suspicion about laboratories in Boulder, it's high tech and it could be important to the local community but satellite dishes might radiate. We're not sure about these satellite dishes. So Louisville welcomed us. I think what I wanted to tell you, Rex, is I was skeptical of the job when I was first approached. First of all because I didn't think I had any chance at it because I didn't have enough cable background, I didn't know that much about the industry. The deciding factor for me was, or what was really a turning point for me is when I met the CEOs, because the original board was populated with the CEOs from the largest cable companies plus Joe Gans who represented the small market operators on NCTA, and I was extraordinarily impressed by that group of people. The documents that the group sent out early on -it was a letter from John Malone to the industry; when I read that I realized this was an extraordinary group of people. I knew the pitfalls of a membership organization because PBS is a membership organization, and it was obvious to me that this group understood the difficulties in that and had built structural safeguards into the organization -the fact that to be on the board you have to be a CEO or the president of a company is extraordinarily important. The concept that the dues commitments run for three years at a time gives stability to technical people. So the elements in the foundation were there and they had been carefully considered and thought out. Each of those people had contributed to a structure, a concept, that really contemplated what was needed for success and so when I began to grasp that and that began to come through from the documents and the discussions with them, that's what convinced me. This is an extraordinary industry, they're extraordinary people, they really knew what they were doing. They really knew what they were doing. Coming from a broadcast world, I just have to say it was refreshing to see this kind of leadership and this kind of capability, leadership management capability. The challenge in cable technically is much more difficult than any I had ever faced as well because broadcast technology is relatively -in my view -simple compared to cable. Making a cable system work is not easy; it's very hard, and people who do that take on a challenge and they become extraordinarily capable technical people, too. So it had that aspect of it, too, which was very convincing for me. So the net result of those discussions was, boy, this is an opportunity, I really want to try this. It was the smartest decision I ever made. I wish they'd formed CableLabs five years earlier! The only thing I regret about this business is I didn't get in it ten years younger than I was.

PORTER: How long did you have to work at the labs in Boulder where you were up on the fifth floor?

GREEN: We were about five years in the Exeter Building in Boulder, I think.

PORTER: But all the time you were breaking ground and building your new structure in Louisville?

GREEN: We decided to move and it took about nine months to a year to find the property and help design the building. People like Dave Eng did a good job of designing the new building and the laboratory and it's been very good for us. We've just kind of outgrown it now. We're in two buildings, which isn't optimum. We're going to try to move into a single building.

PORTER: What was the project that was going on when you arrived?

GREEN: Well, I probably still have the slides from the first board meeting. The main projects were high definition, fiber optics, basic cable technology was another one. I remember the importance of working with broadcasters on high definition television was one of the elements of the first board meetings. So I should go back and look at those, but those were the major projects.

PORTER: When did you start the DOCSIS?

GREEN: Well, the phases that we've been through ... when we first started CableLabs the HFC concept was just emerging and our role in that was more to reach an industry consensus. I think Time Warner had done a lot of research and had a very good idea of what the direction ought to be there. Other companies had done work and had visions but they were different. So by getting everybody in one room and going through this, each CTO presenting their company's view about how fiber should be used really worked to come to a common approach, and so one of our first goals was to find some unified industry approach to the technology of fiber, and HFC basically came out of that with 500 ohm nodes and it was made over a period of years. The second important thing that I think that we undertook was digital. We issued an RFI probably in '91 to industry saying do you think video compression is ready for cable? We got back enthusiastic responses from industry, from manufacturers, "Yes, it is. There are a lot of advantages and by the way, we have the best technology and you should use ours." So that's what started the process of digital and we specified a digital cable box probably before any other industry. By the way, PBS was a partner in that. It was a long story but we came up with a specification for network transmission digital which PBS uses, which we use, and we came up with a specification for set top box. So that was the beginning of digital. TCI stepped up to buy the first boxes and to help foster that overall development. Another development was the regional hubs. We came to the conclusion that there were too many headends and by consolidating and getting scale economics in a region by interconnecting the headends and eliminating a lot of them, actually, that way that would be a huge economic advantage to cable operators. So we put that forward and it was an idea that originated in Canada because Canadian members had suggested that that worked very well. Rogers had developed Toronto kind of on a regional hub and so we propagated that idea in the U.S. and it caught on. We then looked at telecommunications. We issued an RFI saying we want to put telephony, data, and video telephone on cable, and of course out of that project DOCSIS grew and I can remember the executive committee meeting in New York where the CEOs sitting around the table were talking about a data service and it became clear that all the companies had purchased modems from different manufacturers and were offering or experimenting with data services. Bill Schlier said, "Well, why don't we ask CableLabs to get us a common standard?" So I said, "Okay." They said, "Well, could you do it in four months?" I think Jim Chiddix was in the meeting and I looked at him and he's kind of choking, "You're not going to say you can do it in four months, are you?!" But standing in front of the board all I could say was "We'll try our best." It took longer than that but it's one of the fastest developing specifications of its kind, which is a pretty significant advance in technology. We went from a specification to field tested hardware in three years. That's very fast development. So, as a project it took that little spark of leadership saying "Why don't we see if we can't get a unified standard here?" There have been huge benefits to that over the years. There were pioneers who obviously preceded us like Rouzbeh Yassini at LAN City who had been building modems for awhile and had been selling them. Motorola was building a modem but they weren't compatible. So DOCSIS grew out of that. It was a real test. I think a lot of people though that it was not going to work. There were manufacturers betting on the fact that it wouldn't work. But in the end we got a good product and it matched the cable industry's needs better than any of the proprietary products, and it is populated by something like 250,000, I think, certified modems at this point in time, many manufacturers, a very competitive environment, a very successful service on cable.

PORTER: What impact do you think that the SCTE's work with ANSI to take the specifications ... ?

GREEN: You know, I look at the cable world as having three important technical elements all of which do a different thing. CableLabs is an operator organization and it's closed. You have to be a cable operator to be part of CableLabs, therefore we can't do standards because we can't be an open process. We can develop specifications, we can find out what the industry wants, and our role is to figure out what the industry requirements are, what serves the needs of the cable companies. That's a very difficult thing to do a lot of times because companies will have different ideas and to come to some consensus on that is difficult, but once that's decided then we can issue a specification. I specification needs to be processed by a qualified standards organization which has to be an open organization, a due process organization, it has to follow ANSI rules, and therefore the SCTE is a very important element. We can't do what the SCTE can do, SCTE can't do what we can do. So we work together as a partnership. The third element, of course, is the NCTA engineering committee in which you have manufacturers and operators working together and working on the various elements of technology which fit into that. So those three elements -we all do something different, we all have different constituencies, and we're all inter-dependent and we're very lucky because as an industry together we've been, I think, very successful at developing specifications and standards and so on.

PORTER: That NCTA engineering committee actually interfaces in with... it's their one chance to meet with...

GREEN: The manufacturers. And to participate in that. We're very grateful for the role the SCTE has taken on in establishing a very credible organization. Steve Ocsala brings with him a huge amount of credibility and ANSI connections and has raised the level of the appreciation and credibility of cable standards. The DOCSIS standard, by the way -of course after a standard is approved by the SCTE then we take it on internationally, so you have DOCSIS and packet cable and very soon open cable standards which are world-wide -world-wide scale economics, world-wide credibility. Not too long ago the DOCSIS standard was the largest selling standard in the international telecommunications union. So a lot of interest. It is a world-wide standard. There's a DOCS IS modem on every continent and they all have common elements so that it means scale economics both for the consumer and the manufacturers.

PORTER: We've seen DOCSIS 1.0 and the industry's, I think, very forward expectant for 1.1, 1.2, 2.0, 2.2, whatever's coming on down...

GREEN: There's no such thing as 2.2 yet.

PORTER: Whatever's coming down the line. They've been open to the needs for security questions and the later aspects of DOCSIS. What do we not know yet that you could tell us about maybe if you look forward ... ?

GREEN: What's on the horizon?

PORTER: Yeah.

GREEN: Well, our goal is to provide a transition plan which in the end has the cable networks being digital packet networks. My personal belief is that when we get to that conversion, and we're moving along, we have the specifications written for it, the packet cable specifications provide all the elements of it, but again, it's an umbrella, we can build a lot of other elements under the umbrella to convert. The cable system becomes the most powerful network, the most capable network, the most efficient network in the world, and it is by far the best path into people's homes. It's, in my view, vastly superior to the public switch network in just about every possible way. It's self-healing, it's distributed, it doesn't have a single point of failure, it's highly efficient, it's much more efficient... Think about it, on a telephone line when you're talking half of it's not used because the other half coming back is sitting there idle. Well, that doesn't happen in packet network. Paul Baran, who invented packet networks, has been to several of our conferences and I think, again, it's kind of interesting for him to see that we've taken a concept which he developed for DOD as being a very powerful way to build future networks, and we're taking his technology and using the very powerful infrastructure, the very capable infrastructure that the cable industry has been able to build, and we're turning this into an extraordinary asset for the delivery of every kind of telecommunication service you can think of in a way that's superior to any way it's ever been done before.

PORTER: Let's talk about one certain product for a second.

GREEN: Okay.

PORTER: Do you see any chance that computers one day are going to be called cable ready and that they're going to have a DOCSIS modem already in it?

GREEN: They already have! We had a program, again originated by an executive committee decision, and the decision originated when our executive committee was meeting with Andy Grove. Andy told us, "Why don't we build the modem on the processor. If we did that we could reduce the price to $50." At the time the modems were $200. And of course being the competent executives that our executives are, they said, "Oh, that would be good!"

PORTER: They would be willing to pay just as much just to get the modem away from...

GREEN: Well, it reduces the cost, it becomes ubiquitous, lots of advantages. So they basically said, "Let's do that." It's a lot easier said then done. It's a very difficult task because of a lot of security elements. Computers have software which can be used to infiltrate a cable network. So we worked with Intel and others for quite a long time to solve those problems. It took about three or four years. It took a lot longer than I had anticipated or I think any of our executives had anticipated. We call it a CCEM modem, which is the modem built on the processor, and it passed certification in the last wave and so now it's available. So you will see computers arriving in the field that have F connectors on them.

PORTER: Well, I hope we have more luck with that than we did with cable ready TVs, and I'm being a little cute.

GREEN: We're working on the interface between consumer electronics equipment and cable. I think there are some important breakthroughs on the horizon there. I think that we've come a long ways towards solving that problem, too.

PORTER: So are you kind of hinting that we may be looking toward TV manufacturers that will put the need for an outside set-top convertor completely away from us the same way?

GREEN: Well, I think a different way of saying I think may be close to the same way is that we need to make consumer equipment more cable friendly. We have a process through open cable and then with various licenses with the CE industry so that they can build television receivers that will connect to cable, have the security element a replaceable element, a pod, and therefore be more friendly to the consumer than the present sets. Does that mean there won't be set-top boxes? My personal view is that set-top boxes are the way the industry introduces and provides new services.

PORTER: More interactive?

GREEN: Well, television sets last a long time. People buy them and the technology moves at a much faster rate than that, so anything you build in a television set is going to be quickly superseded by technology. So in order to bring the latest technology to customers you need to add something to the television set. You need to put a set-top box on. I mean, that's the way we're doing digital. The old sets ... you don't want sets to become obsolete because there's a huge investment in the existing sets but you do want people to be able to see new services on their old set, and that's where set-top boxes come in. Even if we built the most advanced, high definition, digital set now, I guarantee you in three years from now you're going to want some service on there that...

PORTER: You always do.

GREEN: You always do. And we're good at that.

PORTER: What impact do you think fiber into the home is going to have?

GREEN: Obviously the desirable long-term goal is the cable network fiber which is now out at a node gradually migrates toward the home. I think eventually, probably not in my lifetime, but eventually, that will happen. Right now there isn't sufficient economic need or benefit in doing that. It's very expensive; the economic trade-off is not favorable. At least, I've never seen an economic model that makes sense to do that.

PORTER: And that's ultimately the driver anyhow.

GREEN: The cable industry is very committed to using the capital expenditures in a very effective way and incrementally introducing the technical developments because in a capital intensive industry like cable, you can't really afford a capital mistake. You have to go carefully an incrementally introduce the elements of new technology. Therefore, to jump from fiber to the node to fiber to the home is a huge cost, a huge jump and you really can't justify it, you can't justify the capital expense for doing that. We haven't been able to do that for the last fifteen years and I think in the future at some point, yes, it will become economic and there will be a need for it. There's a direction now, a kind of concern that we need 100 megabits into every home. Well, I won't deny that that isn't a goal for the future. Right now, certainly, most people couldn't use JOO megabits. That isn't to say we shouldn't have a plan to get there, but to jump ahead and give everybody 100 megabits when they don't know what to do with it... they're reluctant to pay for the 10 megabits we give them now, or the 2 megabits we give them now. So it's an evolution and very, very important because of the capital intensive nature of the cable business.

PORTER: We've got about five minutes left on the tape. Anything that you want to leave us with to finish this tape up?

GREEN: I think that the thing I'm most grateful for is being a part of this industry. I count my lucky stars every time I get a chance. I was very fortunate to be found at the time I was and to come into the industry at a very propitious time where technology was really becoming a major driver. Technology's always been a driver for the industry, but it was I think the right time and right place and so I feel very lucky. I feel very fortunate to work with the people that I've been able to work with in the cable industry and now work with. What a great group of talented people. We've been able to bring a forum for discussion of technical topics and strategic topics to the industry which has been very satisfying to us. I hope we've made a contribution.

PORTER: I think I can assure you that the cable industry would say the same thing about Dr. Richard Green and the folks at CableLabs.

GREEN: Well, thanks Rex, and thanks for the opportunity to get this all on tape.

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  BACK TO ORAL HISTORIES

Henry Goldstein

Henry Goldstein

Interview Date: Tuesday May 25, 1999
Interview Location: Denver, CO
Interviewer: Jim Keller
Collection: Hauser Collection

KELLER: The oral history today is of Henry R. "Hank" Goldstein; attorney, cable television pioneer and one of the very early major city market cable television operators. The interview today is a part of the oral history and video history project of The Hauser Foundation for The National Cable Television Center and Museum. We are at the studios of TCI/AT&T in Denver, Colorado. The interviewer is Jim Keller. Hank, give us a little bit of your background prior to getting into the cable television business.

GOLDSTEIN: Well, my entry into cable television came through my practice in law. I was with the Fletcher-Heald law firm in Washington. Actually, it started when I was in law school and I wanted a job as a clerk. A friend of mine at that time was clerking for Dow-Lohnes and he said that there was a firm on the 10th floor in the old Munsey building that was looking for a clerk and I said, "What do they do?" He said, "Well, they do FCC law." I said, "What's the FCC?" It didn't matter, I went and I interviewed and I got the job. I was there as a clerk and practicing law for a total of five years. When I decided to leave, I just felt that I'd rather be on the management side of the business than the legal side and I had an opportunity to join TransVideo in San Diego.

KELLER: TransVideo was what?

GOLDSTEIN: TransVideo was a holding company for several cable TV companies, one in Chanute, Kansas and one, at that time, in El Cajon, California, which is east of San Diego. They wanted to expand where they were and also get franchises in other parts of the country. So I called Jack Cole, who I'm sure you know, because there weren't very many people in Washington in those days who knew what cable TV was about.

KELLER: What year was this?

GOLDSTEIN: That was 1964. It may have been the end of '63, but early '64 anyhow. Jack was at that time practicing law with Strat Smith and Strat Smith was the founder of NCTA, if I recall properly.

KELLER: One of the founders and he was the first general counsel of the NCTA.

GOLDSTEIN: Right. So I had lunch with Jack. Jack had been in law school a couple of years ahead of me and I described this opportunity to get in the cable television business and also live in San Diego. He thought the cable television business came first, San Diego second. He said, "Go back and resign and go on out there," which I did. I arrived in San Diego after five years in Washington with a very narrow tie and a rolled up umbrella and all these guys are, as everybody is today, in shirtsleeves. The first job I had was to go out and walk with one of those mile measurers to measure the miles of cable we were putting down.

KELLER: So you started right from the bottom?

GOLDSTEIN: Started right from the bottom. Lee Druckman was the president and that's the way Lee did things and I said to myself, "What have I done?" But in a couple of months, I realized that Jack was right. I made the right decision and after I'd spent about six months doing that sort of thing, then I got into...

KELLER: Did you climb poles, too?

GOLDSTEIN: No, I didn't climb any, no.

KELLER: String cable?

GOLDSTEIN: Strung cable, and just did a lot of different things.

KELLER: This is an attorney talking.

GOLDSTEIN: Well, in those days, we only had seven-channel amplifiers. They were tube amplifiers and we were all excited when they went to twelve-channel. So, I got involved in some management and also in getting some new franchises. We went after the franchise for Bakersfield, California and Porterville, California.

KELLER: Let's make that a separate portion of this oral history. Let's stay in San Diego, the early days of San Diego.

GOLDSTEIN: Okay, right. So, in San Diego - of course, we started in El Cajon, which in Spanish means "the box" and if you've ever been there, it literally is a box. They got little or no television, and then the rest of San Diego, because of the canyons, most people off the air only got two channels. Some people, fortunately, if they had a high enough antenna or were properly placed, they got all three networks. We found a mountaintop where we could pick up nine channels from Los Angeles. So we put the nine channels from Los Angeles and the three local channels and we were delivering twelve channels of cable TV for $5.95 and it was $14.95 for installation. But we always had some sort of marketing gimmick that you could get the installation free. At Thanksgiving you could even get a free turkey!

KELLER: You couldn't even trade in your antenna for that.

GOLDSTEIN: Oh yeah, we gave turkeys and we gave cases of Coca-Cola, we did anything we could to get subscribers and really the system got started. Lee had been a Jerrold salesman and that was his area and the guy in El Cajon couldn't pay his bills. That guy was building the network by charging high installation charges per block and then he'd get some money together and build another block. So Lee went to Milt Shapp and said, "I'll pay...

KELLER: Milt Shapp was the president of Jerrold Corporation at that time?

GOLDSTEIN: That's right.

KELLER: The former governor of Pennsylvania, too.

GOLDSTEIN: Right. And Lee said, "I'll pay the guy's bills and let me buy him out and I'll get into this business." And that's what Lee did and he came to me and hired me after he was able to put together a fairly good amount of money to expand into San Diego proper. So we came up out of the canyon over the hills and began building in San Diego. One of the local television stations was owned by Augie Meyer, who I guess goes down in cable TV infamy . He was the CBS network operator – he was from Illinois, I think – in San Diego and he challenged our right to build cable television in the San Diego market on the basis, which we heard all the time around the country, that cable television was going to destroy the local channels. There would be no local broadcasting, advertisers would have to go to LA if they wanted to advertise to the local populace and there'd be no local programming. It was a tune that we had heard for a long time in lots of cities. Augie had the ear of the local newspaper and finally after several attempts – he was an attorney as well – after several attempts at the FCC, he got the FCC to agree to issue an injunction against us to prohibit us from building any more plant. At that time, we had close to 30,000 subscribers, which was the largest cable television system in the United States. That was in 1965 or so, '66 maybe, that Augie got the injunction against us.

KELLER: The case became known as The United States vs. Southwestern Cable, is that correct?

GOLDSTEIN: Yes, that's right. It was The United States vs. Southwestern Cable. Southwestern Cable also had a franchise for the San Diego area north of what was the San Diego River, which was a dry bed. It's basically Pacific Beach, which is the northern part, and then west of Pacific Beach. Our company was Mission Cable TV and we had south of the river, which included all of metropolitan San Diego and Chula Vista and National City and some other cities around – La Mesa, other cities. So when the FCC filed the injunction, we said that we were bringing these channels from Los Angeles without any FCC licenses. No microwave, no other licenses were required for what we were doing and we went to the U.S. Circuit Court of Appeals, the ninth circuit, in Los Angeles and made the case that the FCC had no jurisdiction because there were no FCC licenses involved. We had franchises from the various cities and that's all we needed and the ninth Circuit Court of Appeals agreed with us. But it didn't take the FCC long after that to go to the United States Supreme Court and of course, somehow Southwestern's name got in first and Mission Cable was in second because they were all so enjoined – Southwestern was all so enjoined. Our case was argued at the Supreme Court. At the same time, the very first copyright case which was brought against the cable TV industry was brought...

KELLER: That would have been the Fortnightly case.

GOLDSTEIN: The Fortnightly case, right. The decisions were handed down about the same time as well. I always think that it would make a good law journal article for some law student who's interested in communications because it was clear that the court didn't feel comfortable ruling against the cable TV industry in the copyright case and basically it was clear to them that cable television was going to have an impact on the nation eventually and that since the FCC is really an arm of the Congress, they asked Congress to give the FCC some direction in regulating this industry. So they allowed the injunction to stand. Now we were allowed to add subscribers wherever we had plant but we weren't allowed to add additional plant. At that time, Cox Broadcasting...

KELLER: Excuse me, just a minute, but was there anything set at that point about providing only local signals as opposed to providing the signals coming in from LA in the areas that you currently had set up?

GOLDSTEIN: No, we could provide all twelve channels.

KELLER: But you weren't allowed to build any farther than that?

GOLDSTEIN: We couldn't build any new – not one more new street.

KELLER: Even if you were only going to provide the local channels?

GOLDSTEIN: I don't think we ever got to that issue. There were some areas that we probably could have gotten subscribers because they didn't get all three networks, but we just didn't pursue that. So anyhow, Cox Broadcasting had, prior to the whole case, had bought, my recollection is, 24-25% of TransVideo.

KELLER: That was the company you were with?

GOLDSTEIN: Yes, TransVideo was the holding company that owned 100% of Mission Cable TV and Mission Cable was the company that served the San Diego area. The major investors, or the other investors, were really Wall Street bankers – the old Drexel-Burnham company – and they felt, their investment turned out alright, that it was going to be a long time before these issues were resolved with the FCC and so they agreed to sell the remaining shares to Cox. Some of us, Lee and some of us, had a small amount of interest in the company but the major shareholders were Cox and the Burnham people. So that's when it was sold to Cox and then Cox in turn created Cox Cable. It was put under Cox Cable and I stayed on until 1972. That happened in 1967, I stayed on until 1972 as Cox's western regional manager because as I said, we had other properties.

KELLER: Without being able to build any further than you were at the time of Fortnightly.

GOLDSTEIN: Correct.

KELLER: And so the FCC, as I recall, and correct me if I'm wrong, the Southwestern case was the case that finally developed into allowing the FCC to exert certain jurisdiction over cable television. Is that correct?

GOLDSTEIN: That's correct. That's right, and that's where the non-duplication rules evolved and other...

KELLER: The importation non-duplication rules and how they affected you in San Diego?

GOLDSTEIN: Well actually, they didn't really affect us in terms of getting on new subscribers. The equipment wasn't very sophisticated so equipment had to be developed to black out the networks in LA when the networks in San Diego were carrying the same programming. And what we did was actually put the San Diego channels eventually on both cable channels.

KELLER: Non-duplication protection.

GOLDSTEIN: Yes, non-duplication protection.

KELLER: For network programming only, is that correct?

GOLDSTEIN: For network programming only, right. And we, in San Diego, actually had I believe, well I think the first actual origination channel as well. We set up a studio that didn't look anything like this.

KELLER: How did it look?

GOLDSTEIN: It was much smaller, there was a small hand-held video camera. We hired a guy out of San Diego State who just wanted to do programming. One of our most famous interviews that we did – we didn't have much audience, we were sure of that – but we got Lionel Van Deerlin, who was a Congressman and actually, at that time, Chairman of the House Interstate & Foreign Commerce Committee, which regulated the FCC. Lionel was a pretty good friend of ours and so I did an interview with him and we did a few other things.

KELLER: What did you talk about?

GOLDSTEIN: I don't remember, Jim. That was a long time ago. I didn't want to put him on the spot when it came to cable television, so we probably talked about local issues. We also did a couple of football games, remote.

KELLER: High school football?

GOLDSTEIN: High school football games. We had these big dreams we were going to sell advertising around it and it was going to be the new cable television. We figured if Augie Meyer said we were going to compete with him, we might as well compete. But, when you only had 30,000 customers and twelve channels, in those days of pretty good television, it was hard to compete with that.

KELLER: As I recall, Augie Meyer was also a very close friend of Van Deerlin's, wasn't he?

GOLDSTEIN: I'm sure he was. He sure was a big contributor, a bigger contributor than we were but Lionel was always very good to us and always gave us his ear.

KELLER: He always was good to the industry.

GOLDSTEIN: Yes, he was. He was very sympathetic to the industry. I think he understood that it was going to grow and have the impact on society that it's had. So he was a good guy.

KELLER: When did you finally start to build farther on out from the original point in San Diego?

GOLDSTEIN: You know, I don't remember exactly the year, but it probably started when the non-duplication rules were put into effect.

KELLER: After the FCC took over jurisdiction?

GOLDSTEIN: Yes. Then with the non-duplication rules, the FCC was able to say to the local television stations, okay, we've given you protection and these guys can go ahead. I just don't remember what year that was. It wasn't too long. There was a year or two maybe, that we...

KELLER: It was prior to the satellite?

GOLDSTEIN: Oh, yes.

KELLER: So it had to be in the early '70's, then.

GOLDSTEIN: Yes, probably even before, maybe '69, '70, sometime in there. We were building, certainly before I left the company in 1972.

KELLER: Were you able to discern a difference between the new area you were building and the numbers of subscribers in the original area?

GOLDSTEIN: No. We used to pretty much get 40% saturation with a little good marketing and it didn't make much difference. As I looked around for other cities to obtain franchises in, the first thing you always looked for was how tall were the antennas on everybody's roof. San Diego had some of those 300-foot poles, so those are the streets you built first and they were pretty good customers. It was interesting during times of recession, which we were in the business long enough to see, people would actually disconnect their phone before they'd disconnect the cable.

KELLER: Oh, yes, I remember that very well.

GOLDSTEIN: You remember that?

KELLER: Yes. So then, you continued to develop in San Diego and eventually San Diego was built and Cox eventually took most of the area?

GOLDSTEIN: Yes. We don't even want to hear what the numbers are today.

KELLER: They're staggering.

GOLDSTEIN: I'm sure they are.

KELLER: They're one of the largest systems in the world.

GOLDSTEIN: Well, Lee has nerve enough to live there. I don't think I could do that.

KELLER: Lee is still living in San Diego?

GOLDSTEIN: Yes, he lives in San Diego.

KELLER: Well, you were also franchising, or trying to obtain franchises elsewhere?

GOLDSTEIN: Yes. One of the larger ones we got was in Bakersfield, which was an interesting story. I know that you were a franchise getter as well. We were an applicant, well there were three applicants basically. The people that had Southwestern Cable, they were a third competitor in Bakersfield and then the other competition was a consortium of the three local television stations and 27 local business people. The night that it came time to decide who was going to get the franchise, all those people sat right in front of the city council and when the vote came, we won. A guy that we all know in the cable industry, Burt Harris, owned one of those television stations and it took a couple of weeks before Burt could call Lee and say, "You know, I couldn't even speak to you guys that night. All I could do was think about if I was going to throw up, because I couldn't believe that you guys won that franchise in Bakersfield." But Lee and I worked very hard on that. It's a rough and tumble town. There was a time toward the end when the only place we'd stay was the airport motel; we wouldn't even go into town.

KELLER: Get out of town, huh?

GOLDSTEIN: Right. We were asked by a few people not to come back, but we persisted and we won. Then we went on and got Porterville, which is about 20 miles away.

KELLER: How large a system did that become?

GOLDSTEIN: My recollection was, well when we sold it, it had 10 or 12 thousand customers.

KELLER: A reasonably good sized system at that time.

GOLDSTEIN: Yes, it still was a good size because Bakersfield, again, those people had a sense of Los Angeles, so we again were able to bring nine channels from Los Angeles and we did an interesting thing there as well. Because you have to go over that pass and we didn't have microwave, our chief engineer, a guy named Jack Long, who's also an old pioneer in this business from the technical side, built a parabolic antenna out on a farm. If you can visualize this, it looked like a big radar screen and he was absolutely sure that he could capture those signals and sure enough, he did. Because, he said, the mountain range created a scatter effect and so when the signals came over the mountain range, he was able to get them on this parabolic antenna and that's how we delivered our nine LA channels in Bakersfield.

KELLER: So you were delivering the nine plus the three.

GOLDSTEIN: The three locals, right.

KELLER: Were you doing any origination then?

GOLDSTEIN: No, we didn't do any origination.

KELLER: Earlier, when we were having lunch, you mentioned the story about hiring the law firm that you clerked in early on.

GOLDSTEIN: Fletcher-Heald represented us at the Supreme Court and I always jokingly said that I paid them more in legal fees than they paid me in salary in five years, but it was not a joke. It was actually true. But Bob Heald, who was one of the senior partners, argued the case and did a great job, but unfortunately a lot of it had to do with timing in the industry.

KELLER: You then became a western regional manager for Cox?

GOLDSTEIN: Yes, I was a western regional manager. We bought Lubbock, Texas and so I was responsible for Lubbock and San Diego and Porterville and Bakersfield. Prior to that, with Lee, we also had Chanute, Kansas and Pittsburgh, Kansas, which we sold to Monte Rifkin. We decided to concentrate more on the California area. I went to all those towns – Iola and Hannibal, Missouri and it was a great education but we just never were successful other than getting the Pittsburgh franchise so we decided to concentrate on the West.

KELLER: You were also partly instrumental in the formation of the California Cable Television Association, is that correct?

GOLDSTEIN: Yes, I was with Walter Kaitz. Of course, again, in a lot of states they wanted to put cable television under the public utilities commission, so Walter was hired by our group to represent us in Sacramento and Walter said, "Why don't you form an association?" So, we formed the California Cable TV Association. We always had the meetings in San Diego in November and the first couple years we had about 40-50 people and then it started growing and we moved it to the Del Coronado. In November, everybody wanted to come, so people used to call and come from the West. One of my famous calls, I told you at lunch, annually I'd get from Bill Daniels, "Hank, make sure I get a good room." Anybody that knows Bill can just hear that voice, and I always promised him a good room and it grew and grew. It really was the basis for the Western Show today.

KELLER: The second largest cable television conference in the country.

GOLDSTEIN: Right. And we had some good times. We had good speakers. One year, I remember, we had Jess Unruh, who was the speaker of the California legislature and then I decided to go after the Sacramento franchise and create a consortium with Jess. We lost to the McClatchy's, who ran the newspaper. They were too strong, even for Jess.

KELLER: Even for Jess, and that's powerful.

GOLDSTEIN: Right.

KELLER: At that time, Ronald Reagan was governor of California.

GOLDSTEIN: Ronald Reagan was governor, and we testified before Ronald Reagan and tried to make him understand what cable television was. Why it shouldn't be under the PUC and maybe if we'd been talking about movies, he could have understood us. He sure didn't understand what cable television was. But we were able to stay out from under the PUC. We had the usual battles with the phone company. On one hand, we were paying them rent to use their poles and paying them a lot of money to change the height of their lines. I think you had to be a foot above phone in pole clearance and two feet below power, or something like that. But then we'd fight them tooth and nail to keep them out of the industry and of course we know today that that's changed. We want to get in their industry and they want to get into ours.

KELLER: It's also ironic that when you went from there, you went into the phone business in Europe.

GOLDSTEIN: Yes.

KELLER: I'm going to get into that. Let's stay right in this country right now. Any problems that you remember or that were notable in the Bakersfield system?

GOLDSTEIN: Only how we were going to get the signals without microwave, because we actually got that before the Supreme Court case as well and we just didn't want to have to go to the FCC for anything.

KELLER: Now as I recall, the early stages of the regulation by the FCC were only on systems that received their signals from microwave, is that correct? That was their first regulation, the Carter Mountain Case?

GOLDSTEIN: Exactly. If you had an FCC license, basically what you had was microwave, then they could control you because they could say, you can't use that license for that unless you do this. So we wanted to stay out from under the FCC and the real issue for us was how to get the signals from LA. Jack Long designed the parabolic antenna. Other than that, it was a bit slower moving market than San Diego because they really did get the three networks, where as I said, in San Diego, if you've ever been there, there are a lot of people that just couldn't get all three networks. As a matter of fact, I think ABC or one of the networks changed to the Tijuana station, changed their affiliation, because they had a better coverage coming from the south into San Diego.

KELLER: We're about ready to go into the second tape, so we'll take a little break.

(BREAK)

As we ended that first videotape, we were talking, Hank, about your experiences in Bakersfield. How you'd built the parabolic antenna to bring in the LA signals to Bakersfield. Did you ever go to microwave in the Bakersfield system?

GOLDSTEIN: Not while we owned it. Now that you mention it, I think Cox finally did it after I left. I think they did.

KELLER: Now, when you were operating in San Diego, did you ever bring in the Mexican channels from below the border?

GOLDSTEIN: You know, the equipment only handled twelve channels. The amplifiers were only twelve channel amplifiers, so we didn't. As long as I was there, they still were only twelve channel amplifiers.

KELLER: But one of the stations was not the Tijuana station?

GOLDSTEIN: No.

KELLER: That was added later. Of course there was a large Spanish population.

GOLDSTEIN: Right, yes. I think the next increment was going to 20-some channels and vaguely I remember that they started to build 20 channel portions of the network toward the end of my time there. So certainly they added the Mexican channel. But there was one very, I think it was XETV, one very popular channel in Mexico, in Tijuana.

KELLER: When did you leave Cox?

GOLDSTEIN: Well, I left in 1972. Lee thought we ought to try to do TransVideo again. It was actually when Dean Birch became chairman of the FCC. Dean was from Tucson; Lee was from Tucson. They had some conversations about allowing cable television to grow and I think unfortunately, Dean wasn't able to accomplish as much for the cable TV industry as he would have liked. But we decided to do it again, so I moved to Tucson and we started a company called Century Cable. We got the franchise for Saginaw, Michigan and Owosso, Michigan.

KELLER: Quite a ways from Tucson!

GOLDSTEIN: Yes, well, cooler! I spent almost a year working to get the Grand Rapids franchise. That's another one of those great franchise stories. There were ten applicants.

KELLER: What year was this?

GOLDSTEIN: That was 1972-1973.

KELLER: At the real height of the battle for cable television franchises.

GOLDSTEIN: Right.

KELLER: In mid-size markets, anyway.

GOLDSTEIN: Right. Grand Rapids was a great market. It was a good-sized market and it had very little television off the air. Nine of the applicants put together local groups, we were one of them, and the city council went through a two-stage process and they whittled it down to four. We were one of the four, Cox was one of the four and there were two others – General Electric and I can't remember the fourth.

KELLER: That's right, GE was in there, Frank Drendel.

GOLDSTEIN: Right. We decided to make our chances better, we got together with our old friends Cox and told the city we were going to put our two applications together. In the meantime, we had gotten Children's Workshop, Sesame Street. We had offered them 20% of the deal and we figured nobody could beat us. I mean, how could you beat us with Sesame Street? We're going to come to Grand Rapids and the Sesame Street people said to the city council, that they would do a lot of origination there, they'd do some creative new stuff. So we were really riding on a high and it came the night for the decision. The council decided to give it to General Electric, who had no local partners. Of course, when you think about it, it was probably the easy way out for the council. But I spent about a year, and you know how it goes...

KELLER: Tell us how you would go about getting a franchise. Especially when you had a local group.

GOLDSTEIN: Well, you just had to, at least we did, we spent a lot of time first of all, establishing our own creative credibility. There's lobbying the city council and other people that work for the government, like the city attorney. Generally, city attorneys were pretty strong in these decisions – maybe the city planner, a couple of other people and telling them who we were, what our background was. The opposition, of course, said that these guys, meaning us, we were obviously franchise flippers, you know, we'd been in San Diego and sold it. All we'd come in there for was to do the same thing again. We'd then tell them the whole story about the Supreme Court and how it really wasn't our decision to sell. So you'd build some credibility and then put together a local consortium of what you thought hopefully would be a strong group of people from different walks of life, different political persuasions.

KELLER: A politically strong group.

GOLDSTEIN: Yes, a politically strong group, vis-à-vis the city council.

KELLER: What would you offer them?

GOLDSTEIN: The group?

KELLER: Yes.

GOLDSTEIN: They would get shares in the company.

KELLER: Carried interest?

GOLDSTEIN: Carried interest.

KELLER: Isn't there a name for that?

GOLDSTEIN: I don't remember.

KELLER: Rent-a-citizen? Does that sound familiar or did that come later?

GOLDSTEIN: No. That must have come later. So that's what we did in Grand Rapids, we did it in Saginaw. In Bakersfield we didn't do it. We went in as TransVideo and we really convinced the city attorney and one councilman it was time to break the hold of the establishment, so to speak. That's what we kept hammering away at in Bakersfield. Those guys had backbone enough to stand up and do it. In Grand Rapids, there were other good consortiums, there's no question about it. It's Gerry Ford's hometown, his brother who is a dentist was in one group, a Democrat by the way, not a Republican like his brother. We had, I thought, a pretty well-rounded group. We did get in the finals out of the ten. I really do believe the city council took the easy way out.

KELLER: Was this in the days prior to the advent of the cable television consultants?

GOLDSTEIN: Yes. There were no consultants.

KELLER: CTIC, Cable Television Information Center, came on later?

GOLDSTEIN: Yes. The consultants turned out to be the guys like us who started the industry or came in later, actually.

KELLER: It did develop a whole industry of so-called experts of cable television.

GOLDSTEIN: A lot of what we did was winging it. You were selling yourself, you were selling your product, you were trying to convince them that you were the best bunch of guys to come to their city and for the most part we were all strangers. Bud Hostetter beat me out in Holland, Michigan. I told you the night the city council was to decide - there again, I thought I had a really strong group – Bud and his team showed up with their big mobile van from Ohio and showed the city council what they could do in providing remote programming. I turned to Lee and said, "We might as well leave right now." Some guys were fun to compete with. I hated to lose, but Bud is a good guy and you don't mind losing to a good guy.

KELLER: Do you remember some of the other people you competed against?

GOLDSTEIN: Well, the guys from Southwestern Cable who got the northern part of San Diego, Bud, and I can't remember who else. Well, certainly in Grand Rapids, everybody was there. GE and I'm sure the other major players at the time. I'm having a senior moment.

KELLER: How long did you operate those properties?

GOLDSTEIN: We only kept Century for a couple of years. We also built one other network because we really thought that the major market rules would change, so we built a network, a cable TV system in Sun City, outside of Phoenix. Phoenix of course had plenty of local television, but we just felt we were going to be able to bring distant television. Of course that was our major mistake in this industry. Building it was sort of funny because it was all underground. The cost in those days, I don't know what it is today, but I think it was $1,500 a mile overhead and $7,000 a mile underground. But it was an all retired community and some of our installers found themselves facing rifles when some of these retired people saw them coming to go through their backyard in Sun City, which is all laid out in stone. But we did build it and of course couldn't get the distant channels. It sat fallow for quite a while until some rules changed and then we sold it a few years later.

KELLER: Did you do any programming in Sun City?

GOLDSTEIN: We tried, but it really wasn't enough to sell many subscriptions. So in 1974, we sold Saginaw and Owosso to Cox, our good old pals at Cox. Henry Harris, who I'm sure you remember, was running Cox. So then I sort of disappeared out of the cable TV business.

KELLER: Then what?

GOLDSTEIN: Well, then I went to Europe. A friend of mine, who had been with Drexel-Burnham, had been the deal guy who put the money together for TransVideo. He called me and said that he had an idea. Since 800 toll free dialing was doing so well in the United States, why don't we take it to Europe where they didn't even have the concept. So I said, sounds like a good idea to me. He also had interest from a man who had 40 years experience with AT&T and had really been the executive who, through AT&T, helped a lot of the European countries rebuild their telephone systems after World War II. In order to do what we wanted to do in Europe, we had to have the permission of all the PTT's they were called – Post Telephone Telegraph companies – owned by the governments. We would arrive in Stockholm or Helsinki and people would roll out the red carpet for us. We were there to sell something. At that time, all the director generals still remembered him, what he had done when he was at AT&T, so we felt we had a good entrée and we did. But every director general said, "Well, you've got to take this switch that you have down tot the switching people and the transmission people." So we went to all the western European countries to get permission to use our switch. I said I'd try it for a year, I was living in London. Well, two years went by and I started calling Walter Kaitz and said, "I think I'm ready to come back and look around." At that time, NCTA was looking for a new president. Of course I was a good friend of Van Deerlin's, who was the Chairman of the Interstate & Foreign Committee, so my name was thrown in the hat. Just about that time we did get approval in three countries that allowed us to put in our switch – France, Spain and Holland – and then the others came pretty quickly. I called Walter and said, "I think this thing is starting to snowball," and I moved the company to Switzerland. The tax laws in England at that time were horrendous, so we moved to Switzerland near Geneva and started the business.

KELLER: Still with Drexel-Burnham backing?

GOLDSTEIN: Well, it wasn't Drexel-Burnham. It was all private. My friend had been with Drexel and actually he had left and so this was all private. We all put in some money. It didn't take a lot to fund it at that point. Finally, Continental Telephone, Charlie Wohlstetter's group, came in and put some money into it when we really needed to spend some capital to buy the major amounts of equipment. The way it worked, like early cable TV, was pretty rudimentary. We had these small switches, to give you an example, VISA had no authorization center in Europe at that time. So, they put an authorization center in London and we were able to give them a telephone number in most of the major cities in Europe. If, in Milan, you went to buy a pair of shoes, the Milan shoe store owner could dial a Milan number, our switch would send the call to VISA in London and they could give him the authorization code. We paid the PTT for the phone call, the shop owners didn't. Then we billed VISA for that plus a monthly fee for every line they had. Our major customers were credit card companies, hotel reservation services, a lot of Wall Street companies that either had good clients somewhere, like in the Middle East. I was really surprised. I figured, what does a sheik in Kuwait care about making a toll free call, but the fact is they loved it and a lot of the brokerage firms and big houses couldn't get licenses to open offices in those countries. So we moved into the Middle East and then the Far East.

KELLER: Were you using an AT&T switch?

GOLDSTEIN: No. This little switch was built by a company in Portland, Oregon. Actually it was a call diverter and it really just diverted the call. You could have it for you home. It was almost too rudimentary to believe. Each country was different. The Germans wanted the switch to be within 500 meters of an exchange. Some countries allowed us into the exchange, which was very unusual. I think probably because of our former AT&T guy. Some countries, for example Sweden, tore the thing apart and I learned later that for the 747 to get approved in Sweden they were the most rigorous. I always thought he Germans would be the most rigorous in reviewing new equipment. Each country had its own hurdles but we finally got it all put together and as a business it was okay, but it wasn't great because the biggest part of the toll free calling is really within a country, within Germany, within England. Because in Europe, as we learned, people in France don't buy a Braun mixer, they buy a Mullinex. There wasn't a lot of cross border trading. Our clientele was limited to the kind of people I mentioned. I did that for eleven years.

KELLER: Did you ever think during that period that you might want to provide cable service also in those areas?

GOLDSTEIN: Well, I looked into cable and actually, Freddy Lieberman owned the cable TV system in Switzerland at that time. I had some discussions with Freddy about going further into Europe and it never really went anywhere. Then when I decided to leave Europe, cable television was really just coming. Freddy was probably the first cable television operator in Europe. He's an old Jerrold guy; I don't know if you knew Freddy.

KELLER: Oh yes, Telesystems with Jack Crosby and Ben Conroy and that group.

GOLDSTEIN: Right. And so I went to a conference in Wembley which was about cable TV and John Saeman from the Daniels Group was there and we talked about cable and he said that they were applicants in England and they decided that there was enough to do here in the United States and they weren't going to do anything in Europe. I thought, well, I wouldn't mind staying in Europe, but it was time to change. I'm an advocate of change from time to time. John said that he and Bill would love it if I'd stop by in Denver sometime when I came back to the States. So I did that and they had the idea that there was an opportunity in the paging industry. This was in 1983, I guess, that larger companies were coming into the paging industry, a lot of the paging industry had grown up from answering services, Mom and Pop shops – some of them were very large – and those people had reached a point where they'd like to cash out. So I said, "Well, I didn't want to go chasing licenses anymore, but if we could put a fund of money together for acquisitions, I'd be interested." In early '84, John called and said he felt the money could be put together and would I like to do it? In July of '84, I moved to Denver and started acquiring paging companies around the country.

KELLER: This was your first go around with Daniels?

GOLDSTEIN: That's right.

KELLER: I failed to mention earlier that you are currently the managing director international of Daniels & Associates. I should have mentioned that earlier. This was your first time at Daniels that we're now talking about.

GOLDSTEIN: Right. But on the operating side, actually. So we got paging operations in six or seven states and had 75,000-80,000 customers. However, Bill decided that he was going to take his company back to its original roots of being investment bankers/brokers. As you know, they operated as a general partner in some other partnerships, a lot of cable TV systems and they sold them all to United Artists. At that point, the paging part was like the tail wagging the dog, so I turned around and sold the paging companies, some of them back to McCaw, some of them to US West and Arch mainly. I was on the board of Telocator at the time, I think it's changed its name now to the PCIA Group. Telocator was the paging industry's trade association. Anyhow, I said to a number of my friends on the board that I'd done cable TV, I'd done paging, I'd done some telephony, I'd like to get into cellular because it looked to me to be something pretty close to cable. What we were in cable was a monopoly. At least cellular was only a duopoly in most markets. So I just put the word out and I got a call for the first time in my life from a headhunter who said he had a client looking for an American with telecommunications experience who had lived abroad. I said, well, I think you're speaking to him. One thing led to another and I ended up in Hong Kong with a company called First Pacific. They had a 50% interest in a cellular telephone license for Hong Kong. The other 50% was owned by Millicom. They had management control.

KELLER: Millicom had control?

GOLDSTEIN: No, First Pacific. So they were able to hire the president, CEO, which I was. We were actually the first company in the world, I believe, to be the third in the market in cellular telephone and I called that company Pacific Link.
End of Tape 1, Side A

Start of Tape 1, Side B

GOLDSTEIN: (cont) I named all my paging companies Interlink and other links and so I carried that name over there, then First Pacific, the parent company, liked the business so well that I moved over to the corporate side and we created a holding company called Asia Link. I put on my license getting hat again and we got franchises, or licenses, in China, in India, the Philippines, Taiwan and Indonesia. Actually, in Indonesia we made an acquisition. We built and operated cellular networks in all those countries and last year, 1998, I decided to come back to the United States. I had been coming back annually for the CTIA show, which is the cellular telephone industry show and always running into the Daniels guys - Brian Deevy and Brad Busse. They asked me when I came back if I'd be interested in helping them expand their international reach because I had experience in Europe and Asia and so I told them I'd consider it. Last year, we officially moved back in February but then I went back to Hong Kong to clean up some things. In June, I joined Daniels, again, but this time it's an investment banking company. I had to take the Series 7 exam. I hadn't studied like that since I took the bar exam. So I'm in the investment banking business on the other side of the table. I was always on the operating side up until now. Fred Vierra is doing the same thing with Daniels, but he's concentrating on Latin America. So that's what I'm doing. It's great to be back in the United States, I'll tell you that.

KELLER: While you were working, getting licenses in places like India and the Philippines, was cable developing in those countries?

GOLDSTEIN: Well, yes, there's a lot of cable in Asia that's sort of pirate cable and it competes with satellite. Satellite has done very well. Satellite was late to come. There was cable before satellite. In the Philippines, there was a lot of small cable operators, there are no big cable operators in Asia. There are a lot of small ones around in virtually every country and then satellite, AsiaSat and StarTV have done very well carrying mostly movies. For instance, in India, which is a movie crazy country, StarTV has a lot of viewers and so they sell a lot of advertising around there. You know there's a cable system now in Hong Kong. Cable is having a tough time in Asia, I think for several reasons. One is the Asians are not big TV viewers like we are in the United States. Secondly, the general populace speaks the local language, so in order to have good programming that they're going to want to watch, you either have to dub it or subtitle it. In Hong Kong, all the movies you go to are subtitled, even the theater movies. But even with that, the cable TV network has not done well. Hong Kong people are interested in CNN maybe, ESPN probably not. Those are available. CNCB is available on the satellite. The ex-patriate community in Hong Kong is only about 150,000 people at most out of 6 ½ million. The ex-patriate community probably subscribes pretty heavily to cable television but where I lived I know the habits. I mean, the Hong Kong people work late, husbands and wives. Everybody goes to their mother's or mother-in-law's for dinner. They get home to their own home around 10-10:30. They may watch a little television and then they go to sleep and they don't go to work until 9:30 in the morning but they'll work the other end in their offices until 7,8,9 o'clock in the evening and then go out to dinner. So there's not a lot of television viewing time, except maybe on weekends. It's pretty much that way in a lot of the countries. I mean, you'll see television antennas in china and they do watch television but I really think the key to success there is going to be more good local programming. Programming that is in the local language, not necessarily local programming. They love American movies but it's very expensive to dub them or subtitle them.

KELLER: Now, from the outlook of a telecommunications provider, have you seen a big difference or any difference at all between Hong Kong as a British protectorate and becoming part of China?

GOLDSTEIN: Not really. I was there through the handover. As a matter of fact, if you watch the handover, that rainy night when Prince Charles made his speech, I was sitting there soaking to the skin, but it was a big event. In truth, the real impact on Hong Kong over the last year since the handover has really been the overall Asian economic crisis. It hasn't really been the Chinese takeover. The Chinese government, prior to the takeover, invested a lot of hard dollars in buying property in downtown Hong Kong. They bought 20% of the local telephone company, they bought 15% of the airline.

KELLER: That's the Chinese government?

GOLDSTEIN: The Chinese government. So, they had a lot of hard dollars, or have a lot of hard dollars invested in Hong Kong. The noticeable difference, because I was just there three weeks ago, the noticeable differences are that you hear more Mandarin spoken. Hong Kong has always been a Cantonese speaking area. That's really one of the biggest differences. You don't see any difference; the police wear the same uniform, they don't have the Queen's picture on their buttons anymore, but there's a faction in Hong Kong who say they should have a vote, an elected legislature. There are about fifteen people elected to the legislature and they really have no power. But the truth is, the British didn't even allow elections of the first fifteen and the British legislature was entirely appointed, everybody was appointed. The British legislature was entirely appointed, everybody was appointed. The British ruled it much more like a colonial city-state than the Chinese and everybody that I spoke to – no one is complaining that things have gotten worse since China took over. The fact is that the Chinese government, although it's nominally communist, really has an economic reform that's been going on since the days of Deng Xao Peng who was a Mao follower, that has made Hong Kong and the coastal regions boom. Shanghai is booming, the city across the border from Hong Kong, Shenzen, is booming, Old Canton, which is called Guangzhou, is booming. So they may be nominally communist but they're not in reality.

KELLER: This is a good point to change tapes.

Hank, when we left the second tape and took a little break, we'd just talked about the takeover by China of the British protectorate of Hong Kong. You were very active in the various trade associations and so on in Hong Kong. How did you get involved in those things, especially being an ex-patriate?

GOLDSTEIN: Well, Hong Kong is very open to ex-patriates and of course running the second largest cellular telephone network gave me the opportunity. Our company was invited to join the Hong Kong Telecom Association, which was an association of operators of cellular networks, paging operators, and even installers and vendors of fixed line switchboards and that sort of thing. So I was active virtually every year I was there in that organization which was very effective because while I was there, the government regulation of the telecom industry changed quite a bit. They, they being the British, brought in a guy from Australia and created, they called it OFTA, the office of something telecommunications, I can't remember what the "F" was for. He had been in a similar capacity like the FCC in Australia and he was a cone-man FCC. He made a lot of changes, some of them good, some of them not so good. There were four cellular operators by the time he came and he issued six more licenses for a city of 6 ½ million people. Not so good. But the association, as most associations do, had some valid points and he listened and he spoke and he came to the luncheons, so it was an opportunity to get to know him quite well. As an interesting anecdote, I did get to know him quite well and when the government was changing, Governor Patton, Chris Patton, invited certain level executives to have lunch with him before they left, before the handover. Alex Arena was the name of the guy who was the one-man FCC. He was invited and Alex invited my wife and me along with two other couples to be his guests at Chris Patton's lunch table before the handover. That was pretty exciting. Getting back to the association, it was very effective. This brings up something else which is not common at all in the United States. They have no anti-trust laws there, so when I first got out there, one of my competitors called me on the phone and asked if we could have lunch and I said, "Well I'm not sure that's a good idea." He's a Canadian and he said, "This is not the United States, you can have lunch with me." So we had lunch and we never discussed really how much we were going to charge for service fees, but we did discuss the price of phones. I had just come from the United States and what he was telling me was don't do what they do in the United States. You don't have to give away the phones here, people will buy them and he was right. Then, before Alex Arena arrived, with the government's endorsement, the four cellular operators used to meet monthly. Now, it was understood that we wouldn't discuss pricing but we discussed such things as the government housing authority making it difficult for us to get antennas on buildings and we kept a log or minutes, so it was pretty interesting to me. I got over it fairly quickly, but to sit down with your competitors once a month and sort of talk things out. That was another thing. It wasn't truly an association, but... The trading association used to put on an annual telecommunications show, a small show, with vendors, so we did that. Then I also got involved with the Hong Kong Chamber of Commerce and they had a committee that was responsible for looking into telecommunications activities in Hong Kong. The last three years I was there, I think it was three years, I was the chairman of that committee.

KELLER: But they were not involved in cable?

GOLDSTEIN: Well, they weren't involved in cable directly, but there was a cable TV... In the course of my time there, the government awarded a cable television franchise and the winners, two of the partners being two very strong Chinese companies, couldn't get along and the thing never got done. Then the government awarded it again with a fixed wire telephony license and one of the partners who'd been in the first consortium won it this time. The second time they built the cable television system with a fiber optic telephone network on its back. We're seeing convergence all over the world and that's really what is happening there. Of course, that's WHARF cable. WHARF was always active in the trade associations but the Chamber was more of a policy kind of thing and going to the government policy makers, the committee was maybe ten or twelve people from different aspects. The telephone company had a representative, the cable TV company had a representative, I was the cellular representative, well actually there were two cellular operators represented but we'd looked into all kinds of things, internet access and lots of other things. I was fortunate, since I was chairman at the time of the handover, I got invited to all of the festivities. That's how I happened to be at the rainy night affair. It was quite interesting and Hon Kong being ruled by the British, to see ex-patriates in these jobs, or positions, not jobs, was not uncommon. There has been, and maybe this is something that's changed since the Chinese takeover, but there has been more of a, call it a localization, of all of these kinds of things. Even at OFTA, the government FCC body, the headman is now a Hong Kong Chinese. The executive director of the Hong Kong Chamber of Commerce, who for years was a Brit, is now a Hong Kong Chinese. The guy who succeeded me as the chairman of that particular committee is a Hong Kong Chinese.

KELLER: You know, the viewer may wonder why we're spending so much time on other than cable operations at this point and I think there are two very good reasons. Number one, Hank gives us an insight into the international telecommunications situation and also serves as a link between the cable television and telephone and the convergence of telecommunications as a single entity as we're currently seeing both in this country an internationally. I think that for those two reasons, to spend the time going through both the international and the telephony aspect of this has been very profitable.

GOLDSTEIN: Well, as we said earlier, we used to fight with the telephone company to keep them out of our business and now they're fighting us to keep us out of their business.

KELLER: At one time, the telephone companies were in until they were forced out by the Consent Decree and so it's all coming back and when the break up of AT&T and of the Baby Bells occurred we knew at that time that sooner or later they were all going to be back together again.

GOLDSTEIN: And that's what we're seeing worldwide. Everybody's looking for some broadband opportunity for video, data, internet, all in one box in the house.

KELLER: We're finally fulfilling what we've been bragging about since the very early days, it's only taken 30 years to be able to do it.

GOLDSTEIN: Right.

KELLER: Hank, I think this is a good point for us to break and end this thing. We're very appreciative of you spending your time with us.

GOLDSTEIN: Thank you, Jim. For me it's been fun to reminisce. I'd forgotten a lot of the things we talked about.

KELLER: It really is fun. As always, we'll end with the commercial that this interview is part of the Oral and Video History Project of The Hauser Foundation for The National Cable Television Center and Museum. The interviewer was Jim Keller and again, we thank Henry R. "Hank" Goldstein.

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Leonard Goldenson

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Interview Date: Thursday January 17, 2002
Interview Location: Los Angeles, CA
Interviewer: Rebecca Lim
Collection: Hauser Collection

LIM: This is the oral and video history of Leonard Goldenson, who was a visionary in television programming, management and innovation. It's going to be told in the third person by his daughter, Loreen Arbus and also by author, Marvin Wolf, who wrote a book concerning Mr. Goldenson called Beating the Odds. Today we are recording, January 17th, 2002, at Loreen Arbus Productions in Los Angeles, California. This is part of the Gus Hauser Foundation Oral and Video History Program of The Cable Center, located in Denver, Colorado. I am Rebecca Lim. For today's recording, we are going to follow the format: first some questions related to Mr. Goldenson answered by Marvin Wolf, and then we will move on and talk with his daughter, Loreen Arbus about her father's career, as well as her distinguished career in cable. So with that long introduction, let's get right to the questioning. Could you just tell me first, Marvin, a little bit about Mr. Goldenson's background – you know, where he came from, what his roots were?

WOLF: Mr. Goldenson grew up in a small town called Scottdale, Pennsylvania, about 40 miles as the crow flies from Pittsburgh, but a lot further in pace. You couldn't really say it was suburban Pittsburgh. It was a farm town. His parents had a traditional marriage for the time; his father ran a dry goods store, his mother ran the home. He had two sisters and he was something of a prodigy in school. He finished high school at 16, he excelled in sports, although he was a rather diminutive man. He hardened himself, physically, by digging post holes in summers, and taking a job in a steel mill in Pittsburgh, and he entered Harvard without ever taking an exam. He had never taken one in his life.

LIM: So the Pennsylvania background really made a difference to his character, you reckon?

WOLF: I think it did. He grew up during the Depression, watching his father, knowing how people were suffering, taking the time and the interest in his clientele. He carried a lot of those farmers, Mr. Goldenson did, and he carried them for years and years and years. Many times people came to the store and they paid them not in cash, but in kind. They brought eggs, they brought apples in season, they brought livestock, and Leonard used to talk about helping his mother and his sisters out on the back porch canning all this stuff so it wouldn't go to waste.

LIM: So do you think his roots there made a difference in how he operated in his professional career?

WOLF: Absolutely. I think he expected the best from people. He also came along in that time, his life began right at the start of broadcasting, and he remembered going out in the backyard and listening to a crystal radio set that he bought, and just marveling at how this sound was coming out of the air.

LIM: Can you just tell me a little bit about Mr. Goldenson's love of the movies and how he worked at a theater when he was a young man?

WOLF: Sure. His father had interest in the town's two movie theaters. One of them just showed serials and was only open on the weekend, the other was a standard movie theater, and although he had to work in the family store, he used to slip away and go to the theater and he'd watch every movie, and he'd stand near the doorway after the show was out and he'd stop people and he'd ask them, "What did you like about this movie?" And then when that was all through, he'd go see the manager and say, "Why did you get this movie? What made you choose this movie?" So he was interested, even then.

LIM: So tell me how he developed the early part of his career then, after the theater and how he got into Paramount and some of the early bits of his career.

WOLF: He graduated from Harvard Law School at the base of the Great Depression, when there weren't many jobs for many people. Interestingly enough, he had been offered a job in a law firm in Pittsburgh, but he turned it down. He went to New York to try and find his fortune and for six months he walked the pavement looking for a job. Finally, he find a job clerking for a railroad lawyer, a man who knew railroad lawyer, and it was the most boring job that he could ever imagine. One day, one of his Harvard classmates called him up and said, "Paramount is going into receivership," – bankruptcy laws were somewhat different in those days – "and they're looking for lawyers and accountants. Here's a guy you can call." So he went over there and he met with a man named Stephen A. Lynch, and Lynch had been a minor league baseball player and he had come up in the Carolinas and Tennessee and he had acquired an enormous chain of movie theaters, and this chain of movie theaters was picked up by Paramount in the '20s and '30s as they built the company. Now that they were in receivership, they were looking for a way to put the company back together. So, Leonard was hired to go up and straighten out the New England theaters, and what he had to do was learn the business from the ground up. He had to go up there and talk to these old showmen and see how each theater ran, and see where the money was coming from and where it was going, and he had to negotiate, or re-negotiate, leases. He had to concern himself with every aspect of the business. And so he did, and it was a great education for him. He was hanging out with these people, picking their brains, and then every week he'd catch a train down to New York and he'd have a meeting back with Mr. Lynch, in Mr. Lynch's office. He'd send letters, he'd send notices, he sent everything back down to New York, and in this way he became very, very important to putting Paramount back together. When Paramount emerged from bankruptcy, they repaid the creditors a hundred cents on the dollar. There aren't many companies that can say that. He had a role in that. And he was picked by a man by the name of Frank Freeman, Y. Frank Freeman, who was the head of Paramount's theaters. Paramount had about 1,500 theaters, more than any other entity, and Freeman was the head of them in New York, and he picked Leonard to be his right hand man. A couple of years went by and then Freeman went out to run the studio, and he gave Leonard his job. And so, at a very young age, around 30 or 31, Leonard became the biggest booker and buyer of motion pictures in the world.

LIM: So that would have been around '35?

WOLF: '36.

LIM: So what kind of movies? What kind of movies were on in those days?

WOLF: Musicals were big. Romances were big. One of his innovations, very early on, was he realized that they old way of doing business in the movie business was coming to an end. In the old days, the theaters pretty much took whatever the studios gave them, but under the new Paramount, the theater owners and the circuit theater owners, men and women who owned more than one theater, were now their partners. And so Leonard instituted a practice of having these people come out to Hollywood and meet with the producers and tell them what they thought of movies that were in production, what they thought they could do with them or what they thought they couldn't do with them, and so as a result of that, some movies never got made and others did. He had another wonderful idea. He noticed that every movie had a soundtrack, or every movie should have a soundtrack, and people were going around humming this as they walked out of the theaters, so he asked Bonnie Balban, one of his early heroes, the head of Paramount, why couldn't Paramount release a soundtrack record album on vinyl? And after that, every movie at Paramount, and pretty soon every movie at every studio, had a soundtrack, and most of them were released separately on records.

LIM: So it all really ties back to his days of asking people when they came out of the theater what they liked.

WOLF: Yes, and listening and paying attention.

LIM: And he applied it, right, to the practice. So, Marvin, tell me then how Mr. Goldenson transitioned into the television industry from the theater biz.

WOLF: There were two really important events. The first was that in 1939, he went to the World's Fair in Flushing Meadow, New York, and he saw for the first time television, and he was enchanted. He looked at television and he saw the future, and he wanted to get into that. He asked Bonnie Balban to start a television station, and they did, WBKB in Chicago, the second commercial television station in the world, but then the war came along and all of his technicians got drafted, so they mothballed it. There had been a lawsuit just before the war, by a man who owned theaters in Texas, who had sued Paramount and the Texas theaters that were their partners, because he couldn't get first run movies, and they put that lawsuit on the shelf during the war, too. After the war, the suit came out and Tom Clark, the Attorney General of the United States, joined the suit as a plaintiff. At the end of that lawsuit, 1950, the Supreme Court of the United States decided that Paramount, and by implication all the other studios, had been operating as a vertical monopoly and this wasn't allowed. So they told Paramount to get rid of their theaters. At this time Mr. Goldenson was offered the opportunity to remain with Paramount as a vice-president. He elected instead to become the president of a new company that only had theaters. That company was called United Paramount Theaters, and he had to preside over that company with no cash in the till, because the day before the separation, Paramount took all their cash, but from that moment on he was very hot to get into television. Not long after that, an opportunity arose. There was a small, struggling collection of stations called ABC, American Broadcasting, that had been patched together from an earlier radio network that had been started by NBC, the "blue" network. They had five stations, they had eight other affiliates, they had maybe 10 hours of programming a week, all the other programming was local. But Leonard realized that there wasn't going to be another television network come open for sale anytime soon. It was losing a million dollars a year. He bought it from a man named Edward Noble, who was a noted skinflint, the sort of fellow that would take his staff to lunch and then whip out a thousand dollar bill to pay for it, so that someone else had to pay for it.

LIM: He was the lifesaver, right?

WOLF: Yes, his lifesaver came.

LIM: So really, Mr. Goldenson turned out to be the lifesaver for ABC.

WOLF: He did. And ABC wasn't the third network. It was the fourth network. There was NBC, which was the first major broadcasting company, and there was CBS, and then there was the Dumont Network, which was the first network. But the Dumont Network was controlled in part by Paramount, because they owed a great deal of money to Paramount. Leonard Goldenson was not worried about Paramount because he knew that unless you put money into programming it was never going to amount to anything, and he knew that Bonnie Balban, who to him was almost a second father, was never going to put any money into Paramount. He was another skinflint.

LIM: So when he first took the helm and got ABC, when he managed to talk Paramount into buying in...

WOLF: No, you missed something.

LIM: I'm sorry – tell me the transition.

WOLF: United Paramount Theaters became a separate entity January 1, 1951. He immediately opened negotiations to buy ABC. After they were concluded – it was an enormous struggle to get his board of directors to get along with that – but when that was completed, then they had to go through a series of hearings by the Federal Communications Commission. The Federal Communications Commission chose to lump a couple of other issues into the same hearings, and these things dragged on forever, and people attacked Leonard Goldenson from all sides. They said that he was a movie man who was buying this network in an effort to strangle the infant television in its cradle. The movie people said, "Leonard, you're a traitor. Why are you doing this?" He was the man in the middle, but he had a vision. He knew how he was going to do this. Before Leonard Goldenson, television was radio with pictures; it was all live. But he knew that it didn't matter whether it was live or on film – tape hadn't come along yet – people wanted a good show, and he knew that the best shows were made in Hollywood. So his idea was, never mind what the other networks have, "I know all these people in Hollywood. I will convince them to make programs for television." Well, after the FCC allowed the sale to go through, he went out to Hollywood to try to convince them, and they spit on him. They spit on him because they were terrified of what television would do to motion pictures. How can you give it away when we're trying to sell it? They just didn't get it. They didn't get it. His break came when Walt Disney came to him. He knew Walt Disney for a long time, and Walt Disney had had this dream, stupid dream, the bankers didn't get it, for a 5-6 scale amusement park, an amusement park for children, and he wanted to build it in some little bean field out in Anaheim, a place that nobody had ever heard of, but he didn't have any money. Disney was never a major studio in those days, he never had theaters. All their films were animated. It took forever to make a profit from an animated film in those days because they were all hand drawn – they took years to draw them. It took them 14 years to see a profit from Snow White. In order to get the money to build a scale model, Disney hocked his life insurance. He built a scale model and then he went to the banks and the banks said, "No, we don't think so." So, he went to NBC, he went to see General Sarnoff, and explained what he wanted to do, and he asked Sarnoff to guarantee 5 million dollars in loans so he could borrow the money to build his dream, and in return, he told Sarnoff, he'll open his film library – he had 600 animated films – Sarnoff was offended. "Television is a medium of spontaneity. People will never watch films on television." So, he went to Paley at CBS. Paley got rich watching Sarnoff, so in the end, he sent him away too. And finally he came to Leonard, and he didn't even have to ask him what he wanted, because everyone knew by that time, but he had made his little pitch and Leonard said, "Well, first of all, you don't need 5 million dollars, you need 15 million dollars. You've got to build this, you've got to train people, you've got to operate it. We'll give you the 15 million dollars. We'll sign the loan, but I want something from you. I want you to produce an hour a week television program." So that was the deal they made. Oh, one thing more. Leonard was an exhibitor. He knew about concessions. He got the concessions at Disney Land for six years, that was part of the deal, and that broke the boycott. Then he went back out to Hollywood and he had a four and a half hour lunch with Jack Warner and convinced him to put a young person, as it turned out, his son-in-law, Bill Orr, in charge of a new division to make programs for television. And so they came up with Jack Warner presents, or Warner Brothers presents, which in the beginning was three rotating shows, but two of them died, and the one that stayed was, of course, Cheyenne, the start of the Westerns.

LIM: So he basically looked at what was out there and thought about the customer need, or what viewers might want to see and he trusted his gut to fund Disney to do these innovated type programming.

WOLF: That's part of it. There's even more to it. He saw, as very few people did, immediately, the television set in someone's living room is just like a theater. You've got to bring to this theater things that people want to see. What do people want to see? He knew what people wanted to see. He'd been learning what people wanted to see for a long time. He was not the sort of guy that would sit down and write a series, but he was exactly the sort of guy that would listen to someone tell him about the series and say, "Yes, people will want to see that" or "No, they won't." To the very end of his days, he screened pilots, and I can tell you, in his 90s, if Leonard Goldenson didn't like a pilot, it didn't go anywhere.

LIM: So, the same sort of story with the Disney example of "no, no, yes" was a similar thing with "The Fugitive", there was no, no, and then Mr. Goldenson said yes.

WOLF: Yeah, but it was all done within his own shop. He had a relationship with Roy Huggins, that's to say he knew who he was. Roy Huggins was a very, very clever young writer, and he had the strange idea, walking on the beach on New Year's Day, to do a story about a man unjustly convicted. But when he brought this to ABC, he took it to the head of the network at that time, Tom Moore, and Moore started berating him that it was un-American. "What do you mean? He was convicted of murder. How can this guy be the hero?" And they were about basically ready to throw him out when Goldenson spoke up, and he said, "That's the best idea I've heard in a long time." That's how it got on. He wasn't about embarrassing anybody, he was just not letting him leave with that idea.

LIM: So he really went against the naysayers, even in his own company, you know, even people who worked for him.

WOLF: When necessary. When ABC came along, they could reach a very small percentage of the country. They only had five stations that they owned and eight other affiliates. CBS and NBC had upwards of 50 each around that time, and in the interval between when he applied to the FCC and the FCC allowed the purchase to go through, they added more stations. He was way far behind. So he had to do things that nobody else was doing. He decided that since television programming in that era, the early '50s, had grown out of radio and all the big stars had been radio stars – Bob Hope, Jack Benny – that they appealed to people with set tastes, older people. He would go after the younger people; he would give them something that they couldn't get on the other networks, counter-programming. I don't know that he invented counter-programming, but he damn sure showed us what it was.

LIM: And that model has been followed successfully by others throughout the industry.

WOLF: Yes, yes, right. If the other two networks are showing movies, don't show a movie.

LIM: Can you tell me just a little bit – we talked a little bit about the programming innovations, but specifically how would you characterize the top three most fundamental breakthroughs that he helped orchestrate?

WOLF: Well, aside from a lot of trends, like caper shows and Westerns and medical shows, I think a far more fundamental breakthrough was in wresting control of his programming schedule from the advertisers. Once again, television broadcasting grew out of radio, and in radio, broadcasters sold blocks of time to advertisers and the advertisers produced the programs. In those days, if you had a show to pitch, you didn't go to the network, you went to an advertising agency. Goldenson hosted, or ABC hosted the U.S. Steel hour, and that was a variety show, and when it acquired an audience, they took it away and put it on NBC. He realized that they would never, ever be able to control their network until they controlled the schedule. And so he created a whole daytime schedule and he refused to let the advertisers control his schedule. They started making programs; they cut the advertising agencies out of the equation. This was a sea change, fundamental change. It changed television, it gave them the opportunity to put shows on in the order that they wanted to put them on, to take an established show, for example, and put it on at 9:00 in primetime, so that immediately afterwards you could introduce a new show, or perhaps a show that wasn't doing so well, and try to keep as much of that audience. You couldn't do that when the advertisers controlled your schedule, and he saw that very clearly. That's a major programming innovation.

LIM: So, how did the advertisers respond to that? Probably at first it was difficult, but they came around. I mean, he did have a lot of advertiser support.

WOLF: I don't think the problem was so much with the advertisers as it was with the advertising agencies. The agencies, of course, were functioning as production entities, and so they were making money on that. One of the things they did is they got the Congress to pressure the FCC to keep television networks from owning most of the programs that they aired, and so those production entities became larger and more important.

LIM: Let's switch over for a second now and talk a little bit about his perceptions about cable. Cable television when it first came... initially it was really people that couldn't get a signal and then it started building in the bigger cities. How did Mr. Goldenson perceive cable?

WOLF: Well, he embraced it at first because he had so few affiliate stations that anything that could increase the reach of any of those stations was welcome to him, so that if he didn't have a station, say, in Gary, Indiana, or Indianapolis, an affiliate, that they people there could get cable and could get the Chicago station, why, he was all for it. He got to thinking about cable when the other two broadcast networks were saying, "Oh, this is going to take our business away", he realized that if cable was going to fulfill its potential of being a more reliable signal, a better signal, a clearer signal, and remember, television sets were not what they are today, someone was going to be in that business. Well, if someone was going to be in that business, why not them? He actually took a page from the advertising agencies, and from the advertising business, Proctor and Gamble learned very early on that if you created one kind of a soap and it has a possibility of having competition, create your own competition. Make another rival brand and market them both, and maybe somebody else won't get into that. He understood very clearly that cable was going to be a growth industry. Networks were not allowed, in that early time, and probably still aren't, to own the physical facilities for cable. So, what could they do? Their strength lay in programming and knowing what to do. He had a relationship with the head of Hearts, Frank Bennick, Jr., and he went to him and he said, "Why don't we start some cable networks? You guys have content, you have magazines, you know what good stories are, you have an audience. We know how to do this." And out of that came a couple of cable networks: the Arts Network, which later became Arts & Entertainment, and what eventually became Lifetime.

LIM: What about ESPN? Did he have a role in ESPN?

WOLF: He did. ESPN was created over by the Getty people, an oil company, as an investment and it was a little thing in, I believe, Greenwich, Connecticut, and they bought time on a satellite. That was the big deal. Goldenson saw what that could be and he bought a small share in it. I think he bought 10%, if memory serves me. When the opportunity came to get the rest of it from Getty, he jumped. It was an enormous investment at the time, it was 100 million dollars, but well worth it. ESPN very soon became one of the few immediately... in fact, became the most profitable cable network and returned that investment many times over.

LIM: What year do you think that might have been?

WOLF: Late '60s or early '70s, if memory serves me, but I'm not certain.

LIM: So his interest in sports – I mean, the Wide World of Sports that was some extreme groundbreaking there might have set up part of the acceptance of ESPN.

WOLF: Well, I think he saw by then that there was a certain large minority of the audience that really enjoyed looking at sports, even sports that weren't familiar to them. Wide World of Sports proved that. When the people came to him, when Roone Arledge came to him, and said we want to do a show, we want to show events that happened last week in Turkey, sporting events, he thought it was a stupid idea, but he listened, and he realized that Ruen Arledge was not a stupid man. One of his great strengths was in knowing how to pick people, so he said, "We'll try it."

LIM: And so, can you just describe a little bit to me about the evolution, maybe, of Wide World of Sports and then how it segued later into Monday Night Football.

WOLF: Well, it didn't really segue into Monday Night Football, that's a separate program.

LIM: Well, but I mean the sports...

WOLF: Sports came to ABC in a very strange way. They really needed a sporting department, and they didn't have enough people with that ability in hand. They bought a small production company that had been started by a man named Edgar Sharik, and Edgar Sharik came in and essentially became the head of sports for ABC and his principal assistant was Ruen Arledge. Ruen Arledge had the idea one day to create this show, the Wide World of Sports, and to bring the most interesting and the most exciting sports from all over the world, and to do this as a weekly show. The fact that the event had already happened, that the results were already known was kind of off-putting at first until he came to realize that what people were interested in was not always the score. It was also how did it happen, what was this about? So when that idea was tried out, it became a success rather quickly. When it became a success, it emboldened Leonard Goldenson and all of ABC to try to do more in sports. Edgar Sharik really didn't want to be in sports, he wanted to be the head of programming, a job that he got, and when he got that job Ruen Arledge became the head of sports.

LIM: So, Marvin, let's switch over to sports for a minute. There were some major renovations, Wide World of Sports, and then later on, Monday Night Football. Can you just explain a little bit to me about how the evolution of those took place through the leadership of Mr. Goldenson.

WOLF: Leonard had an open door. Anybody could come and talk to him about anything in a way that very few CEOs and very few leaders of large organizations really do. Many of them give lip service, but he really did. So when a young man named Ruen Arledge decided that he had an idea that he wanted to pitch to him, of course he came up with his boss, Edgar Sharik, and they talked about what became the Wide World of Sports. And his notion was that there was a certain large segment of audience, American men, who would watch any kind of sports even if they knew the score. They'd watch a football game, if it was a good football game, and he had the idea to bring these other kinds of sports, which most Americans were not familiar with, to the audience. That was the show. Leonard's first reaction to this was, that's the stupidest thing I ever heard. But he had a gut for who was smart about things. He knew how to pick people, and he knew that Ruen Arledge was a very smart young man. So, it didn't cost that much to try it. He gave him a few weeks to see if it would work, and it did work. Not long after that, Edgar Sharik took over as the head of programming, which was the job he'd wanted all along, and he put Ruen Arledge in charge of sports. ABC was in a different situation with professional sports than CBS and NBC. They did not have long standing relationships with professional football, and long-term contracts, which cost enormous sums of money, had been let. Sunday was pretty much not ABC's game, but Monday night primetime sports, that was different. Goldenson had the notion that he could sell this to Pete Rosell, who was the commissioner of football to do a program in primetime and to turn it into an event, and by doing it on Monday rather than on Sunday, you would get a whole different audience. And once again, Arledge deserves a lot of credit here. His idea was the other networks bring the viewer to the stadium. We're going to bring the stadium to the viewer. We're going to put cameras on people's helmets, we're going to shoot the audience, we're going to see people jumping up and down with joy, or with their heads covered in sorrow. We're going to show them just what they'd see if they went to the stadium, and that became the legend that was Monday Night Football.

LIM: Talk to me a little bit about the technical innovations that were partly born through that sports effort, slo-mo, instant replay, some of the things that were pioneered in just what you're talking about to try to get the audience more involved.

WOLF: Leonard was not a technical guy, but he knew when someone brought him something if it could make the story better, the show better, he could see that in a minute, and so Monday Night Football pioneered a whole bunch of hardware. Around the time that they were doing this, the Japanese were developing an American product that had been designed in California, videotape, and they were developing smaller, lighter videotape cameras. Well, once you had videotape then you could have an instant replay. You could play back over and over again. If you could make a camera smaller and lighter then you could put a camera on the sidelines, a handheld camera. That was another Ruen Arledge idea. So they gave money to Japanese electronics companies to develop specific products for them to try to fulfill that vision. Leonard's role in this was to write the check, to say, "Yes, we can do this. Let's try it." That translated into the Olympics, it translated into every sport, so now you see it everywhere. It completely revolutionized sports. Sports is an enormously profitable enterprise. If it wasn't, why would networks spend billions of dollars for NFL contracts and for NBA contracts.

LIM: So he took what would have been early on called a sort of niche... you called it a large minority, but sort of the niche concept, and really pioneered into what people would want to watch, what they would want to pay for, not just in sports, in other areas like international programming. Do you want to speak to me about that just a bit?

WOLF: Yeah. Leonard came out of the film business, and one of the things that Paramount did, when he was with Paramount, is they had about 200 theaters in Europe and much of Paramount's product, as well as the other studios was exported, and not just to England, but also throughout Europe and in some cases to the Far East, to Hong Kong. And so Leonard decided that if a television set in someone's living room was just no different than a theater, why couldn't some of those television sets be in other countries? And so he created a division of his company called ABC International and he put a young Canadian man named Don Coyle in charge of this. His idea was let's get networks started as partnerships in other countries and we'll then sell them our programming. The problem was he was about 25 years ahead of himself. The problem was that distribution was a problem. There weren't satellites yet. So they started television networks in Central American, in the Mid East, in Europe, but they were never really able to get that off the ground, they never really made any money on it. One of the interesting things about that is he tried to get television in Israel and David Ben-Gurion wouldn't hear of it. "We don't have time for television", he said. Now, he took that same idea a little further. He didn't believe for a minute that Americans had a monopoly on good ideas or good shows. He knew there were some very talented European filmmakers, and Europe, especially in the ten or fifteen years after World War II, was a place where you could make a movie for a lot less than you could make one in the United States, and there were some very talented people, like Carlo Ponti, who were making movies. He believed that you could take a good show that was made in Italy or in France and show it to Americans and they'd watch it. Of course you'd have to dub the sound, and so he was the first person to bring large numbers of films and show them on television, foreign films.

LIM: Could you describe for me the difference in his legacy, Mr. Goldenson's legacy, to his counterparts of the time at CBS and NBC?

WOLF: Well, I think that at the time when they were the leading networks, General Sarnoff had a reputation, he spent an enormous amount of energy burnishing it, created a legend about himself, and he was very much celebrated for his prescience. So much so that during World War II, they made him a Brigadier General and ran something for the Army. You know, he's very proud of that. They only made Paley a colonel and he regretted it his whole life. Paley lived the highlife. He became high society and took credit for everything that happened at CBS, whether he even knew about it or not. He went away for years during the war and even afterwards to be in the Army and serve the country and left Frank Stanton in charge of the company, but when he came back it was his company and his innovation. So he bought the line that he was the boss, it all ought to be his. Everything that happened was his responsibility; he got the credit for it. Well, as a result of that, you saw him in Life Magazine, you saw him in the newspaper society pages, he hung out with the Whitneys and the other social lions. Leonard Goldenson had a really different feel. He tried to tiptoe around the edge of the spotlight and let other people get credit. The result of it was that during his lifetime, his contribution was not really appreciated. He's only been gone two years now, a little over two years, but we already see that his greatest contributions are being recognized. People are seeing that he had a vision that no one else had. He wasn't an opportunist, he wasn't an egoist. He had a vision for broadcasting as a public trust, a sacred duty, and we're seeing now, as history lends a little perspective to it, that his contributions are being more and more recognized. I think that's partly because, number one, he didn't want any publicity when he was around, he was very happy to let other people take credit, and two, as time goes by we see how perishable vanity is as a commodity.

LIM: You said earlier that he knew how to pick people.

WOLF: He did.

LIM: And certainly some of the people that worked under him, Barry Diller, Michael Eisner, some of the huge names in television and cable today, what was the loyalty, where did it come from? Where did the training... I mean, you explain that he let them take credit more than himself for some things, but how did that manifest in his operational style?

WOLF: A couple of ways. First of all, he was starting a network that was going to go after a young audience, so he picked young people. Michael Eisner told me he sent out a hundred resume, he got one response – from ABC, that was the job he took. Here he was, 26 years old, three or four years later, and he's in charge of daytime, all by himself. Goldenson didn't care how old you were. If you had the ability he let you do it. He was looking for talent. He was looking for people who were willing to take chances. Younger people don't know what they're not supposed to be able to do, they very often do that. You can't be young forever, but there was a part of Leonard that was always young, who understood that. At the same time, when an opportunity came for Eisner, and before him, Barry Diller, to make an enormous leap from being a mid level executive at ABC to being the chairman of Paramount, Goldenson was not about to stand in his way. To him, loyalty was a two-way street; it wasn't just loyalty upward, it was loyalty downward. He knew every man in that building, and every woman, he knew everybody in that building that he worked in and he knew them by name. He got on an elevator and if he didn't know your name, he'd say, "You're new. What's your name, what do you do?" And he wouldn't forget. He had a phenomenal memory, but he cared. When I first met him he was 85 years old and even then he could remember the names of all of the theater managers and the names of their wives and the towns that they were in Texas.

LIM: That's pretty impressive. You know, back again to some of the people, what do you think that he tried to convey to them as a manager to them?

WOLF: Show us what you've got.

LIM: Creativity first?

WOLF: Show us what you've got. He had an alter ego, Cy Siegal, at first. Leonard was Mr. Yes, Cy Siegal was Mr. No.

LIM: So if you had to characterize, sort of overall, his management style, it wasn't the management style of the time. It really was a forward...

WOLF: No. It's a people business, he knew it was a people business, show business has always been a people business, and he knew that. He knew that it was show business. Yes, it was big business. There were large sums changing hands, there were enormous stakes, but at the end it was people.

LIM: And in the book that you wrote with him, with the support of over 100 people that you interviewed, what were some of the comments from people about working with him, what they thought of him, kind of in an overview fashion?

WOLF: You know, I didn't find anybody who had a bad word to say about him, and it wasn't because he was in a position to harm their careers, by this time he was already retired. I think the one thing that comes through in all of those interviews is the affection that they held him in. The fact that he allowed them to find out how far they could go, to have the opportunity to do the things that most people only get to dream about. He was very, very good at picking talent. Make mistakes – sure, if you don't make mistakes you don't live. He told me that.

LIM: He had all this affection, no one said a bad word, but from what you described to me before the interview, he had one enemy.

WOLF: It was an enemy he didn't mean to make. One day in about 1965 or '66, a man named Robert Maxwell called him up. Robert Maxwell was a wannabe British publishing baron and he asked Leonard if it was true that ABC owned 6 ½ % of a company called News Limited, and Leonard said that it was true, and he said, "Fine, I'd like to buy it, how much do you want? And he said, "Hold on, wait a minute. Why do you want to buy it?" "Well, because I own 5 ½ % of the company now, and if I have 5 ½ % and another 6 ½ %, then the chairman of the company, Rupert Murdoch, is going to have to let me have a seat on his board, and if I have a seat on his board I can stop him from buying the London Daily Sun, because I want to buy the London Daily Sun." And Leonard said, "Well, then I'm sorry, I can't sell it to you. Rupert Murdoch is a friend of mine. I'm very sorry, goodbye." He had never met Mr. Maxwell, never in his whole life. So then after he hung up, he told his secretary, Marion Ayers, to get Rupert on the phone and he said nothing at all about Robert Maxwell on the phone. He said, "Would it be of any value to you if you guys bought back that 6 ½ % of your company?" He said, "Yes, it would." He said, "Fine, whatever it closes at on the London Exchange today." And that was done. About six months before my book came out, before the book that I wrote with Leonard came out, Beating the Odds, Robert Maxwell bought the publishing company. He spiked the book. He made sure that no pictures got in it, he made sure that there was no promotion done.

LIM: So what was the final outcome?

WOLF: He drowned. I don't think Leonard had anything to do with that.

LIM: No, I didn't think so. Just a bit about his philanthropic efforts – how would you, as an author and historian, what do you think the real contribution was there?

WOLF: You know, a lot of people if you come up to them and say, "I have this good cause", they'll get their checkbook out. Leonard Goldenson got himself out. He founded, co-founded, with the Housmans and his wife, United Cerebral Palsy because there was a need to do it. He spent an enormous amount of his time and energy to found this charity because there was a need for it. He wasn't just going to write a check. He went out and called in all the favors that he had from all the show biz people, the only time he ever did that, and he said, "I want you guys to go on a telethon for me. I want you to help me glamorize this very misunderstood and little known disease (or condition, not a disease) cerebral palsy." And they did. Bob Hope, who had essentially a lifetime contract at NBC and rarely, if ever, appeared on ABC, became not just the titular chairman, but the real chairman of this effort, the telethon effort, and stayed in the job for 40 years, long after anybody could expect him to. He did that out of loyalty to Leonard and he did it because Leonard put himself out. It's one thing to write a check, it's another thing to go to meetings and to call in favors and to twist elbows and to go around the country. That's what Leonard Goldenson did.

LIM: If you could kind of crystallize one favorite moment, "ha-ha" moment in his career, what would you say that would be?

WOLF: I think it was the time when he outsmarted Howard Hughes. Howard Hughes made a tender offer to buy the company in the '60s and he offered so much money per share that the stockholders – he had to take it to the stockholders, he had an obligation to do that – the stockholders had to accept it. They sure as hell didn't want to sell that network to Howard Hughes, or anybody, so they appealed a ruling to a friendly judge, in fact his name was Friendly, who had been a classmate of Leonard's at Harvard, and got the expected ruling, which was if Mr. Hughes wanted to buy that network, he's going to have to personally appear before the FCC and explain how he was qualified to do this. And he did that because he knew that Howard Hughes wasn't going to appear in any courtroom before any group of people before any cameras. He was going to hang out in the shadows. That was Howard Hughes. And that was the end of the threat. I think that was a big "ha-ha".

LIM: That was again a full circle of understanding people.

WOLF: Yes. It's not the answer maybe you would have asked for, but I think it was a big moment.

LIM: You're the historian. Let's talk just a minute about who orchestrated the merger with ABC and Capital City.

WOLF: That was Leonard. For many years he had been trying to find a successor for himself. Elton Rule was the man he thought would do the job, but Elton died, became ill and he died. Fred Pierce he thought might do it, but then Pierce wasn't the right guy. He was coming up on 80 years old, and he was very much aware that ABC dismembered, its stations sold off, was worth a lot more than the book value of ABC if you bought the stock. So he knew they were vulnerable. He chased away the Bass brothers with a phone call to Michael Eisner. He chased away Larry Tisch with a lunch at the Waldorf Astoria, but he knew he couldn't continue to chase people away; he was 80 years old. So he went looking for some kind of a broadcaster that could manage a company in the manner in which broadcasters should manage companies, as a public trust, and he found Tom Murphy at Capital Cities. And he convinced Tom Murphy that his minnow should swallow the ABC whale. The key to that, of course, was Warren Buffett. You had to find someone who would be willing to put up a huge amount of money, not for the sake of making a short-term profit, but for holding a long-term investment, and Leonard Goldenson knew that Tom Murphy and Warren Buffett had a friendship, a relationship.

LIM: And then that eventually led to Capital Cities/ABC, and the Disney...

WOLF: Well, Disney came later.

LIM: Okay, do you want to...?

WOLF: Long after Leonard had retired, Disney became a company, actually became pretty much the company that Leonard had envisioned ABC would become and the laws changed. The Congress changed laws; the FCC repealed certain laws that made it possible for a production entity like Disney to own a broadcasting network. When ABC was acquired by Disney, I think Leonard saw that as a fruition of his dream. He finally had a company that could do everything under one roof.

LIM: So I've asked you lots and lots of questions. Is there anything that I didn't ask that you feel would be important as part of this oral video history?

WOLF: Yeah, one other thing. All of these executives that Leonard Goldenson recruited over the years and promoted and groomed, this is pretty much a who's who of the television and cable industry today. That's another set of his legacy. They saw how he did things and they did them. Rupert Murdoch has told many people that Leonard Goldenson was his guru, his model. He was able to do internationally what Leonard wanted to do but was not able to do because there wasn't enough technology to do it.

LIM: So in summary, what would you say is his largest contribution to the industry besides the people that you mentioned, or overall what would you say would be...?

WOLF: Leonard Goldenson held a shotgun and forced movies and television to get married.

LIM: Okay. Thank you.

LIM: And now we continue the oral and video history of Mr. Leonard Goldenson with his daughter, Loreen ARBUS:. Loreen, let's just start off – what's your favorite memory of your father? What's the best thing about your dad?

ARBUS: Oh, I have so many wonderful memories of my father. He was an extraordinary man, and an extraordinarily wonderful father. Quality time, not a lot of time, but quality time always. To single out and have one memory, I don't know that I could do that, but I always think in terms of how he was with other people and I was always so proud, and I think hopefully, hopefully, it shows in my mode in going through life, very influenced by his style. He was so gracious to people, so lovely, and so unself-involved. He always was interested in what other people had to say and he never talked about himself. It took me years to convince him to do the book, to write the book Beating the Odds, and then I was so fortunate to be able to recommend a writer that he enjoyed working with, but getting him to talk about himself was no small task for me. When we would ride in an elevator in the high-rise building that was ABC at the time, in New York, he always would greet people when they came in the elevator. He knew everyone's name, and if he didn't, he went out of his way to not only ask them their name but what their experiences in life were, and years later he would ask, "Now, how's your daughter?" and know the name. It was amazing the interest that he took, and genuine interest. He was always a small town boy.

LIM: That's great. He was quite different from his contemporaries of the time.

ARBUS: Oh, yes.

LIM: In the way he was perceived. Can you describe that?

ARBUS: The way he was perceived and his style of life. He drove a car – always drove his car himself, never had a chauffeur. He always traveled tourist, the executives at ABC oftentimes, not knowing that, if they were on the same plane had a very rude shock to their systems when they would emerge from the plane to find, and they would be up front coming out of first class, to find that my father was in the tourist... flying coach. And he never, never... to say he was not flashy is the understatement of the century. He was extremely quiet in his personal style, completely. And the other part of the question that you asked was?

LIM: Just how did people that he worked with perceive him?

ARBUS: So gracious. His style was that it was an open door policy, always. Never close the door, and it was the same for me as a child. I mean, you know, even though Saturday and Sunday afternoons he was watching the game and going through piles and piles of work, if I'd come in he'd say, "Would you like to talk with me, Loreen?" or "Is there something on your mind? Come on in, watch the game with me." I didn't like sports at all, but just to sit and be in his company was wonderful.

LIM: And kind of back to my earlier question, he was lesser known than his counterparts. That was the other part.

ARBUS: Ah, yes. That was the other part of the question, right.

LIM: Why did that come about that way? How do you characterize that?

ARBUS: He always put everyone else in the Limelight. Celebrities and stars, that was and is what celebrities are and should be about; they are on camera, they do the interviews, they are the personalities, they promote the product, and he was the person always behind the scenes. But he was the same way as far as the executives and people he interacted with in his career. He was so self-effacing, and he believed that it wasn't important what he had to say, but rather to do what needed to be done, and support others so they would feel good and feel that they had a great endorsement and support, and also, I think, in no small part, because his lifestyle was such a modest one. He was just not interested in the material accoutrements that go with the kind of position he had in life, and the money that certainly he made, and he took much less money actually – made much, much less money by his choice – than certainly his successors and his contemporaries chose to make. A good example, I think, of this, might be the extraordinary art collection that was amassed with his interest and wonderful eye in the course of many, many years, and hung at ABC; he never considered it his collection. It was what went to Cap Cities when the sale was made, when he stepped down, and it really was his art collection. It was an amazing art collection, but he never looked at it that way.

LIM: So he also transferred that love of people to a lot of philanthropic work.

ARBUS: Oh, yes, and he had a genuine interest in science and in medicine. He made, with my mother, what was the largest gift ever made in the history of Harvard, to the Harvard Medical School. It was at the time the 7th largest gift in the history of the United States, in terms of education, and in general, but his reason for doing that was several fold. Number one, he had a great debt of gratitude. He always felt toward Harvard, Harvard gave him connections and confidence, and a kind of a stature to be able to be that small town boy credentialized, as he then found that many doors opened to him as a result of that. Additionally, he had always such a great interest in science and in medicine, and in breakthroughs that would help people to improve their conditions in life, whether psychologically or physically, and he felt so importantly about really trying to make this world a better place, and so he stayed very, very abreast of what developments were occurring across the board. Not only in cerebral palsy, and he, with my mother and the Housemans, did start what is today the third largest health agency in the world, and one of the ones that has the greatest return in terms of the monies raised that go right back out, and this was very, very important to him, that it was, as with everything, not important, and singularly critical to him that money be put into the program, the projects, into the research, and not into people's pockets, and that was one of the great contributions, I think, along the way that he made as far as cerebral palsy was concerned. The building that is named after my parents at Harvard is dedicated to the study of the brain, and of course the study of the brain is the study of everything that is human because the brain is what effects us altogether, inside and out, top to bottom.

LIM: He also did a lot for access for disabled people.

ARBUS: Yes.

LIM: In terms of parking spaces, closed captioning, handicapped access, these kinds of things that were very much ahead of their time, or there wasn't anybody else that was particularly a champion like he was at that time. Could you just describe that a little bit further, because that must have been back to his love of people doing things for themselves and their self-esteem and the access.

ARBUS: Well, I came across, in going through a lot of papers in the year after my father's passing, a decree from the Senate that was a recognition of the contributions that my parents made in terms of the innovations and laws that were passed that have made such a huge difference in the lives of the disabled in America. Now, it is my mother who was the unsung heroine, to a very large degree. Many, many of the innovations that occurred and the laws that were passed were her ideas, but my father went to Congress and went and took my mother to NASA after the first man landed on the moon, or after we landed on the moon the first time, my mother was very indignant, very angry. Everybody else was very thrilled and exhilarated watching this amazing event occur, and my mother said, "But what are they doing for people on earth, and all this money is being spent. Where is the application of all this technology and all of these developments to people on earth?" And the long and the short of it is, NASA condescended to have a half hour meeting to appease, in essence, my mother and my father's efforts to set up the meeting, and it turned into a day, another day, another day, and ultimately the technological innovations – as an example, the light-weight materials that were created, invented, to take man to the moon are now realized in incredibly light-weight wheelchairs and remote control of human bodies through technological, the suits that astronauts wear, and so on, these have had an extraordinary application for the disabled. The Disabilities Act – my parents were instrumental in the passing of the Disabilities Act, and way prior to that, legislation was passed in this country mandating that every public building have parking spaces that are handicap accessible, that the telephone booths be lowered so that they are wheelchair accessible public telephones, that public transportation be wheelchair accessible, buses and so on and so forth. The list is very long of the innovations.

LIM: Someone from the television industry, and cable industry, who took that kind of action is pretty remarkable and rare.

ARBUS: Yes.

LIM: Tell me a little bit about his interest in the cable industry. In the early days of cable, a lot of people thought it would kill television and vice versa. So, we heard a lot from Marvin about how he bridged the movie industry with the television industry, how did he bridge the cable industry?

ARBUS: My father never, never saw any innovations that occurred as being competitive and never viewed the possibility, as most people did – I think the majority of people have done throughout time and certainly modern history – as a threat to the very wellbeing of the businesses that they have been in. Each time a new innovation has occurred, and new opportunities have... my father has seen the innovations as opportunities, so rather than seeing cable or home video or other innovations as threatening, he saw opportunities to embrace and expand and create synergy.

LIM: And you have a very distinguished career in cable as well.

ARBUS: I love the medium, and of course, the medium, that word understates what it is, it is so extensive, the medium and the product that comes through that medium.

LIM: But as a programming exec at Showtime and also American Health Network, that evolved into Lifetime, how did you use some of the lessons learned from your father in programming innovation?

ARBUS: Well, my father always said to me, "Loreen, I do not believe in nepotism. If you would like you can have an opportunity for a short period of time to train at ABC and be an executive in training, but you must go out and make it on your own." By the same token, he always said, "Do not expect any money from me. You must make your own way and your own career and your own livelihood altogether. If I can support you in any ways other than financially, I'm happy to do that, in terms of some introductions, but that's it. You're on your own." And when I left ABC, where I did go intern for a short period of time, I had two offers. One was to go with an established very, very large station group to head up the overall head of programming for a very, very significant amount of money, and the other was for very little money with a very little title, comparatively speaking, to a company that – the only way that I could explain who we were was to say who our competition was, because everybody had heard of the competition, more people had heard of the competition, which was Home Box Office. So I would say, and this was at the beginning of Showtime, while we are like Avis... "We are... and have you heard of Home Box Office? This is who we are." But I think my father's sense of adventure and of pioneering and of going into the unknown and unchartered waters was something that I truly identified with, and when my lawyer at the time said, "There is nothing to negotiate, obviously, in terms of the choice between these two companies." I said, "No, I want..." And he said, "I'll do what you say, but..." Because I saw there were no rules. It was just outlaw territory and you make your own rules, you make your own way. For me to walk into a job where there was already a track record, where there were already ways of doing things, no, no, no. To go somewhere new, start-up and begin, which we did with Showtime and then again with Cable Health Network, which became ultimately Lifetime, was just... it was so exciting.

LIM: And the Cable Health Network, I mean, you were there for the start-up.

ARBUS: Yes.

LIM: What was that like?

ARBUS: Well, we in three months put together a program slate. We had to program 24 hours, we had virtually no money, and the credit line of $50 million dollars never existed, we didn't know that. It was so small, I was told that the programming cost had to average $7,500 dollars a half hour, and that meant that the acquisitions had to be for a few hundred so I could get budgets of programming up to maybe 10, 12, 15 thousand dollars a half hour, juggling, juggling, juggling, 24 hours a day, of programming. That was not an easy feat, but the bigger problem was that we only had three months to do it in and we had no staff, no programming person, nothing there and never did, and trying to negotiate all the deals, and then eventually a contracts person came in way after the fact and kind of did some paper and cleaned up some things, but it was quite a challenge. I don't think it's the right way to do things. One has to plan and really allow time and really do your research and work a lot more carefully than... you know, it was an outrageous experience. We were renegades. There was an energy like you could never believe in what we were doing at that time, and there was an appetite and a market for what we were offering in the way of health programming. The problem was we did not have the money to promote and market what we had, what we were doing, and that, I think, was a great missed opportunity, and it was a great idea to program 24 hours of health. And of course, the Discovery Networks have long since and substantially proven that the market and appetite is there for reality programming that is for the betterment of us.

LIM: It evolved eventually into Lifetime, which is now, today, 2002, one of the highest rated cable networks targeted towards women.

ARBUS: Indeed.

LIM: You, as a woman, manager, visionary, thoughtful person in the cable industry, how do you think women's roles have been in the industry through the early '80s into today?

ARBUS: I think, of course, a lot is cyclical. For 25 years, and this is our 25th year, a very close friend and I have hosted a luncheon where we have had 25, more or less, different women every month come to lunch, women who are established, not starting out in their careers, and it's really been quite an insight looking at what has been the evolution. We've had 10,000 women to lunch in 25 years. We've begun doing this now in New York in the last year, and we see there are times where women are doing much better, and now I think it's a very difficult time again for women, because the jobs and the reorganizing and acquisitions and compression, in terms of companies and streamlining and downsizing, it's very difficult and minorities and women are still far more expendable in the scheme of things. But it is cable that gave and has always, historically, given the opportunities to women. Now some of the newer networks, UPN and WB, have, but you look at ABC, NBC, and CBS, there's never yet been a woman head of the three commercial networks. Fox had very briefly Lucy Salhany. Cable has given women and minorities the opportunities that never otherwise would have existed for us.

LIM: That also ties back to your father. I mean, he was the first to put a woman on a newscast.

ARBUS: The first primetime anchor ever in the history of television, woman anchor, was Barbara Walters on ABC. She was also the first million dollar baby, and the first series ever to be hosted by or to star a minority, Sammy Davis, Jr., was on ABC. My father's personal hero was Jackie Robinson, of all the people in the world that he met, and he met everybody in the world in power in almost any country, and he traveled extensively where he went, every continent in this world, but I think his single greatest hero was Jackie Robinson. Which wasn't exactly the question that you asked.

LIM: No, that's fine. What did he not accomplish that he wanted to accomplish?

ARBUS: Well, on my father's 90th birthday I went to Florida to celebrate with him, and I said to him, "Dad, I know you never like to look back, not to mention you don't like to talk about yourself at all, but I've got to ask you something and I insist, and I'm not leaving until I have an answer, what would you like to have done that you didn't get to do, and if you were in the business today, what would it be that you would be doing?" And he said, "I'll tell you exactly. With the fractioning of the audience, and the difficulty in ultimately being able to finance programming because you have a diminishing core audience in terms of the size and concentration of audience with so many options between home video and the internet, and so on and so forth, for me the challenge would have been to find ways in which we could break through and bring back and create a large enough, sizable enough audience with programming, and I would have loved to have explored the internet and to have been able to find the synergy between the internet and the network." And I think that was probably his single greatest gift and contribution to the industry. There were so many innovations that took place under his watch, more than, probably in my very objective mind, any other media mogul or leader in the world at any point in time. I think the single greatest number of contributions occurred under my father's watch, and through his support and in his encouragement of others, and listening to them and giving them the chance to go forward and innovate. But I think his greatest personal contribution was seeing and understanding and embracing the synergy of media. He was involved in and loved passionately and saw the opportunities and brought together the worlds of theater, of music, of course of television, of cable, of home video. He saw the global playground in a way that was years, decades, ahead of his time. There was no area... publishing, magazines, newspapers, books, every aspect of the media was part of and incorporated into what it was that he did, the company that he built.

LIM: So you told me earlier you thought he even orchestrated the timing of his passing. Can you kind of elaborate on what you meant?

ARBUS: Yes. My father passed away three days before the millennium and I learned of his passing – I was in Argentina, and I was not able to get on a plane to come back for his funeral nor for the, at the very end to be there. And I had a lot of time, being at one of the furthest outreaches of civilization, being in Argentina at that time, and literally unable to fly out of the country, and I realized that my father had chosen to pass away before the millennium. He loved life so much, he loved people, he loved his work, he loved what he did, he loved his family, but he felt that he could not continue to make a contribution. In the last year his health had been failing so significantly and he had held on and held on in those last few years as his health went down, and in his 90th year he chose not to enter the millennium and he waited until three days before the millennium, because he would not be on this earth if he could not make a contribution.

LIM: But, as you said, he made so many across his life. With regard to cable what do you think he would be most remembered for?

ARBUS: Well, in terms of cable, I suppose... he saw cable as another means of distribution and a source of product. He saw the possibilities of producing for cable and cable programming airing on network television, and network television programming airing on cable, and he saw the ownership possibilities not being mutually exclusive. For him, the concept was so big that these two giant media, for most people were separate, he saw the union, the possibilities of coming together.

LIM: So Loreen, we talked about some of the firsts in news, the gavel to gavel coverage of the McCarthy hearings: that was something also orchestrated by your father. There are so many things that could go on the list, but what do you think his philosophy, if you will, or his view on the media, if you could summarize it, what would that be?

ARBUS: Well, I think in a way, my father was so innovative because for him rules were made to be broken if it made sense to break them, and what made sense to him was to go with his gut. He always went with his gut, and in terms of rules being broken, CBS is always credited with breaking the McCarthy era by airing the horrendous proceedings of the McCarthy trials, it was in fact – a little known fact – it was ABC alone that carried the McCarthy trials gavel to gavel the entire time. My father never saw the technology as more as the means to the end. When we talk about cable, cable was a technological means for the delivery and the expansion of the possibilities of the delivery of programming, and for him that is where the innovation was, in the programming. In going with his gut, in responding to what people wanted to see or in identifying for people what they might want to see, and it was never for him a matter of what he liked or disliked as far as his personal taste. For him it was always, yes, that is something that I think will be, or I believe will interest people, and he is, as someone has said, they used that term, he was always the man with the golden gut.

LIM: So what was TV to your father?

ARBUS: He loved the medium, and I think one of the greatest common denominators of people who are enormously successful and who have a sense of wellbeing and enjoyment in their lives, is that they have pursued with passion that which they want to do, that which they love, and my father was a truly passionate man. He loved the medium. He lived and breathed it, until his dying day, literally, he wanted to know the ratings, he wanted to watch all the new pilots, he constantly was changing channels. He had three television sets, minimally three television sets on simultaneously, read the newspapers, read the magazines, was always interested in the great wide world beyond, and what we were communicating, and communications for him was the passion in his life.

LIM: And that passion – he quoted before, he said, "After all, it's pictures on a screen."

ARBUS: "After all, it's pictures on a screen." And I think that he felt that power of the medium, the most powerful too, and the single most important contribution that ever has been made in the last millennium, is in the world of communications, and I think he felt always a kind of humility and a gratitude that he was able to be a part – and he never would say – but I think, the most significant part of that signature of the millennium, this last millennium, which is communications.

LIM: Well, thank you so much for your interview today.

ARBUS: Thank you.

LIM: This has been the oral and video history of Leonard Goldenson, one of the greats in television and cable history, and on behalf of The Cable Center, I thank you for your time today, January 17th, 2002. We also thank the efforts from Marvin Wolf, who is the author of the book called Beating the Odds, co-written with Mr. Leonard Goldenson. This is a part of the Hauser Foundation Oral and Video History Program of The Cable Center in Denver. I'm Rebecca Lim. Thank you very much.

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Robert and Richard Gessner

In Memoriam

Massillon Cable TV (MCTV) founder Richard (Dick) Winfield Gessner, died at his home in Massillon, Ohio, on July 18. He was 90 years old.

Article Links
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Interview Date: Monday May 30, 2011
Interview Location: Denver, CO USA
Interviewer: Brian Kenny
Collection: Cable Center Collection
Note: Interview was conducted with Robert and Richard Gessner

 

BRIAN:      Today is Thursday, June 2, 2011 and we are here at The Cable Center in Denver, Colorado with Richard Gessner, founder and chairman of Massillon Cable Television and Robert Gessner, president of Massillon cable TV.  I wanted to start with the first question to you Richard. How did you become interested in cable television?

RICHARD:      Well, I worked my up to broadcast sales manager for a television station in Utica, New York. I was general manager also of the radio station in the same market. It was a single station market, which means that I got all the business to sell advertising.

ROBERT:      Single station market.

RICHARD:      Oh, single station market. I looked around and I said “Boy, if somebody ever built a cable company here, they’re going to steal my audience. So, if anybody’s going to build one, let it be us.” So I went to the owner and he said, “Yes. Sounds good to me.” I said I also want to get 10% of each franchise as I get them. Which is what I did and I think that was probably one of the best things I did.

BRIAN:      In about what year was that?

RICHARD:     That would be around 1962, something like that.

BRIAN:     Bob, how long have you been involved in the industry and were you always interested in getting involved in the family business?

ROBERT:     Well, my official start date with Massillon Cable TV was in 1979. So, I was 32, 33. I have to say I was probably still in high school when I told my father I’d like to come back. I’d like to work in the family business. At the time, there really wasn’t anything for me to do. I did some warehouse kind of work. It was really high school days. Off to college and a couple of years after college, I was working for a large insurance company and had literally just moved to Detroit, called my father to say that my wife and I had just purchased our first house. And I can really remember clearly, he said “How soon can you sell it? Because it’s time to come home and work in the company now.” So, within a couple of months, sold the house and came back at home. Been there ever since.

BRIAN:     Great. These questions here, I’d like to throw out to both of you. Were there any memorable people that you worked with in the early days of the business?

RICHARD:      I’ll defer to you.

ROBERT:     I really can’t say. I don’t know.

BRIAN:     Well, you mentioned earlier that you had visits from Bill Daniels.

RICHARD:     Bill Daniels had a jet plane. And he would to Denver from New York City ever once in a while. The price of gasoline for a jet airplane was a lot more in New York City than it was in my market. So he would stop off and see me and have his jet filled with the cheaper fuel and we’d go out and have lunch together. So we were good friends. I used to go to his house all the time. So Bill Daniels was a great guy.

ROBERT:      You know, I have to say there are so many memorable and colorful characters in the cable industry, that it’s hard to say which are memorable but as I think about it, I think most of my memorable characters are probably memorable to me because I was in scraps with them rather than as co-workers or buddies. We had some run-ins with TCI so I shouldn’t even say who they were. That we were sort of in Dutch with and had some really royal battles with and the same thing with some of the programming networks. I know Chuck Bratches? and George Bodenheimer at ESPN, we had some monumental struggles there. We’ve had our fights with Fox and so forth. I like to think that we have respect for one another but I’d say they are my memorable characters but they are in my memory because we had tough times not good times together.

But that’s probably indicative of the cable industry as it’s changed.

BRIAN:     I’ve seen some of those articles, that you were quoted as it was all about the affiliate fees. Subscriber fees and such.

ROBERT:     That’s correct.

BRIAN:      Since we talked earlier when we had our tour about the Barco’s. Can you talk about your relationship since we’re the Barco Library here at the Cable Center? Just talk about your connections with Yolanda Barco.

ROBERT:     I met Yolanda a couple of times because of their system in Meadville is only 50-60 miles from ours. It is interesting of course that they were Pennsylvania so they really weren’t in our Ohio Association nor were we in Pennsylvania. I do remember her as being a highly respected and very intelligent woman. Very tough and even into the 70s and 80s, it was still a man’s world in the cable industry. You didn’t see a lot of women in system roles at that time or at the higher ranks of the programmer roles. So she was a very well respected lady.

BRIAN:     What have been some of the challenges of running a smaller cable company? I realize that Massillon is not really that small, it’s got 45,000 subscribers.

RICHARD:     Getting enough money to do it. I can remember ordering a tower but I didn’t have any money at all. I ordered it, sold stock and got to build that tower. I felt relieved. Although I’m not so sure as I think back because the payroll is always more than the bank deposit. We kept going anyway. I can remember, this might not be an answer to your question but it is something that comes to mind. When a customer came in... when we hooked somebody up, it would be $7.50 for the installation plus the first month’s rent which was $3.95. I can remember we worked the first month and we got about 20 customers and one of them came in and paid for the second month. Oh, thank goodness this thing is going to work.

ROBERT:     It is kind of interesting thinking back but as we’ve been talking about the history of the company in the last couple of days, some of the challenges have remained unchanged. One of the most difficult times in the company’s history before I was even really aware of; it was the complete failure of the electronics. We were trying to be first, I can’t say we because I wasn’t involved, the company was trying to be the first transistorized system in the mid-1960s. It completely crapped out in the first freezing weather. All the equipment taken out and replaced with tube type of amplifiers that worked for many, many years. That same sort of thing still kind of plagues a smaller cable operator in that we have to rely on our suppliers. We have rely on their word rely that what they’re selling us is going to work because we’re not large enough to have a research and development center. We’re not large enough to have consulting engineers and really do these deep dives into the technology. So instead you take something of a leap of faith, run some equipment and if it doesn’t work, you find a way to make it work. We had the same thing happen; in 2008 we were one of the first systems to become all digital, no analog. We were the first company to roll out a specifically made ETA box and it had some of those same growing pains. So that sort of thing doesn’t change. You roll things out and you find ways to make them work.

One of the challenges when you do that in a small system is you don’t have a test bed, so you take somebody like Time Warner Cable when they launched their full service network in Orlando, it was 4,000 out of maybe 10 million customers. Very small number. When we roll the dice on our new technology or on our new marketing program or anything new, we have to take that gamble with 100% of our customers. So it’s a little bit more difficult, leap of faith. But at the same time, I think there are some blessings to being a smaller system and one of those is we’re flying below the radar most of the time and what happens in Washington, and the FCC doesn’t really affect us quite as much. I don’t know if that is because we are too small to care or if we are so local, we’re so focused on doing what’s right for our customers that we don’t run into those same problems. Perception problem.

BRIAN:     So you think that’s to your advantage?

RICHARD:      Sure, yes, a blessing and a curse, to be in a medium sized system. One of the good things, we have a 128 employees the last time we counted and we had 56 trucks on the road and a group of employees that are just second to none.  We have a dispatcher, all of our trucks have computers and are dispatched as needed, regardless of where they by keyboard.

ROBERT:     That’s one of the interesting [things]. You keep referring to us as a small system and I guess we are. I would say we’re tweeners. We’re the largest of the small and the smallest of the large. And that does give us, I think, something of a unique advantage over larger and smaller systems. We’re large enough that we can afford to have, like now, a terrific crop of network engineers who really like a challenge and like being innovative and creative, but we’re small enough that we can focus on where we want. So not a lot of hierarchy or bureaucracy. Never had a budget for anything in the whole company. We just say “Got the money? Yup. Good idea. Let’s do it.”  In fact, I think this is one of the best stories about our employees. I was out at CableLabs summer conference a couple of summers ago and was talking about some new proactive maintenance tools that we developed to reduce inbound service calls to our call center and outbound truck rolls. After I discussed that for a while for a group, somebody from CableLabs came to me and said “Come with me, I want to show you something.” Took me into the exhibit hall and here was a Comcast technician who took me through a proactive maintenance tool beta demonstration and I was kind of laughing the whole time because it was our system. We had exactly the same stuff and when he was all finished, I said “That’s really good.” I said “Where is this in use?”  He said “It’s Beta.” I said “Six months we’ve been working it in our system. You’ll really like this.”  It had been made entirely in-house by our own guys and we knew it worked. We didn’t have to rely on anyone else to help us with it. So those are the challenges there for a small operator. Basically to gain the respect from your larger contemporaries. I think that’s a difficulty. It’s certainly difficult in terms of prices, contract negotiations and that sort of thing, but the ability to really focus our resources on the consumer at the end. Not having to worry about the ivory tower in a distant town somewhere is a great benefit to us. So there’s a balance there.

RICHARD:      I think for a smaller system operator, keeping your employees happy is extremely necessary. In fact we pay for our employees’ kids’ college after they’ve been with us for five years. All they do is submit to us a successfully completed semester or quarter and we give them 80% of whatever that is. The only reason we do only 80% is, we don’t want somebody to go in and say I want 100% and I’m going to some Harvard.

ROBERT:     They need some skin in the game to keep them serious about [it].

RICHARD:     It really helps. We’re always sending 2 or 3 kids to college.

BRIAN:     That’s amazing. So let’s continue in that vein. The company seems very active in the community as well and on the tour we talked a little bit about local origination and things like that. Elaborate on that just a little bit.

ROBERT:     It’s probably one of our… I’ll toss it back to you in a second… we have, I think, the capstone of one of our projects in our   Massillon system. It is a full blown digital television studio in our local high school that is operated and staffed by students. It’s a vocational course. They produce 100s of hours of programming every year. It’s very professionally done. They have their own full time channel on the system. They sell advertising. They create the ads. They’re the on camera talent as well as behind the scenes. So they really are getting a full blown education in new media or television media and it started in 1967, 1968 with my father trying to overcome a franchising obstacle that had been put in the way during the initial franchise efforts. Tell about that.

RICHARD:     They said that a cable company couldn’t originate programming. I said “What do you mean that I can’t?” Said “I can’t? Here’s what I’ll do then, I’ll have the kids originate the programming and I’ll help them.” Which is what we did. I went to the Timkin? Company and I got a grant to buy equipment, cameras, the works. Built a studio in the school for the kids and they’ve been running that thing now ever since…what is it 1968, probably.

ROBERT:      44 years.

RICHARD:     Some of them graduated from school and go right into radio stations.

ROBERT:     They do a great job. Then again, We were talking about this…the small town aspect of this is one of the first students in that program now works in the school district and is charge of the program. His son works for us in our call center. He’s a great young man to have for us. So it’s very much a small town atmosphere but also a very innovative program that overcame an obstacle where the local radio station and newspaper and movie theaters were afraid that a cable company, an unknown, was going to change their world to significantly to compete.

RICHARD:     So it’s been fun. It really has. And if somebody told me I had to pick some kind of career, I’d pick what I did. It’s been fun.

BRIAN:     Sounds good. I’ve got a very generic question here. It says what are some of the memorable moments in your cable career? Are there a couple that stand out to you? Obviously you’ve hit some highlights here but any others?

RICHARD:     I’m thinking but I’m not thinking very well.  (Laughter)

ROBERT:     I have to say I always think that the most memorable thing in your career is probably the next thing. As I think about the stuff that I must have been tremendously excited about - it must have been memorable when we put in that first earth station and then put in the first simulstat station and when we were addressable and then we were digital and we launched cable modems and phones and now it’s IP Video. It goes on and on. I talked about some of the memorable moments were an overbuild battle in court with TCI. I still have reams of papers about that stuff. It was a huge thing, but there’s always…there’s so many exciting things coming toward us in the future. We’re just launching home security and broadbase home security. Those are some really memorable things we’re doing there. The push to be the first all-digital systems using DTA’s [digital television adapter], very memorable times and then you think but there is IPTV coming up. We’re starting to build the foundation for that in our system so there is always kind of looking at those things and saying “Well, those things are memorable but boy, what’s coming up is going to be even more memorable.” It’s going to be, I think, continue to be an exciting industry.

RICHARD:     I’ll tell you something. It reminds me of when we were first getting started. My wife was the only one on the payroll other than me. I had an interview with a young gal, by the name of Betty Ann; it was in 1965 for a job. After we had a successful meeting, I said “You can start Monday.” She said “I have to be perfectly truthful with you - I’m only going to me here for the summer.” I said “Well, come on. Let’s see if we can get along anyway until I can find someone else.” She just retired after 42 years and gave me a card that said “It’s been a long, long summer.” (Laughter)

BRIAN:     That’s wonderful. I guess related to what you were talking about looking to the future. We look the other way... did you ever thing that cable would evolve kind of the way it has. Did you ever think that you would be in the phone business or obviously the internet business or other…?

ROBERT:     I think I heard that question, I think by definition that evolution is such a slow process that is almost imperceptible. So at what point, certainly not when I started in 1979, I thought that it was going to be a revolution to have a computer system, to have HBO, WTBS and WROR by satellite. That was revolutionary but as we evolved it seemed like we could always look a few years out and see the next generation of our technology. To think that in 1990, we were thinking fiber and digital but we weren’t thinking internet. By ’94 we were internet and maybe phone and now it’s something beyond that. So I can’t say that I’m that much of a visionary to say that 10 years before we were in the phone business, I was thinking about the phone. It is constant marvel that there is so many smart people in this industry that keep thinking of new ways. We kept talking about we were going to exhaust our spectrum but we found a way around it. And now we’re going find a way past the huge demand right now for IP bandwidth for streaming video. We’ll find ways to work with Netflix and we’ll find ways to work with Over the Top and IP wireless and all the pads and pods and phone apps that our coming our way now. I think we’ll continue to evolve.

RICHARD:     Another thing is, Massillon is a great football city. It’s one of the top ones in the United States. It’s where Brown got started etc. I think when we built that channel and put football on there with the kids doing it live, it certainly helped the applications. You just have to do things that people would like. And that’s what we do.

BRIAN:     Here’s a really large question but what would you say cable’s legacy is? How has cable impacted the world?

RICHARD:     That is a big one.

ROBERT:     I’ll split that one in half and I’ll say our world versus the world. In terms of our world, I think that legacy of our company is as he said 150 families with good jobs and well educated children who are going to move forward in the world in a community that has I guess has been the beneficiary of philanthropy and a concern from a local company continuing to be in business.  That’s a very important legacy in our little corner of the world. And I’m grateful virtually everyday that we stopped entertaining brokers and stopped entertaining offers some years ago and said we’re a family business and we’re going to be a family business for a long, long time and we make our corner of the world a better place. So that’s our legacy and I think that’s important.

In terms of the world, wow, the cable industry has left such a rich legacy already of the colorful characters who are enshrined here, the advance of technology, certainly the impact we’ve had on worldwide communications with fiber and coax design and internet and voice over IP phone, and so on. We built the satellite industry and think of the networks. Things like CNN and ESPN, that I’m not sure that they would agree but they did it with us not in spite of us. They didn’t do it for us, we did it together. Very often I think they somehow did it without our assistance but there’s that whole legacy of the change of television. If you think of how those networks changed and we’re going to continue that battle of retransmission consent and of course in the future. But the legacy of cable is, we’re not TV. I always joke with people that it’s just TV. It’s not even worthy of a word. It’s just two letters. And you think how has it been characterized in the past? Well, it’s the boob tube, the idiot box, the vast wasteland. That was, that’s the history of cable television, but the critics of it…if you look at how television or cable television has advanced that model to really good programming and worldwide communications and continuing to participate in that throughout the decades is tremendous?

RICHARD:     I have nothing more to add.

BRIAN:     And the last question here is very open. Are there any last thoughts or comments on your career or on the industry that you would like to record, I guess.

RICHARD:     Are you asking me that question?

BRIAN:     Both of you.

RICHARD:     Read it again.
 
BRIAN:     Any last thoughts or comments on your career or on the cable industry?

RICHARD:     Well, I’m 83 years old. It’s been a great life. And I think we’ve made a lot of people happy including the stock holders. That’s all.

ROBERT:     As far as my career is concerned, my first thought is I hope that it is not over. I still hope I have quite a few years to go and continue to be engaged in dynamic industry. I also hope that my career can progress to a third generation in the family business which I think would be a terrific thing. Along with our attorney, I host a thing called a “Generations Dinner” every year at NCTA and we continue to get some of the people who are out here. Some of the people like Tom Gleason, the Bradley family, Dave Van Valkenburg. These guys, they like to show up every year just to swap lies and renew old acquaintances but it’s great to see those generational families that continue. If there’s a legacy in the industry from companies like ours, I’d like to think that’s part of it. It’s innovation, it’s sort of an excitement in the industry that in our larger corporate brethren doesn’t exist so much anymore. They have to be careful of any word they say and every step they take. I don’t want to characterize myself as a cowboy like what Bill Daniels or a Bill Bresnan were in those early years because they were far more adventurous than I was but we continue that effort that says let’s push the envelope, let’s challenge some people, let’s try that and if it doesn’t work, let’s try something else. If you are afraid to fail, then you’ve probably never going to try. So we keep trying. We have some scars to prove it but we also have some good memories and some smiles to go along with it.

BRIAN:      Very good. Anything else come to mind?

ROBERT:     I think would say two things. First, my father started this and said we could not have done this without terrific employees and we’ve had a great bunch of them and we’ve had them now.  So we’re very grateful to their efforts over the years. I’ll just mention that we recently lost one of our super long term employees and that was Neil Travis. After 37 years with us, retired and then passed away. So we keep him in our thoughts.

RICHARD:     A number of employees are over 35 or 40 years with us.

BRIAN:     That’s testimony to the fact that they liked the [company].

ROBERT:     Their toiled diligently in the field and they are very much appreciated.

RICHARD:      And every day somebody in town comes up to me and says you’re man was out to our house when I called and he was just great. You know and he wouldn’t leave until he had corrected everything. Regardless of whose fault it was and it’s great to have people say that to you.

BRIAN:      That’s the ideal.  We don’t often get an ideal situation like that.

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Alan Gerry

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Interview Date: Tuesday June 06, 2000
Interview Location: Liberty, NY
Interviewer: Tom Southwick
Collection: Hauser Collection

SOUTHWICK: It's June 6, 2000 and my name is Tom Southwick. This is a part of a series of oral histories and video histories of the builders of the cable television business. We're in Liberty, New York at the headquarters of Alan Gerry who played a key role in building the cable television business over more than four decades. Mr. Gerry, thank you for having us today. I wonder if we could start by asking you a little bit about your family background, your parents, where they came from, what you know about that. Tell us a little bit about the history of your family.

GERRY: Thank you, Tom. First of all, we'll start off with everyone calls me Alan around here. So you may as well call me Alan, too.

SOUTHWICK: Very good. Thank you.

GERRY: You always have in the past. As far as the business or my life up here, our family moved up here in the early 30's when I was an infant. My dad and mom were both born overseas, in Russia. They came here as children. They met in New York City. They worked in the garment factory down in the lower east side. That's where they met. My mother, I believe, was 17 or 18 years old at the time she met my dad. He used to come courting her. He lived in Brooklyn. She lived in the Bronx. He used to rent a horse and buggy, if you believe it, and drive it over the Brooklyn Bridge to come see my mother on Saturdays or Sundays and take her for buggy rides. So that's how it started. When they got married and the family started coming along - I have two brothers, one older, one younger – we moved up here to Sullivan County. That was back in the early 30's, 1931, 1932, something like that. I grew up here and went to school here. We lived here until about 1941. I think we moved to New York City in 1941. It was very, very hard economic times. We moved there right before World War II.

SOUTHWICK: When were you born?

GERRY: I was born in 1929.

SOUTHWICK: The date?

GERRY: Christmas Eve.

SOUTHWICK: Very good.

GERRY: Just made the holiday. My mother tells me they were singing Christmas carols outside the window when she was in labor. So that's what I must have heard when I first came into this world – Christmas carols.

SOUTHWICK: Good start.

GERRY: We lived in the city for two or three years during the early part of the war. In 1945, 1946, in that area, I left high school. I was going to graduate that June. I left in April and joined the Marine Corps. They had a special program that I was anxious to get into, an electronics program. I went into the service. The war ended shortly after that. When that was over, I came back to Sullivan County and did odds jobs, did what kids did then when they got out of the service. I went in when I was 17 years old and I came out about 19. I drove a truck. I worked on a chicken ranch. I did construction.

SOUTHWICK: What did your dad do?

GERRY: My dad, at that time, worked for a large food wholesaler in New York City. He was a salesman. He was in charge of selling all of the exotic sea products. He knew where all the lobster and shrimp beds were all over the world. His job was buying them and supplying them to the upper scale customers - the Waldorfs, the shipping lines, later the airlines when they started serving upscale meals. That's what my father did. Incidentally, he wanted very badly that I join him working in that company. He said I'd start packing tomatoes, and I'd work my way up. It didn't sound very appealing to me.

SOUTHWICK: Were you interested in electronics, you mentioned that, as a young man or a boy?

GERRY: Yes, from the beginning. I used to fix lamps. I used to build lighting systems in the house. I'd wire up the garage and put light bulbs in the garage. I put electricity in the garage. Later on, I started fixing radios. When I got older and went in the Marine Corps, they did aptitude tests and I wound up in a radio and electronics program in the Marine Corps. When I got out, after coming back here and sort of bumming around for a year or two, I did the GI bill at that time. I went to school in New York City at Delahaney Institute, and I studied electronics there. Basically it was when TV was first starting to break onto the scene. At that time it might have had two or maybe three channels on out of Manhattan, and they were on part time. They weren't on full time. As part of the course, you'd build radios, and you'd build an FM radio – build it right from the chassis up. Then in the more advanced courses, you'd build a television set - everything. You created the channel selector. You built the channel selector our of switches. You knew how every component in that television set worked. At the end of the course, you had an AM radio, an FM radio, and a television set. You didn't have any cabinet on it, but it was a television set. You really learned the fundamentals from the ground up, at that point. During the period of time I went to school down there, I went to school for five hours a day. Classes started at, I believe, 8:00 and by 1:00 I was through. In the afternoon I used to put up antennas for the radio and television dealers down there. In those days there wasn't a WalMart. There was no Whiz. They were the mom and pop radio and appliance stores. Almost every block in the city had a radio and television repair place. They got into television. I worked for a company whose job it was to put the antennas up and deliver the television sets from the mom and pop store to the consumer. I was the guy that put the antenna up.

SOUTHWICK: So you'd go up on the rooftop and attach it and make sure it pointed the right way.

GERRY: Attach it onto the walls up there and point it the right way and try to get rid of what they called ghosts in those days. It was multi-reflection. Being down in the city, the signal used to bounce around the buildings. We'd have to trap the antenna to get the most acceptable picture with the least amount of ghosts. You clean up Channel 2, then Channel 5 would have a ghost. You'd go back to Channel 5 and clean that up and then Channel 2 would have a ghost again. Those types of things. You learned a lot of tricks about how antennas work and how signal was transmitted. I did that for almost three years while I was going to television school. When I got out, I came back to Liberty, came up here and started a repair business. I put an ad in the paper that I was in the television repair business, and that phone started ringing.

SOUTHWICK: What did it say – the ad?

GERRY: It said, "Got a TV problem? Call Alan Gerry – 1955" That was it. The telephone number was 1955. And the phone started ringing, and it never stopped ringing since. A little later on, I got a dealership for Fada. The name of the television set was Fada. It was named after Frank A. D'Angelis, I think his name was. He was a sort of an inventor type of guy. He went into the television business, and he produced a television set. Then we had the CBS franchise. CBS used to make television sets, if you don't remember.

SOUTHWICK: I didn't know that.

GERRY: That was before you were born. We got a franchise to sell, to distribute CBS television sets – actually to retail CBS televisions.

SOUTHWICK: Did you have a store front or were you operating out of your house?

GERRY: I started the business operating out of the basement of my home. I had built a home, got a GI loan, 4 ½% mortgage on the house. The government used to guarantee them. I had a place in the basement where I was able to bring TV sets in. I had a shop set up down there with a bench and repair equipment – oscilloscopes, meters, and all the other things that you needed – parts and pieces. That's where I started the business.

SOUTHWICK: What hours were you open?

GERRY: We were open all the time.

SOUTHWICK: 24 hours a day, 7 days a week.

GERRY: Anytime someone called or someone used to drive up in the driveway with a broken television set in the back of their pickup truck. They'd help me lug it into the cellar and stand there and watch me while I fixed it. I got telephone calls – and this is important for later on when we talk about getting into the cable business – invariably during supper. I'd finish dinner. About 7:30, 8:00 I'd go back out on the road for 3 – 4 hours, work very, very often till 10:30, 11:00 p.m. repairing TV sets so I'd have a clean agenda for the next day. I used to put up antennas in the morning and do the service calls in the afternoon. I started by myself, and I had a couple of part-time fellows helping me. Then I hired my first, full-time employee. That was early 50's - 1953, 1954.

SOUTHWICK: How big was Liberty then? What kind of a town was it?

GERRY: The village itself was a community of about 4,500 – 5,000 people. It was located in Sullivan County. Sullivan County had about 60,000 people. It had another 3 – 4 towns in it about the same size. That's primarily the area that I started with. The area here is quite mountainous. Unless you were fortunate to live on the right side of the mountain, the side facing New York City, you didn't get any television signal. So in order to sell television sets in the early days, we got very, very creative by topping off a very, very high tree and hanging antennas up there. Then later on, we developed the skill of putting up steel towers. We put up towers as high as 160' to pull in television channels. At that time, the sponsor, the owner of the tower, had so much money in it, he'd ask his neighbors if they'd want to hook up to the tower. They'd chip in and give him, some of them, $50 a year, $100 a year. Then it got to be maybe $2 a month, something like that. We were the guys who put the towers up, put the distribution box in there, and ran the lines so all the neighbors could enjoy television. There was always one neighbor down the road who was too far away and he didn't get any reception. He couldn't join the club. So at the time that we got into the cable business up here, I had a lot of these systems scattered around that served 5 families, 10 families, 20 families, scattered all around. They were ideal spots that we wanted to wire up initially with the cable system so that we could get in there and pick up all those subscribers.

SOUTHWICK: You already had wires into the home.

GERRY: They were tickled pink to get rid of the towers and all the wires and all the service calls and the intermittent service they got from trying to pick up signals off the air. They already had the wires in the home. What we had was open wire. It was called Gonset line. It was two copper wires, spaced with 1 ½" piece of poly every 12" to keep the wires apart. You could run ½ mile of that stuff without an amplifier between it. When we built our system, we did it, of course, with coax. We turned our first system on ...

SOUTHWICK: Before we get into that, how did you learn about cable TV?

GERRY: I guess the story's been out there for awhile. But I was up on top of a tower in the village of Liberty changing the tubes in an amplifier. The tower was on top of the Liberty Motel. It was relatively small tower, an 80' tower. When I got down – it was in February, a very cold day – there was a fellow in a green Chevrolet sitting there who introduced himself. His name was Fred Green. He was a sales rep from Jerrold Electronics out of Philadelphia. He had been traveling through Liberty, coming from upstate, and saw this guy on top of a tower on a cold February day. He thought he'd stop in and find out why there was no cable in Liberty. This was in 1954, maybe early 1955. He asked me if I'd like to have a cup of coffee, and I said, "Yes." He introduced himself. We went up to one of the coffee shops and he asked me why there wasn't any cable in Liberty. This sounds kind of ridiculous to tell the story. In that period of time, I said, "What's cable?" It just was not well-known at that time in the early 50's. He explained where he was from and all the rest of that. To make a long story short, he invited me to come down to New York City where they had a sales office. He introduced me to a guy by the name of Walter Goodman who was the head honcho out of Philadelphia. They gave me a short dissertation on cable TV and how it worked and how they could help me get into the cable business. At that time they'd provide franchising help. They would provide engineering. They'd provide financing. They'd help you finance not only the amplifiers and things that they built, but the cable that we were buying at that time from Times Wire Cable over in Wallingsford, Connecticut. So, long story short, we met with them a couple of times, and I asked them how much money I'd need to get into this thing. They had maps of the village. They said, "Well, we can get you started for about $20,000 - $25,000." For that money you got a headend, a 5-channel headend and maybe enough money to build 3-4 miles of cable plant. I went out and saw a bunch of the merchants in town and told them my story. Five or six of them thought it was a good idea, and they put money in. We formed a company.

SOUTHWICK: So you didn't want to take the Jerrold deal then.

GERRY: Well, we had to have $20,000 - $25,000 worth of cash getting in.

SOUTHWICK: Oh, I see they wanted you to put up the money.

GERRY: That's right. And then they would give us the rest of the money to buy the trucks, the cable, the headend and all that other stuff. But to get started, we needed $20,000 - $25,000. So we raised something like $12,000 or $15,000. Then our local bank loaned us another $10,000. Then Gerrold financed the rest of it. I think we must have had $50,000 or $60,000 into the deal by the time we got the cable system up and operating. I'm a little bit fuzzy about that but it was right in that area. That was in the winter of '56 – '57. We turned it on in February, 1957. We had five channels - and that was the state-of-the-art – on at any given time. We had seven channels up at the headend, but the capability of the amplifiers was only five channels.

SOUTHWICK: And these were all broadcast stations out of New York that you were picking up?

GERRY: They were all broadcast stations, yes. They were Channel 2, Channel 4, Channel 5, I believe Channel 7, Channel 9, Channel 11. There was one more. We picked up Channel 12 from Binghamton from the other direction so that was the seven channels. At any given time, we'd have five of them on there. Then we'd put a set of timers up there so that at a certain time on a Sunday afternoon, we'd switch one channel off and put Channel 11 on so we'd have the ballgames. The Yankees were playing on Channel 11.

SOUTHWICK: How did you decide? The Yankees are an obvious choice.

GERRY: We listened to what our subscribers had to say, what they wanted. Invariably, someone got ticked off at us. I can remember one Sunday afternoon, I was mowing my lawn up there at the house, and this old gal came up. She must has been -Mrs. Blatchley her name was – she must have been 60 some odd years old. Her husband was a prison guard, a very quiet man. He drove her up. She got out of the car and came over to me, and she bawled me out for taking Channel 5 off the air. A wrestler that she used to like to watch, was on that afternoon. We took him off and we put the Yankees on. Those were the problems that you had in the early days.

SOUTHWICK: So, in effect, you were changing channels for the whole town.

GERRY: Oh, yes. The system, the state-of-the-art at that time, the amplifiers that Jerrold Electronics built, at that time were only 5 channel capability. Then they went to 12 channels several years later. We redesigned the system and changed the amplifiers. We took the 5-channel amplifiers out and put in a 12-channel amplifier. We were able to expand the channel capability. When we did that, we still had two blank channels left because there just wasn't enough programming out there to fill them up.

SOUTHWICK: You mentioned the franchise. Was it difficult explaining this to the city? Is it a city council?

GERRY: It was the village board. Basically, I went in, and I spoke to the mayor. I told him what I wanted to do. He said, "Well, come to the meeting next Monday and tell the rest of the fellows what it is and what you want." Basically, we needed a permit or a license to do business. When I got done telling my story, they looked around at each other and said, "It sounds crazy to us, but if he wants to do it, we're all in favor of giving Alan a license to run the cable in Liberty." Aye, hit the hammer, done. That was it – no public hearings, no franchise. It was a resolution. With that, I was able to go to the telephone company and negotiate a pole attachment agreement. Those were the two critical things – getting the permit from the village and then going to the telephone company and getting a license. They were tough even in those days.

SOUTHWICK: This was New York Telephone Bell?

GERRY: New York Telephone, yes. I still remember the fellow's name – Mr. Aurelea. This was in 1955, 1956. Very, very tough. We had to get an insurance policy, a liability policy, and all the rest of that stuff – sign a bond, put up a few thousand bucks for the bond as security and all kinds of other things. But we were able to get on the poles.

SOUTHWICK: And they charged you a monthly fee for the poles?

GERRY: Yes. Back then, that's the one thing that stayed pretty constant all through the years – the pole rental charge. I think back then it was $3 dollars a year, something like that.

SOUTHWICK: Per pole?

GERRY: Yes, per pole. And then we had to do the make-ready to allow us to have enough room to get on there. That was relatively expensive. We spent a lot of money getting make-ready done. We started up near the headend so that we built the headend. While we were building the headend, the telephone company was making ready on the poles for the cable so we were able to be right behind them to hang our cable. We had subscribers hooked up, the ones that were closest to the headend, 3 – 4 miles down the road. They were getting pictures before the whole system was turned on. We used that approach pretty much right on until the end. We always tried to get the systems built in a hurry and get the cash flow running.

SOUTHWICK: Get some paying subscribers as quickly as possible?

GERRY: Yes, exactly.

SOUTHWICK: What did you charge? Was there an installation fee?

GERRY: Back in those days, it was $130 installation and it was $3.50 a month and you got five channels. If you wanted an extra outlet, it was $1.50.

SOUTHWICK: What kind of response did you get? Were people eager for it or was it tough to sell?

GERRY: My brother had a photo shop downtown. When we announced that we were opening up, there were lines outside the photo shop. There must have been 100 people lined up. I was inside with an old, beat-up Underwood typewriter, typing out the contract. We used to have a contract in those days, a 2-sided page, all the things you can do and what you can't do and what happens if you don't pay your bill. It was very onerous. People didn't even read it. They just wanted the reception. They came in the photo shop and they saw 8 – 10 television sets out there that we had on there, some with duplicate channels. But every one had a picture. It was quite an exciting thing for people to come in – in a community where they had no reception - and see 8 – 10 screens lit up with really great quality, great quality. We had a wonderful sight for our antenna on the outside of Liberty. We were fortunate enough to find a great spot and were able to buy the top of the mountain, a place called Ravona Hill. We put the headend up there. That's how it got started. People were tickled pink. Interestingly enough, the plan was if we could get cable out to all of these streets and outlying areas around the village, I'd sell a lot of television sets. That was the plan. Because you don't make a whole lot of money at $3.50 a month. But if I could sell a television set and make $50 - $60 profit on them, which is about what you used to make in those days, and you sold a couple of hundred television sets, that's real money. That was, sort of, the underlying purpose of it. Of course, after the first 5 –6 years, you realize that the real business is building that recurring revenue that comes in every month when you send out your cable bill and building more services. When 12 channels became state-of-the-art, we rebuilt the system where everything was 12 channels. Then we went to 20 channels years later and started bringing the cable into other communities in the county. Some of the communities had no reception. Others had sort of mom and pop cable systems out there, and reception was pretty rough in some of those areas. One fellow had a sign painting business, and he was in the cable business. Another fellow, his family sold appliances in Monticello, and they got in the cable business. But over the first 15 – 18 years, we acquired probably 80 – 90% of the cable systems, 100% eventually, of all the cable systems in the county. In those days, you could buy a cable system for $300 a subscriber. To a lot of these folks, if it was a side business like the fellow in the sign painting business, that was a big bonanza. He picked himself up $150,000 - $200,000 for his cable company. That was a big bonanza. So we went out and, during that first ten years, the people who helped us get started, the early investors, all were bought out. I bought all of them out over that first ten years. So at the end of the ten years it was myself, and my dad had a little piece. He stayed in with me.

SOUTHWICK: How long did it take before you became profitable? Is that the right way to describe it after you started building a system and started signing up subscribers?

GERRY: In those days, the accounting was very simplistic – money in, money out. We were always borrowing money, wherever we could get it, because there was always another mile of cable, or 10 miles or 20 miles, or a town across the border in Orange County that had no cable. So we went down there and started franchising. We'd have lines of credit in the early days from Jerrold Electronics, and then mostly from the banks.

SOUTHWICK: So the objective really wasn't to have profits. It was to have enough cash flow so you could borrow more money and build more systems.

GERRY: To build the business. It was a passion that you developed. The big guys out there had 30,000-40,000 subscribers. When I first went to electronics school that Jerrold held in Philadelphia, about the time we turned our system on in 1956/57, the largest cable operator in the country was John Walson.

SOUTHWICK: In Pennsylvania.

GERRY: Yes. And he was there with two or three of his people, his engineers, his technicians. He was "the man." He was there. He had 12,000 – 13,000 subscribers. You had little systems all over the place with 1500 – 1800 subscribers, 3200 subscribers. That was the business in those days. It was just getting started. The big towns had no cable because people felt, "Why do we need it? We have all the networks off the air. We've got a couple of educational channels, maybe one or two independents. We don't need cable here." There were no satellites. There was no HBO. There was no cable-originated programming. It was all networks. So it was all these little communities - the people that were getting in the business in those days were the people in the little communities who had money. And who had money? The funeral director, a lot of funeral directors in the cable business back in those days; the guys who had a drug store - they always had money; automobile dealers and the fellows in the insurance business – those were most of the people that we saw later on that we bought their companies out in the 50's and 60's.

SOUTHWICK: Alan, tell me a little bit about how .... Was it Cablevision Industries in those days? Was that the name of the company?

GERRY: No. We called ourselves Liberty Video for a lack of another name. That's what we started with.

SOUTHWICK: How long did that last?

GERRY: Right into the 60's. Then when we started branching out, getting out of the Sullivan County area, we wanted a more generic name so that people didn't identify us from a little town of Liberty. We came up with the name Cablevision Industries and it seemed to click. The people started calling us CVI. The trades picked it up right away, and that was the logo – the big CVI. When we went out to franchise in the suburbs of Boston of all places... and the fact that we were doing business at that time in Pennsylvania, New York, and a few licenses early on in Massachusetts, so we were a multi-state operator. CVI had a nice logo, good presentation, good references, great letters of recommendations from the mayors and the county government from different places. We started doing local origination during those early years. We thought that was something that was important. We would give the people an opportunity to see things that they couldn't possibly see over television which was news – what went on in their own home town. That was a very key thing when we went in to the other communities. When we went in competitively with other cable operators, LO (local origination) at that time was nothing that anyone wanted to have a whole lot to do with because it cost money, and you couldn't make any money with it. In the early days, we were one of the first people selling advertising. We started getting close to breaking even with it, but it was such a powerful marketing tool. It was very, very helpful in franchising in communities where there were two or three other operators wanting to get the same franchise. We'd make a presentation; and then we'd have a film we'd show, a video, of our LO capabilities, of what we've done; and then a video, a talking head of the mayor of Canton, Massachusetts or the selectman from Fair Haven or one of the other communities that we had actually gone in and done what we told them we'd do. It was a very interesting time that a lot of people would come in and make a lot of promises, get the franchise, get it built half-way through, sell it to someone, and off they'd go to do it again. We were the ones that made the commitment. We'd build them out. We'd build them out on time. Everything we said we'd do, we did. And we had the local officials to attest to that – on film. It was very, very helpful to be able to go out and get these new franchises. We had a very interesting guy that we had developed. He was a high school teacher. He'd be able to go into a town, all by himself, and go to the library, find out all about the history of the community, take pictures of the early days of the community, and weave it into a ten minute film on the community – very much like they do on the History Channel, a biography, close-ups of a picture or a close-up and go away and then maybe another fade in on another and then a really good story coming out – a live video interspace. We'd come up with these wonderful little vignettes on the community. And we used to blow these other people away because we'd come in with this, and it showed a greater interest on our company than these other applications that they got from some of the big companies. We used to call them hired guns. They'd hire the people just to go out to try to get the franchise for them – United Artist, TCI, General Electric. But we were there, and I invariably would do the presentation because it was very important for us. I would commit, you know, "You have my word ..." and so on. And I'd make these personal commitments. We never let anyone down. I can tell you, Tom, that all the years that we've done this thing, we always built the franchise on time. We never asked for an extension for the turn on date. Invariably we would beat the turn on date. It helped us build a reputation of very serious cable operators that would do what they promised to do. It was very, very important – the quality of our product had to be right up there. We were among the first people, if not the first people, that created 24-hour answering services so you could always call the cable company. The cable company's phones were never not answered – very important. We got a reputation of great service. We built quality plant. We were also one of the first people that specialized in training the customer service reps. Most cable companies, whoever was nearest the phone, would pick it up – a bookkeeper, a technician, maybe an operator. We had what we called CSRs – customer service reps. We were one of the first outfits that trained these people and bonused them up for sales. How many second sets did you sell? Did you sell any pay services? They got money, bonuses, for selling a new subscriber a second set, maybe a third set, one, two or three pay services, a sports package. We recognized very, very early that you go in, and you sell the best package you can at the time that they walk in the door pick up the phone. I used to tell the kids, "When you go out to a store and you buy a new suit, the guy doesn't sell you the jacket and hope you come back for a pair of pants later on, and then maybe you'll buy a shirt in a month or two. You sell them everything. You sell them an outfit. You sell them a tie, the shoes, the whole nine yards. Sell them a package. Maybe discount it a little bit – if you buy everything together." And it worked. We got them very, very much enthused. We had people that did nothing from our company, when we got started, but go around to the different cable offices and keep training and re-training the customer service reps. We also developed reporting packages. We had it for all of the key areas for customer service, for technical, for new subscriptions, for trouble calls. We had a report that we used to get at the end of each week from every system – how many new subscribers came on, how many did you lose, what was the average revenue per new subscriber, how many trouble calls, what was the percentage of trouble calls per subscriber. Every single week we got those back at corporate, and they wound up on my desk. Other people got them too, but I had copies. And I used to look at those things every single week. If there was somebody started falling off, .... Let's say their backlogs started to creep, 300 – 400 people waiting to get on to cable. And that used to happen. They were supposed to call up corporate, and we'd send out extra crews or get contractors to get that down so no one had to wait more than 2 – 3 days. People get tired of waiting and say, "Never mind." So we had systems that we put together in those times. They were manual systems. Today everything is computerized. The point is, we knew we exactly what went on in every one of those communities. Even back in those days when we started to have 20 – 30 systems, that's a lot of stuff to track. These people were off on their own. They're hundreds of miles away in Massachusetts, Pennsylvania, later on in the middle Atlantic states. The ability to maintain the reputation for quality pictures, next to no service calls .... because we felt that if you had a lot of service calls, people would say, "Cable isn't worth it," and they'd drop off and all that other stuff. I know in the way beginning, we used to have these preventive maintenance programs where we had people measuring or shooting trouble or measuring signal levels on the line on a consistent basis, out on the trunk lines. So if the signal started to creep down, we'd know about it way before the customer could see it and get out there. "Well, an amplifier is starting to fail. Fix it before it goes out." So we got a reputation for running very, very clean systems, great quality, good customer service. I think a lot of it came from during the days when I got started in the early 50's fixing TV sets and selling them.

SOUTHWICK: Same mentality.

GERRY: In those days you had 8 – 9 guys running around here with a pickup truck or a van and a tool box fixing television sets. I went out at night. They would not be without reception, made sure that happened. The other thing we used to do back in those days - whatever the manufacturer's guarantee was, we'd double it. You bought a picture tube from a guy down the road, one year guarantee on the picture tube, we'd give him 2 years; 90 days on parts and service, we'd give him 180 days. We just wanted the people to be satisfied. We wanted, hopefully, that they'd come back, and they'd buy another TV set or maybe .... In those days we had a dealership with RCA/Whirlpool and GE. We used to sell washers and dryers and freezers and refrigerators and all that other good stuff. It really built a very, very complete business where the customers had a lot of confidence in you because you did what you told them you were going to do. And we took that whole mentality into the cable business which, in the early years, people weren't doing. There were a lot of guys in the early years, Tom, that would be in the franchising business. They'd collect franchises. It was a very, very good business. You could go out, in those days, and build a cable system for $200 per subscriber. Later on it became $400 - $500. But even at $400 - $500 you could turn around and sell the system for $1,000 a sub. Great business turning and churning. A lot of people made a lot of money back in those days. But it did leave, in many instances, a bad taste in the communities.

SOUTHWICK: The tax laws also prompted a lot of guys to sell out, didn't they? You could depreciate your plant over a certain amount of time and then if somebody else bought the plant, they could start the depreciation cycle over again.

GERRY: Yes, if you bought assets. If you bought stock it wasn't as ...

SOUTHWICK: Right.

GERRY: But if you bought assets - if someone had a dollar into it, and you decided you were going to buy it for $2 and you put it on the books at $2 and then you start depreciating at $2 not the $1 - it was a very, very good business if you incorporated the intelligent use of the tax laws in the U.S. It was a great tax shelter. It was a great tax defer. You eventually will pay tax. When the tax man caught up with us is when we merged with Time Warner. We had to pay some taxes on the cash portion. But even then, ...

SOUTHWICK: That's a lot of years before you had to pay.

GERRY: That's a lot of years so you have the use of those dollars for a lot of years.

SOUTHWICK: As you began to expand, was this concurrent with beginning to use microwave to transmit the signals farther away from New York City? When did you start using microwaves?

GERRY: The microwave story is an interesting one. It happened in our life at the beginning of the 60's when we had several cable systems in Sullivan County where we're in now. Then we went into the neighboring community into Orange County. Now Orange County is over the mountain range which is on the southeast side of the geography up here, facing New York City. So the communities there were some of the early communities that got free, off-the-air reception from the city. But to get some of the other channels, .... At that particular point, HBO was coming out, some satellite services were coming out. We went in, and we aggressively started to franchise in Orange County. One of the things we promised them is that we were going to deliver a 35-channel package which was kind of unheard of in those days, because where are you going to get 35 channels? We acquired this receiving site up on top of Wurtsboro Mountain Ridge, and we put up a 160', 180' tower. We were pulling channels in from Phildaelphia, from New York City, from some of the upstate communities, from some upstate Pennsylvania communities – Scranton, Wilksbury, as well as satellite channels in those days which were just starting to come out. The plan was that we were going to pull all of these channels into this master antenna system - this master antenna receiving area on top of Wurtsboro Mountain - and then microwave them out to all these communities up and down the Hudson, up into Sullivan County, down to the border of New York and Pennsylvania. We had systems, in that time, in Port Jervis, New York, right on the Pennsylvania border. We were applying for the franchise in the city of Middletown, the town of Wallkill, all those many, many communities in Orange County. We had systems in the village of Wall, the town of Montgomery, and several of the other towns there, plus a bunch of other systems up in Sullivan County. So with the single microwave location, we'd be able to go out and tie together something close to 60,000 – 70,000 subscribers passing over 100,000 homes with one headend. Big time - we felt like we were in the big time. And we built a microwave distribution system up there. Two things, Tom: first of all, we were very, very proud of the fact that it was one of the first ones of its type up in the northeast, Hughes High Gain Microwave System. It cost a lot of money. Those channels, I think, cost a lot of money. I think it cost us something in the area of $12,000 - $15,000 per channel to put this stuff up there. Then it all was combined into a single dish that put the signal – let's say out to Saugerties, New York or down to Middletown or down to Port Jervis. Down in Port Jervis, you put up one dish to receive all that – no big fancy headend – one dish, process it, put it right in the cable, and then off you went to serve thousands of homes down there. So it was a very efficient way to tie a lot of small communities together because we did not have the muscle, in those days, to go out and franchise in the cities that had 100,000 homes. All the big boys were in there. We just didn't have the muscle to get in there. We didn't have the financial .... Those cities wanted public companies, people who have millions of dollars, hundreds of millions of dollars worth of asset value to their company. They wouldn't look at a little puny guy like us or some of the other smaller operators. So we took those secondary markets and tied them together.

End of Tape 1, Side A

Start of Tape 1, Side B

GERRY: We did the same thing in Massachusetts when we built the system up there. We found a site up in Foxboro, and we couldn't buy it but we rented the land up there. Again, we built a great big tower and a big, high-powered microwave receiving and transmitting facility up there. We tied 12 – 14 communities together up there, and again put together 50,000 – 60,000 homes with one delivery, one transmitting facility up there. And it worked out very, very well. We'd be able to go into some of these little communities and give them a more efficient package because we had this big facility 18 – 20 miles away that we could just beam all this stuff into. Some of these other people that were trying to franchise up there, didn't have that advantage. They'd have to build a single facility just to serve 3,000 – 4,000 subscriber where we were serving 60,000 – 70,000 subscribers. The overhead on the whole was broken up into 60,000 – 70,000 subscribers rather than having to put all that investment in there for 3,000 – 4,000. Anyway, it helped us very, very much. We did another one of those things down in Philadelphia. We were able to join forces with a fellow that had a franchise for 25% of the city of Philadelphia but couldn't get it financed. He had a partner. TCI was going to partner up. Sixty days before the deadline came where he had to start or lose his franchise, TCI packed out because there was a big deal going on. They bought Westinghouse or some big deal was going on there. We found out about it. One of the brokers brought that deal to us. We spent a Saturday morning looking around down there. We said, "Gee, this is great. Look at all these homes." So we shook hands, and we made a deal with him. We made a partnership with him – that was Jim Wade. Tom, this is something kind of weird, and I'm still kind of a little bit proud of. We were the last company to get started there. All of the other companies had started building their cable systems. We were the last to get started. We were the first to finish.

SOUTHWICK: Wow.

GERRY: We went cash flow positive in that system in nine months, nine months. We brought in the best people we had in from New England, from upstate New York, our best people to go in there to keep people. Then we brought contractors in as well. We built that system in a hurry. We did a joint venture with Comcast, and we used their tower. I think we hung some of our microwave stuff on their tower and some joint venture we did using the headend. We took some of their feed, and they took some of our feed. That's when I first got friendly with Ralph and Julian and Brian.

SOUTHWICK: Roberts, yes.

GERRY: Yes. So we used that high-powered microwave technique again there. So that became our hallmark for awhile. Shortly after that, we heard about this fiber optics thing. So we got very, very much involved in finding out how that worked. And that was really the key to change a lot of things in the cable business.

SOUTHWICK: Before we get on to that, there are a couple of other interesting things. You grew almost entirely by franchising rather than acquisition. Is that correct?

GERRY: In the early days, it was much less expensive to build a subscriber than to buy one. At a point in time when you owned these subscribers and someone else owned the ones next door on the left and someone else owned other subscribers on the right, it was more efficient for you to buy them, aggregate them, close down the headends, close down the office feed, have everything out of your system. The economics were such that, in some of those systems, we were getting a 2 - 3 year payback out of. We'd buy them. We'd have our money back in 2 – 3 years because they were poorly run. They had little or no pay. We bought systems with no pay service. The people that owned them would say, "Well, we're thinking about that HBO, but it's awfully expensive. We have to buy that box, you know. We have no converters in our system, and we have to buy those boxes, and we don't want these boxes." It was that type of thing. So we'd go in. We'd rebuild the systems if it was an old fashioned system. If it was a 12-channel system or a 20-channel system, we'd rebuild it to the next capability. We'd add channels. Then we'd re-market everything - we'd take a basic service of 12 channels, then we converted to a basic service of 20 channels - people were tickled to pay another $2 - $3 a month because they were getting all the extra channels. Then we'd sell them a couple of channels of HBO or Cinemax or Showtime or the Movie Channel or things like, or some sports services. In those days, we put a converter in, with or without a remote control because most of the sets in those days didn't have remote controls. So they'd pay an extra $2 - $3 for a remote control. So we'd convert a $6 - $8 a month subscriber to an $18 - $24 a month subscriber, give him a whole lot more service, and we never mandated that they had to take it. It was always an elective thing. It was remarkable what we could do. In one system up in Pennsylvania, we doubled the cash flow from when we closed in April to when we turned on the new services in September – we doubled the cash flow in six months. It was amazing. Those are the type of things we were doing, and it was really very opportunistic for us. It was a lot of fun. It was very, very challenging. We then started to see the advantage of getting lines of credit so if something came up for sale, we'd have the money to buy it or we could aggressively go after someone. We could say, "You know, we're right down the road here, and it would make sense if we could do this."

SOUTHWICK: And we can write a check today.

GERRY: Exactly. I used to keep the checkbook in my pocket.

SOUTHWICK: Really?

GERRY: Yes. I'd lay the checkbook on the table and then talk.

SOUTHWICK: But you're unusual in that you never went public. You never did private placements of equity.

GERRY: Let me tell you how that worked. In our own way, even in the early days, we were doing things that weren't done before. And we were relatively successful at it. I know both of the local banks here loaned me up to their legal limit, both of them. They couldn't legally lend me any more money. So they'd call up someone that they knew up in Binghamton or Syracuse and say, "We've doing business with this fellow since he's been selling television sets. He always makes his commitment. We're all out of lines for him. Let me send him up here and talk with him." So I'd go up there to see them. It would be invariably in communities that we got franchises with up there, up in Seneca Falls or Geneva, New York, those Finger Lakes communities up along in there. We used to be able to go up there and as long as I'd guarantee the note personally, they'd lend me all the money I needed for the project, up to their legal limit. They were small banks, $200,000 - $250,000 legal limit. It got to the point that we needed more money. We kept going to the industry functions, to the NCTA, and all the other stuff, and I got friendly with the people from Daniels, way early, way, way early in the game. One of Bill's people, _______, took us to John Hancock Insurance Company up in Boston where we told our story. We got $5.2 million loan up there.

SOUTHWICK: When was that, roughly?

GERRY: That was probably in the early to mid 70's, right in there. And that paid a whole bunch of bank debt, and it gave us $1.5 million left for operating capital. This sort of opened up my eyes. Then we met some people from Paine Weber, Ian Gilcrest, who was working for Paine Weber at that time. He said, "Alan, what you need to do is get into one of the money center banks." I said, "What's a money center bank?" He explained all that to me, and we wound up with a very, very good line of credit with the Bank of New York. That consolidated a lot of the other stuff that we had into a single loan and gave us extra money to go out and do deals and build cable systems, do some acquisitions and things like that. We were still private, still have to guarantee everything. I never minded. Not in my worst day, did I ever think the business was going to go broke or I couldn't pay my bills. I knew our business cold. I knew how many subscribers we had. I knew what they were paying. I knew our cash flow. I knew our capital expenditure budget for the year. I knew what kind of increases we were getting. I knew when our rate increases were programmed and all the rest of that stuff. I just knew, I just felt, maybe it was fool-hearty, but I just felt that we were not going to fail. We were going to get this thing done. We started hiring some very good people because we basically ran the company with technicians like myself and some bookkeepers, kids you could hire and teach them how to be installers. Then we started going after some really good engineering people. I had some key people. We probably turned our crew over in the 40 years I was in business, probably I can identify 3 or maybe 3 ½ times we turned the crew over.

SOUTHWICK: I wanted to ask you a little bit about the advent first of HBO and when you became aware of HBO and began to carry it in some of your systems, and then the development of satellite television. If you could talk a little bit about that.

GERRY: In the early days, when Time Inc. came around peddling HBO, they cycled tapes around. If you wanted HBO, they'd deliver you a tape, and you'd have HBO for that evening. Later on, they'd microwave it up to you through a feed out of Scranton. Eastern Microwave had this microwave, the delivery system up here in the northeast. They'd deliver independent television signals to you. They were the logical choice of using their microwave systems to deliver HBO in the early days. They had Les Read, really great guy. We're good friends. I've known Les for probably 25 years.

SOUTHWICK: One of the great voices.

GERRY: Great voice. Great, on-air personality. He'd come up here and say, "You've got to have HBO, Alan." "Gee, I don't know. Our people are paying $7 - $7.50 a month now. If we put HBO on, it's going to be over $10, and everyone knows no one pays over $10 for cable." That was the industry concern. Long story short, we tried it out, and we launched it. We would up ....

SOUTHWICK: Where did you first launch it?

GERRY: Here in Liberty. We wound up with 11% - 12% of the subscribers taking it. I was disappointed. I thought I'd get 20%, and I spoke to Les. He said, "No, that's good. Because in a few months, you'll have 13% - 14%, then you'll have 15% - 16%, and next year you'll have 20%." It was a grind, grind. The issues in the early days was that they repeated their stuff, their programming, too much. You'd see the same thing 4 – 5 times a week. People would drop off. It wasn't worth it. But they developed their programming in just an outstanding manner over the years. It's become such a strong foundation for the cable industry.

SOUTHWICK: Did that coincide with the introduction of converters into the system at Liberty?

GERRY: No. When we introduced HBO, we trapped the whole system on Channel 3. The way we did it, we went out ... And at that time I don't know how many homes we had passed, maybe 3,000 – 4,000 homes in the village of Liberty. We went out and physically put where a multi-tap was, we'd disconnect the RG 59 and screw this little trap in and then put it back up again.

SOUTHWICK: And that blocked out the channel.

GERRY: That blocked out HBO. What we basically did, I think what we did, we had a free preview so everyone got it. Then they had to sign up by a certain date or the trapping procedure started. We'd trap you out if you didn't hook up. No converters. HBO is still on Channel 3 in this system here 40 years later, 43 years later. That's how we did it in the beginning. Then later on, when we went to 20 – 30 channels, 36 channels, everyone had a converter. There were subscribers that, up until ten years ago or so, were still trapped out.

SOUTHWICK: And no need for a converter.

GERRY: No.

SOUTHWICK: How did the advent of satellite distribution change the business from your perspective?

GERRY: What happened, over a period of years, we started getting the availability of so much programming that we never had before. We'd be able to market like we'd never marketed before. We'd have sports packages, and we'd have specialty channels and all of the early channels that first came on, USA Network, super channels, then the news channel, TBS. It just opened up the whole world. People started to say, "You know, ..." people like school teachers were notoriously not cable subscribers "Garbage. We don't need that." But we started getting great educational channels on, then getting the news channels on, then much later on A& E, the History Channel, Lifetime, E! and a lot of this other stuff that came on. When MTV came out, a whole bunch of people got on to cable that never got it before because their kids wanted their MTV. It was really important to them. It did change the complexion of the business where it was no longer a 30% penetration business in the off-the-air communities. It became a 50% business. Then when we did our merger with Time Warner 4 ½ years ago, I cannot tell you how many of the systems that we had were over 80% - 90% penetration. We went in there, and we marketed the dickens out of that service.

SOUTHWICK: Where was your first dish? Where did that go? Where did you first introduce satellite?

GERRY: The first dish that we had was up here in Liberty. Then shortly after that, we put a conical dish up on the Wurtsboro headend where we had the microwave there. Do you know what a conical dish is?

SOUTHWICK: No.

GERRY: It looks like a horn of plenty. It's one of these great big things that ...

SOUTHWICK: Cornucopia.

GERRY: Yes. They made it in a place down in Florida, 1,100 miles away. I remember because we had to pay $1 a mile to get it delivered on a flat-bed truck so it was $1,100. We had to have that type of dish up there on the Wurtsboro Mountain because there was so many signals going up there, so much terrestrial information flowing through up at that high point, that they felt that the only way we were going to be able to receive any of the satellite dishes was to have a conical antenna because it was very directional. You could take that thing – it was a mammoth thing, mammoth .... I don't know where that thing is today because I know later on, with the types of normal dishes that they make and the directivity of the equipment on them, we added dishes to other satellites, and we experienced none of that interference that the engineers warned us against. But we had to put that up there. The first dish was here. It just became common to put the dishes in every place. We were doing acquisitions during that period of time, and people who were in the cable business, like the system up in Sayer, Pennsylvania, that had no dish. Here it was 4 – 5 years into the satellite launch period, and they had no dish. We put a dish up there, and that's the systems that we doubled the cash flow in nine months.

SOUTHWICK: Did you run into this period, in the late 70's as satellites began, where the issue of rate increases began to hamper your grown in any way? Or were you able to work that out with most of the city councils?

GERRY: No. We worked it out because in those days we had tiers. We left the basic 12-channel people alone. They might wind up with a $ .50 or $1 rate increase every 2 – 3 years or something. But the people who wanted the service, the additional channels, that would be a separate tier. They'd pay, let's say, $5 extra for another twelve channels and then maybe another $3 four or five other channels that were high cost channels like a sports package or something like that. There was a lot of tiering going on at that time. At that time we started with all of the new subscribers. We'd package it. We wouldn't sell from the bottom up, we'd sell from the top down. For only $31.50 you get this and this plus a second set, plus two remote controls, all of the things plus two movie channels, Disney for the kids, this and that. People were much more apt to buy it at that point when they're first calling up than when you try, once you've sold them a $12 - $15 service – the old people –to up-grade them to a new service. Very, very difficult. But if you had just moved into town and you were a new subscriber and you called us up, we'd sell it from the top down. That's part of that customer service training that I told you we spent a lot of time on, a lot of time on.

SOUTHWICK: The turnover in these communities, I think, is relatively small, isn't it – vs. Los Angeles?

GERRY: Very, very low turnover. Most of the people, interestingly enough, own their own homes. They're very stable. Most of these upstate communities are very, very stable. Where you get a lot of churn, .... When we went out to the west coast, we bought a system in the west valley of Los Angeles that was owned by a Canadian newspaper group. They were great newspaper people, but they were poor cable operators. And was there churn in that system. They tried to build a subscriber base, giving everything away for nothing. If you got an offer to get hooked up to the cable for nothing and maybe 1 – 2 months free, you'd place very, very little value on that thing. So when you were ready to leave, you wouldn't even bother calling up the cable company you're leaving. So we had a lot of churn. There are thousands and thousands of these garden apartments out there.

SOUTHWICK: But that wasn't an issue for you around here?

GERRY: No. It was an issue out there. We learned to deal with it by just creating a cost to get on. We'd give them a free month of HBO or a free month of a big package or something, but that had to commit. They had to pay something to get on there.

SOUTHWICK: Were there regulatory issues, pole attachment comes to mind, tax issues, franchise renewal that were part of your daily headaches?

GERRY: There was always a headache. There was always a regulatory issue, and there still is always regulatory issues in the business. I don't say we were the first, but I think we were perhaps among the first or the first for the size we were, to have full-time government relations folks.

SOUTHWICK: Really.

GERRY: Yes.

SOUTHWICK: When did you start that?

GERRY: Back in the late 70's. We took the franchising people, when franchising started slowing up, and we converted them to government relations people.

SOUTHWICK: At all the levels – state, local, and federal?

GERRY: Here's what we did. First of all, we trained the managers very, very thoroughly so that they knew how to deal with the local municipalities. Beyond a certain level of issues, you had to call corporate. We had a government relations team there. We'd fly out and do whatever we'd have to do. Then as our company got bigger, we'd have a government relations person, let's say, in the southeast. We'd have another one in the middle Atlantic states. We'd have another one up in the northeast, up in the New England states. We'd have one out there in California because that place was a hot bed of regulatory issues out there in L.A. So we had 4 – 5 people out in the field. Then we had one fellow with a staff, small staff, right here at corporate. Those people would report in to him. He knew if it was a really hot issue, that he felt uncomfortable with, he'd call me. Then we'd say, "We will," "we won't," go out to see him, "offer "them this," "hold your ground," this and that. Then we developed, also during that period of time, excellent legal counsel. We were, again, one of the smaller operators but we always had great legal people. I don't want to repeat myself, but we never lost a franchise. We never were denied a renewal. We were never, ever denied a rate increase – never in 40 years! Never! We always made sure we did our homework and there was a good reason for the rate increase. We had split decisions. A couple of times, they denied it to us and said, "Come back and fix this," or "Give us a certain service that we haven't got and we'll give it to you," or "We'll give it to you on condition." But we never, never got it. We had to go away and wait till next year or two years.

SOUTHWICK: It wasn't like California where they just absolutely denied.

GERRY: No. We never had that because we always did our homework. We made sure that we were sensitive to the needs of the community and to the local regulatory people. The other thing we did, and I'll just throw this in because maybe it shows you how cock-eyed we think, we never allowed the system managers to mail the franchise payment to the community. They had to make an appointment. They had to appear at a council meeting, make a little speech, and "Here you are, Mr. Mayor. Last year it was $42,000. This year it's $57,000. Thank you." (Claps) We used to get standing ovations like that. So we made it a point to make it an event. And they knew that we were serious. We used to tell them, "We're partners here. You run the city. We run the cable company. We service the same people. We're partners. We're going to make this thing work. You have a complaint, tell us."

SOUTHWICK: Did you get involved in the NCTA efforts on things like copyright and pole attachment?

GERRY: Late in my career, I would say, I became a board member at the NCTA. Incidentally, it shows you how well-known I was in those days, I had to run three times before I was elected. I got very much involved once I got down there. We were short personnel. We didn't have luxuries of belonging to state and .... We belonged to the state organization. I was the president of the New York State Cable Television Association for several years way back. But when I got involved with the NCTA was in the 80's. I got involved. I got on some committees. I got very interested in the lobbying issues because we were all painted with the same brush, and I thought that was unfair. I spent a lot of time down there walking those halls of congress, meeting with these people.

SOUTHWICK: This was in the late 80's?

GERRY: Yes.

SOUTHWICK: Before we get into that, tell me a little bit about the advent of the 1984 Cable Act and what that meant for your business and how it changed the industry, in particular Cablevision Industries.

GERRY: That's probably one of the biggest mistakes the industry made.

SOUTHWICK: Really?

GERRY: Biggest mistake. Because they were offered a deal, back then, ...

SOUTHWICK: The NCTA was?

GERRY: Yes. And they turned it down.

SOUTHWICK: By the ...?

GERRY: They were offered a deal by the government. They were going to allow us to raise our rates, not to exceed x%, every year. There were some other caveats that we had to do, and it couldn't go more than, I think, 5% or something like that. I thought it was a reasonable thing. At a $20 number in there, grossed up, I think our average rates at that point were right around .... We could have gotten $1 - $1.50 a year or something like that. I'm not sure. I don't recall. I thought it was something that we could very, very well live with. We had people say to us, guys in the business, "We're going to turn it down." "Why?" "Because the president is on our side." Now, who was in office at that particular time? Was it the Reagan White House?

SOUTHWICK: Well, '84 it was Reagan.

GERRY: Yes. "... and he'll veto it. If they try to do this, he'll veto it." Well, they passed it. They nailed us on the rates. They froze our rates. They rolled our rates back.

SOUTHWICK: But that was in '92.

GERRY: That was in '92. Yes. '92 was when Gore was in there Clinton. But this was before that in '94. We had a deal ...

SOUTHWICK: I'm talking about 1984 which was the deregulation of rates and the ...

GERRY: Oh, okay. Excuse me.

SOUTHWICK: ... kind of guaranteeing franchising.

GERRY: That opened up everything. We can go in there and raise our rates when we wanted to raise them and put on programming that we felt was appropriate and could sell and gave us all this flexibility. It also gave us tremendous credibility with the financial community.

SOUTHWICK: How did that change the way you financed your growth?

GERRY: That was the period of time where we went in, and we reorganized the business. We formed a holding company, CVI. Then we formed five operating divisions, and each one of them was able to go to the banks and borrow money independently.

SOUTHWICK: Oh really.

GERRY: It didn't even have to be guaranteed by the parent company. It was against the assets of that region. Then we would take the holding company and go to the high yield market and raise junk bond debt at the holding company. So if you took the high yield junk bond debt and the low cost at the banks that we were getting - because we did not leverage up down here – we were only maybe five times leveraged up at the holding company, we were another five times leveraged up there. So collectively, we were ten times leveraged. We had ten times leverage on the company, eleven times at one year, a lot of leverage. But down at the operating level, at the regional levels, we'd go to the banks. We were only 4 ½ - 5 ½ times leveraged down there, so we got excellent rates. So as a result of that, we had lots of availability of borrowing capability. We had very, very good rates. There was a period of time there we had the second lowest cost of debt in the industry. The only one who was borrowing cheaper than we were, less expensively, was TCI. We had better rates that all the other guys because of the structure of what we had over there. At that particular point ...

SOUTHWICK: How did you come to put that in place? Were there people that suggested that to you?

GERRY: We started hiring some very, very good people. One of our lending officers, .... You know Roco Camizo?

SOUTHWICK: Sure.

GERRY: We first met Roco when he was at Chase Manhattan. He was brand new, right out of Columbia. The next time we ran in to him, he was a senior lending officer at the Royal Bank of Canada. He and I worked out a deal how to lend us money when we were building cable systems up in Massachusetts because we had no cash flow. What do you lend against? We lent against homes passed. At the end of each month, we'd tell him, "Well, we passed another 3,000 homes," and he'd give us whatever it was, $400 a home or something like that, up till the end of a year where we had to have cash flow of certain amount per subscriber. He was a very, very innovative guy. He and I became very good friends. He wound up coming to work for us. During the period of time when Roco came in, that was the time we restructured the company with the holding company. Then we went after the high yield market. We were one of the first small companies that got substantial out a high yield bond through Morgan Stanley, because they were doing junk bonds with all the big boys. We were a relatively small company at that time. I think we were under 100,000 subscribers when we went out to get our first bond.

SOUTHWICK: Which was roughly when?

GERRY: It was in the 80's. I have a list here someplace. I can tell you exactly what year it was. But we were able to go out. Where deals were going for 12% - 16% interest in those days, we came off the road show, and we were so over-subscribed that we did our deal at 11.25%. We were triple-subscribed for what we wanted. We wanted $100 million, and we got appetite out there, orders for over 300. So we took 125 and we negotiated a rate of 11.25% which is a very, very hot rate at that particular time, the cost of money and all that other stuff. And right after that, two or three other cable companies, even bigger than ours, went to Morgan Stanley. They wanted the same kind of deal. We had great covenants in it, great covenants. So we stayed with Morgan, and we did three other bonds. The last one we did, we never had to walk away from our desks here in Liberty. We did it over the phone and in 24 hours, it was way over-subscribed. That one, I think, was 9.25%. That was the last one we did. These were all done at the holding company. We had the flexibility to do whatever we wanted to do with that money as long as we paid it back. We then lent it to the subsidiaries. Then we'd combine that money, it was like equity, into the subsidiaries. They could take that money and then borrow enough outside money to take that equity plus outside money and do an acquisition.

SOUTHWICK: Wow.

GERRY: Then the last big acquisition that we did was also, I think, a good piece of financing. It was when we bought Wimetco. We had about 590,000 subscribers. We bought Wimetco. They had 307,000 subscribers. We did that deal by assuming all of their debt. So we put on 307,000 subscribers, we took their debt with us, horribly expensive debt, and we didn't give them a quarter. We didn't write a check for $.05. We took on their debt, and we got their systems. We combined them so now we had 900,000 subscribers.

SOUTHWICK: Were there equity holders in Wimetco? What happened to them?

GERRY: They owned other systems which they kept. They owned Atlanta. So the whole system had a lot of debt on it.

SOUTHWICK: So they got rid of all their debt to you and kept a few systems.

GERRY: All their to us and they kept some systems, debt-free, or relatively debt-free. We got all of these systems. First thing we did was to refinance the company in 90 – 120 days, had terribly high expensive debt - they were doing business with General Electric Credit Corporation - very high debt. So we took them in, we assumed some of their bonds that they had, and we refinanced the company with our own banks, got much lower debt. We had great financing arrangements. We used to borrow a percentage off of Lyborg. We'd go out and get fixed contracts so the rates wouldn't go up any higher. We'd buy certainty in the cost of money by buying contracts, fixing the rates. It was a great opportunity because it got us near 1,000,000 subscribers. Then within the next year with growth in our own company and growth in Wimetco, we had over 1,000,000 subscribers. Then we started to get all kinds of offers. We were buying HBO less expensively because we had 1,000,000 subscribers now. They had different price ranges once you hit certain levels. With the other programming people, we renegotiated our cost of programming for everybody. We started buying converters less expensively, we made better deals on literally everything we purchased because we were one of the 1,000,000 subscriber companies.

SOUTHWICK: So it became cheaper to run the Wimetco Systems as well as your own systems.

GERRY: Exactly. The whole thing flowed right down to subscriber 1. That enabled us to get on the Top 10 List at that time. That was supposed to be a very prestigious place, one of the top 10 operators in the country. We felt very, very proud. Here we were, leveraged ourselves all the way up, to be one of the 10 top operators. Then we started getting a lot of, .... It's funny the way the business works. Size is so important. They started coming along and making specials deal with you, then introducing a new program. "If you would take it on, we'll give you a special deal perhaps with a very, very low rate or nothing for the first year. Take it. You start paying for the second." There were all kinds of economic opportunities for us to start growing our cash flow. You know that cash flow is the life blood of this industry. If you grow your cash flow or have substantial cash flow, you can borrow against it and leverage against it. It was just a turning point for us at that particular point. We had money coming in from our high yield efforts, the bank loans we always had. When we did our deal with Time Warner, we had unused bank lines of close to $750,000,000 or something like that that we didn't use.

SOUTHWICK: Wow.

GERRY: One of the tings that we were doing when Roco came in, .... We had another fellow, became the vice chairman here, Rod Cornelius, a very, very bright guy. He was an accountant that we brought aboard and over the fourteen years, .... Very, very bright. One of the best deal-makers out there. We were able to get these great lending arrangements going with the banks. It was a great story when we'd have to go out on the road to sell a junk bond or even go out and do a deal. There was a period of time there, Tom, back in the 80's, when we were doing a couple of deals a month. We bought systems from Tribune Company. We bought systems from Westinghouse which had just acquired TelePrompTer. We bought some systems from TelePrompTer before they sold to Westinghouse. We bought systems from TCI. We bought systems from all sorts of independents, from newspaper companies.

End of Tape 1, Side B

Start of Tape 2, Side A

SOUTHWICK: Let's talk a little bit, Alan, if we could, about what happened to the industry in the 80's after the passage of the '84 act. Things looked great. New programming was coming along. You had the ability to raise rates without getting permission from the city councils. The industry expanded like crazy. Then it began to run into some problems. How did that happen? How did it go from being kind of the golden boy in Washington to, all of a sudden by the end of the 80's, kind of in the dog house?

GERRY: From my view, I think several things happened where the guys really stepped on their toes. One, very, very early on, you had people that were just coming into the business. They were traders. They came in, they bought systems, they put limited partnerships together. There was a lot of tax advantages at one particular time when you could structure a company where the investors took the losses, and they really didn't care anything about service. They got a bad reputation. They bought a system down in Tennessee where the average rate might have been $6 - $8, something like that. They went in there. They jam a $5 rate increase, $5 on the customer's bill. They didn't improve the service, didn't add any channels, couldn't answer the phones. In some cases they cut staff. It was just not acceptable. In one particular case that I'm familiar with down there, the director of operations for the company, when he was interviewed by the newspapers, in effect told them to mind their own business, it was his systems, he was going to run them the way he wanted to, and if he decided he was going to have to raise the rates ,then the people were just going to have to pay for it. This is before the satellite, before direct TV and all the rest of that stuff. That's when Al Gore who was running for the senate at that time, got involved and saw the .... That's when he became an enemy of cable because he figured all the cable companies were that way. That was one of the examples of many instances like that. That was on that level. On the other level, I think that some of the fellows that did very, very well at that time got a little bit heady. I think that we weren't watching how the press described us. We became the cable mafia, the big parties that were going on out in Denver, and it was like we became elitists. There was a lot of resentment. I don't think we did enough, we're doing it now. We've turned that thing around quite some many years ago. But I think there were people that didn't carry their success well. People in Washington, whether it be envy or whether it be vindictiveness or jealously or just that they felt that they had to do something for the people that they represented - in areas like Tennessee where rates were going out off the page and the people were not getting good service - they started to react. Nothing is going to get someone in Washington, a legislator down there, more active than starting to get letters and telephone calls. And they were getting plenty of them. There were some incidents where some of the larger cable companies made some promises, some hand-shake deals, that they backed out on.

SOUTHWICK: With the ...

GERRY: With the government, with the legislators, the people in the Commerce Committee and people like that. There was a lot of bad blood developed at that particular point.

SOUTHWICK: And the broadcasters were upset as well with a "must carry" situation.

GERRY: There were a whole plethora of issues at that particular point. Some of the guys, ... we talked about Amos Hostetter, about Continental. Those guys were always good operators. They were always very, very responsive. They were very active in the NCTA. They were good lobbyists. But there again, there were people out there that were jealous of them. I can say this because I was there, and I heard it, and I was in the man's presence – our congressman from Massachusetts, Markey. He was very, very jealous of the success of the cable guys. And I spent a lot of time lobbying him and trying to get him turned. He was just a very, very difficult guy to deal with. And he hurt us during the period of time that he was in charge of that committee that oversaw the cable industry. I think it was a period of time that, call it inexperience or call it the headiness of the day or we could do no wrong, President Reagan won't sign that bill, and all the rest of that stuff .... President Reagan wasn't going to be there forever. His veto of that piece of legislation that was very helpful to us was overturned. We lived to see rereg come back. I can remember the day that they signed that, that President Clinton and Al Gore were down there. I went to the signing of that thing.

SOUTHWICK: Did you really?

GERRY: Yes. It was held in the Library of Congress. It was a great big to-do here. You could feel the .... It was euphoria on one end because all these people won. They beat the cable guys.

SOUTHWICK: The consumer groups, the broadcasters, all the enemies.

GERRY: Yes. But the cable guys were down there. You just knew, you could see the way their jaws were set, that they really had their work cut out for them. Our company, at that particular point, to give you an example of what happened to the business, was in the midst of a complete, total rebuild of all of our systems in the state of New York. We had made that commitment to the New York State Cable Commission. It was one of the strongest regulatory bodies in the United States - the New York Cable Commission - one of the first and one of the strongest, long-lasting. I believe they're still up there. I don't think they have the power that they had at one time. But we had a commitment on franchise renewals. They would agree to renew all of our franchises. If you had a cable franchise and the local community gave you a renewal, that wasn't enough. You had to take it to Albany and get them to stamp it: "If you want a renewal, you will rebuild everything to 60 channels," I believe it was at that time. These tiny little systems – everything. We were in the middle of that thing, the cable rereg happened:

A.they froze our rates;

B.they rolled them back once;

C.they rolled them back twice.

And here we were in the midst of this rebuild, and we made commitments to the bank that we'll pay this thing back because here was our business plan. The State Cable Commission had approved it. The rates were going to go up $X a year for the next 4 – 5 years during this period of time where all this money was going to be put into the state for the rebuild and the two-way and the converters and all this other happy stuff that they wanted there. So we were in a very, very tough situation. Right around that period of time, we ran into this highly leveraged transaction regulation that came out that they told the banks, "We don't want you to lend any money." The Feds were telling them to highly leveraged companies. So here we are. We have the rate roll-back, we can't borrow any more money. It was a very, very tight and uncomfortable position to be in. We started doing business with the Canadian banks at that time. We went up to the Royal Bank of Canada, there was another bank up there, Ian Crow's bank, and there was another one up there. So we borrowed as much money we needed from off-shore banks. We were borrowing money from banks in Japan, banks in France, banks in ....

SOUTHWICK: Because they were not subject to the HLT rules.

GERRY: Yes. So we got through that thing. In answer to your question – how did we get into trouble – I think that the industry could have done a better job. The leadership in the industry could have done a better job. Fortunately, I think there was a giant turn-around. There was a different mentality being developed at that period of time. The guys realized that if they want to stay in this business, that they better start to conduct themselves a whole lot better. Companies were putting in government relations people. They were putting in PR campaigns. They were starting to contribute to the local charities and all this other stuff in making the cable company more part of the community. And a lot of guys got out at that period of time. You know what happened there. A tremendous amount of people started getting out. So it created opportunities for the fellows that stayed in. They were able to buy some of the cable systems or merge them or things of that nature. I think it's something you see. Listen, it happened over the last year or so with Bill Gates. Why is Bill Gates in so much trouble?

SOUTHWICK: Yes. He's taken over John Malone's role as the "evil" man.

GERRY: That's right. Thank goodness.

SOUTHWICK: I'm sure John Malone is happy with that.

GERRY: Yes, yes. But that's something else. You know, the government is always looking for a new industry that is succeeding - how can they go in and either regulate them or cut them down in size or tell them how to run their business or get in their pocket somehow or other.

SOUTHWICK: You went down and lobbied, you mentioned Congressman Markey, but also Reed Hunt who was the FCC Commissioner.

GERRY: We spent a lot of time with Reed Hunt.

SOUTHWICK: Could you tell me a little bit about that experience, because he had to implement the '92 Act.

GERRY: Yes, yes. We got to know Reed Hunt. He checked us out, and he told us that he thought we were good operators and the regulatory, the punitive things that they had to do was really not based against the good operators. "There's a lot of bad people out there," he said, "and we have to bring them in line." He had his own philosophies. Interestingly enough, Tom, they didn't understand the cable business, not their smartest guys down there. We told them so. And we also volunteered. I said, "Send some people up. Let us show you how we run. Let us show what cash flow is made up, and let us show you what happens to the money that we take in from the subscriber." And he did. He sent people up here. We had some training sessions for them. We went down there. We met with some of their staff. He was very, very open. I can say that I didn't love what was going on down there, but we certainly survived the period of time that he was down there. We had excellent, excellent relationships with his people. We did because we reached out. We made it our business to go see him, to find out what was going on down there. We got to the point where we had good access from him. And it got to the point, also, that he used to call here every so often. If something was going on, he would kind of maybe disguise it a little bit. He was jammed up and what would I think or what would our chief financial officer think. And we were able to .... I don't say we influenced the guy, but I think we helped him form opinions. And it was important. There were other fellows in the business that took the same position. And other guys dug their heals in. My good friend, John Malone, publicly announced, "Shoot Reed Hunt." It was all over. He should be shot. That was a toughie. That was a toughie.

SOUTHWICK: Absolutely.

GERRY: Then we also went after Vice President Gore. I made it my business to find out who knew him that I knew and got in. I spoke with him on several occasions.

SOUTHWICK: What was your impression and how did that go?

GERRY: I think that his whole thought process on the cable television business was formed on the experiences that he had down in Tennessee. His parents lived in one of the communities that we served, that we bought from Wimetco.

SOUTHWICK: Oh really.

GERRY: And I reminded him that that was our community. I said, "You ask your mother and dad, Vice President Gore, what they think of Hoco Cable Company." I made sure we checked the signal out. It was all good, and all that other stuff. But it was. We ran a good, good show down there. And he became ... he flipped. He is not the enemy of cable that he was. We got letters from him, and we've had .... Up in the office I'll show you a picture of him with he and I when I was pointing my finger at him, something like that. He became a good guy. I think he helped us a lot. Does he love cable? No. I don't know anyone that loves cable. It's like saying, "I love Bill Gates. I love to pay him these fees for Windows and all that other stuff."

SOUTHWICK: But he doesn't have the passion to squash the industry that he used to have.

GERRY: No. No he hasn't got that passion. No. Remember when he called John Malone Darth Vader, part of the cable mafia and all the rest of that stuff? There's bitter blood, and I think it's still there between he and Dr. John.

SOUTHWICK: A couple of other things happened at this time technologically. Particularly, I wonder if you could talk a little bit about two of the big ones – the development of fiber optics and digital compression. How did that impact your business?

GERRY: The first experience we had with fiber optics was after we acquired the cable system from the Canadian newspaper publishers out in the west valley, out in California. That system, interestingly enough, had high powered microwave out there. But the plant was so bad. The system was going out on a constant basis. During any given week, the system was out several times. We, I believe, were the first people to do a 100% deployment of fiber optic trunk line in a cable system out there on the west coast.

SOUTHWICK: This was late 80's?

GERRY: This was in the mid-80's. A Japanese company bought a cable plant down in North Carolina, and they were spinning fiber optic cable down there. We went down there, saw the cable being made. They did a whole dog-and-pony show for us, how you splice fiber optics, and all that other stuff. It was just amazing what happened to the signal quality in a cable plant when your cable was delivered through fiber optics - the purity of the picture, the clarity of the picture, the reliability of the service, the getting rid of all the active electronics that you could get rid of – in that period of time and that process. I really think it came in the knick of time because cable did not have a good reputation for reliability, for service, for client relationships, for customer relationships. Shortly after that period of time, it wasn't too far after that, the NCTA went on this reliability campaign and the on-time guarantee where you pay them $20 if you don't show up within the time that they tell you.

SOUTHWICK: Right – to fix the problem.

GERRY: It was notorious in our business where people, fortunately not in our company, would take a service call, say they'd be there tomorrow, and tomorrow would come and tomorrow would go. The day after would come, call up again. "Oh, weren't they there?" or "Let me find out." People were outraged. Again, it was part of the turn-around process that had to go on in the business at that time for us to get to be counted as an industry that could deliver a product and be relied on.

SOUTHWICK: And later, in the early 90's, this digital compression came along which also changed the way the business worked.

GERRY: The digital boxes and the satisfaction level of the digital boxes is outstanding. The effects that the launching of digital boxes have had in the cable companies that are seriously going after the launching and the reprogramming of their channel line-up using digital has been very, very gratifying.

SOUTHWICK: And this allowed you to add more channels without upgrading, rebuilding the plant.

GERRY: Exactly. You could take a 60-channel system that delivered perhaps all of the basics on 40 channels. Then you could deliver who knows how many channels, 5 to 1, or whatever, on the rest of the channels. You could deliver another 80 – 100 channels on the rest of the 20 channel conventional band. It changed the face of the industry. Fortunately enough, it came at a time when the competition from the direct TV people started to rear their heads.

SOUTHWICK: Did that have an impact on your company? Did you see any loss of subscribers to the ...?

GERRY: No. We used to measure, any time we lost a subscriber and we knew they went to digital, to a box, to direct TV, we recorded it. We used to have those numbers every single week from every single system. We used to watch it very, very carefully. Then we'd also have buy-backs where we'd buy the people's dish back, particularly if it came right before we had a rebuild going on. We were building, at that time, 80-channel systems and doing a lot of conversions to 80 channels.

SOUTHWICK: So we'll offer you more channels and we'll buy your dish back?

GERRY: And you have the local channels. That was before they could deliver local channels. In cases like here in Orange County, in this Wurtsboro district, the Orange/Sullivan/Ulster district over here, we have a very, very popular local news channel on every night. And you can't get that from the direct satellite. A lot of people that have gone to direct satellite for sports packages still keep our cable because of the importance of the local news. We also cover all the sports teams and all of the high schools that play each other – football, basketball, baseball.

SOUTHWICK: I've always thought that was the great strength of cable because I came from newspapers where the local newspaper had a monopoly on that coverage and that's what kept them in business despite USA Today and the New York Times.

GERRY: Exactly.

SOUTHWICK: For forty-some years, you resisted, I assume, many, many offers to sell your company. Why did you not ever want to sell out and what made you change when you finally did decide?

GERRY: Well, I suppose it was an evolution or several things started to come into convergence at the same time. We shook hands with Time Warner probably 18 – 20 months before the deal closed. So I was in the business, at that time, 38 years. At that time, when we made the decision, the phone companies were the big threat. Then right on the heels of that came the direct TV people. So we saw our ability to continue growing starting to flatten out. We were still pretty-well leveraged up. We were about 7.5 times at that time, way down from 11 times. I thought I was getting into good, green country. But we were still 7.2 times leveraged up.

SOUTHWICK: And that's a cash flow?

GERRY: Yes, that's a cash flow. I thought two things had to happen. We had to go public to get some money in here and bring our debt down and give us some more flexibility (I didn't have to own the whole company) or we had to merge. We had to get a partner. We started to talk to Time Warner. We knew them a long time. We share a lot of markets with them, and we got to know the management. I know Jerry Levin. We go back some 20-some odd years when we first got involved with HBO with Time Warner. That's when I met Jerry because he was involved with the HBO product at that time. There was some talk then about making an investment in our company. We'd still run it, but they'd own 20%. It was a very attractive offer. But in going though all of the numbers, what would happen if ...

SOUTHWICK: Can I ask you how that happened? Did you pick up the phone and call Jerry Levin one day and say, "Gee ..."?

GERRY: No. I think what happened there .... I was very friendly with Joe Collins. Joe was the president of their cable division. He said, "Al, why don't you sell the company to me?" I said, "Joe, I don't want to sell the company. I like the company." "We could give you a heck of an offer. Let me make an investment." That type of thing. We had very, very well organized managers meetings on a yearly basis. We'd take all the system managers out to New Mexico, down to Florida or North Carolina or someplace else to these really great management conference areas. We had these great, great 3-day management sessions. One of the times, Joe was invited to be the guest speaker. That night he said, "We'll really do a really good deal with you." I said, "Why don't you put something on paper." So that's how it started. Then we got a phone call after he had gotten some ... He wanted to see some financials and things like that. He came up with a very, very good offer, a very, very good offer at the time. So I said, "Well, let me think about it." That's when they were in this expansion kick. I think they only had, at that time, 5,000,000 subscribers or something like that. They did the deal with ____ channels. And they did a deal with some Houston Industries. They bought Houston Industries. They bought another company in the Carolinas someplace. Anyway, that was sort of the history of it. Then Jerry came up here. He came up to this building with a couple of his heavy weights and he sat down. And I started thinking about the time I'd been in the business. I can't stay here forever. I don't know how to renew myself so I can't stay here forever. And I just thought my youngest child, my son. He always knew from the time he was a little boy that he was going to run the company one day. He was, at that particular point, just starting his first or second year at college. I just felt it was better economically and life style-wise if I merged with a company I was really happy with. I knew that the subscribers would be taken care of, the career CVI people would be taken care of, and there would be more opportunities for them being part of Time Warner than I could ever give them. I can't give them stock options and all that other stuff. We had all kinds of private deals. We had profit-sharing and all kinds of things, but no way could I replicate the organization that Time Warner had. And I just thought, with the changing of the industry, the consolidation that people were starting to talk about, .... We were one of the early ones that made a deal. I made the decision, and I never looked back. I never looked back. Do I miss it? Yes, I miss it. It's a great, great business, great people. Some of my best friends are still in the business, relationships I've formed, the involvement. I cannot think of a better way that anyone could have grown a company or lived in this country, and I've said this to you before, and grown up in America and been part of this industry from its infancy and growing with it. I just felt that all the stars were lined up the right spot – good company, very good price at the time. Of course prices went crazy since, but so did our stock. We got paid mostly in stock. So we did okay in that department.

SOUTHWICK: You remain involved. What is your relationship now in terms of Time Warner? You're a major shareholder.

GERRY: I think we're the second largest private stockholder in the company. Ted's first, then we come. I think that's the way it works at this point. Then there were a couple of the big funds that owned more than I do, but they were big funds made up of thousands of people. I don't know where we'll shake out on the AOL. We'll be one of the major stockholders there. Ted's ahead of me, and I don't know who's ... I think I'll own more stock in the company than any of the guys at AOL. It doesn't make me live any differently or anything like that, but we'll be major shareholders. They've been very good. They've been very responsive. We've had a separate meeting with them - "tell us about your company" and this and that and the other thing. We're very comfortable with those folks. We're still involved. I get involved with things with the NCTA, a limited amount of lobbying. We still are very, very much involved in the cable pack. I was very close with Decker right up to the end. I'm sort of getting away from that because it's a new crowd in there now, new people, new ownership, new interests. You have to know when you've run the race and won and get off the track and let somebody else run.

SOUTHWICK: I know the feeling. Now I'd like to ask you about some of the people you've been involved with over the years and have you give me your impressions of them. Maybe we can start off with one of the most colorful – Ted Turner. When did you first meet him and under what circumstances and what has been your relationship over the years?

GERRY: I met Ted back in the 80's through my involvement with NCTA. We became friendly. We served on some committees and things together. I can't sit here and tell you I'm his bosom buddy or anything like that. We sort of have different life styles. But he's become a good friend. He's very, very accessible if something comes up and we need to talk about anything, whether it's Time Warner business or anything else. I can pick up the phone. He calls me back. We've spent private time together at different periods in our lives. He's a very, very unique individual and very, very bright. He's as close to genius as you can get. He's got a unique personality as you know. He's one of a kind. He's a great guy. I think he's played a tremendous role in the industry in doing what he did with TBS and leveraging off from that and to do it through the creation of all these other channels that he's put together.

SOUTHWICK: What did you think of CNN when you first heard of it? Did you think it would work?

GERRY: I think it was just wonderful.

SOUTHWICK: Did you really?

GERRY: Yes, I did. I've always been a news junky, and to have a place you could just always get news was wonderful. Of course, it's expanded tremendously.

SOUTHWICK: Did you think it was viable? Did you think it could be pulled off, a 24-hour news channel?

GERRY: I think that I, I believe, I can't remember where I was at the time when Pearl Harbor was bombed or something like that, but I can tell you that I always thought, from the beginning, it was a very, very good idea and that it was possible. We needed programming at that time in the industry and what a great addition to have in your cable line-up a good news channel. We never even thought that there were going to be news bureaus all over the world and that you could watch wars going on or coronations or whatever the other things, the tragedies – a famous person died or something. There was CNN at the funeral or there at the important things that happened any place in the world.

SOUTHWICK: Another person, John Malone. What's your bond or bill at TCI?

GERRY: I met John Malone way, way back.

SOUTHWICK: When he was with Jerrold?

GERRY: I might have met him at Jerrold, but I don't recall. I remember, in the early days at the NCTA conventions, I used to meet John out there, and he was always accessible. I'd come up and introduce myself and talk about things. We bought some systems from him along the line, from TCI, partnerships that didn't work out between he and the partners or for whatever reason. I got to know him a little bit better at that time. Then when I started serving on the NCTA board, I used to see him on a regular basis several times a year, listening to him at the meetings and after hours or having drinks in the evening and just rambling on about the industry about things. He's with doubt one of the brightest guys that I've ever met in a wide area. He's not one of the greatest operators, but he's one of the greatest deal guys. He's very, very smart financially. I've learned a lot from him, a lot from him. He was always willing to open up. When things were going on, we used to talk about things. I always tried to be the listener. I didn't want to talk a whole lot when I was around John Malone. It's time to listen. And he's been always very, very available, even after he's .... I guess the last time I spent any quality time with John was right before Leo came aboard. I was out in Denver and I called him up and told him I was going to be out there in a few days. "Yeah, come on over." We spent three hours together in his office.

SOUTHWICK: Is he a tough deal maker?

GERRY: Oh, yes.

SOUTHWICK: Is it hard to do a deal with him?

GERRY: Well, I don't think he's hard to a deal with. I think he'll try to get the last ounce of flesh off of a deal before he turns it over to you. We tried to do a deal on some stuff that he had out on the west coast and, in retrospect, I probably should have done it. It was very, very highly priced. It was cable systems that were probably worth 10.5 – 11 times. He wanted 13 times for them because he knew I wanted them. They were right next door to where we operated. I should have done a deal. I should have co-ventured the deal with him rather than just _____ because they would have been much more advantageous to me to be his partner and get me nose under the tent so maybe we could have done other deals. But it didn't work out. But we're still friends. He's sent me some great letters over the years, and John doesn't write a lot of good-guy letters. But he's sent me some nice notes that I treasure. He's a good guy. I like him a lot.

SOUTHWICK: Jerry Levin.

GERRY: I'm afraid that you'll ask me about a few guys, and you won't ask me about the rest of them. I hope I'm never going to leave anybody out.

SOUTHWICK: Well, this is my list.

GERRY: This is your list. Okay, so I'm safe there. Jerry's a very, very smart guy. You talk about a visionary. I don't know if you heard the story, but ten years before they did the deal with Turner, Jerry had recommended that Time Inc. buy Turner – ten years before. At the announcement, the press conference to announce the deal, he related that story to the press at that time. He still had a copy of the note.. I forget if Dick Munroe was in charge, ...

SOUTHWICK: Yes.

GERRY: ... at that particular point, of the company, and he recommended that Time Inc. merge with Turner because their interests were so aligned. Time Inc had all of the content that Turner would need in developing his .... And I guess he had his eye on that situation for a long time. Jerry's a very bright guy. He's a visionary. He sees the world differently, I think, than anybody else out there. He sees the convergence of all these things that has built Time Warner right up to the point that the AOL deal was announced. The shocker to me was that a company like AOL would buy Time Warner rather than the other way around. But you have to be realistic and understand what's happened to the world. We're living in a digital world. There was no way Time Warner could take advantage of becoming a digital company and a digital network and have it done in a short period of time other than going out and buying a company like AOL or being acquired. I think that Jerry was smart enough, and I don't think he let his ego get in the way. It's better. AOL/Time Warner will be a better company than AOL by itself or Time Warner by itself. The synergies are such, and the interesting thing is that I do think the management is such, that they will get along very, very well. There's probably not going to room for everybody. There's probably going to have to be a few bulls let out of the pasture because there's a lot of strong personalities in there. But I think what will remain, will remain a very, very unique set of assets that has a tremendous amount of potential to continue growing.

SOUTHWICK: John Rigas. And I ask you that because I think his story is similar to yours, a small town, not too far from here, started out as a theater owner. Are there parallels?

GERRY: John Rigas is one of my favorite guys in the world. I've know John probably 25 years. We met when we were franchising against each other up in western New York. His systems are right across the border in Pennsylvania. I met him when his brother was still in the business with him and his oldest son. His brother and oldest son were franchising in western New York in a town called Canandaigua, New York. That was one of the first cable systems that was franchising after the New York State Cable Commission came into existence and froze all the cable franchises in New York State for two years while they rewrote the laws. That's where I met the Rigases, in the early 70's. I've got the greatest respect for John and his family and the boys. They've just done one, hell of a job. They still are a major stockholder in the company. They're not down to a little, single-digit ownership or anything. They're very serious about the business. That's one family that I would bet will own and run and control that company way into the next generation. They're so serious about that company, and that business and what they've built and what they've accomplished. They're smart operators. They're hard-working people. They're risk takers of the greatest degree a risk taker can be and still survive.

SOUTHWICK: And with deep, local roots as you have.

GERRY: Very, very deep, local roots. I'm very fond of John and his boys and the family. I know John's wife, know his daughter. They're good people. They are what this business is - was all about. They're a very rare commodity. There's he, there's the Robertses and the Dolans. I don't think there's a lot of others.

SOUTHWICK: Not too many other left.

GERRY: No, no.

SOUTHWICK: That's what built it, those kinds of folds.

GERRY: No question.

SOUTHWICK: And one other guy because I know you have some feelings about him, and that's Decker Anstrom and way he transformed the NCTA.

GERRY: I met Decker when he was the right-hand man of Jim Mooney. Decker has always had his own special, special "Decker way." He's a great thinker. He's very pragmatic guy. He's a consensus builder. He doesn't try to bully his way into anything. He never shoves people around. He's one of the few, probably the only person that I know, that could have gone in after Jim Mooney left and gone in and done the repair work that needed to be done. Jim was put in a very, very difficult position. He and I have had a lot of talks about this. "This MSO wanted to do it this way and that MSO wanted to do it the other way." And here he's caught. He's getting phone calls from both these guys – move it this way, move it that way. I think that Decker had the ability to come in after a very, very difficult period and bring many of the operators to the same thought process. He could also go out and speak to the congressional aides, the senatorial assistants, the members of Congress and the Senate and explain things and make commitments and bring integrity back to the business. There was a lot of separation in thought. As I described a little earlier, we did ourselves a lot of damage. We didn't make our commitments. We weren't good citizens in many instances. And I think during this whole transition period, we actually reinvented ourselves, and I think we did it very, very successfully. I don't think it could have been done anywhere near as effectively and as timely without Decker Anstrom. As an individual, he's a joy to know. He's "feel good" after sitting down and spending some time with Decker Anstrom. I'm a big fan of his, I admire him tremendously, and I'm delighted that he has had a chance to bite off a little piece of the American dream. He's with a great company, and I've heard he has a great deal out there. I hope he'll be able to enjoy some of the fruits that a lot of the others of us have already picked.

SOUTHWICK: Terrific. Thank you very much.

GERRY: That's it?

SOUTHWICK: It is indeed.

GERRY: It's been a pleasure.

SOUTHWICK: Thank you from me as well.

GERRY: Come back in forty years. We'll do it again.

SOUTHWICK: Thank you, Alan.

End of Tape 2, Side A

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Henry Geller

gellerHenry5

Interview Date: Sunday November 10, 1985
Interview Location: Washington, DC USA
Interviewer: David Paglin
Collection: Penn State Collection
Note: Audio Only

Interview dates: November 10, 1985; November 26, 1985; June 19, 1986; March 31, 1987

PAGLIN: Good morning, this is David Paglin, Oral Historian for the Golden Jubilee Commission on Telecommunications. I'm in the office of Mr. Henry Geller in Washington, D.C., at the Washington Center for Public Policy Research.

First, would you tell me, Mr. Geller, something about your early life. I'd like you to talk to me, if you would, about your birthplace and your parents, your family, early memories, important things like that, where you lived; some memorable things that come back to you from your early childhood. Perhaps something about your early education in elementary and high school as well. Whatever details seem to be interesting and important to you.

GELLER: I was born in 1924 in Springfield, Massachusetts. I escaped a great fate at the date of my birth because I was born on Valentine's Day in 1924. That was the height of Rudolph Valentino's popularity and the nurses all told my mother to name me Valentino. That would have been the end of it. Fortunately, she resisted and simply named me Henry. I did not stay in Springfield very long and have no great recollection of it. My father decided to move to California, stopped to see a brother in Detroit and never got to California. So I grew up in Detroit.

My father was a builder. He, as my mother said, made and lost several fortunes, and so at times he was a painter also. He hated being a painter during the Depression, but he would get wiped out. My mother always said it was a roller coaster with him. Fortunately, he was going up when he died, so he left her with some money. He loved building homes. It was his life and he was all wrapped up in it. And it was a rather typical Jewish family of somebody who came over from Europe. From Poland, in my mother's case; from Russia, in my father's. And that is that it's all family wrapped around the children. My father was very interested in his work but left the bringing up of the children to the mother. And the mother runs the household, does everything, and really caters to the child's needs. Too much now as you look back and think, My God! Because she would make a meal for each child, for example. God forbid that you would just put a plate on and say eat. Each child got a food that he wanted.

PAGLIN: Do you have brothers and sisters?

GELLER: Yes, I have one brother and two sisters. The sisters are the oldest. One is twelve years older; one is ten years older; the brother is two years older. The one great tragedy in my family is that my sister at the age of two and a half or so got infantile paralysis, the oldest sister. The result was that she never could walk. She dropped out of school at sixteen or so; very bright, but never used her capabilities. My mother and father ... again, being what they are ... just showered love on her. But they really needed to push her out into the world and insist that she stay in school and that she move ahead. And the result is that she has always been very dependent on the world and that bothered both my parents a great deal. It's just, I think, the single great tragedy of their married life.

The rest of it is very routine. And it was, as I said, a very close knit usual Jewish family. We lived in a Jewish neighborhood. The school--95 percent Jewish‑‑very high academic standards. I went always to public schools. The public school system at that time was extraordinarily good. I've no complaint ever about teaching. They were tremendous, terrific educators. The library system was terrific. It's not true anymore. Detroit kind of has fallen on bad times in the library. But I use to love going to the library. I loved sports a great deal. I used to live on the tennis courts.

PAGLIN: I can tell by the contents of your office today, there are various sundry things, having to do with tennis, and literature, and all kinds of things I wouldn't necessarily expect to see in this office. A wonderful state of disorder.

GELLER: Well, it's creative chaos.

PAGLIN: Right.

GELLER: But I, the upbringing with what's happened, there are no untoward episodes or anything like that. I graduated ... my mother used to send me to summer school every summer instead of camp. The result is that I simply graduated at the age of sixteen from high school. And went into college immediately at the University of Michigan. I graduated from that at the age of nineteen.

The war came ... and I clearly was going to go into service. I did go into military service in April of 1944 and got out in May of '46. The military service, in my case, was also quite interesting. I took basic training in Alabama and I was trained in the 4.2 chemical mortar. I have a degree in chemistry. I should talk a little bit about that. But after going overseas to New Guinea and the Philippines I ended up in Japan. I never saw a 4.2 chemical mortar. That's the Army, typical. I spent most of my time unloading ships at quartermaster depots, loading and unloading things.

PAGLIN: You were a sergeant then?

GELLER: Yes, but during most of the war I was nothing at all but a casual doing this type of labor. I did volunteer for OCS, things like that, but they correctly evaluated that I was a very immature type. I was then just living on the wind, as my mother would put it. And after the war, I ended up as a sergeant. I finally began using chemistry, but only until the war ended. When I got over into Japan, they did assign me to a lab outfit and I used my skills in chemistry to run tests. I would run tests on cons in Washington to insure about syphilis. I would run tests about methyl alcohol. The troops would be drinking something that might make them blind or kill them because it was not ethyl alcohol.

I should go back. I just kind of skipped ahead and, as I said, it was very uneventful. I wasn't in any great danger. We'd go in on invasions, but we were in more danger really I believe, going down the Mt. Vernon Parkway, than you are on these things. There would be kamikaze planes, but after about the fourth day, from then on all you would be doing was unloading the ships. There would be one plane that would come over, drop a bomb or something. The chance of getting killed was very slight in those circumstances. Much greater at home driving down some highway, I believe. I met a lot of interesting people; I enjoyed my military experience, too. I feel guilty about that. So many people died and had a hard time. It was just a very interesting time for me. Enjoyable, I'm sure.

PAGLIN: Can I infer, from what you were saying about the University of Michigan and the service, that if you had an early professional aspiration at this time, it had to do with science rather than chemistry?

GELLER: That's what I wanted to get back to. I skipped over it. I was always extremely interested in science. I loved reading about it as a kid, doing lab sets. I loved astronomy. I still do this. My chief reading is on cosmology‑‑books on superforce and what is happening in quantum mechanics and how this explains the creation of the universe. I was drifting toward science and I took a lot of science in high school. When I went into Michigan I was going to be a chemical engineer.

PAGLIN: I see.

GELLER: I was kind of switched off that by faculty advisors. This is back in, I went in in 1941; and at that age, as I say, '40 ... I was sixteen when I got in and soon turned seventeen.

PAGLIN: What made you choose Michigan?

GELLER: It was right there and very reasonable. It cost $60 tuition for the semester, $120 for the year.

PAGLIN: It would be a bargain nowadays, wouldn't it?

GELLER: Yes, to live in the dormitory was $16 a month. To eat three meals a day was $1. And when you add it all up, it was absurd to go anywhere else. It was a good school. Now it's very large. Then it was 10,000 students. I liked it. It was close to home and Ann Arbor is a lovely city, it really is. And so I just went on, it was the easiest way, and I went to Michigan. A faculty advisor strongly recommended that I not continue in chemical engineering.

PAGLIN: Why was that?

GELLER: He said that there was great prejudice against Jewish people, and he recommended that I not do it.

PAGLIN: Has this been borne out by what you have seen?

GELLER: There was at the time, but it's all gone now. At the time, when you go back, I finally ended up in law. If you applied to a New York law firm, they did not hire the Jewish people. Now they're delighted to do so. If you're a top graduate, they would take you on as a partner; but this town has changed remarkably. When I came here and your father came here, you know, you ended up at Union Station. Had drinking fountains colored, white; restaurants colored, white. Enormous change. We're talking about the early 40's. This was a sleepy southern city and I think that my advisor was probably right. I had no reason to doubt it. He was a very sincere guy.

I took him at his word and began drifting ... thought about pre‑med. Fortunately, I never went into medicine. I would not like it; would hate it. It was not my field. Although I could probably do research in it. By that time I had an awful lot of chemistry. And then I decided I didn't want to do pre‑med. I never applied to med school. I just kept on with chemistry. And I graduated with a major in chemistry and a minor in physics and mathematics. I went into service, as I say, with this chemical background.

When I got out I went back to Northwestern and began working on a master's degree in chemistry, the one thing I loved reading about it. I don't like the lab. The labs to me were very boring. They take hours, and hours, and hours of work. And what you do is you run it at 32 degrees, you run it at 35 degrees, you run it at this pattern, you run it at that. I really didn't enjoy it all that much. The reading I didn't mind. The lab work I did mind.

What I tell you now is a true story and doesn't reflect very well on me, but it is the truth. I would go down to this one bar in Chicago, the Black Hawk Bar. I was taking, say a two‑hour qualitative organic course and putting in thirty hours a week to do it because of lab work. And every time I was down there, I would bump into these University of Chicago law students and I asked them if they ever studied. They said no, you didn't have to study in law school, that they'd give you one exam at the end. And I've never had problems taking exams. Labs are a problem, but with exams, never. And so I went home and told my parents. They were amazed that I wanted to study law. Then I wanted to become a patent lawyer. And actually, you've got to realize, I was quite young. What I wanted to do was just goof off. I was on the G.I. Bill at Chicago.

I didn't even want to be in Chicago; I wanted to be in California or New York. But they were swamped with applications, so I just drifted to Chicago.

PAGLIN: The law schools?

GELLER: Well, this was Northwestern Graduate School.

PAGLIN: Oh, I see.

GELLER: The law school's the same way, though. I applied to California, I applied to Columbia, and I don't think I stood a ghost of a chance. Whereas, I could easily get in at Northwestern at the University of Chicago. I didn't really have a great interest in patent law. I took one seminar in it and never got near patent law. What I wanted was not to be bothered and spend three years having a good time. And I did. I had a joyous time. I played bridge all hours and ate, played golf--just had a ball. Law school is remarkably easy. It's just a bullshit course and I would do nothing for fifteen weeks and then I'd spend a whole week trying to learn it.

PAGLIN: It isn't relative to the hard sciences, that is.

GELLER: You can't do what I did in science. You can't even begin to do what I did. If you did it, it's a wipeout, I can tell you. In law school I finished second in the class. I had very high averages. As I say, the same type of attitude, if you tried to do in chemistry or physics, you'd pick up the pieces. All they do is give you an exam or they want you to analyze factual situations. It's almost an advantage not to know too much. You've got to know certain boundaries, but if you have certain fundamentals in mind, and you simply reason on it, you have an advantage because you're not trying to fit it into any mold just thinking about it. And as I say, I found it just a piece of cake. When you get out, you're a lawyer.

When I got out, I at no time wanted to do private practice. I would never, never be interested in it. I've always wanted to do what I call public service. There was no Ralph Nader or no public service of that nature at that time. If you wanted to do public service, you had to work for the government. In any event, I thought I would go to the government. Even now, even if there were a Nader, if you want to accomplish anything in the way of policy, you have to do it from the inside much more than from the outside. You can be far more effective if you're inside pushing for policy than if you're outside suing them. I'm outside now, and I sue them. And I can tell you, that it's that old thing, "I've been rich and I've been poor, and rich is better." Believe me, I've been in and I've been out, and in is better. Trying to effect policy from outside is extraordinarily difficult. I honor Nader and others, but maybe they can do a better job than I. I find it very hard to do.

PAGLIN: When would you say you got, initially, this sense of yourself, this intending to head in those directions, the initial conviction to effect policy, you wanted to be with the government? Does this have anything to do with law school? With things that happened to you in the military? Political views of yours that began forming at that time? Responses to the national government, the administration then? Anything of that kind. Innumerable events happened on the national scene that compelled you in some way in that direction.

GELLER: No, no, I'd like to say yes. I tell you what my convictions have always been. You'll find it amazing that I acted as I did in law school, but my convictions have always been that you put in so much time working that you ought to choose the most interesting work. It's a pity that you work for months and you put in hour after hour; and unless you have enormous needs of money, something that I've never had to have. Unless you have something that you want to own, an airplane, a yacht, unless you have some driving need for money, you ought to work for the sake of saying, "Gee, I'm awake in the morning, I've got interesting work, I want to get into work, and ought to look forward to work." And, therefore, you ought to choose work that you really like to do. Which you say I can't wait to get in and do it.

Now, I knew that's what you should do and like so many other people, I just thought I knew it from the very earliest time. It wasn't hard to figure out. As what I just said to you, ought to be like A, B, C. Doing it is the hard thing to do.

PAGLIN: Considerably.

GELLER: You've got to find something you like to do. There are people that work at Rand Corporation, they call them Bostons, or at Hughes that don't want to leave the lab. If you paid them nothing they would come in. They simply want to do research on some particular physical thing, something like that. And that's what I wanted. And that's why I set out in science. But I found out I didn't like the lab work, and so I ruled that out. Once I did that, I was kind of adrift. And then I ended up in law, and I still don't know what I'd like to do in life. Have no notion. If you'd send me back, I don't know. But if I was going to go into law, and knew, and that's why it isn't any particular thing you said on the landscaping [???] event, I knew that you ought to choose work that would be satisfying. Where you would get some satisfaction saying if I got done doing that kind of work that was worthwhile. And that's not working for a client. A client it may be very worthwhile, and could be absolutely against it. I know people out there who represent cigarette companies, the Richard Cohen column.

PAGLIN: I read that.

GELLER: How do you represent cigarettes? I'm not saying they're not entitled to represent cigarettes, but what satisfaction do you get out of it? Some theoretical one where everybody's entitled to representation or my God I've got a lot of money? It's blood money almost. And, therefore, I figured out based on the same thing that led me to try to do the science thing that I want to do work that I can say "that was interesting and that was worthwhile, worth doing." And that's government. That's not private practice.

Now there was one other thing you could do, I suppose, and that is you can go and become a lawyer where you help people. Where when people come in with problems, instead of just making money off them, you deal with people in a way that helps them and you can look back on a lifetime of helping them solve their problems. But on a human basis, I didn't think of doing that for the most part because, it's just the same way I didn't think of becoming a psychiatrist or a psychologist. I don't think I have any special bent for hearing people, being sensitive to people. I thought my bent was much more in the way of policy work and, therefore, I drifted to government and have always stayed with government. But it seems to me that if you're going to do law and get satisfaction out of it, there are only two things that would meet my definition of it. One of them would be where you work with people and at the end of it say, "By God! I helped that person." You know, he would ... I've seen some lawyers who ...

I had a secretary once whose son was accused of taking some money from Highs [???]. My brother‑in‑law worked on it, got him off, and then gave him a Dutch uncle talk and said you ought to learn from it. And I think what he did there was a very worthwhile thing. He can look back on it with some satisfaction. That it was worth doing. I don't do that type of thing. My work would be how you get on counter‑commercials to smoking? How do you get fairness out? How do you get more informed electorates. Since your democracy depends on a more informed electorate, how do you get a contribution by broadcasting data with it. In some ways the lower echelon, than working with the kiddies and all, would hide. But I thought it fitted me better and that's why I drifted to government.

The '60s, certainly, from what I gather were very strongly motivated toward public service. The driving force in the '30s was the Depression, of course, and it drove people to labor law and to social security work or interests of that nature. My interest when I came to Washington was getting into anti‑trust and I applied and I didn't make it. But when I came here from law school, very few people came from Northwestern to Washington, D.C., very, very few. Maybe one or two. Every class, in fact. And there were two professors there and one in particular, Willard Wirtz, who later became Secretary of Labor.

PAGLIN: Yes, I've heard of him.

GELLER: Wirtz was called in by the dean and said Henry wants to go to Washington, who do you know? And he gave me a letter to Adrian Fisher and to Harry Plotkin. Adrian Fisher was at the Atomic Energy Commission and told me you don't want to work here. The security is so heavy that you don't want to come to work at this organization. I then saw Plotkin and that was the FCC. I had no great notion to work for the FCC. My love was to work for anti‑trust, but with anti‑trust you needed political drag and I didn't have any. You really did to get into the Justice Department.

PAGLIN: You were at the Justice Department for ...

GELLER: When I applied in '49, you needed political drag. It was the Democrats, and you needed to get some clearance to do it. They would not hire you without clearance. Whereas, the FCC would hire you purely on merit. The FCC had a hiring mark and they told me after I came to work that the ratings were high enough to hire me, but no one could even remember what I looked like. And Max Goldman, a friend, said, that when I showed up they said, "Oh, that's what he looks like." You can see they were doing things on the merits, so they hired me on the merits. And I ended up at the FCC for that reason.

But to drift, and I've since then left government only when compelled to do so. I've had to leave twice. And, frankly, what I'm doing now is waiting to go back into government. The last, what do you call, "waiting for lefty." Maybe I'm waiting for Godot. And if Godot never comes, then my turn may never come.

PAGLIN: I can express that political bias for '88 or so, let's hope not.

GELLER: So, I would like to go back and in between I avoid private practice. I take jobs that allow me to pursue public interest goals, as I see them, but not very effectively. As they say, you're not as effective out as in. And I simply wait to return.

PAGLIN: I see. I'm looking at my sketch here of a long and varied career and I see exactly what you're saying. It's substantiated without looking down here. I'm kind of wondering if I could get you to glance back for a moment or two at what you think of and think back to your clerkship and NLRB and your early time at Justice and then the FCC. What you think of now as the significant personal and professional achievements and milestones, things that had a really consequential effect on enlightening you or changing your professional direction or your objectives at that time. What really had an effect on your understanding of the work you were trying to do in public policy at any of those places and at any time?

GELLER: I think it was working with people. Working with people like Plotkin and others that were the mentors and you learn from them and from the experience. Dick Solomon, Roger Wallenberg, and Max. As you work with these people and at Justice, Danny Freedman, Hal Westen, at each one of them you would add a layer. The Labor Board had some very able people working there, Fred Reel, Arnold Ordman. You just can't help having it rub off on you about how you go about it; how you go about the job; how you go about perceiving the public interest, where the leverage is.

PAGLIN: Yes.

GELLER: It's interesting. I began the way a lot of people did, for example, believing in ... that you could adopt regulations in what I would call behavioral regulations. The more I got into it, in areas like this, I concluded, for example, that structural regulation was far better than behavioral. The difference, and one of them is content ... the Fairness Doctrine is behavioral regulation. Another one, the ultimate one, is the station comes up for renewal and you have to determine whether an overall basis is served that meets the needs of the public. That's behavioral. It does not work well. It took me a long time to come to that conclusion that it doesn't work well.

A structural one is a multiple ownership rule. That you can't own two stations or I want 5 percent of your money in a tax on you and I'm going to turn it over to public broadcasting. I've got the money, and I will structure the works for me. The commercial people make money. I take the money; I give the money to public broadcasting. Public broadcasting is motivated to do worthwhile children's programs, commercial isn't. I'm just using shorthand to you; but what I'm saying is that over a period of time, you gradually learn what works and doesn't work. And I learned it from people, from observing. I learned it also from failures. You know, everyone recalls the mistakes you've made now. But I think you just accumulate experience, wisdom, knowledge.

PAGLIN: I wonder whether that mentor thing kind of has operated in both ways in that you've served in that capacity to people who've worked with or beneath you at later times in your career. Do you perceive that that's happened as well?

GELLER: Somewhat. I think that there are people, Charlie Firestone, Stewart Brockman, and young people who I think have learned something from the way I've approached problems. And it is that it's evolution, you know. You just hand it on down, and I think we are part of a web or something of that nature. And I certainly, as I say, drew from the Plotkins of this world and I would assume that people ... you know, I'm passing on here and things like that, on down the line.

PAGLIN: Were you ... speaking about Washington, D.C., as a place where you've spent most of your professional career. What was the most exciting time or climate over those years, starting with let's say the late '40s, early '50s or '60s? Why so, in a very general way?

GELLER: Sixties. Kennedy brought in enormous ferment. Really there was a feeling that the government could accomplish a great deal. I was at that time coming into my own because I was no longer way down the line. I was now Deputy General Counsel, and after your father left became General Counsel. I was in positions of greater power from that. There was a great deal of ferment, it was just a juxtaposition arriving then at an age, at a position where you could get things done. In the late '60s, from about '65, '66, '67, '68, '69, I really was a very powerful force at the FCC, through a combination of circumstances. And I got a lot done, that's all. I got things done that I never thought I could get before, the anti‑smoking commercials, Fairness Doctrine ... On a different keel, we got out competition to AT&T for the first time in the NCI. The Carter phone decision came down, which opened up the telephone lines for the first time for equipment.

As you look back on it, it was a period of great flux where there were a number of things happening. I had a very good staff working with me during those years, excellent people--Ruth Reel, Dan Ohlbaum, people like that. And we just got a lot done. It was by far the most satisfying time in my career. I reached higher office later when I was the Assistant Secretary of Commerce. But the most satisfying time by far, was that period in there, all the way from '61 to about '70.

PAGLIN: So it does happen then. You're saying that not only the work one does but the conditions in which one has to work is affected by the external environment, and the economic things, political things that are happening. Other agencies and in other parts of the government all can cumulatively have a kind of a bearing on what you can accomplish and what you set out to accomplish. That can change from administration to administration.

GELLER: No question. Right now for example the FCC is a total wipeout for petitions to deny. The Congress is very difficult to get anything out of. The only thing you have left is the courts. And the tide is not running well in the courts. The courts are not perceptive to the type of petitions any longer--the public interest petitions--and the result is that these are very difficult times for the public interest movement. So, I would fully agree with your statement. The only thing I would hope is that it's like a pendulum, and there will be other swings to this country. I may not be in on the swing, but there will be other swings.

PAGLIN: You know what else I'm interested in is some of your ideas and feelings about communications, specifically, communications history in particular have come about and I'd like to take you back again to ask you about some of your early experiences, personal ones with the mass media. What are, for instance, some of your earliest memories of radio and TV in your life, in your profession, as to what meaning they had for you and for other people around you and for your education and any professional aspirations, and so on and so forth. Go all the way back, if you would. I'd like to hear this very much.

GELLER: I listened to radio when I grew up. I listened to all the serials of Jack Armstrong, Tom Mix, the Green Hornet, and The Lone Ranger.

PAGLIN: So you had radio from your earliest years?

GELLER: Yes. I remember the radio. I was born in '24. By the time I was paying attention, there was radio. Particularly in the '30s you'd listen to the Lux Radio Theatre every night. Radio was a very powerful factor in our lives.

PAGLIN: In what kind of way?

GELLER: Well, it was mostly entertainment and news. You would listen to Roosevelt. My father was very taken with Roosevelt, and he would listen to the "Fireside Chats" and I heard them. Mostly what I was listening to, though, was entertainment and sports. I would not miss the Green Hornet. I knew every time he was on and I knew Sherlock Holmes would be on and I'd send away the Ralston box top to get various things. I was taken up with radio the way today's youth might be taken up with MTV. We didn't get records until very late and the records were all single play. I'm just a classical music lover. I don't listen at all to anything but classical music. But for the most part it wasn't records, you'd listen to radio.

The other thing you did was you went to the movies. There were double features on Saturday. You'd walk to the movie, see the double feature and the serial. It was the typical way kids grew up. I'm sure your father grew up the same way and that was it. Television did not come in until the late '40s. I did not see television until I came to Washington and got a set. Television for me is '51, '52, that period of time.

PAGLIN: As someone who'd been interested in the sciences and had some idea of the technological work that was going on in the world, were you aware that this thing was being developed and that in some kind of primitive form it was out there somewhere being tested and the marketing was being anticipated, and so on and so forth? Any interest in it in that regard?

GELLER: My interest, as I say, was in science generally but more in astronomy and chemistry. And second, when I went into law, my interest in law was in anti‑trust and not in communications law.

PAGLIN: Well, then you flirted with patent law a little bit.

GELLER: Not really. I took one seminar, but at no time did I ... I just had to rationalize to my parents why I was doing this extraordinary switch. And I said I want to combine law and chemistry. It is a very lucrative field; it's also very boring, and it did not meet my definition at all of interesting work where you're going to wake up in the morning and be satisfied. Therefore, I never applied to the Patent Office to work and I never tried to become a patent attorney. One attorney actually interviewed me on patent law when I got out of law school; and one attorney interviewed me also to become a private anti‑trust lawyer. I was a little more interested in that but decided that I didn't want to do private practice. It was doing something that was worthwhile, not only lucrative but bringing anti‑trust suits against the movie companies at that time.

PAGLIN: Oh, yes.

GELLER: And he wanted to hire me and I thought about it very seriously and then decided I just didn't want to do that.

PAGLIN: This would have been the late '40s?

GELLER: Yes. There was still a lot of them and it was not that you couldn't get satisfaction out of the work. You could get both money and satisfaction.

PAGLIN: Right.

GELLER: But I didn't see how I'd be affecting policy that much, so I decided I wanted to go to government.

PAGLIN: I see. I'm wondering if at any time during the '30s and '40s, in education, you were exposed in any formal way to consideration of the meaning of mass media--media studies, if you will. Did you do any reading in that department or anything of that kind?

GELLER: I knew a little bit about some of the media studies. I took a seminar in communications law.

PAGLIN: Ah!

GELLER: The reason why I did that was very interesting. It wasn't even deliberate at all. I came back late to register for law school in my final semester. You had to take two seminars. One of them I had no trouble getting in, patent law, which I took just because it would have looked odd not to take it. But the second one, I signed up because nobody else wanted it and it was just kind of shoved in there. He was a very good professor.

PAGLIN: Who was it?

GELLER: Nathaniel Nathanson. He was a very excellent professor. He was Leo Resnick's brother‑in‑law, really a towering intellectual figure. And as a result of taking that, I enjoyed it to my surprise. Didn't make me want to become a communications lawyer. My interest was, as I told you, to become an anti‑trust lawyer. But because of Thurman Arnold, The Bottlenecks of Capitalism, I thought that's where you could do the most good for society. Remember, there's no environmental law, there's no energy law. Your choice was kind of that or labor law. But whatever, in that course I did read some materials on mass media. There was a freedom ... Zachariah Chaffey at the University of Chicago was doing a freedom of the press study about how do you make the press more responsible. And that study went on in '47 and '48.

PAGLIN: Does mass media have anything to do with print journalism trend?

GELLER: Although, he touched on radio too. Radio was then there so he touched on that also. And I would read things of that nature. The Blue Book had been issued by the FCC and we touched on that, how you make radio responsible there. But the course, as I say, I found very interesting. He was a good professor. The issues were very interesting; I enjoyed it. I hated the patent law seminars. But I enjoyed that one. But I never got out saying, "Gee, I want to work for the FCC." If Willard Wirtz hadn't been a classmate of Plotkin and given me a letter to the FCC, I never would have gone to the FCC. Bill Wirtz had got me there; and once I got there, they have this system of interviews. I trusted them to make the offer because I didn't have any political drag and the FCC did. So I accepted the FCC offer.

PAGLIN: Well, you've told me a whole lot about a whole lot of years. We've covered a great deal of territory. I have one last thing I'd like to ask you. Be